JUDGMENT GOPALA GOWDA, C.J. : This petition is filed by the petitioner seeking for appointment of an Arbitrator under Section 11 (6) of the Arbitration & Conciliation Act, 1996. 2.The relevant facts are stated for the purpose of deciding the rival legal contentions urged in this case with a view to find out as to whether the petitioner is entitled for appointment of an Arbitrator. 3.The undisputed fact is that the petitioner is a proprietorship firm carrying on business within the territorial jurisdiction of this Court. Indian Oil Corporation, a giant public sector company, entrusted the work of construction of quarters, executive hotel and guest house at their refinery project near Paradeep to the O.Ps. The opposite parties in turn, entrusted a part of the said work to the petitioner through Letter of Intent dated 12.1.2007 (Annexure-1). After completion of the work final bill for Rs. 66,06,822/- against which running payment for Rs. 37,26,261/- was made and balance amount of Rs. 28,80,561/- remained outstanding due to be paid by the respondents, was submitted. 4.It is the case of the petitioner that on account of breach of contract committed by the opposite parties, the petitioner suffered huge loss and he was forced to sign the final bill which was prepared on 13.11.2008. The same has not been paid till today. It is the further case of the petitioner that certain deductions by the opposite parties were made from the bills submitted by the petitioner without his knowledge and they stopped payment of his dues, illegally. The petitioner was asked to come over to Calcutta office of the opposite parties. Though the petitioner had gone to their office at Kolkata on three occasions, i.e., on 15.10.2009, 10.12.2009 and 29.12.2009, no settlement was reached between them. Therefore, the petitioner issued letter dated 15.9.2010 (Annexure-2) requesting to appoint one of the persons named in the letter as Arbitrator. The same was received by the opposite parties as per the A.Ds. (Annexure-3 series). It is further contended that in the absence of clause in the agreement, as per the provision under Section 7 (4)(c) of the Arbitration and Conciliation Act, 1996 the matter has to be referred to the Arbitrator. In support of such submission, he placed reliance upon the decisions in Smt. Elizabeth Mathew v. Prof. (Annexure-3 series). It is further contended that in the absence of clause in the agreement, as per the provision under Section 7 (4)(c) of the Arbitration and Conciliation Act, 1996 the matter has to be referred to the Arbitrator. In support of such submission, he placed reliance upon the decisions in Smt. Elizabeth Mathew v. Prof. S.K. Narayan and another, AIR 1999 Karnataka 291, State of Orissa and others v. B. C. Pasayat and another, AIR 1983 Orissa 29 and Jeweltouch (India) Pvt. Ltd.v. Naheed Hafeez Quraishi (Patrawala) and others, 2008 (2) Arb.LR 321 (Bombay). He has submitted that he has not received the letter produced at Annexure-A to the counter-statement. Therefore, after expiry of 30 days of the receipt of notice (Annexure-2), non-acceptance of the request made by the petitioner for appointment of an arbitrator and there being a clause in the agreement between the parties to the effect that in case of any dispute of any claims regarding execution of the work, that itself must be considered to be an agreement under Section 7(4)(c) of the Act. 5.The opposite parties have filed counter-affidavit denying various petition averments. It is contended that vide letter dated 19.10.2010 (Annexure-A) the claim of the petitioner for appointment of an Arbitrator was denied stating that there is no arbitration clause in the agreement. The letter was sent by registered post with A/D which was returned unserved as the petitioner did not receive the same. Thereafter the said notice dated 19.10.2010 was sent through ‘under certificate of posting’ which was acknowledged by the petitioner. Since the opposite parties have denied the contention urged in the demand notice that there was agreement for arbitration of any dispute regarding execution of the work between the parties, vide Annexure-A sent within thirty days from the date of receipt of the notice (Annexure-2), therefore, the decisions upon which reliance is placed, are not applicable to the fact situation for the reason that in those cases there was a communication which was not denied in the demand notice and the contention that there was an agreement between the parties regarding arbitration of the dispute between the parties. Therefore, the petition is not maintainable. The petitioner has filed rejoinder affidavit on 16.3.2012 along with two documents, Annexures 4 & 5. As could be seen from Annexure-5 letter dated 26.4.2011, the opposite party-company has requested to confirm the balance of Rs. Therefore, the petition is not maintainable. The petitioner has filed rejoinder affidavit on 16.3.2012 along with two documents, Annexures 4 & 5. As could be seen from Annexure-5 letter dated 26.4.2011, the opposite party-company has requested to confirm the balance of Rs. 4,12,278.52/- (Cr) due to be paid to the petitioner as on December 31, 2010 to their Statutory Auditors, Chaturvedi & Partners, Chartered Accountants. In that view of the matter, prayer is made for appointment of an Arbitrator to settle the dispute. 6.With reference to the above said rival legal contentions, the following points would arise for consideration of this Court. (i)whether communication of appointment letter vide Annexure-2, has to be treated as an agreement between the parties regarding arbitration vide Annexure-A reply notice dated 19.10.2010 sent Under Certificate of Posting on 12.11.2011 with an endorsement that there was/is a valid service and the service is within thirty days as required under Section 11(4)(a) of the Arbitration Act ? (ii)whether the petitioner is entitled for appointment of an arbitrator ? 7.The aforesaid points are required to be answered in favour of the petitioner for the following reasons. Point Nos.1 & 2 are answered together as inter-related. It is an undisputed fact that there is an agreement between the parties to execute the Civil work for construction of the quarters as mentioned in the case and the petitioner has executed the work and also submitted final bill. He has received Rs. 37,26,261/-. As the final bill was not paid, by letter dated 15.9.2010 the petitioner prayed for appointment of Arbitrator. He has specifically stated in the demand notice that under Section 7(4)(c) of the Act, the dispute is to be referred to the arbitrator under the Act suggesting the names of three persons which includes names of senior advocate, retired judicial officer of this Court. The same has been acknowledged by the opposite party. 8.As stated in the counter-affidavit, the letter dated 19.10.2010 was sent to the petitioner by the opposite parties by registered post with acknowledgement due. As could be seen from the xerox copy produced today along with memo, the said letter addressed to the petitioner which is given by them in reply vide Annexure-A, returned with an endorsement “Not known. So returned to sender”. The correctness of the endorsement need not be examined in this case. As could be seen from the xerox copy produced today along with memo, the said letter addressed to the petitioner which is given by them in reply vide Annexure-A, returned with an endorsement “Not known. So returned to sender”. The correctness of the endorsement need not be examined in this case. The fact remains that the reply has not been served upon the petitioner. In that view of the matter, the letter sent by them in the same address through under certificate of posting dated 12.11.2000, could not be said to have been served. Apart from the legal position, reply notice sent by certificate of posting cannot be construed as a valid service. 9.It is a fact that the reply sent by registered post with A/D returned unserved. In that view of the matter, it cannot be said that reply to the petitioner’s letter dated 18.9.2010 was sent within thirty days. After expiry of thirty days, the petitioner is justified in approaching this Court for appointment of an arbitrator under Section 11(6) of the Act on the ground that there is an agreement in terms of Section 7(4)(c) of the Act between the parties, that has not been replied to the notice demanding appointment of an Arbitrator within thirty days which is an undisputed fact. So the demand made in the demand notice Annexure-2 dated 15.9.2010 has not been acted upon or replied within 30 days. Therefore, the said point is required to be answered in favour of the petitioner. Learned counsel for the petitioner has placed reliance upon the aforesaid decisions and the provision under Section 7(4)(c) of the Act, which fact is not disputed. Therefore, it would be just and proper for this Court to appoint an Arbitrator to adjudicate the dispute between the parties. But having regard to the facts and circumstances of the case, the cost of arbitration shall be borne by the petitioner. If he succeeds, that will be levied upon the opposite party. Accordingly, the petition is allowed and Mr. S.F. Ahmed, former District Judge is appointed as the Arbitrator to decide the dispute between the parties. The arbitrator so appointed shall enter upon the reference within a period of six weeks from the date of communication of the order. The fee and other charges of the arbitrator will be fixed by the arbitrator himself. S.F. Ahmed, former District Judge is appointed as the Arbitrator to decide the dispute between the parties. The arbitrator so appointed shall enter upon the reference within a period of six weeks from the date of communication of the order. The fee and other charges of the arbitrator will be fixed by the arbitrator himself. After entering upon the reference, the arbitrator shall decide the dispute between the parties within a period of six months. Registry is directed to communicate the order to the arbitrator appointed immediately. Petition allowed.