MARKANDEYA KATJU, C. J, J.

( 1 ) THIS writ appeal has been filed against the impugned judgment of the learned single Judge dated 30. 7. 2004

( 2 ) HEARD learned counsels for the parties and perused the record.

( 3 ) THE facts of the case have been set up in detail in the impugned judgment of the learned Single Judge and hence we are not repeating the same except where necessary.

( 4 ) THE writ Petitioner (respondent herein) is a company registered under the indian Companies Act, 1956. The Appellant (respondent in the writ petition) invited tenders for the infrastructure works for supply and installation of construction water system and operation and maintenance of construction and drinking water system at its Paradip Refinery. Petitioner"s tender was accepted and work order in respect of jobs was issued in favour of the petitioner. A true copy of the letter of acceptance dated 30. 11. 2000 is Annexure P2 to the writ petition.

( 5 ) PURSUANT thereof, two agreements dated 18. 1. 2001 were executed between the parties and a copy of one such agreement relating to the main contract is annexure P3.

( 6 ) IT is alleged in paragraph 4 of the writ petition that the petitioner started work in right earnest. However, it is alleged that various delays, breaches and inactions on the part of the respondent (appellant in this appeal) prevented the petitioner from successfully completing the work. Despite this, the petitioner was able to carry out the work of the value of approximately Rs. 7. 9 crores. It is alleged that the respondent was not interested in completing the work for reasons best known to itself and abandoned the work, but somehow to shift blame it made the petitioner a scapegoat and took up the bogey of slow progress and issued a show cause notice to it asking why the contract should not be terminated. The respondent encashed the bank guarantee.

( 7 ) FACED with this situation, the petitioner invoked the arbitration clause. Since the respondent was seeking to limit the terms of the reference and was declining to refer all the claims of the petitioner, the petitioner filed a petition in this Court being application No. 35/2003. This Court vide order dated 17. 3. 2003 allowed the petition and directed the respondent to refer the petitioner"s claim to arbitration vide Annexure P5. The Arbitrator entered upon the reference and a copy of the notice issued by him is Annexure P6 to the writ petition, and a true copy of the first proceeding held by him on 01. 05. 2003 is annexure P7. Thus, it is alleged that the Arbitrator is seized of the complete matter and the issues which are directly involved in the said arbitration case e. g. whether there was breach of the contract, who failed to perform the contract, whether the petitioner abandoned the site or the respondent abandoned the project, whether the encashment of the bank guarantee is illegal and what are the amounts due to the petitioner, etc.

( 8 ) THE respondent terminated the contract vide letter dated 29. 10. 2002, Annexure p11 to the writ petition. It is alleged that this was done in a malafide manner. Thereafter the respondent issued a show-cause notice dated 17. 1. 2003 calling upon the petitioner to show cause why it should not be placed on the "holiday list" and be not debarred from entering into the contract. A true copy of the said notice is Annexure P12.

( 9 ) THE petitioner vide letter dated 18. 1. 2003 replied to the said notice refuting the allegations and also requested the respondent to refer the matter to the arbitrator. A true copy of the said letter is Annexure P13. However, the respondent vide letter dated 23. 1. 2003 rejected the request of the petitioner for referring the matter to arbitration. Thereafter by order dated 10. 4. 2003, the respondent placed the petitioner on the "holiday list" vide Annexure P17. It is alleged by the petitioner that the said act of the respondent is illegal, malafide and arbitrary. The petitioner asked the respondent to withdraw the

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