An arbitration clause in a contract survives even after the expiry of the period fixed for the performance of the work under the contract.

1. - This appeal by the Food Corporation of India is directed against the judgment dated Sept. 10, 1981, of the District Judge, Churu, dismissing the appellant's application filed under Section 20 of the Arbitration Act, 1940, (hereinafter referred to as the Act).

2. Banwari Lal, respondent herein, to be referred to as the Contractor, entered into a contract with the appellant for loading/unloading and transporting food grains etc., in and around Churu for a period of 2 years from June 1, 1971 to May 31, 1973. The work was completed and the respondent was paid his bills. Subsequently, the internal audit party of the Corporation pointed out that excess payment of money had been made tor-the contractor. Three amounts viz. Rs. 16,301.49, Rs. 9.19 and Rs. 76.80 were pointed out as excess payments. A notice was given to the contractor to refined the amount of excess payment but he did not comply. The Corporation also claimed interest' at the rate of 12 per cent per annum from that contractor on this amount. As the contract contained a clause which provided that all disputes, and differences arising out of or in any way touching or concerning the agreement shall he referred to arbitration of a Arbitrator to be appointed by the Managing Director of the Food Corporation of India, the Corporation filed an application under Section 20 of the Act in the Court of District Judge, Churu, for the tiling of the original agreement in the court and forget erring the dispute to the Arbitrator to be appointed by the Managing Director of the Food Corporation of India.

3. The application was contested by the Contractor. He denied that any excess payment was made to him. It was rather stated that the Corporation was un-lawfully with-holding the amount of security of Rs. 3,000/- deposited by him. It was pleaded that as no dispute or difference arose between the parties during the period of agreement, the Corporation was not entitled to have the matter referred to Arbitration. It was averred that the agreement was for 2 years. The said period had expired and, as such, the agreement itself having ended, no proceedings in pursuance of that agreement could be taken after the expiry of the period.

4. The District Judge, by the judgment dated Sept. 10, 1981, dismissed the application. The learned Judge found that though the dispute existed between the parties, the period of agreement itself having expired on March 31, 1973, the clause in the agreement relating to arbitration could no longer be enforced. According to the learned District Judge, the application was not maintainable after the expiry of the period of contract.

5. Aggrieved by the aforesaid judgment of the learned District Judge, the Food Corporation of India, has filed the present appeal in this Court.

6. I have heard learned Counsel for the parties. Mr. D.S. Shishodia, counsel for the appellant, has contended that the arbitration clause survive even after the expiry of the period of contract and the learned District Judge was in error in dismissing the application on the ground of being not maintainable after the period for the performance of the contract came to an end.

7. The question for consideration in this case is whether the arbitration clause of the contract ceased to exist on the expiry of the period of contract. The period of contract was 2 years from June 1, 1971 to May 31, 1973. To decide the question whether the arbitration clause would survive even after the expiry of the period of contract, it would be necessary to refer to the arbitration clause. In the contract it is Clause XIX, which reads as under:-

"XIX. Arbitration. - All disputes and differences arising out or in any way touching or concerning this agreement whatsoever (except as to any matter the decision of which is expressly provided for in the contract) shall be referred to the sole arbitration of any person appointed by the Managing Director of the Food Corporation of India. It will be no objection to any such app