Sudershan Kumar Misra, J.

1. This appeal has been filed by M/s. Northern Coalfields Ltd. against the decision of a Single Judge of this Court dated 10.07.2007, whereby the two applications filed by respondent No. 1 and 2 under Order 7, Rule 11 (d) of the Code of Civil Procedure were allowed and the plaint filed by the appellant was rejected. The facts leading to the present appeal are as follows:

2. In May 1984, the appellant issued a tender for construction of a Coal Handling Plant at Bina (hereinafter "the Bina Project"). This construction work was to be carried out under two contracts. They were (a) a Contract for Works and Services; and, (b) a Contract for Equipment and Spares. Both the contracts were awarded to M/s Heavy Engineering Corporation Ltd. (respondent No. 1) on 21.09.1988. Clause 3 of the terms of the said Contracts prohibited the contractor, i.e., respondent No. 1 herein, from sub-letting; a. the whole contract; or, b. any part thereof without the prior written consent of the appellant. It is alleged that within 45 days of the said contracts, i.e. on 4.11.1988, respondent No. 1, i.e., Heavy Engineering Corporation Ltd., sub-contracted the entire work to M/s Rampur Engineering Corporation Ltd. (respondent No. 2).

3. In both contracts between the appellant and the first respondent, there were arbitration clauses. However, by the time, these contracts were awarded, the Government had set up a permanent machinery of arbitration in terms of two decisions of the Supreme Court in the case of Oil & Natural Gas Commission and Ors. v. Collector of Central Excise decided on 11.9.1991 reported as 1992(61)ELT3(SC) and Oil & Natural Gas Commission and Ors. v. Collector of Central Excise decided on 11.10.1991 reported as MANU/SC/1462/1995. Consequently, when disputes arose, the appellant and respondent No. 1 decided to invoke the permanent machinery of arbitration set up in pursuance to the aforesaid directions of the Supreme Court. There, claims and counter claims were made by respondent No. 1 and the appellant against each other. On 28.02.1997, the arbitrator pronounced two awards, by virtue of which, respondent No. 1 was awarded a total sum of Rs. 16,87,61,981.11 and appellant was awarded Rs. 56,05,000 as counter claim. Dissatisfied with the awards, both the appellant as well as respondent No. 1 preferred two separate appeals to the Law Secretary, Department of Legal Affairs, Ministry of Law and Justice (Appellate Authority) under the said permanent machinery. They were Appeal No. 67/1998 pertaining to supply of equipments and Appeal No. 64/1999 pertaining to works and services contract.

4. In the meanwhile, respondent No. 2, who had independently entered into a relationship with respondent No. 1 with regard to the contracts in question, filed a suit No. 450/1999 in this Court on 25.02.1999 against both the appellant and respondent No. 1, praying for an order of injunction restraining respondent No. 1 from settling the disputes with the appellant. It is the appellants case that it learnt of respondent No. 2s involvement only when this suit for injunction was filed by the second respondent. In that suit, an interim order was passed to the effect that the award of the appellate authority, if delivered, shall not be implemented. Respondent No. 1 contends that the factum of sub-contracting by respondent No. 1 to respondent No. 2 was in the knowledge of appellant and with its consent. Be that as it may, this appeal is not concerned with that suit and these facts are only being mentioned in the context of the appellants stand about its knowledge of the involvement of the second respondent, as well as the stand of the appellant in that suit that there is no privity of contract between itself and the second respondent, and that the latter is a stranger to the contract.

5. Ultimately, the appeal No. 67/1998 that was filed by the first respondent before the Appellate Authority, and which related to the supply of equipme