Mrs. T. MEENA KUMARI, J :-This appeal is directed against the order dated 24.6.2002 passed in O.P. No.301 of 1999 by the learned III Addl. Chief Judge, City Civil Court, Hyderabad, dismissing the petition filed under Section 34 of the Arbitration and Conciliation Act, 1996, seeking to set aside the Award dated 2.11.1998 passed by the second respondent herein.

2. The facts, in brief, which necessitates the disposal of this appeal are that the first respondent herein entered into contract with the appellant vide agreement dated 17.1.1995 for construction of left bank and covering of cut out for ground floor, trading hall and other RCC works in the existing structure and upper floors at Door No.6-3-654/A, Somajiguda, Hyderabad. Among other conditions mentioned therein, clause 4 of the agreement entitles the parties to refer the matter to the sole named arbitrator viz., the second respondent herein. As such, in view of the disputes that arose between the parties, the first respondent referred the matter to the second respondent - sole arbitrator, who after conducting enquiry passed an Award on 2.11.1998, allowing the claims.

3. Aggrieved by the said Award, the appellant herein filed the above O.P. under Section 34 of the Arbitration and Conciliation Act, 1996 (for brevity the Act) seeking to set aside the Award dated 2.11.1998, inter alia contending that since the first respondent had completed the work only on 30.11.1995 and in view of the Arbitration Clause in the agreement stipulating only one month from the date of completion of the work for reference to the named Arbitrator, the reference is categorically time barred inasmuch as, admittedly, the representation was made for arbitration only on 9.1.1996. It was further contended that the second respondent ought not to have travelled beyond the scope of reference and terms of the contract and passed the Award.

4. The Court below, on appreciation and consideration of the material placed before him, dismissed the O.P. observing that the contentions sought to be raised cannot be the substratum under Section 34 of the Act to set aside the award.

5. Aggrieved by the said dismissal, the petitioner in the above O.P. is in appeal before this Court.

6. Mr. N. Subba Reddy, learned Senior Counsel appearing for the appellant contends that though both the parties to the arbitration have agreed to follow the procedure contemplated under the provisions of the Act, 1940, but since the sole Arbitrator had already been appointed by representation dated 9.1.1996 before the commencement of the Act, 1996, which came in effect from 22.8.1996, the Arbitrator ought to have chosen to proceed under the Act and, therefore, the order impugned is liable to be set aside. He also contends that no application for the appointment of Arbitrator as contemplated under Section 11 of the Act, 1996, is filed by the parties. It is further contended that the Court below ought to have held that the claim is time barred inasmuch as even as per the first respondent, the works were completed only on 30.11.1995 and representation for the appointment of the Arbitrator was made only on 9.1.1996, which is directly in contrast with clause 4 of the Agreement, which stipulates that the reference to the arbitration shall be made by the parties within one month after completion of the entire work. Thus, the order and decree passed by the Court below is not in consonance with the agreed terms and conditions of the agreement and, hence, the same is liable to be set aside.

7. Per contra, Mr. S. Ravi, learned Senior Counsel appearing for the first respondent has vehemently contended that as Section 85(2)(a) saves the procedure contemplated under the Act, 1996, the Arbitrator has rightly entered into reference under the Act, 1940 and, as such, the procedure adopted by the Arbitrator is valid and the objection raised by the learned Senior Counsel on behalf of the appellant cannot be sustained. He further submits that the claim made by