( 1 ) THIS is respondent s (State of Madhya Pradesh) application under Section 41 of the Arbitration Act, 1940 read with Section 151 Civil Procedure Code for recalling order of reference, made on 19 May 1993 in Suit No. 968/93 filed under Section 20 of the Arbitration Act, 1940, whereby two arbitrators were appointed for adjudication of claims/disputes raised by the petitioner Builder/contractor. The material facts giving rise to the filing of the application may be summarised below :-

( 2 ) FOR construction of Vidhan Sabha Bhawan at Bhopal, M/s. Puri Construction Pvt. Ltd. (hereinafter REFERRED TO to as the Contractor), entered into a building contract with the State of Madhya Pradesh (for short the State) on 11 July, 1984. The contract Clause 29 stipulated differences/disputes arising from or in connection therewith, being decided by arbitration and the decision so given to be final, conclusive and binding on the parties. Prior to the execution of the contract, the State had passed an Act viz. , The Madhya Pradesh Madhyastham Adhikaran Adhiniyam, 1983 (No. 29 of 1983) (hereinafter REFERRED TO to as the Act), which received the ascent of the President of India on 7 October 1983 and was enforced w. e. f. 1 March 1985 (After the present contract ). Section 3 of the Act provides for constitution of a Tribunal for resolving the disputes or differences pertaining to works contract or arising out of or connected with execution, discharge or satisfaction of any such works contract. The Tribunal was constituted and notified to operate with effect from 1 March 1985. The term "works contract" is defined in Section 2 (i) of the Act, inter alia, to include a building contract with the State, like the one between the parties herein.

( 3 ) IT appears that during the execution of the contract, some disputes arose between the parties. The State stopped payment and rescinded the contract. Acting under Clause 29 of the Contract, the contractor filed suit (No. 962 A/86) under Section 20 of the Arbitration Act, 1940 in the Delhi High Court for filing the arbitration agreement and reference of disputes enumerated in the petition for being REFERRED TO to the arbitrator. The defendant State resisted the suit, inter alia, on the pleas : i) lack of territorial jurisdiction of Delhi High Court to entertain the petition and ii) the suit being barred under Section 20 of the Act on which issues were framed, arguments were heard but no orders could be passed as, meanwhile, a compromise application was filed under Order 23 Rule 3 and Section 151 Civil Procedure Code for appointment of arbitrator to adjudicate the disputes/claims raised by the contractor and for settlement of other matters. The compromise was recorded in accordance therewith; the recision of the contract by the State was withdrawn by it; the time for execution of the work was extended; additional mobilisation advance was made; the contract dated 11 July 1984 was maintained intact and the claims raised by the contractor against the State were REFERRED TO to the arbitration of Sh. G. P. Srivastava, Chief Engineer. While doing so the Court (S. N. Sapra, J) recorded his satisfaction the "parties had settled their disputes out of Court and the same were not contrary to law". Sh. Srivastava, the arbitrator, gave his award on 21 June 1989, which, on being filed was made rule of the Court on 28 September 1989. On further disputes, occurring from time to time, Suits No. 3729/91, 4636/92 and finally 968/92 were filed under Sections 5,8,11,12 and 20 of the Arbitration Act, 1940 for reference of disputes in each for arbitration. The last suit was again resisted on the same pleas of lack of territorial jurisdiction and the bar of Section 20 of the Act, as in the first Suit No. 962 A/86. The objections were not pressed and on agreement between the parties, arrived at on instructions of the State, based on due consideration of the whole matter at its highest level and conscious decision take