Where the option to refer the dispute to arbitration or not is given to one of the parties to the contract, the dispute must be referred to arbitration in terms of the arbitration clause.

( 1 ) THIS is a petition filed by M/s. Ahluwalia Contracts (India)Ltd. , (hereinafter referred to as the Contractor" under Section 20 of the Arbitrationact, 1940 and in this petition it has been prayed that M/s. I. F. S. Co-operative Grouphousing Society Ltd. (hereinafter referred to as "the Society ), be directed to file theagreement and refer the dispute between the parties to arbitration. Notice of thepetition was sent to the Society and in the reply filed on behalf of the Society, itwas admitted that there is Suit No. 781 /92. A dispute between the parties but itis alleged that there is nogreement enforceable by law between the parties inrespect of the submission of such a dispute to arbitration.

( 2 ) MR. Midha, the leared Counsel appearing on behalf of the Contractor drewmy attention to the arbitration clause and submitted that since the Society hasaornitted the fact of the existence of the dispute between the parties, the disputesmentioned in the petition should be referred to arbitration in terms of the arbitra-tion clause. Dealing with the submissions made in the reply filed on behalf of thesociety that there was no agreement enforceable by law between the parties forreferring the dispute to arbitration, the leared Counsel submitted that the Societycannot refuse to refer the dispute to arbitration in terms of the law laid down by thesupreme Court in Union of India v. Prafulla Kumar Sanyal, AIR 1979 SC 1457 and bya Full Bench of this Court in Veil Prukash Mithal v. Union of India, AIR 1984 Delhi 325.

( 3 ) DR. Sidhu, the learned Counsel appearing on behalf of the Society,however, submitted that in the present case as per the terms of the arbitrationclause one of the parties to the contract ;. (, . the Society has the caption to make areference to the arbitration or not to make a reference and if the Society opts not tomake a reference, then the dispute cannot be rl-ffm-d to arbitration at all. Hefurther submitted that in the case of Vcd Prakas i \li!ua (supra) decided by a Fullbench of this Court the option to refer the dispute or not to refer the dispute wasnot with one of the parties to the contract but was with the Chief Engineer and sincethe Chief Engineer was not a party to the contract, the decision in the case of Vcdprukush Mitlilil (supra) was distinguishable from thr facts of the present case. Hefurthersubmittedthaton the same ground the decision of the Supreme Court in thecase of Prafulla Kumar Sanyal (supra) was distinguishable from the facts of thepresent case. In this connection he also referred to a Division Bench judgment ofthis Court in Union of India v. Bharat Engineering Corporation, ILR (1977) II Delhi 57and a decision of this Court in the case of P. C. Aggarwal v. K. N. Khosla and Others,air 1975 Delhi 54 and also referred to Russel on the Law of Arbitration (20thedition ). I may also point out here that the leared Counsel for the Society did notadvance any other reason except mentioned hereinabove to justify refusal of thesociety to refer the disputes.

( 4 ) I have given my thoughful consideration to the submissions made by thelearned Counsel for the parties and have also perused the record. Before dealingwith the rival contentions urged on behalf of the parties it will be relevant toreproduce the arbitration clause which reads as under:-

"57. ARBITIiation, Except where otherwise provided in the contract allquestions and disputes relating to the meaning of the specifications,designes, drawing and instructions herein before mentioned and as to thequality of workmanship or materials used on the work or as to any otherquestion, claim, rig^it, matter or thing whatsoever, in any way arising outof or relating to the contract, designs, drawings, specifications, estimates,instructions, orders or those conditions or otherwise concerning theworks or the execution or failure to execute the same whether arisingduring the progress of the work of after the completion or abandonment249thereof shall b