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1. This Appeal assails the Order of the learned Single Judge dated 1.8.2007 referring the disputes and claims made by the Plaintiff, namely, Hindustan Steel Works Construction Limited, who is the Respondent before us, to the Permanent Machinery of Arbitrators (PMA). It is noteworthy that both the parties are „public sector enterprises‟ and hence ought to have respected and implemented the legal regime set-down by the Supreme Court in ONGC -vs- Collector of Central Excise, 1992 Supp (2) SCC 432. It is indeed a matter of regret that the Appellant, who is the Defendant in the Suit, had elected not to do so and apart from spending large sums of monies in frivolous and needless litigation, has exhausted a large chunk of time available to the Courts, which we feel could have been better utilized.

2. In the impugned Order, the learned Single Judge has recorded the existence of an Arbitration Clause in the General Conditions of Contract (GCC) which empowers the Chairman, National Airport Authority (NAA) or the Administrative Head of the NAA to appoint the Sole Arbitrator. It appears that before the filing of the Suit, the Plaintiff had made repeated efforts to have the disputes referred to Arbitration, all of which met with no fruition due to the obduracy on the part of NAA. In the first instance, the Appellant/Defendant had called upon the Plaintiff to make specific claims and when this was done, the request for arbitration was declined on the ground that since more than ninety days had elapsed, the request for arbitration contained in Clause 25 of GCC has been rendered ineffectual. At this juncture, the Plaintiff addressed a communication dated 10.2.2005 to the Secretary, Department of Public Enterprises, requesting for a Reference of the claims to the PMA which declined to intervene on the specious ground that the Arbitration Clause did not contemplate a Reference of disputes to the PMA. If ONGC is properly and comprehensively understood, NAA should have welcomed the PMA as the forum for a resolution of its disputes as an alter ego, as it were, to the Cabinet Committee of Disputes. We have been informed that the PMA has, in the interregnum thereafter, issued notice to the parties hereto for entering and completing the arbitration process. A suggestion, however, was made by the PMA that the parties may agree to fresh Arbitration Clause empowering the PMA to enter upon the Reference. The Plaintiff‟s request to this effect was declined by the Appellant/Defendant, leaving the former with no alternative but to file a suit for the recovery of Rupees 2,95,75,162/-.

3. In response to the Plaint, the Appellant made a complete turn around and has raised a Preliminary Objection pertaining to the alleged non-maintainability of the suit in view of the existence of the Arbitration Clause. The submission made before the learned Single Judge was that it was open to the Plaintiff/Respondent to invoke the provisions of Section 11(b) of the Arbitration Act, 1996 (for short „A&C Act‟) for the purposes of appointment of an arbitrator. In the impugned Order it has been opined that once a Defendant has repudiated the arbitration agreement, the Plaintiff could pursue either of the two options - firstly, to file a suit for recovery and secondly, to invoke Section 11 of the A&C Act. The learned Single Judge has applied the decisions of the Supreme Court in Datar Switchgears Ltd. -vs- Tata Finance Ltd., (2000) 8 SCC 151 and S.B.P. & Co. -vs- Patel Engineering Ltd., (2005) 8 SCC 618 to arrive at the conclusion that the appointment in terms of Section 25 of the GCC had been deliberately delayed, leaving it to the Court to adopt the option of appointing an arbitrator itself. Implementing the dicta in P. Anand Gajapathi Raju -vs- P.V.G Raju, (2000) 4 SCC 539, the learned Single Judge has referred the parties to arbitration in respect of all the claims of the Plaintiff/Respondent under the aegis of the PMA.

Kameshwar Prasad Singh, (2000) 9 SCC 94, can be of no avail to the Appellant. In any event, what ought not to be lost sight of is the fact that the learned Single Judge had referred the parties to the arbitration of the PMA, which, in the tenor of the ONGC decision, is best and ideally suited to resolve the disputes between the public sector enterprises. Furthermore, on the failure of the Appellant to appoint an arbitrator and in light of its reliance on the Arbitration Clause in defence to the suit for recovery filed by the Respondent, the learned Single Judge was fully empowered to appoint an arbitrator, which is precisely what it has done in the present case.