( 1 ) THIS appeal by the State of Karnataka through the Executive Engineer, UKP Dam, division No. 2, Alamatti Dam, is directed against the Judgment and decree dated 20-10-1989 passed in Arbitration Case No. 2 of 1988 by the learned Principal Civil Judge, Bijapur.

( 2 ) THE matter arises this way:respondent-1 is a Class-I contractor executing the civil work under the appellant and in the course of executing the work, he had entered into a local competitive bidding contract with the appellant on 12-11-1982 in No. 13 in respect of work of construction of Alamatti power Dam at Alamatti, Bijapur District. By virtue of Clause-53 of the said contract, the disputes between the parties arising out of the said contract are to be referred to the arbitrator and the parties are to abide by the decision of the Arbitrator certain disputes having arisen between the parties, the same were referred to Sri A. Sel- varaj, Chief Engineer, Government of Karnataka, as a sole Arbitrator. Thereafter, the arbitrator issued notices to the parties. The respondent presented an application claiming certain sum of money payable by the appellant for the work done under the contract. The appellant