( 1 ) THE question which arises for consideration in this application is as to whether having regard to the settlement arrived at between the parties on 12-9-1998, the arbitration agreement contained in clause 56 of the contract survives. Certain facts are not disputed. The parties entered into a contract for civil and structural work for gas lift facilities at CPF, Gandhar. The agreement contained an arbitration clause which is in the following terms:"56. 1 : If any dispute shall arise between parties touching on the contract/agreement or the construction or operation thereof, or the rights, duties or liabilities under these, except as to any matters, the decision of which is specially provided for by the General or the Special conditions, such disputes shall be referred to two arbitrators, one to be appointed by each party, and the said arbitrators shall together appoint an umpire in writing before entering on the reference and the award of the arbitrators or the Umpire, as the case may be, shall be final and binding on both the parties. The arbitrators or the umpire as the case may be, may, with the consent of the parties, enlarge the time from time to time for making and publishing the award. Such arbitration shall be governed in all respects by the provisions of the Indian Arbitration act, 1940 and the rules framed thereunder and any statutory modification or re-enactment thereof. The arbitration proceedings shall be held in Hyderabad. "

( 2 ) DISPUTES and differences having arisen between the parties, discussions were held between them with regard to the said disputes and differences on 11-8-1998 and 12-8-1998 and they entered into a final settlement which is to the following effect:"2. . . . . . . . . . IT has been mutually agreed that a sum of Rs. 25 lakhs (Rupees twenty-five lakhs only) will be paid to m/s. V. M. Thomas as a full and final settlement towards closure of this contract. This takes into account all invoices of M/s. VMT, recoveries, advances, release of retention and settlement of extra claims and all other items and claims executed by m/s. VMT against the work contract of M/s. TPL on M/s. VMT ref. No. TPL/ocg/00/01 dated 31-01-97 and all subsequent amendments and correspondences. 3. M/s. V. M. Thomas has agreed to provide a performance Bank guarantee of Rs. 13. 9 lakhs (Rupees thirteen lakhs ninety thousand only) for the warranty period till 31-10-99 with further six months claim clause. The existing bank guarantee for security deposit of Rs. 13. 9 lakhs already submitted to M/s. TPL and presently valid will be converted into the (above) performance bank guarantee for the above value and validity by a suitable amendment from the bank. This bank guarantee amendment will be furnished by M/s. VMT to M/s. TPL before 25-8-98. The advance payment guarantee will be returned by M/s. TPL for cancellation. 4. With the above mutually agreed settlement both the parties will not have any claim on each other. This is the full and final settlement. "

( 3 ) PURSUANT to and in furtherance of the said agreement the petitioners herein have executed a No Claim Certificate stating:"we have submitted Final Bill for above Contract vide Bill No. Final settlement dated 12-8-98 for rs. 25,00,000. 00 (Rupees twenty-five lakhs only) for the complete execution of the above order. This is our last claim under the above order. We confirm that we have no outstanding further claims of any nature whatsoever to make against the above order. We also certify that all our dues have been fully settled to our entire satisfaction by TATA Projects limited. "

( 4 ) THEY also affirmed to an affidavit which is to the following effect:"we M/s. V. M. Thomas hereby furnish this affidavit as required under clause of the General Conditions of contract for construction/erection and commissioning with regard to the above contract. We hereby declare that all lien arising out of the above contract has been released by us in full, which to the bes