Disputes falling within the category of "excepted matters" under Clause 63 of the General Conditions of Contract cannot be referred to arbitration, while disputes arising out of the contract, such as those relating to refund of earnest money, guarantee bonds, termination of contract, and interest, are referrable to arbitration. Filing a petition under Section 20 of the Arbitration Act constitutes a sufficient demand for arbitration under Clause 64.

( 1 ) THIS is a petition u/s 20 of the Arbitration Act for directing the respondents to file the arbitration agreement and to refer the disputes mentioned in this application to arbitration.

( 2 ) IT is not in dispute that an agreement was entered into between the parties in respect of some civil works which the petitioner was to carry out. According to the petitioner he completed the work, but there were some breaches which was committed by the respondents. It is further alleged that the respondents illegally and arbitrarily cancelled the contract on 9. 8. 82. The respondents state that the contract was cancelled on 22. 7. 82. Nothing will turn on this. It is further alleged by the petitioner that he had approached the respondents for the release of his lawful and legal dues, that it was made clear that in case the Deptt. did not accede to the request then the matter should be referred to arbitration.

( 3 ) IN the petition which has been filed, the petitioner has enumerated 29 disputes. According to the petitioner the said disputes are to be referred in accordance with Cl 64 of the General Conditions of Contract. The said clause contains the arbitration clause. This fact is not denied.

( 4 ) IN the reply to the present petition, it has been contended that the disputes which the petitioner seeks to raise had never been referred to the Railway as required vide cl. 63 of the General Conditions. It is also alleged that the disputes referred to therein either fall under the category of excepted Matters , referred to in cl. 63, or do not arise out of the contract. [in para 5, 6 issues and cl. 63 are reproduced. ]

( 7 ) THE opening portion of cl. 63 requires the contractor to refer the disputes to the Railway for its adjudication but the later part of the said clause states that disputes regarding which decisions are to be taken in terms of clauses i8, 22 (5), 39, 45 (a), 55, 55-A (5), 61 (2) and 62 (1) (xiii) (B) (e) (b) of the General conditions of Contract and the decisions taken under any of the clauses of the special conditions of the contract are not to be referred to arbitration. It is these decisions which are deemed to be excepted matters .

( 8 ) IT is clear from the reading of the aforesaid 63 cl. that the petitioner cannot demand any of the disputes to be referred which fall within the category of "excepted matters". One of the "excepted matters" admittedly is regarding the quantum of work which is done by the petitioner, and which is mentioned in the measurement books maintained by the respondents. In other words, the petitioner cannot challenge, by way of arbitration, the correctness of the entries in the measurement book. Apart from this, it is open to the petitioner to challenge and contend that he has not been paid his dues even according to the entries made in the measurement books.

( 9 ) IN the W/s there is no objection taken with regard to dispute 1 to 24 as being not referrable to arbitration on the ground that they fall within the category of excepted matters . This is subject to the petitioner not being entitled to challenge the correctness of the measurement books.

( 10 ) WITH regard to disputes 25 to 29, it is contended by Shri B. D. Sharma that they do not arise out of the contract [after citing these, cl. 64 is reproduced in para 11].

( 12 ) THE aforesaid arbitration clause is very widely worded. As I read it, the said clause provides that the following types ofdisputes can be referred to arbitration : (a) disputes are differences between the parties as to the construction or operation of the contract, (b) dispute or difference between the parties regarding the respective rights and liabilities on any matter in question ; (c) dispute or difference on any account; (d) dispute or difference as to the with holding by the Railways of any certificate to which the con- contractor may claim to be entitled to ; (e) dis- pute or difference if the Railways fail to make a decision within a reasonable tim