JUDGMENT : 1. Special leave granted. 2. Heard counsel for the parties. The facts briefly stated are that the respondent, who was given a contract for construction of 140 Units, Double Storey. Type IV Quarters in Rail Coach Factory, Hussainpur, District Kapurthala by the Union of India, had agreed to an arbitration Clause, being Clause No. 64, which inter alia provided that, in the event of any dispute or difference between the parties to the contract as to the construction or operation of the contract, or the respective rights and liabilities of the parties on any matter in question, dispute or difference on any account, or as to the withholding by the Railway of any certificate which the contractor may claim to be entitled to, or if the Railway failed to make a decision within a reasonable time, then and in any such case, save the "excepted matters" referred to in Clause 63, the contractor, after 90 days but within 180 days of his presenting his final claim on disputed matters, shall demand in writing that the dispute or difference be referred to arbitration. Such demand was required to specify the matters which were in question, dispute or difference. Only such disputes or differences in respect of which the demand was made, could be referred to arbitration and none else. If the contractor did not prefer his specific and final claims in writing within a period of 90 days of receiving the intimation from the Government that the final bill was ready for payment, he would be deemed to have waived his claims and the Railway would be discharged and released from all liabilities under the contract in respect of these claims. It is, therefore, obvious from a plain reading of the arbitration Clause 64, that if any dispute arose between the parties in relation to the construction work or the operation of the contract, etc., the contractor had to, after 90 days but within 180 days of his presenting his final claim on disputed matters, demand in writing that the dispute or difference be referred to arbitration. When such a demand was made, a decision on the same had to be taken within a reasonable time. When such a demand was made, a decision on the same had to be taken within a reasonable time. Clause 64(3) further provided that a sole Arbitrator, who should be the General Manager or a Gazetted Railway Officer, be nominated by him in that behalf in cases where the claim in question is below Rs. 5 Lacs and the issues were not of a complicated nature. The Neural Manager would be the sole Judge to decide whether or not the issues involved were of a complicated nature. If the claim was of Rs. 5 Lacs or more, or was of a complicated nature, two Arbitrators who should be Gazetted Railway Officers of equal status, would be appointed as Arbitrators out of a panel of more than three names, one to be suggested by the contractor. This, in brief, was the clause in the contract to which the parties to the contract had agreed. There is no dispute before us that the nature of the dispute in respect of which the respondent-contractor invoked the arbitration clause was one falling within the terms of that clause. Now, under the contract, the work was to be completed within 12 months, i.e., by 24.3.89. It was not completed within that period and the time was extended upto 22nd July, 1989 by which time the work was expected to be completed. Since the progress of work was slow, reminders were sent to the respondent-contractor to ensure that the work was completed by the extended period. It is not necessary for us to go into the nature of the dispute between the parties but it would suffice to state that by a letter dated 7th September, 1989, sent by post, the respondent-contractor invoked the arbitration clause. Of course, the contention of the appellants is that the letter was ante-dated, but we need not go into that issue because, soon thereafter, the respondent-contractor moved the Court under Section 20 of the Arbitration Act, 1940 for appointment of an Arbitrator. To complete the narration of facts it may be mentioned that according to the appellants, the letter was sent on 7th September, 1989 but was despatched on 23rd September, 1989 and within two days thereafter, the application under Section 20 of the Arbitration Act was filed. The High Court has come to the conclusion that the letter was ante-dated. To complete the narration of facts it may be mentioned that according to the appellants, the letter was sent on 7th September, 1989 but was despatched on 23rd September, 1989 and within two days thereafter, the application under Section 20 of the Arbitration Act was filed. The High Court has come to the conclusion that the letter was ante-dated. But even if we were to proceed on the premise that the letter was posted on 7th September, i989 and the application was filed on 25th September, 1989, it cannot be said that the contractor waited for a reasonable time to enable the appellants to take a decision under Clause 64 of the contract. The question is whether the Court should have entertained the application under Section 20 of the Arbitration Act. 3. The learned Sub-Judge, First Class, Jalandhar, by his order dated 25th May, 1990, appointed one Shri I.C. Gupta, a retired Engineer-in-Chief, as a Sole Arbitrator notwithstanding the provisions in regard to the Arbitrator to be appointed in the event of a dispute or difference under the contract. The appellants therefore filed a First Appeal in the High Court of Punjab and Haryana, and a learned Single Judge of the High Court of Punjab and Haryana, and a learned Single Judge of the High Court, who heard the First Appeal, dismissed the same on 3rd June, 1994 upholding the order passed by the learned Sub-Judge, First Class, Jalandhar. A Letters Patent Appeal was filed questioning the decision of the learned Single Judge but on the appellants realising that it would not lie in view of Section 39 of the Arbitration Act, the same was withdrawn and the present Special Leave Petition came to be filed. There was, therefore, a delay which, in the circumstances, we thought proper to condone. 4. Section 20 of the Arbitration Act, 140 inter alia provides that where any persons have entered into an arbitration agreement before the institution of any suit with respect to the subject-matter of the agreement or any part thereof, and where a difference has arisen to which the agreement applies, they or any of them, instead of proceeding under Chapter II, may apply to a Court having jurisdiction in the matter to which the agreement relates, that the agreement be filed in Court. Such an application is required to be numbered and registered as a suit. Such an application is required to be numbered and registered as a suit. Such an application being registered, the notices have to go to the opposite parties requiring them to show cause. If the Court does not see sufficient cause, it shall order the agreement to be filed and make an order of reference to the Arbitrator appointed by the parties, whether in the agreement or otherwise, or, where the parties cannot agree upon an arbitrator, to an arbitrator appointed by the Court and thereafter the arbitration shall proceed in accordance with the provisions of the Arbitration Act so far as they can be made applicable. In the present case, the parties had agreed that in the event of any dispute or difference by and between them in relation to the construction or arising under the terms of the contract, the same shall be resolved through arbitration and the Arbitrator, one or more, as the case may be, would be those named in the contract. Clause 64 of the contract further provided that a reasonable time would be given to the Department on receipt of a demand from the contractor to nominate or appoint the the Arbitrator or Arbitrators. In the instant case, as the finding stands, the respondent-contractor after posting the letter on 23rd September, 1989, immediately filed the application under Section 20 of the Arbitration Act, 19400 on 25th September, 1989, perhaps even before the letter reached the Department. As pointed out earlier, even if one were to proceed on the premise that the letter was posted on 7th September, 1989 and the application was made on 25th September, 1989, it could not be said that the contractor had made the application after waiting for a reasonable time. Looking at it from any point of view, there can be no doubt that the respondent- contractor rushed to the Court rather too early, thereby depriving the Department of the opportunity to deal with his demand within a reasonable time. 5. Before we proceed to deal with the submissions made at the Bar, we must point out that contracts are entered into by parties to be kept and not to be breached. The Court should also endeavour to enforce the sanctity of contracts and should try to assist the party which seeks to enforce a contract rather than show indulgence in favour of the party which commits a breach thereof. The Court should also endeavour to enforce the sanctity of contracts and should try to assist the party which seeks to enforce a contract rather than show indulgence in favour of the party which commits a breach thereof. If contracts are allowed to be breached with impunity, the very object of entering into an agreement prior to the assignment of work to a contractor would be lost. We are, therefore, of the opinion that if the Court finds that a party has approached it after breaching the contract, it should not over-look the breach and show indulgence towards the party which is guilty of the breach. This is the premise on which we think that Courts must proceed when questions of enforcement of contracts or otherwise come up before it. In the present case, the parties had consciously entered into a contract for construction of certain quarters and the respondent-contractor had agreed that in the event of a dispute by and between the parties arising out of the terms of the contract or the construction work, that dispute would be settled through arbitration in the manner provided by Clause 64 and related clauses of the contract. With open eyes the respondent- contractor had agreed that in the event it becomes necessary to resolve the dispute through arbitration, the Arbitrator or Arbitrators, as the case may be, shall be those indicated by the contract. Even Sub-section (4) of Section 20 of the Arbitration Act enjoins that the Court should appoint the Arbitrators named in the contract unless there are special circumstances to depart therefrom. 6. In Government of A.P. v. K. Mastan Rao, (1995) Supp. 4 SCC 528, a three-Judge Bench of this Court was dealing with a case where the respondent-contractor had executed certain works in pursuance of a written agreement containing an arbitration clause providing for settlement of disputes between the parties by arbitration of three persons holding the post of the Chief Engineer, Srisailam Project, the Deputy Secretary to the Government, Finance Department, and the Director of Accounts, Sriramsagar Project. When a dispute arose between the parties, it was referred to them for settlement. The matter was, however, delayed whereupon the respondent-contractor moved the Court for appointing a single Arbitrator. When a dispute arose between the parties, it was referred to them for settlement. The matter was, however, delayed whereupon the respondent-contractor moved the Court for appointing a single Arbitrator. That application was opposed by the State Government but the learned Subordinate Judge overruled the objections, removed the panel of three Arbitrators, and appointed a retired Chief Engineer as the Sole Arbitrator to adjudicate the dispute. The High Court rejected the Revision Application and hence the State Government approached this Court for special leave to appeal. The respondent- contractor raised a preliminary objection on the ground that the State had participated in the proceedings before the Sole Arbitrator and a final Award had already been made and, therefore, this court should refuse to interfere. The State, on the other hand, contended that as far as it was concerned, it had promptly filed the Special Leave Petition and it could not be blamed for the delay that took place in this Court dispute the effort to have the matter listed. In the circumstances, if the Arbitrator, insisted on proceeding with the matter, the State was helpless and had no option but to cooperate after lodging a formal protest in writing. The preliminary objection was overruled by this Court and special leave was granted. After considering the matter and the submissions made at the Bar, this Court held that it was a fit case in which the arbitration should be entrusted to the incumbents of the three posts mentioned in the agreement. Accordingly, the Award made by the Sole Arbitrator was set aside and the matter went back to the three Arbitrators appointed in terms of the contract. This decision, in our opinion, clearly endorses the view that the sanctity of contract must be upheld and even if certain developments have taken place on account of the breach of that contract, those developments must be ignored. 7. The learned counsel for the respondent- contractor invited our attention to a decision of the Delhi High Court reported in M/s Greenland Foods Pvt. Ltd. v. Union of India, AIR 1973 Delhi 157, and contended that the application under Section 20 of the Arbitration Act should have been construed as an application to the Department for appointment of the Arbitrator as per the terms of the contract. In other works, the respondent-contractor contends that notwithstanding the fact that he had moved the application under Section 20 in total disregard of the arbitration clause of the contract, that application itself should have been construed as an application to the Department to appoint an Arbitrator and since the Department failed to do so, the Court was justified in appointing a Sole Arbitrator outside the terms of the contract. With respect, such a view would encourage breaches of contracts rather than adherence to contracts. We see no reason why the Court should assist the respondent-contractor who was guilty of breach of contract in filing the application with undue haste under Section 20 of the Arbitration Act. The second decision to which our attention was drawn, relates to the case of Prasun Roy v. Calcutta Metropolitan Development Authority & Anr., (1987) 4 SCC 217 . In our opinion, this case has no application because that was a case in which the named Arbitrator could not be appointed on account of an allegation of bias and the parties had participated in the proceedings before the Arbitrator without raising any objection whatsoever. It was, therefore, a case of a special type in which the Court's jurisdiction was invoked since the named Arbitrator could not have proceeded with the arbitration on account of the allegation of bias. Therefore, this decision, in our view, turns on the special facts of the case. An attempt was made by the learned counsel for the respondent-contractor to contend that this was also a case of bias and in support thereof he invited our attention to the last but fourth paragraph of the impugned judgment. Merely because a petition for contempt was filed against the Railway Department, it cannot be said that every officer of the Railway was biased. Such a view would make it easy for any contractor to level some allegation or file some contempt proceedings and disqualify all the named Arbitrators in the contract. The allegation of bias must be a genuine one and there must be sufficient material in support thereof to entitle the Court to bypass the contract. 8. Such a view would make it easy for any contractor to level some allegation or file some contempt proceedings and disqualify all the named Arbitrators in the contract. The allegation of bias must be a genuine one and there must be sufficient material in support thereof to entitle the Court to bypass the contract. 8. In the result, we allow these appeals, set aside the order of the Sub-Judge, First Class, Jalandhar, as well as the order of the learned Single Judge of the High Court appointing the Sole Arbitrator under Section 20 of the Arbitration Act and, consequently, every action taken by the Arbitrator including the Award made by him pursuant to the reference made under the Court's orders. We also direct the respondent to pay the cost of these appeals which we quantify at Rs. 10,000/-.