BHASKAR BHATTACHARYA, J.

(1.) THIS letters patent appeal is at the instance of the Union of India and is directed against the order dated April 29, 2005 passed by a learned Single Judge of this Court by which His Lordship dismissed an application under Sections 30 and 33 of the Arbitration Act, 1940 (hereinafter referred to as the Act) for setting aside the award passed by the Arbitrator.

(2.) THE respondent-contractor agreed to carry out a civil construction work worth Rs. 19,47,050/ -. The time-limit for completion of the work was fixed as one year from the date of awarding the contract. The work was to be completed by 10th February, 1990 but it was actually completed on 13th June, 1991 and as such, there was a delay of more than 16 months in completing the work. The claimant-contractor, after completion of the work, submitted bills and there was dispute with regard to the quantum of the final bill. The final bill was not paid for a long time despite repeated requests and representations.

(3.) ACCORDING to the respondent, it however, received part of such payment and the same was received under protest and without prejudice to its claim for further sum. The final payment was made when the respondent was forced to strike out the endorsement "with protest". The respondent apparently recorded full and final satisfaction and certificate of clearance of all dues. The respondent, however, contended that such endorsement was forced upon it by withholding the amount of the final bill.

(4.) ON the aforesaid background, the dispute arose between the parties and the arbitration was sought for but refused. Ultimately, with the intervention of the Court under Section 20 of the Act, the learned Arbitrator was appointed.

(5.) INITIALLY Mr. Justice Satya Brata Mitra, a retired Judge of this Court was appointed as Arbitrator; however, such appointment was later set aside and as provided in the agreement, a departmental Arbitrator was appointed and thereafter, the said departmental Arbitrator made and published an award. Such award was set aside by a learned Single Judge of this Court on an application under Sections 30 and 33 of the Act and the said learned Judge, while setting aside the award, appointed Mr. Justice Sambhu Chandra Ghose, a former Chief justice of this Court, as the sole Arbitrator in place of the departmental arbitrator. However, Justice Ghose died before the conclusion of the arbitration and in his place, Mr. Partha Bihari Mukherjee, an advocate of this Court, was appointed as Arbitrator who ultimately published the award and the said award was brought under challenge.

(6.) BEFORE the learned Single Judge, the following points were raised: (1) The respondent having accepted the payment in full and final settlement after deleting the word under protest, there was no cause of any arbitration, as no dispute existed. (2) The Arbitrator acted without jurisdiction in granting interest as Clause 16 (2) of the General Conditions of Contract prohibited payment of interest of any amount payable by the Railway to the contractor. (3) No amount of damages incurred due to suspension of work causing undue prolongation of the period of performance and such claim was not admissible under Clause 17 (3) of the General Conditions of Contract. The learned Single Judge answered all the questions in favour of the respondent and dismissed the application under Sections 30 and 33 of the Act. Being dissatisfied, the Union of India has come up with the present appeal.

(7.) MR. Roychowdhury, the learned senior advocate appearing on behalf of the union of India, at the very outset, submitted before us that the learned Single judge should have set aside the award simply on the ground that in view of the specific terms of the agreement there was no scope of appointment of any "third party Arbitrator". According to Mr. Roychowdhury, only the departmental arbitrator could be appointed and such being the position, the award passed by the thir