( 1 ) THIS appeal is preferred by the South Central Railway by its Officers being aggrieved by the judgment and order passed by the III Additional Judge, city Civil Court, Hyderabad, at Secunderabad dated 22nd November, 1994 in o. S. No. 97 of 1991. By the impugned judgment, the suit was decreed by appointing sri M. Markandeya, retired District judge as sole arbitrator to settle the disputes arisen between the parties to the suit agreement.

( 2 ) THE present appellants were the defendants in the suit. The learned counsel for the appellants contended that the impugned judgment and decree are illegal, contrary to the arbitration clause. On the basis of the conditions stipulated in the agreement which was entered into between the appellants and the respondent-contractor, the present dispute could not have been referred to the arbitrators. On the other hand, the learned counsel for the respondent contractor strenuously supported the impugned judgment and decree.

( 3 ) IN order to appreciate the rival contentionsof both parties, it is necessary to note a few facts of the case. The fact that is not disputed is that the respondent entered into an agreement for the constru