JUDGMENT - Dr. B.P. SARAF, J. :---This appeal is directed against the judgment and order of the learned Single Judge dated 8th June, 1993 dismissing the suit of the appellant filed under section 20 of the Arbitration Act, 1940 ('Arbitration Act") and thereby refusing to refer the dispute arising out of a contract between appellant and the respondent to arbitration.

2.The material facts of the case, briefly stated, are as follows: The appellant, who carries on the business of building contractors and developers in the name and style of "United Precast Products", entered into an agreement with the respondent, City and Industrial Development Corporation of Maharashtra Limited (CIDCO), for construction of 14 buildings comprising of 168 tenements at Nerul Road, New Bombay. The contract contained an arbitration clause which provided for reference of doubts, disputes and differences arising between the parties to arbitration. The said clause reads:

"83.Arbitration : Except where otherwise specified in the contract, the decision of the Chief Engineer (CIDCO) shall be final, conclusive and binding on all parties to the contract upon all questions relating to the meaning of the specifications, designs, drawings and instructions hereinbefore mentioned and as to the quality of workmanship: or materials used on the work in New Bombay or as to any other question, claim, right, matter or thing whatsoever in any way arising out of or relating to the contract, designs, drawings, specifications, estimates, instructions, orders or those conditions or otherwise concerning the works or the execution, or failure to execute the same whether arising during the progress of the work or after the completion or abandonment thereof. The Chief Engineer's decision taken under this clause should be considered as that of an Arbitrator and this should be considered as the decision taken under the Indian Arbitration Act."

The appellant completed the work and gave a notice of completion in terms of the contract to the respondent. A completion certificate was also issued by the respondent in favour of the appellant. On 17th June, 1985, the appellant submitted his final bill under Clause 74 of the contract containing, inter alia, various claims on account of balance dues including sums due on account of execution of extra items, wrongful recovery of interest, etc. The final bill was for a sum of Rs. 3,57,000/- while the said bill was pending scrutiny, the respondent, by its letter dated 10th December, 1985, asked the appellant to furnish "No demand certificate" as per the format enclosed therewith which according to the respondent was a pre-condition for releasing any amount due to the appellant including security deposit. The demand for "No demand certificate" was reiterated by the respondent by their letter dated 10th December, 1985. In that letter, it was mentioned that the final bill was under scrutiny and the "No demand certificate" in the enclosed format was required for that purpose. The appellant was also informed that the final bill would be settled only after the receipt of "No demand certificate" from the appellant. In such circumstances, the appellant submitted "No demand certificate" in the proforma supplied by the respondent. Since, the said "No demand certificate "was lost by the respondent, a fresh "No demand certificate" was furnished by the appellant on 23-4-1987. In the month of May 1987, the measurement bill was prepared by the respondent which was counter signed by the appellant with the remark "under protest". Thereafter, on 11th July, 1987, the respondent made payment of an amount of Rs. 33,000/- only to the appellant and rejected the balance claim of the appellant on various counts. The appellant thereupon referred the dispute in regard to its balance claim to the Managing Director of the respondent as provided in Clause 58 of the general conditions of the contract on 16th September, 1987. On the failure of the Managing Director to consider t

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