( 1 ) THIS matter has been placed before us on a reference made by the learned Single Judge, because it was pleaded before him that there was a conflict between judgments of learned two Single Judges of this Court namely in 1980 Rajdhani Law Reporter 313 (Vilayatiram Mital v. Union of India) decided by Dalip Kapur, J. , and 1982 Rajdhani Law Reporter 12 (Ram Nath Mehra and Sons v. Union of India), decided by Avadh Behari Rohatgi, J. On the point as to who is to decide whether if the demand for arbitration is not made within a stated period, the claim will be deemed to have been waived Kapur, J. has held that it is for the arbitrator. Avadh Behari, J. has held to the contrary, and says it is for the court, before making a reference under Section 20 of the Arbitration Act.

( 2 ) THE applicant and the Union of India entered into a contract for the construction of a temporary accommodation for Kendriya Vidyalaya at Faridabad. The terms were reproduced in the agreement. Clause 25 of the agreement provides that except where otherwise as provides in the contract all questions and disputes relating to the meaning of the specifications, designs or otherwise concerning the works or the failure to execute the same whether arising during the progress of the work or after the completion or abandonment thereof shall be referred to the sole arbitration of the person appointed by the Chief Engineer, Central Public Witness D. , incharge of the work at the time of dispute. It is also a term of the contract that if the contractors) do/does not make any demand for arbitration in respect of any claim (s) in writing within 90 days of receiving the intimation from the Govt. that the bill is ready for payment, the claim of the contractors) will be deemed to have been waived and absolutely barred and the Government shall be discharged and releesed of all liabilities under the contract in respect of these claims (S. O. No. 209 ). The arbitrator (s) may from time to time with the consent of the parties enlarge the time for making and publishing the award.

( 3 ) ON 4. 3. 1981, the petitioner/applicant moved an application under Section 20 read with Section 8 of the Arbitration Act praying that disputes having arisen between the parties, a refrence was sought for arbitration, but the Union of India refused to appoint an arbitrator on the ground that the claim is time barred in accordance with the provisions of clause 25 of the accordance with provisions of clause 25 of the agreement (as mentioned above ). In reply the respondent Union of India amongst others, took the objection that as per clause 25 as the demand for arbitration that as per clause 25 as the demand for arbitration was made beyond a period of 90 days of receiving the intimation from the government that the bill is ready for payment the claim of the contractor will be deemed to have been waived and the government shall be discharged and released of all liability under the contract in respect of these claims. Hence it was pleaded there can be no reference to the arbitration and the application under Section 20 of the Act be dismissed.

( 4 ) BEFORE the learned Single Judge, it was sought to be urged by the Union of-India that the Court itself should decide whether the claim made by the applicant was barred by time and if it so holds the question of referring the matter to the arbitration will not arise, and reliance was placed on judgment by Avadh Behari, J. (supra ). The claimant on the other hand relied on the judgment of Dalip, Kapur, J. who has held that this matter has to be decided by the arbitrator. It is to resolve this conflict that the matter has been placed before a larger Bench.

( 5 ) SECTION 20 of the Arbitration Act lays down that where any persons have entered into an arbitration agreement before institution of any suit with respect to the subject-matter of the agreement or any part of it, and where a differeace has arisen to which the agreement applies they or