R.L. Khurana, J,—This order will dispose of the following preliminary issue: "Whether a dispute can be referred to arbitration by the defendant during the pendency of the suit without taking recourse to Section 8 of Arbitration and Conciliation Act, 1996? If so, its effect?"

2. The plaintiff who is Class-A Contractor, was awarded vide four separate agreements No. 60 of 1998-99, 34 of 1999-2000,1 of 2002-2003 and 3 of 2002-2003, the execution of the following works: (i) Improvement and widening of PCM road Km. 26/500 to 35/00 (SH: C/O roadside structures and cross drainage work, culverts, retaining wall and breast-wall; (ii) Improvement and widening of narrow and low grade section of PCM road NH 20 Km. 26/500 to Km.41/500 (SH: Providing and laying earth/gravel filling behind R/wall and culvert beyond 60 cm. boulder filling in Km.26/500 to 39/00; (iii) Improvement and widening of narrow and low grade Section of PCM road NH 20 Km. 26/500 to Km.35/00 (SH: Supply of stone and gravel); and (iv) Improvement and widening of narrow and low grade section of PCM road NH 20 Km. 26/500 to Km.39/00 (SH: supply of stone and gravel.

3. All the four agreements contained an arbitration clause in the following terms: "Except where otherwise provided in the contract all questions and dispute relating to the meaning of the specifications, designs, drawings and instructions hereinbefore mentioned and as to the quality of workmanship of materials used on the work or as to any other question, claim right matter or thing whatsoever, in any way arising out of are relating to the contract designs, drawings specifications, estimates, instructions, orders or those conditions or otherwise concerning the works or the execution of 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 Engineer-in Chief/ Chief Engineer, Himachal Pradesh Public Works Department. It will be no objection to any such appointment that the arbitrator so appointed is a Government servant, that he had to deal with the matters to which the contract relates and that in the course of his duties as Government servant he had expressed views on all or any of the matters in dispute of difference. The arbitrator to whom the matter is originally referred being transferred or vacating his office or being unable to act for any reason, to Engineer-in-Chief/Chief Engineer, Himachal Pradesh Public Works Department at the time of such transfer vacation of office or inability to act, shall appoint another person to act as arbitrator in accordance with the terms of the contract. Such person shall be entitled to proceed with the reference from the stage at which it was left by his predecessor. It is also a term of this contract that no person other than a person appointed by the Engineer-in-Chief/ Chief Engineer, Himachal Pradesh Public Works Department should act as arbitrator and, if for any reason, that is not possible the matter is not to be referred to arbitration at all. In all cases where the amount of the claim in dispute is Rs. 50,000-00 (Rupees fifty thousand) and above the arbitrator shall give reasons for the award. Subject as aforesaid the provisions of the Arbitration Act, 1940 or any statutory modification or re-enactment thereof and the rules made thereunder and for the time being in force shall apply to the arbitration proceeding under this clause. It is also term of the contract that the party invoking arbitration shall specify the dispute or disputes to be referred to arbitration under this clause together with the amount or amounts claimed in respect of each such dispute. It is also a term of the contract that if the contractor(s) 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 Government that the bill is ready for payments, the claim of contractor(s)