1. - The appellant State is challenging the award dated 21.9.1994 passed by the learned Sole Arbitrator and the Order dated 17.2.2003, passed by the Additional District and Sessions Judge, No. 1, Ajmer hereby the learned Judge has partly allowed the objections raise by the State. Since the learned Judge has rejected most of the objections raised by the State, naturally the State is aggrieved by the Order dated 17.2.2003. (For the sake of brevity the appellant shall be referred to as 'the State' and the respondent shall be referred to as 'the Claimant', throughout this judgment.)

2. The case has a rather checkered history. In order to ensure supply of water to various districts of Rajasthan, The State of Rajasthan decided to construct a dam on the Banes River in Tonk district. The project is known as the Bisalpur Water Supply Project. In order to further implement this project, the Public Health and Engineering Department (henceforth to be referred to as 'the PHED', for short) invited tenders for providing and laying of PSCC Pipes complete with suitable jointing material, Specials, Valves and construction of Valve Chamber, Anchor Blocks, suitable crossing including testing and commissioning of pipeline etc. under the Reorganisation of Water Supply Scheme, Ajmer, Kishangarh, Beawar, (Bisalpur Water Supply Project), Package PL 3-4-7. This work was to be done in four stages. Since different bidders had quoted different conditions, they were all called for a common discussion. Thus, in order to compare the tenders, certain Common Terms of References (CTR, for short) were framed on 22.2.1988. Since the claimant submitted the lowest tender, the State accepted its tender. The work Order was issued on 22.8.1988. According to the Work Order, the work was to commence on 22.8.1988 and was to be completed by 21.8.1990. Hence, the work was to be completed within a period of two years. Since some points were still needed to be clarified between the parties, a provisional agreement was signed on 11.1.1989. However, instead of expediting the completion of the project, the PHED department failed to fulfill various terms of the contract. According to the Claimant, the Mobilisation Advance was not given in the terms agreed upon, the drawings and designs were not supplied on time, the route plan and the survey was not carried out on time, amounts were deducted from the running bills, not sufficient water was given for running the factory etc. Because of the lapses on the part of the PHED department, disputes arose between the parties. According to Clause 23 of the agreement, in case any dispute arises between the parties, then the dispute shall be referred for adjudication to a Sole Arbitrator who was to be appointed by the Chief Engineer. (The clause 23 shall be analyzed and discussed in detail later on). Suffice it to say for the moment that since certain disputes arose between the parties, vide letter dated 18.6.1990, the claimant sent a notice to the Chief Engineer for suggesting the names of three persons so that a Sole Arbitrator could be decided upon and appointed by the Chief Engineer in accordance with Clause 23 of the agreement. However, the Chief Engineer did not respond to the said notice. The claimant again sent a reminder, vide letter dated 17.7.1990, to the Chief Engineer for suggesting the names of there person and for appointing the Sole Arbitrator as agreed upon by the parties. But he continued to maintain a studied silence over the request so made by the claimant. Therefore, having no other option, the claimant filed an application under Section read with Section 8 of the Arbitration Act, 1940 (henceforth to be referred to as 'the Act', for short) before the District Judge, Ajmer. Vide Order dated 27.4.1991, the learned Judge held that he had the jurisdiction for appointing the Sole Arbitrator under Section 8 of the Act. But he deferred the actual appointment of the Sole Arbitrator till a future date. However, as the Sta