A clause providing for the reference of disputes to a named individual, whose decision is to be final, constitutes a valid arbitration agreement, even if the words "arbitrator" or "arbitration" are not used.

I.D.Dua, J.

1. This revision has been placed before us in pursuance of my order, dated 19-3-1965.

2. The relevant facts giving rise to this revision briefly stated are that Messrs. Ram Lal Jagan Nath (petitioner-firm in this Court) had entered into various contracts with the State of Punjab for the construction of houses and bridges and also for putting earth along the Second Bhakra Main Line. Disputes having arisen between the parties regarding payment in several cases, the contractors approached the Settlement Committee, Patiala, for arbitration. In the case before us, however, the dispute relates to work-orders No. 1-6/259, dated 21-11-1958, No. 98-100/37, dated 21-1-1954, No. 1-2/54, dated 21-1-1954 and No. 88-95/81, dated 12-12-1954. In this case, according to the departments allegations, over-payments were made to the contractors and Shri B.S. Bansal, Superintending Engineer, was approached by the State for arbitration. The petitioner-firm of contractors challenged this reference on various grounds including the plea that there is no valid arbitration agreement between the parties, and it is indeed this question which was raised before me sitting in Single Bench and which is before us for determination. The arbitration clause is printed at the back of the Work Order Form. It is desirable to reproduce all the conditions printed at the back of the Work Order Form because the learned counsel for the petitioner has also tried to build an argument on the location of the condition on which reliance is placed in support of the reference to the arbitration:-

- "CONDITIONS

1. The officer in charge of the work will accept or reject the work executed, according to his judgment.

2. The work will be measured up and paid for from time to time as the officer in charge may deem necessary, usually once a month when the progress is satisfactory.

3. This order can be cancelled and the work stopped at any time by the officer in charge of the work or by any officer superior to him in authority. Similarly, the contractor is at liberty to cease work at any time.

4. The work shall be executed strictly according to the specification attached.

5. In matter of dispute the case shall be referred to the Superintending Engineer of the Circle, whose order shall be final.

6. All work executed shall be paid for according to measurements taken by or under the orders of the officer in charge of the work, and not according to the quantity given in any estimate."

The main argument on which stress has been laid on behalf of the petitioner is that condition No. 5 does not in law constitute an arbitration agreement and in support of this submission, reliance has largely been placed on an unreported Bench decision of this Court in State of Punjab V/s. Shri Jagan Nath Vig, F. A. O. No. 47 of 1957, decided on 24-4-1959 (Punj) by D. Falshaw, J. (as he then was) and Mehar Singh, J. There is no doubt that this decision is on all fours with the present case and is completely in favour of the petitioners submission. It was precisely identical clause which was held by the Division Bench in that case not to amount to an arbitration agreement. If this decision is correct, then obviously this revision petition must succeed, but the learned counsel for the respondents submits that this decision does not lay down the law correctly and requires re-examination. According to him, this decision runs counter to an earlier Bench decision of the Lahore High Court in Governor-General in Council v. Simla Banking and Industrial Co. Ltd., AIR 1947 Lah 215, to which unfortunately, the attention of the Bench in this unreported case was not drawn. I may here reproduce the relevant portion of the judgment in Jagan Nath Vigs case, F. A. O. No. 47 of 1957, dated 24-4-1959 (Punj):-

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"In the other appeal I do not consider that it is necessary for us even to go into the question whether the decision of the lower Court that the work orders in the various suits do not constitute proper