JUDGMENT - S.M. JHUNJHUNUWALA, J.:---By this petition, the petitioners seek declaration that there is no valid, binding or subsisting arbitration agreement between the petitioners and the 1st respondent and that the invocation of arbitration pursuant to the arbitration clause contained in the Agreements Exhibits A and B to the petition is illegal, invalid, of no effect and not binding on the petitioners. The petitioners also seek declaration that the reference of the disputes and differences between the petitioner and the 1st respondent to 2nd respondent as sole arbitrator is invalid, void and of no effect and not binding on the petitioners. The petitioners also seek the relief to have the reference to arbitration to the 2nd respondent set aside. In the alternative, the petitioners seek declaration that the appointment of the 2nd respondent as sole arbitrator is invalid, illegal, of no effect and not binding on the petitioners and the same be revoked and/or set aside.

2.The petitioners are a company incorporated under The Indian Companies Act, 1913. The petitioners carry on business as manufacturers and sellers of various consumer food products including jams, syrups and squashes under several brand names, one of them being Rex. The 1st respondent carries on business in the name and style of Century Foods as the sole proprietor limited thereof. The 2nd respondent has been appointed as the sole Arbitrator by the 1st respondent in respect of certain disputes which according to the 1st respondent have arisen between the 1st respondent and the petitioners.

3.On 11th December, 1987, an agreement was entered into by and between the petitioners and the 1st respondent, a copy whereof is annexed as Exhibit A to the petition, which agreement is hereinafter referred to as 'the First Agreement'. The duration of the First Agreement was for one year. Clause 7.4 of the First Agreement contained an arbitration agreement between the petitioners and the 1st respondent. The said First Agreement expired by efflux of time after the period of one year from 11th December, 1987. On 2nd January, 1989, another agreement was entered into by and between the petitioners and the 1st respondent, a copy whereof is annexed as Exhibit B to the petition, which agreement is hereinafter referred to as 'the Second Agreement'. The duration of the Second Agreement was also for one year. Clause 7.4 of the Second Agreement contained an arbitration agreement between the petitioner and the 1st respondent. By a letter dated 3rd January, 1989, the Second Agreement was extended to cover the sale of orange squash and pineapple syrup also, as mentioned therein, which was treated as Supplementary Agreement to the Second Agreement. By letter dated 26th May, 1989, the 1st respondent admitted and acknowledged his liability to pay to the petitioners the sum of Rs. 1,71,638.90 and also his liability for replacement of 370 dozens jars of 500 Gms jams which replacement the 1st respondent was required to make but did not do so. According to the petitioners, the said amount of Rs. 1,71,638.90 was due by the 1st respondent to the petitioners in respect of the said First Agreement.

4.It is the case of the petitioners that the accounts between the petitioners and the 1st respondent were settled at a meeting held on 11th July, 1989 at which the minutes were drawn up and signed by the parties. As per the minutes of the said meeting, a sum of Rs. 2,70,000/- was mutually agreed as payable by the petitioners to the 1st respondent in respect of claims relating to both the said Agreements up to 31st May, 1989. It is also the case of the petitioners that the petitioners have made payment of the said sum of Rs. 2,70,000/- to the 1st respondent by two cheques for Rs. 1,35,000/-, each dated 18th July, 1988 sic (1989).

5.According to the petitioners, despite the petitioners having paid the said sum of Rs. 2,70,000/- to the 1st respondent in full and final settlement of all the claims up to 31st Ma

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