JUDGMENT - S.M. JHUNJHUNUWALA, J. :---By this suit, the plaintiffs seek an order under section 20 of the Arbitration Act, 1940 (for short, the Act) to file the Arbitration agreement in this Court as also an order of reference of plaintiffs claim to arbitration in accordance therewith. 2. The Western Railway Survey and Construction Department through the Executive Engineer (S C) (Vasai Bridge) Churchgate, Bombay had by a Tender No. XEN(C) VB/ 6 invited open tenders for the Earthwork for embankment with contractors own earth in filling from Ch. (-)546 M to Ch. (-)1410 M in Bhayander Yard (Loop Lines) in connection with construction of Railway Bridge Nos. 73 75 on Vasai Creek. On 4th October, 1985 the plaintiffs tender was accepted by the defendants and a Contract Agreement bearing No. XEN(C) VB/CCG/23 dated 15th October, 1985 was duly executed between the plaintiffs and the Executive Engineer (S C) Vasai Bridge, Western Railway, Churchgate, Bombay, for and on behalf of the President of India for performance of the work of the said Tender. The General Conditions of contract corrected upto printed/advance correction Slip No. 79 dated 14th June, 1985 and the specifications of the Western Railway contained in the works Hand Book Part III corrected upto printed/advance correction slip No. 2 dated 30th October, 1984 and Sanitary Works Hand Book corrected upto date 1977 edition and the Schedule of Rates of the Western Railway Part I corrected upto date 1984 edition and Schedule of Rates Part II corrected upto date 1984 edition formed part of the said contract. The said work was completed on 12th April, 1986. The plaintiffs had signed the final bill in respect thereof on 5th June, 1986 but by their letter dated 9th June, 1986, the plaintiffs had placed on record that the final quantities computed and billed by the defendants were far less than the quantities done by the plaintiffs. By their letter dated 18th June, 1986, the defendants refuted the said contention of the plaintiffs. By their letter dated 20th June, 1986, the plaintiffs demanded refund of the security deposit from the defendants. By their further letter dated 28th July, 1986, the defendants replied to the plaintiffs that the plaintiffs were adequately paid and the quantities computed by the defendants were, correct. By their letter dated 20th June, 1986, the plaintiffs demanded refund of the security deposit from the defendants. By their further letter dated 28th July, 1986, the defendants replied to the plaintiffs that the plaintiffs were adequately paid and the quantities computed by the defendants were, correct. By their letter dated 29th July, 1986, the plaintiffs again called upon the defendants to furnish the cross-sections of each and every chainage where the earthwork was done and the quantities so computed chainagewise were also required to be given on the said cross-section. By their letter dated 18th August, 1986 addressed to the Deputy Chief Engineer (S C), Vasai Bridge Project of the defendants, the plaintiffs preferred 14 claims for different sums against the defendants as mentioned therein. By the letter dated 1st September, 1986 addressed to the plaintiffs, the Deputy Chief Engineer (S C) Vasai Bridge, project of the defendants replied to the plaintiffs rejecting all the claims of the plaintiffs as mentioned therein. By their Advocates letters dated 6th October, 1986 addressed to the Chief Engineer (S C) of the defendants, the plaintiffs reiterated all their final claims and called upon him for taking final decision under Clause 63 of the General Conditions of Contract. By the letters dated Nil May 1987 addressed by the Chief Engineer (C) South of the defendants to the plaintiffs, the defendants rejected all the claims of the plaintiffs stating that neither of them was tenable. By their Advocates letters dated 14th March, 1987 addressed to the Chief Engineer (S C) of the defendants, the plaintiffs invoked arbitration as per the arbitration agreement contained in the General Conditions of Contract forming part of the said contract and desired that the matters of disputes and difference as mentioned in the plaintiffs Advocates said letter dated 6th October, 1986 be referred to arbitration. By the letter dated 14th July, 1987 addressed by the Chief Engineer (Construction) South of the defendants, the defendants informed the plaintiffs that since neither of the claims preferred by the plaintiffs was tenable, the question of making reference to arbitration did not arise. 3. By the letter dated 14th July, 1987 addressed by the Chief Engineer (Construction) South of the defendants, the defendants informed the plaintiffs that since neither of the claims preferred by the plaintiffs was tenable, the question of making reference to arbitration did not arise. 3. According to the plaintiffs, the claims made by the plaintiffs against the defendants directly arise out of or in relation to the said work executed by the plaintiffs under the said contract and in view of existence of the agreement between the plaintiffs and the defendants for reference thereof to arbitration, the same are referable to arbitration. Since the defendants have declined to refer the claims of the plaintiffs to arbitration, the present suit has been filed under section 20 of the Act for filing the Arbitration Agreement in this Court. 4. Ms. Shah, learned Counsel for the defendants, has submitted that the claims made by the plaintiffs against the defendants fall under the category of "excepted matters" and as such the question of making reference thereof to arbitration does not arise. It is correct that if the plaintiffs claims fall in the category of "excepted matters", in view of the General Conditions of Contract binding on the parties hereto, the same would not be referrable to arbitration. However, as the defendants had initially rejected the plaintiffs claims on merits and not on the ground that the same fall in the category of "excepted matters" the defendants are no more entitled to decline the reference thereof to arbitration on ground that the same fall in the category of "excepted matters". Subsequent plea of plaintiffs claims falling in the category of "excepted matters" on behalf of the defendants is an after-thought on the part of the defendants. In the earlier case between the parties hereto i.e. in the Arbitration Suit No. 2222 of 1985 decided on 7th January, 1988, Pendse, J., of our Court held that when after the institution of the suit, the defendants had informed the plaintiffs that the claims made fall within the category of "excepted matters" the plaintiffs were entitled to have the arbitration agreement filed in Court and relief under section 20 of the Act since such plea on the part of the defendants was an after thought. Similarly, in the case (Elite Construction Company v. Union of India)1, Arbitration Suit No. 453 of 1979 decided on 17th January, 1980 and 25th January, 1980, Pendse, J., has held that unless the Railways determine the claim of the contractor within a reasonable time holding that the claim falls within the category of "excepted matters", it is not permissible thereafter to deprive the plaintiffs from the right of reference to arbitration. Once the decision to reject the claim on merits is taken, then it is no longer open for the Railways to claim that the claim of the plaintiffs also fall within the category of excepted matters. In the case of (Messrs. Bhawani Construction Co. v. Union of India)2, Appeal No. 820 of 1988 from Arbitration Suit No. 454 of 1979 decided on 20th April, 1992 the Division Bench of our Court while interpreting Clause 45 of the General Conditions of Contract has held that it is only when measurements are taken in accordance with Clause 45 that they are excluded from the ambit of the arbitration clause. It is further held that in fact, Clause 45 provides for an objection which the contractor may take to any measurements which are recorded and it also provides for a forum in which such an objection can be examined. In the facts of the case, it was held that even if the claim related to measurements, it could not be excluded from the arbitration Clause by resorting to clause 45 and was required to be examined by the arbitrator as it did not fall in the category of excepted matter. 5. In the present case, in reply to the said letter dated 18th August, 1986 addressed by the plaintiffs to the Deputy Chief Engineer (S C) of the Defendants, the Deputy Chief Engineer (S C) of the defendants did address a letter dated 1st September, 1986 intimating the plaintiffs that the plaintiffs claim against the defendants were rejected on merits. It is not mentioned in the said letter that the plaintiffs claims were rejected as the same fell in the category of excepted matters. Moreover, the final bill which was signed on 5th June, 1986 was disputed by the plaintiffs vide their letter dated 9th June, 1986 that is with a period of less than seven days. It is not mentioned in the said letter that the plaintiffs claims were rejected as the same fell in the category of excepted matters. Moreover, the final bill which was signed on 5th June, 1986 was disputed by the plaintiffs vide their letter dated 9th June, 1986 that is with a period of less than seven days. By the said letter, the plaintiffs did place on record that the final quantities computed and billed by the defendants were far less than the quantities done by the plaintiffs. When the final bill dated 5th June, 1986 has been disputed by the plaintiffs vide their said letters dated 9th June, 1986, it cannot be said that the measurements in respect of the work carried out by the plaintiffs under the said contract were accepted by the plaintiffs or that the plaintiffs claims fall under the category of excepted matters. In the facts of the case, even if the plaintiffs claims relate to measurements, the same cannot be excluded from the arbitration clause by resorting to Clause 45. The plaintiffs claims will have to be examined in arbitration as the same do not fall in the category of excepted matters. 6. Hence, the plaintiffs are entitled to the relief of having the arbitration agreement filed in this Court and an order of reference in accordance therewith. The suit is, therefore, decreed in terms of prayers (a) and (b). The parties are directed to appoint arbitrator in accordance with the arbitration agreement on or before 12th December, 1995. In the event of arbitrator being not appointed on or before 12th December, 1995, the plaintiffs are at liberty to apply to this Court for further directions regarding appointment of arbitrator. In the facts of the case, there shall, however be no order as to costs of the suit. Petition allowed. *****