( 1 ) ALL these four matters arise from arbitration proceedings and can be disposed of under a common order. All of them are preferred by the state of Andbra Pradesh.

( 2 ) TWO agreements were entered into between the State of Andhrapradesh and the respondent contractor herein on 31-10-1973 for widening and strengthening the Madras-Calcutta Trunk Road, between M. 532 to 544. They were lumpsum contracts. The first contract was for a value of Rs. 38,26,385/, and the second contract for a sum of Rs. 17 lakhs. The work had to be completed within three years of the handing over of the site. Site had been handed over to the respondent even on 14-3-1973, i. e, several months prior to the said agreements, under a provisional K-2 Agreement. Accordingly, the work had to be completed on or before 14-3-1976. By 14-3-1976 the respondent did work of a value of Rs. 6,60,000/ only. He did not carry on any work thereafter. The contracts were terminated on 25-10-1976, and the balance work awarded by the Government to a third-party contractor, who completed the same. The Government says, in that. connection it suffered a loss of Rs. 23 Lakhs. The respondent claimed a huge amount of more than Rs. 18 Lakhs against the Government, contending that the Government was guilty of breach of contract and wrongful termination.

( 3 ) THE respondent moved the Court under Section 20 of the Arbitrationact for referring the disputes between the parties to arbitration, as provided by the arbitration clause in the agreements. It was registered as 0. S. 63/1977 on the file of the First Addl. Subordinate Judge, Visakhapatnam. After hearing the parties, the learned Subordinate Judge decreed the suit in the following words :"in the result, inasmuch as there is admittedly arbitration agreement in existence between the parties to the suit, and inasmuch as there are specific, definite disputes and differences between the parties to the suit, who are parties to the arbitration agreement regarding the subject matter thereof, I direct the defendants to file the arbitration agreement, namely, C. R. Agreement No. 29/73-74 dated 31-10-1973 before the named Arbitrator, namely, the Superintending engineer, P. W. D, R and B, bluru. I further make an order of reference of the disputes and differences in question to the said arbitrator and direct him to give an award according to law. . . . . . . . . ".

( 4 ) THE disputes which the respondent raised, and which he wantedto be referred to arbitration in O. S. No. 63/1977, were the following :"statement of Plaintiff s Claims upto 15-3-76 : rs. 1. Preliminary expenses before entering into the contract : 25,000. 00 2. Bank Deposit with the tender : 10,000. 00 3. (a) Loss incurred during 73-75 due to heavy over-heads as a result of slowing down of the tempo of work for lack of funds upto 31-12-75 : 1,16,680. 50 (b) do upto 15-3-75 : 39. 450. 00 4. (a) Work in progress not measured upto 31-12-75 as per balance sheet of the Company : 4,75,687. 47 (b) do upto 15-3-76 : 65,000. 00 5. Value of Material and machinery taken possession of by the department :5,42. 778. 00 6. Profits that would have been earned on the total value of the work i. e. , Rs. 38,26,385/ at normal rate of 15%:5,73,900. 00 7. Loss claimed against the department as claimed by the plaintiff by letter dated 25-2-76:5,000. 00 8. Value of extra work done during semigrout work due to carriage way being damaged :35,000. 00 18,88,494. 02 9. On the above the plaintiff claims the present Bank rate ofinterest at 151/2% with quarterly rests from 15-3-76 upto date of payment".

( 5 ) BESIDES the above, the Stats Government s claim made against the respondent-contractor was also the subject-matter of the said reference.

( 6 ) INITIALLY the dispute was referred to one Mr. G. Albert. Before, however, he could make any significant progress, be retired from service, whereupon one Sri P. T. Malla Reddy, a retired Chief Engineer, was designated as the arbitrator by the Court