JUDGMENT Banerjee, J.: This appeal at the instance of the State of Assam arises out of an application under section 20 of the Arbitration Act. The relevant facts for our purpose are that the respondent company submitted a tender in respect of public notification inviting tenders for design and construction or re-construction of five bridges, namely, 7/1, 21/2, 22/2, 28/1 and 32/2 on North Trunk Road in the State of Assam under North Trunk Road Division and Mangaldoi Road Division of P.W.D., Assam. It is alleged that the said tender was accepted by the competent authority and the contract was entered into by and between the plaintiff and the defendant no. 1 for design and construction of the aforesaid bridges. In the said contract, it is alleged, clause 25 provides for arbitration of any dispute arising out of the execution of the contact. It is further stated that the company respondent could not complete the execution of the contract and the contract was terminated. The company did not challenge the termination of the contract but only applied for arbitration in respect of works done by the company. As the matter was not referred to the arbitrator, the application was made before the Second Court of Subordinate Judge, Alipore, 24 Parganas and as the application was filed the State of Assam showed cause inter alia, contending that the Court of Subordinate Judge has no jurisdiction in the matter to which the agreement relates but only the Court at shillong in the State of Assam has this jurisdiction. Secondly it is contended that as 80 notice under section 80 was given, the application under section 20 of the Act is not maintainable and thirdly it is argued by Mr. Dhar on behalf of the appellants that the said clause 25 of the conditions of contract of the Agreement is not an arbitration clause as this is only binding on the contractor and not on the other parties, that is, the State of Assam or the Executive Engineer and also they have no right to refer the matter to the arbitrator and as such there is no mutuality in the contract and therefore the arbitration has no application or for that matter it is not the arbitration clause. In our opinion in view of the Supreme Court judgment reported in (1) Hakam Singh v. Gammon (India) Ltd, AIR 1971 SC 740 it must be held that the court has jurisdiction to entertain the application if the part of cause of action arose within the jurisdiction of the Court. It must be held that in order to consider the jurisdiction of the Court in the matter of application under section 20 of the Act it has been specifically held that section 20 of the Code of Civil Procedure applies to the Arbitration proceeding also. In the fact of the case it appears that a part of the cause of action certainly arose within the jurisdiction of the Court deciding the application under section 20 of the Act. The acceptance of the tender was communicated to the petitioner at 13C, Deodar Street, Calcutta, and the payment under the said agreement was made at the State Bank of India, Gariahat Branch and furthermore the Bank guarantee was already given at the State Bank of India. In the circumstances therefore, in our opinion, the part of cause of action upon which the agreement relates arose within the jurisdiction of the Court which decided the matter and therefore there is no merit in the contention of Mr. Dhar on this score. 2. The next question which Mr. Dhar argued is that the notice under section 80 is required for the purpose of the proceeding under section 20 of the Arbitration Act. This question was considered in the cases reported in (2) AIR 1947 Sind, 147 (Firm Ramchand & Sons v. Governor-General) (3) AIR 1933 Lahor, 374 (Gian Singh v. Alma Ram), and (4) AIR 1966 Cal., 259. Mr. Dhar argued that under section 20(2) of the Arbitration Act it is provided that an application shall be in writing and shall be numbered and registered as a suit between one or more of the pal ties interested or claiming to be interested as plaintiff or plaintiffs and the remainder as defendant or defendants if the application has been presented by all the parties or, if otherwise, between the applicant us plaintiff and the other parties as defendants. It has been held that under section 20 (2) of the Arbitration Act it is provided that an application that an agreement be filed in Court shall be numbered and registered as a suit, so an application is a plaint in a suit and therefore attracts section 80 of Civil Procedure Code and as such notice under section 80 of the Code of Civil Procedure is to be given. Under section 22A of the Arbitration Act it is provided that the agreement shall be filed in the Court being under Civil Rules and Orders, Vol-1, 528 Clause 47 and therefore the notice under section 80 of the Act is imperative. In our opinion, this argument cannot succeed. It has been held in the case reported in AIR 1947 Sind, 147 repelling a similar argument advanced as follows :- "But in my view, it is not until the proceeding is actually before the Court that S. 41, Arbitration Act and the provisions of the Civil Procedure Code apply; for were I to hold otherwise, so soon as an application to file an agreement is brought before the Court, the Court would dismiss the application, because the notice required under S.80 Civil P.c. had not been given. But S. 80, Civil P.C., would not apply until the proceeding came before the Court. So that it would appear that if I accepted the interpretation of S. 41 put upon it by the learned Subordinate Judge, the pr9visions of S. 20, Arbitration. Act and other sections of the Act and the purpose of the Act would be frustrated S. 80, would not apply until the proceeding came before the Court and when the proceedings came before the Court and S. 80, Civil P. C. applied the application to file the agreement would be dismissed so the p-arties to the dispute would get no further." The Hon'ble Davis, C.J. of the Lahore High Court relied upon the case reported in (5) AIR 1932 Lahore, 374 (Secretary of State v. Kundan Singh) in which the learned Chief Justice Shadi Lal dealt with the question of notice under section 80 of the Code of Civil Procedure as applicable to arbitration proceedings. The learned Chief Justice is clearly of opinion that section 80 of the Civil Procedure Code applies only to a suit; there is a reference in section 80 of the Civil P.C., to the plaint which supports the inference that it applies only to a suit and it may be said that a notice under section 80 of the Civil P.C. is rightly to be given to the Secretary of State when he is made defendant in a suit, for, otherwise, he would be taken by surprise, there can be no question of surprise in the matter of an agreement to which he is already a party and which provides for an arbitration in case of disputes. In the case reported in (4) SPC Engineering Co v. Union of India, AIR 1966 Cal. 259 it has been held that no notice under section 80 of the Civil Procedure Code is required in matter coming under section 20 of the Arbitration Act. 3. The last question which has been agitated by Mr. Dhar is that there is no mutuality in clause 25 of the agreement inasmuch as, both the parties to the agreement have no right to go to the arbitration but only the contractor who can go to refer the matter to the arbitrator and that the same is binding on the contractor and not binding on the other parties. Mr. Dhar relied upon the case reported in (6) AIR 1971 All 270 (State of U. P. v. Padam Singh) and argued that the contract is only binding on the contractor and there is no mutuality at all as an arbitration clause. 4. Mr. Gupta on the other hand, contended that clause 25 is an arbitration clause and has the binding character of the decision of the Chief Engineer but it is on both the parties and not only on the contractor. If the word "contractor" is read separately there cannot be any doubt as argued by Mr. Gupta that this an arbitration clause. For the purpose of the decision of this case, clauses 23 and 25 are relevant which are as follows :- "23. If the word "contractor" is read separately there cannot be any doubt as argued by Mr. Gupta that this an arbitration clause. For the purpose of the decision of this case, clauses 23 and 25 are relevant which are as follows :- "23. A certificate of the Executive Engineer, or an award of the referee hereinafter referred to as the case may be, showing the final balance due or payable to the contractor is to be conclusive evidence of the works having been duly completed and that the contractor is entitled to receive payment of the final balance, but without prejudice to the liability of the contractor under the provisions of clause 13. 25. Provided always that in case any question, dispute or difference shall arise between the Executive Engineer and the contractor as to what additions, if any, ought in fairness to be made to the amount of the contract by reason of the work being delayed through no fault of the contractor, or by reason or on account of any directions or requisitions of the Executive Engineer involving increased cost to the contractor beyond the cost properly attending the carrying out of the contract according to the true intent and meaning of the signed drawings and specification, or as to the works having been duly completed, or as to the construction of those presents or as to any other matter or thing arising under or out of this contract except as to matters left during the progress of the works to the sole decision or requisition of the Executive Engineer under clause, 2, 5, 11 and 12. in case the contractor shall be dissatisfied with any certificate of the Executive Engineer under clause 8 or under the provision in clause 17 or in case the Executive Engineer shall withhold or not give any certificate, to which the contractor may be entitled then such question, dispute or difference or such certificate or the value, or matter which should be certified as the case may be is to be from time to time referred to the Chief Engineer, Assam, whose decision shall be final, conclusive, and binding on the contractor." Clause 25 makes it clear, in our opinion, that there is mutuality in the contract and both the parties to the contract referred the disputes for the arbitration to the Chief Engineer. In our opinion, this clause must be referred ail arbitration clause read with clause 23 of the agreement. In State of U. P. v. Padam Singh, AIR 1971 All., 270 it has been held that the essential characteristic of arbitration is the binding character of the decision of the arbitrator on the parties before him. The very purpose of a arbitration is to resolve disputes between the parties to the agreement. Where the decision of a person is binding on only one of the parties and not on all the parties to the dispute, it cannot said that the function, which the person giving the decision is exercising is arbitral in character. The said case is, howaver, clearly distinguishable. It is stated in clause 13 of the said agreement that the decision of the Saperintending Engineer shall be final conclusive and binding on all parties to the contract. By the first part of clause 23, the Superintending Engineer is empowered to decide disputes between the parties relating to the meaning of the specifications, designs, drawings and instructions mentioned in the earlier clauses of the agreement, and other part says that his decision will be final and conclusive. Their Lordships considering that provision held that the essential characteristic is absent in the second part of clause 23. In our opinion, however, this case is clearly distinguishable in the facts of this case. From reading clause 25 with clause 23 it is quite clear that the decision shall be final and conclusive and binding on all the parties to the contract. Moreover clause 7 of the Appendix to the Arbitration Clause makes it clear that the award will be binding on all the parties. Section 3 of the Arbitration Act provides that an arbitration agreement, unless a different intention is expressed therein, shall be deemed to include the provisions set out in the First Schedule in so far as they are applicable to the reference. The word "arbitration agreement" has been defined in section 2(a) of the Arbitration Act to mean a written agreement to submit present or future differences to arbitration, whether an arbitrator is named therein or not. In our opinion section 3 of the Arbitration Act provides the implied clause in the 1st Schedule and clause 7 of the First Schedule to the Arbitration Act provides that this a binding force on the, parties to the agreement. In our opinion section 3 of the Arbitration Act provides the implied clause in the 1st Schedule and clause 7 of the First Schedule to the Arbitration Act provides that this a binding force on the, parties to the agreement. The First Schedule to the Arbitration Act only provides how the arbitration should proceed and how the arbitrator to be appointed and the time limit etc. etc. It also provides that the award shall be final and binding on the parties and persons claiming under them respectively. In our opinion clauses 23 and 25 of the agreement give power to both the parties to the matter to the arbitrator and any award made will be binding on both the parties. Mr. Dhar argued on facts and that the Additional Chief Engineer and Chief Engineer have already made some orders and there cannot be an arbitration by the Chief Engineer at all. The respondent agreed in the clause 25 as also in the application under section 20 of the Arbitration Act to refer the dispute to the arbitrator. We found however that the clause 23 read with clause 25 referred the matter to the arbitration. If the arbitrator by any means cannot act, the Court has the power to supply the vacancy but it is not case of the respondent. 5. In the case reported in (7) 1966(1) All England Law Reports, 349 at 351 it was held by the Court of appeal speaking through Davies, J. : that it is necessary in an arbitration clause that each party shall agree to refer disputes to arbitration; and it is an essential in gradient in that either party may in the event of a dispute arising refer it in the provided manner to arbitration. In other words, the clause must give bilateral rights of reference. We respectfully agree with the observations but in our opinion clause 23 and 25 read together provide that each party has agreed to refer the dispute to the arbitration and we have held that the award by the referee is binding on both the parties. Another point was argued by Mr. Dhar that the earlier suit which was filed by the respondent against the State Government and in which the State of Assam is impleaded as the party bars the present suit: In our opinion, there is no substance in this contention. Another point was argued by Mr. Dhar that the earlier suit which was filed by the respondent against the State Government and in which the State of Assam is impleaded as the party bars the present suit: In our opinion, there is no substance in this contention. In the said suit only the injunction was prayed against the State Government Nothing was decided in so far as the dispute referred to the arbitration is concerned. We say however that the learned Judge is wholly wrong in awarding the cots in this matter. 6. In view of the matter, the appeal is allowed to the extent that the award of costs of the application is set aside. The other orders passed by the learned Judge stand. The appeals therefore, succeed to the extent as indicated above. There will be no order as to costs. Maitra, J.: I agree.