The main legal point established in the judgment is the interpretation and application of the Arbitration Act 1940, specifically regarding the arbitrability of disputes and the influence of specific contract clauses on the court's decision.

( 1 ) IS the decision of a party to an arbitration contract about non- arbitrability of a dispute (excepted matters under the contract) final between the parties? At what stage, can objections regarding non-arbitrability of a dispute be taken? These are some of the interesting questions involved in this case.

( 2 ) NORTHERN Eastern Railway, Gorakhpur (the Railways) was constructing bridge over Kosi river. They entered into contract on 3rd November 1981 with M/s Madnani Construction Corporation (Pvt) Limited (the contractor) for constructing bridge island no. 13 and 14. There were special conditions in the contract (the SCC) and it states that General Conditions of Contract and standard specification of the Northern Eastern Railways (the GCC) shall form a part of this contract. This construction was to be completed by 15th February 1982. After completion, some payments were made to the contractor but were received by him under protest. The contractor served a notice dated 16. 11. 1983 for appointment of an arbitrator to settle the dispute. The General Manager of the Railways (the GM) rejected it on 24th March 1986 on the ground that the dispute was non-arbitrable as it fell under excepted matters of the contract.

( 3 ) THE contractor filed an application on 18th August 1987 under section 20 of the Arbitration Act 1940 (the Act) for appointment of an arbitrator. This application was transferred on 21st February 1990 to the court of JSCC/additional civil Judge (the court below ). The court passed an order on 2. 3. 1990 that File received, put up on the date fixed. Subsequently the court appointed one Sri BN Shukla, Advocate as an arbitrator on 31. 5. 1991. The Railways filed an FAFO no. 534 of 1991 (the earlier FAFO) against this order. It was dismissed on 27. 8. 1991. The arbitrator gave his award on 13. 4. 1992 holding that the Railways should pay an amount of Rs. 4,48,873. 22 alongwith compoundable bank interest prevalent at that time from 16. 11. 1983 to 21. 3. 1992.

( 4 ) THE contractor filed an application on 8. 5. 1992 under section 17 of the Act for pronouncing judgment and making decree according to the award. The Railways filed application under section 30 read with section 33 (Section 30/33) of the Act before the Civil Judge on 20th May 1992 for setting aside the award. They also filed objections on 24th August 1992 against the application filed by the contractor under section 17 of the Act. The Railways filed an application before the District Judge for transfer of the application filed by the contractor under section 20 of the Act under section 24 of Civil Procedure Code. It was dismissed on 13th November 1992. The Railways filed an application on 23rd November 1992 before the court below for summoning their application under section 30/33 of the Act from the court where it was filed. This was objected to by the Contractor on the same date. However, the court below summoned it and not only rejected it but also rejected their objections against the application under section 17 of the Act. The Court below by its order dated 1. 12. 1992 also pronounced judgment according to the award and decreed interest at the rate given by the Bank from the date of the award till actual payment.

( 5 ) WE have heard counsels for the parties. Following points arise for determination: (I) Whether the court below had jurisdiction to decide the case? (ii) Whether application of the Railways under section 30/33 of the Act and their objections against the application of the Contractor u/s 17 of the Act were rightly rejected? (iii) Whether the decision of the General Manager dated 24. 3. 1986?rejecting request for appointment of Arbitrator on the ground that dispute fell under excepted matters?is final between the parties? (iv) Whether the Railways is entitled to raise objections regarding excepted matters (non-arbitrability of the dispute) at the stage of application under section 20 of the Act? (v) Whether the dispute rel