Judgment The appellants have preferred this appeal under Section 37(1)(b) of the Arbitration and Conciliation Act 1996 (hereinafter referred to as 'the Act') against the order dated 2nd September, 2006 passed by the learned Subordinate Judge-VI, Patna, in Miscellaneous Case No. 26 of 2004 filed under Section 34 of the Act to set aside the Arbitration award dated 25.7.2004 has been rejected. 2. The appellants entered into a contract with the respondent for construction of a high level bridge at Purnia Murliganj Path. For the additional work respondent claimed an amount of Rs. 12,84,972/- which was not accepted by the appellants and the Managing Director (appellant no. 2) found that an amount of Rs. 45,104/- only was payable to the respondent. The contractor-respondent on receiving such communication vide letter no. 305 dated 25th October, 2002 filed an application under Section 11(6) of the Act before this Court being Request Case no. 7 of 2002 and by order dated 31.1.2003 the designated Judge of this Court appointed Mr. Justice R.N. Lal (retired) as Arbitrator. After hearing the pleadings of the parties the Arbitrator made an award on 25th July, 2004 in favour of the respondent-contractor. The appellants filed an application under Section 34 of the Act for setting aside the arbitral award dated 25th July, 2004 in the court of Subordinate Judge-VI, Patna. The points raised by the appellants before the learned Subordinate Judge-VI, Patna, for setting aside the award was that under Clause 23 of the agreement between the parties and disputes were actually referred to the Managing Director of the appellants-Corporation and the decision of the Managing Director was final and the claim of the respondent was not arbitral. Learned Subordinate Judge-VI, Patna, by his order dated 2nd September, 2006 dismissed the application of the appellants filed under Section 34 of the Act. Thereafter, the appellants filed this appeal, before this Court. After hearing the parties, this Court vide judgment dated 16th February, 2012 dismissed the appeal. The appellants filed Civil Appeal No. 8109 of 2013 arising out of Special Leave Petition (C) No. 38030 of 2012 before the Hon'ble Supreme Court. After hearing the parties the judgment of this Court dated 16th February, 2012 was set aside and the appeal was remanded to this Court to decide the pleas raised by the appellants that the Arbitrator had no jurisdiction to decide the dispute referred for arbitration. 3. After hearing the parties the judgment of this Court dated 16th February, 2012 was set aside and the appeal was remanded to this Court to decide the pleas raised by the appellants that the Arbitrator had no jurisdiction to decide the dispute referred for arbitration. 3. In this view of the matter, this case has been heard. 4. Learned counsel for the appellants has submitted that there has been an agreement dated 12.10.1999 between the appellants and the respondent which was signed by the Senior Project Engineer (Appellant No. 3) on behalf of Bihar Rajya Pul Nirman Nigam Ltd., Works Division, Saharsa, Bihar, for the appellants and the Managing Director of the M/s Pile Engineers (India) Pvt. Ltd. on the other. Under Clause 23 of the agreements, if any dispute arises between the parties it will be decided by the Managing Director of the Corporation and his decision thereon shall be final, conclusive and binding on all the parties. The Managing Director of the Corporation has decided the dispute and claim of the contractor and the same was communicated to the respondent vide letter no. 305 dated 25.10.2002 and the same is binding unless challenged before an appropriate forum. The Hon'ble Supreme Court has set aside the earlier judgment of this Court and has remanded the appeal to decide the question as to whether the Arbitrator had jurisdiction or not. He has further submitted that Clause 23 is not an Arbitration Clause, as such, Arbitrator cannot be appointed under Section 11(6) of the Act. An Arbitrator appointed even by the High Court under Section 11(6) of the Act in absence of arbitration clause, the Arbitrator would have no jurisdiction to decide the dispute. Clause 23 of the agreement is binding on both the parties as both of them have agreed upon that the decision of the Managing Director will be final, conclusive and binding on all the parties. The Managing Director has decided the matter, as such, it is binding on both the parties. If the respondent is aggrieved by the decision of the Managing Director, the respondent can challenge this order before an appropriate forum. In support of this contention, he has relied upon a Full Bench decision of this Court in the case of Shambhu Sharma Vs. State of Bihar reported in 2009(2) PLJR 1009 and also in the case of Vishnu (Dead) by Lrs. Vs. In support of this contention, he has relied upon a Full Bench decision of this Court in the case of Shambhu Sharma Vs. State of Bihar reported in 2009(2) PLJR 1009 and also in the case of Vishnu (Dead) by Lrs. Vs. State of Maharashtra & Others reported in (2014)1 SCC 516 . 5. Learned counsel for the respondent vehemently opposed the contention of the appellants and has submitted that even by the Full Bench judgment Clause 23 has not been negatived that it is not an arbitration agreement. The Managing Director was a competent authority to decide as Arbitrator. The Request was made by the respondent but the matter was not referred to the Managing Director of the Corporation for arbitration. The respondent came to the High Court under Section 11(6) of the Act vide Request Case No. 7 of 2002. The Request Case was opposed by the appellants and after hearing both the parties the Request Case was allowed and the sole Arbitrator was appointed by the nominee Judge of the Hon'ble the Chief Justice of the Patna High Court by order dated 31.1.2003, as contained in Annexure-6. In the said case, the stand of the appellant was that the claim is already settled by the Managing Director under Clause 23 of the Act. While appointing the Arbitrator it was clearly stated that in spite of the existence of Arbitration Clause, no Arbitrator has been appointed. The Arbitrator was appointed taking note of the existence of the Arbitration Clause. The aforesaid order even if administrative in nature was accepted by the appellants as the same was not assailed before the appropriate forum rather appellants appeared before the Arbitrator and placed their respective claims on merit. Now it is not open to the appellants to raise their grievance that Clause 23 is not an arbitration clause. He has further submitted that Clause 23 is an Arbitration clause and the Managing Director was to act as Arbitrator which has not been done in this case. Since the Managing Director has not done his duty as an Arbitrator, the matter has rightly been referred to the Arbitrator and now the arbitration award only can be set aside if there is violation of the provision under Section 34 of the Act. In support of his contention he has referred the following decisions in the cases of Punjab State & Ors. In support of his contention he has referred the following decisions in the cases of Punjab State & Ors. vs. Dina Nath reported in AIR 2007 SC 2157 , Mallikarjun vs. Gulbarga University reported in AIR 2004 SC 716 , Naginbhai C. Patel vs. Union of India reported in 1999(2) Bom. CR 189, 1999(1) Mh.LJ 745 , Nandyal Coop. Spinning Mills Ltd. vs. K.V. Mohan Rao reported in (1993)2 SCC 654 . 6. Now the question has to be decided as to whether the Arbitrator had jurisdiction to decide the dispute referred to for arbitration depends upon Clause 23 of the agreement between both the parties. It is better to quote Clause 23 of the agreement. "Clause 23: In case any dispute or difference shall arise between the parties or either of them upon any question relating to the meaning of the specifications, designs, drawings and instruction, herein before mentioned or as to the quality of workmanship of materials used on the work, or as to the construction of any of the conditions or any clause or thing therein contained, or as to any question, claim, rights or liabilities of the parties, or any matter, or thing whatsoever, in any way arising out of, or relating to the contract, designs, drawings, specifications, estimates, instructions, order or these conditions, or otherwise concerning the work, or the execution, or failure to execute the same whether arising the progress of the work, or after the completion or abandonment thereof or as to the breach of this contract, then either party shall forthwith give to the other notice of such dispute or difference and such dispute or difference shall be referred to the Managing Director of the Corporation and his decision thereon shall be final, conclusive and binding on all the parties." 7. If it is held that Clause 23 is an Arbitration Clause then certainly the Arbitrator had jurisdiction to make the award. If it is held that Clause 23 is not an Arbitration Clause then there is no question of any arbitration by any Arbitrator. 8. in this case, there has been an agreement between the Bihar Rajya Pul Nirman Nigam Ltd., Govt. If it is held that Clause 23 is not an Arbitration Clause then there is no question of any arbitration by any Arbitrator. 8. in this case, there has been an agreement between the Bihar Rajya Pul Nirman Nigam Ltd., Govt. of Bihar undertaking and the M/s Pile Engineers (India) Pvt. Ltd. in B.P.N. Form No. 21 and signed by the Senior Project Engineer on behalf of the Corporation and the Managing Director on behalf of the Pile Engineers (India) Pvt. Ltd. on 12.10.1999. An extract of which is Annexure-1 of the Miscellaneous Appeal and the complete agreement is Annexure-5 of the Request Case No. 7 of 2002 and a counter affidavit has been filed by the Corporation in this Miscellaneous Appeal by filing an affidavit on behalf of the respondent. The contract was for labour work in piling for the construction of Kamathandhar Bridge in 17 kilometers in Purnia Murliganj Road. The conditions of the contract have been mentioned as Clause 1 to Clause 29. Out of them Clause 23 has already been noted above. 9. It appears from a careful reading of Clause 23 that for the redressal of the grievance and the difference or any dispute between the parties either on the question relating to the meaning of the specifications, designs, drawings and instructions, or as to the quality of workmanship of materials used on the work or as to the construction of any of the conditions or any clause or thing therein contained or as to any question, claim right or liabilities of the parties or any matter or thing whatsoever in any way arising out of or relating to the contract, design in any way arising out of, or relating to the contract, designs, drawings, specification, estimates, instructions order or there conditions or otherwise concerning the work or the execution or failure to execute the same whether arising the progress of the work or after the completion or abandonment thereof. Either party is required to give either side notice of such dispute or difference and such dispute or difference shall be referred to the Managing Director of the Corporation and his decision thereon shall be final, conclusive and binding on all the parties. This Clause has been considered by a Full Bench of this Court in the case of Shambhu Sharma Vs. State of Bihar reported in 2009(2) PLJR 1009 (supra). This Clause has been considered by a Full Bench of this Court in the case of Shambhu Sharma Vs. State of Bihar reported in 2009(2) PLJR 1009 (supra). From reading of Clause 23 mentioned in the Full Bench decision and Clause 23 of the agreement, the only difference in the Shambhu Sharma's case is that in case of dispute or difference the same was referred to "the Superintending Engineer of the Circle" and according to the Clause in question such dispute or difference is to be referred to "the Managing Director of the Corporation". Only this much is the difference meaning thereby that as per Clause 23 the power, which was given to the Superintending Engineer of the Circle in the Shambhu Sharma's case, was given to the Managing Director of the Corporation in the case in hand. This Clause 23 was placed before the designated Judge who felt the need to refer the matter before a Division Bench. The matter was referred to the Division Bench with the following reasons:- "4. The objection of the opposite party is that Clause 23 of the said agreement between the parties cannot be treated as an arbitration agreement as has been held by a Division Bench of this Court in the case of The State of Bihar and Others vs. M/s Shiv Shankar Construction Company (P) Ltd. reported in 2008(3) PLJR 453 . In the said decision the Division Bench of this Court has relied upon the three decisions of the Hon'ble Apex Court, namely, in the case of Bharat Bhushan Bansal Vs. Uttar Pradesh Small Industries Corporation Ltd., Kanpur, reported in AIR 1999 SC 899 and in the case of The State of Uttar Pradesh Vs. Tipper Chand, reported in (1980)2 SCC 341 as well as in the case of K.K. Modi vs. K.N. Modi and Others, reported in (1998) 3 SCC 573 ". 10. In the Full Bench decision, a number of decisions of the Hon'ble Supreme Court and the High Court have been considered. It appears that the issue in question has been considered in the case of Punjab State & Ors. Vs. 10. In the Full Bench decision, a number of decisions of the Hon'ble Supreme Court and the High Court have been considered. It appears that the issue in question has been considered in the case of Punjab State & Ors. Vs. Dina Nath reported in AIR 2007 SC 2157 and it has been held that Clause 23 is not an arbitration agreement and it was made clear by the Full Bench that the aggrieved party will be free to file a civil suit and the time during the pendency of the writ petition will be excluded while computing the period of limitation. With this observation the request for arbitration was rejected. 11. A similar matter came up before the Hon'ble Supreme Court in the case of Vishnu (Dead) by LRs. Vs. State of Maharashtra reported in (2014)1 SCC 516 . The question involved in that case was whether Clause 30 of the agreement (B-1 agreement) entered into between the Government of Maharashtra and the appellant is in the nature of an arbitration Clause or not. Clauses 29 and 30 of the B-1 agreements entered into between the parties have been considered in para-11 of that judgment. It is better to quote Clause 30 of the agreement:- "30. Except where otherwise specified in the contract and subject to the powers delegated to him by the Government under the Code Rules then in force the decision of the Superintending Engineer of the Circle for the time being shall be final, conclusive and binding on all parties to the contract upon all questions, relating to the meaning of the specifications, designs, drawings, and instructions hereinbefore mentioned and as to the quality of workmanship, or materials used on the work, or as to any other question, claim, right, matter, or thing whatsoever, if any way arising, out of, or relating to the contract designs, drawings, specifications, estimates, instructions, orders, or these conditions or otherwise concerning the works, or the execution, or failure to execute the same, whether arising, during the progress of the work, or after the completion or abandonment thereof." 12. In that case (2014)1 SCC 516 , a number of decisions have been considered including the judgments in the cases of Mallikarjun vs. Gulbarga University reported in AIR 2004 SC 716 , Punjab State & Ors. Vs. In that case (2014)1 SCC 516 , a number of decisions have been considered including the judgments in the cases of Mallikarjun vs. Gulbarga University reported in AIR 2004 SC 716 , Punjab State & Ors. Vs. Dina Nath reported in AIR 2007 SC 2157 (as referred to by the learned counsel for the respondent). 13. Reference made to the case of Naginbhai C. Patel vs. Union of India reported in 1999(2) Bom. CR 189 (supra) has no application in this case as in that case there was arbitration agreement in Clause 25 of the contract but in the case in hand there is no Arbitration Clause in the contract. 14. After considering the decisions in Mallikarjun's case and other cases it has been held that Clause 30 of B-1 Agreements is not an arbitration agreement and the trial court was not right in appointing the Chief Engineer as an Arbitrator and the appeal was dismissed. 15. In the present case, it can be safely held that Clause 23 is not an arbitral Clause. The Managing Director of the Corporation has been empowered to settle any dispute or difference arising between the parties relating to work, construction of any of the conditions or clause, claim, right or liabilities of the parties and his decision will be final, conclusive and binding on all the parties. Clause 22 of the agreement deals with works to be executed under the contract shall be executed under the direction and subject to the approval in all respects of the Deputy Project Manager (Works) or any officer of the Corporation so authorized for the time being who shall be entitled to direct at what point or points and in what manner they are to be commenced and from time to time carried on. After careful consideration of the entire agreement, in my opinion, it appears that there is no arbitral Clause in the agreement. 16. In view of the discussions made above, I have come to the conclusion that Clause 23 of the agreement is binding on both the parties and it has been agreed upon by both the parties that in case of dispute or difference, the decision of the Managing Director will be final. Since Clause 23 is not an arbitral Clause, the dispute cannot be referred for arbitration. Since Clause 23 is not an arbitral Clause, the dispute cannot be referred for arbitration. The appointment of the Arbitrator was not in consonance with the agreements between both the parties. In view of Clause 23 of the agreement made between both the parties, the Arbitrator had no jurisdiction to decide the dispute referred for arbitration. It appears from the pleadings of the parties that objection was raised before the sole Arbitrator. 17. It appears from Annexure-7, which is an affidavit filed on behalf of the appellants-Corporation, that on 24.10.2002 the Managing Director of the Corporation has already settled the claim of the respondent at the tune of Rs. 45,104/- which is final and binding on both the parties and it has been communicated to the respondent-contractor vide letter no. 305 dated 25.10.2002 (Annexure-4 to this appeal). As such, there is no question of appointment of any Arbitrator. After verifying the records the claim of the contractor has been settled for Rs. 45,104/- only out of his claim of Rs. 24,87,234.60 paise and the Corporation is ready to pay the aforesaid settled amount to the contractor and the claim before the Arbitrator was fit to be dismissed in limine. But in spite of the objection raised by the appellants, the sole Arbitrator has proceeded with the arbitration and has made arbitral award vide award dated 25.7.2004 and that award was challenged before the Sub-Judge-VI, Patna, vide Miscellaneous Case No. 26 of 2004 under Section 34 of the Act which has been dismissed by the impugned order dated 2.9.2006 by the learned Sub-Judge-VI, Patna. The learned Sub-Judge has considered the agreement dated 12.10.1999 made between both the parties but has not considered whether the Arbitrator had power to decide the matter and pass the arbitral award in view of Clause 23 of the agreement. The Arbitrator had no jurisdiction to decide the dispute referred to for arbitration in view of Clause 23 of the agreement between both the parties. 18. For the reasons aforementioned, the impugned award dated 25.7.2004 (Annexure-9) is not fit to be sustained. It is accordingly set aside. Consequently, the impugned order dated 2.9.2006 passed by the learned Subordinate Judge-VI, Patna, in Miscellaneous Case No. 26 of 2004 is also set aside. 19. In the result, the appeal is allowed. The parties will bear their own costs. 20. It is accordingly set aside. Consequently, the impugned order dated 2.9.2006 passed by the learned Subordinate Judge-VI, Patna, in Miscellaneous Case No. 26 of 2004 is also set aside. 19. In the result, the appeal is allowed. The parties will bear their own costs. 20. It is made clear that the respondent will be free to file a civil suit and the time during the pendency of the arbitration and this appeal will be excluded while computing the period of limitation. High Court of Patna Amaresh Kr. Lal, J. Bihar Rajya Pul Nirman Nigam Ltd. through its Managing Director, Patna & Ors. – Appellants Vs. M/s Pile Engineering India (P) Ltd. through its Managing Director, Sri Manoranjan Kumar Sinha – Respondents Misc. Appeal No. 465 of 2006 Decided on: 16.4.2014 Advocate Appeared: For the Appellants: M/s Lalit Kishore, Vikas Kumar. For the Respondents: Mr. Jashwir Singh Arora. Cases referred: Mallikarjun vs. Gulbarga University reported in AIR 2004 SC 716 Punjab State & Ors. Vs. Dina Nath reported in AIR 2007 SC 2157 Vishnu (Dead) by LRs. Vs. State of Maharashtra reported in (2014)1 SCC 516 Bharat Bhushan Bansal Vs. Uttar Pradesh Small Industries Corporation Ltd., Kanpur, reported in AIR 1999 SC 899 The State of Uttar Pradesh Vs. Tipper Chand, reported in (1980)2 SCC 341 K.K. Modi vs. K.N. Modi and Others, reported in (1998) 3 SCC 573 The State of Bihar and Others vs. M/s Shiv Shankar Construction Company (P) Ltd. reported in 2008(3) PLJR 453 Shambhu Sharma Vs. State of Bihar reported in 2009(2) PLJR 1009 Naginbhai C. Patel vs. Union of India reported in 1999(2) Bom. CR 189, 1999(1) Mh.LJ 745 Nandyal Coop. Spinning Mills Ltd. vs. K.V. Mohan Rao reported in (1993)2 SCC 654 Judgment The appellants have preferred this appeal under Section 37(1)(b) of the Arbitration and Conciliation Act 1996 (hereinafter referred to as 'the Act') against the order dated 2nd September, 2006 passed by the learned Subordinate Judge-VI, Patna, in Miscellaneous Case No. 26 of 2004 filed under Section 34 of the Act to set aside the Arbitration award dated 25.7.2004 has been rejected. 2. The appellants entered into a contract with the respondent for construction of a high level bridge at Purnia Murliganj Path. For the additional work respondent claimed an amount of Rs. 12,84,972/- which was not accepted by the appellants and the Managing Director (appellant no. 2. The appellants entered into a contract with the respondent for construction of a high level bridge at Purnia Murliganj Path. For the additional work respondent claimed an amount of Rs. 12,84,972/- which was not accepted by the appellants and the Managing Director (appellant no. 2) found that an amount of Rs. 45,104/- only was payable to the respondent. The contractor-respondent on receiving such communication vide letter no. 305 dated 25th October, 2002 filed an application under Section 11(6) of the Act before this Court being Request Case no. 7 of 2002 and by order dated 31.1.2003 the designated Judge of this Court appointed Mr. Justice R.N. Lal (retired) as Arbitrator. After hearing the pleadings of the parties the Arbitrator made an award on 25th July, 2004 in favour of the respondent-contractor. The appellants filed an application under Section 34 of the Act for setting aside the arbitral award dated 25th July, 2004 in the court of Subordinate Judge-VI, Patna. The points raised by the appellants before the learned Subordinate Judge-VI, Patna, for setting aside the award was that under Clause 23 of the agreement between the parties and disputes were actually referred to the Managing Director of the appellants-Corporation and the decision of the Managing Director was final and the claim of the respondent was not arbitral. Learned Subordinate Judge-VI, Patna, by his order dated 2nd September, 2006 dismissed the application of the appellants filed under Section 34 of the Act. Thereafter, the appellants filed this appeal, before this Court. After hearing the parties, this Court vide judgment dated 16th February, 2012 dismissed the appeal. The appellants filed Civil Appeal No. 8109 of 2013 arising out of Special Leave Petition (C) No. 38030 of 2012 before the Hon'ble Supreme Court. After hearing the parties the judgment of this Court dated 16th February, 2012 was set aside and the appeal was remanded to this Court to decide the pleas raised by the appellants that the Arbitrator had no jurisdiction to decide the dispute referred for arbitration. 3. In this view of the matter, this case has been heard. 4. After hearing the parties the judgment of this Court dated 16th February, 2012 was set aside and the appeal was remanded to this Court to decide the pleas raised by the appellants that the Arbitrator had no jurisdiction to decide the dispute referred for arbitration. 3. In this view of the matter, this case has been heard. 4. Learned counsel for the appellants has submitted that there has been an agreement dated 12.10.1999 between the appellants and the respondent which was signed by the Senior Project Engineer (Appellant No. 3) on behalf of Bihar Rajya Pul Nirman Nigam Ltd., Works Division, Saharsa, Bihar, for the appellants and the Managing Director of the M/s Pile Engineers (India) Pvt. Ltd. on the other. Under Clause 23 of the agreements, if any dispute arises between the parties it will be decided by the Managing Director of the Corporation and his decision thereon shall be final, conclusive and binding on all the parties. The Managing Director of the Corporation has decided the dispute and claim of the contractor and the same was communicated to the respondent vide letter no. 305 dated 25.10.2002 and the same is binding unless challenged before an appropriate forum. The Hon'ble Supreme Court has set aside the earlier judgment of this Court and has remanded the appeal to decide the question as to whether the Arbitrator had jurisdiction or not. He has further submitted that Clause 23 is not an Arbitration Clause, as such, Arbitrator cannot be appointed under Section 11(6) of the Act. An Arbitrator appointed even by the High Court under Section 11(6) of the Act in absence of arbitration clause, the Arbitrator would have no jurisdiction to decide the dispute. Clause 23 of the agreement is binding on both the parties as both of them have agreed upon that the decision of the Managing Director will be final, conclusive and binding on all the parties. The Managing Director has decided the matter, as such, it is binding on both the parties. If the respondent is aggrieved by the decision of the Managing Director, the respondent can challenge this order before an appropriate forum. In support of this contention, he has relied upon a Full Bench decision of this Court in the case of Shambhu Sharma Vs. State of Bihar reported in 2009(2) PLJR 1009 and also in the case of Vishnu (Dead) by Lrs. Vs. In support of this contention, he has relied upon a Full Bench decision of this Court in the case of Shambhu Sharma Vs. State of Bihar reported in 2009(2) PLJR 1009 and also in the case of Vishnu (Dead) by Lrs. Vs. State of Maharashtra & Others reported in (2014)1 SCC 516 . 5. Learned counsel for the respondent vehemently opposed the contention of the appellants and has submitted that even by the Full Bench judgment Clause 23 has not been negatived that it is not an arbitration agreement. The Managing Director was a competent authority to decide as Arbitrator. The Request was made by the respondent but the matter was not referred to the Managing Director of the Corporation for arbitration. The respondent came to the High Court under Section 11(6) of the Act vide Request Case No. 7 of 2002. The Request Case was opposed by the appellants and after hearing both the parties the Request Case was allowed and the sole Arbitrator was appointed by the nominee Judge of the Hon'ble the Chief Justice of the Patna High Court by order dated 31.1.2003, as contained in Annexure-6. In the said case, the stand of the appellant was that the claim is already settled by the Managing Director under Clause 23 of the Act. While appointing the Arbitrator it was clearly stated that in spite of the existence of Arbitration Clause, no Arbitrator has been appointed. The Arbitrator was appointed taking note of the existence of the Arbitration Clause. The aforesaid order even if administrative in nature was accepted by the appellants as the same was not assailed before the appropriate forum rather appellants appeared before the Arbitrator and placed their respective claims on merit. Now it is not open to the appellants to raise their grievance that Clause 23 is not an arbitration clause. He has further submitted that Clause 23 is an Arbitration clause and the Managing Director was to act as Arbitrator which has not been done in this case. Since the Managing Director has not done his duty as an Arbitrator, the matter has rightly been referred to the Arbitrator and now the arbitration award only can be set aside if there is violation of the provision under Section 34 of the Act. In support of his contention he has referred the following decisions in the cases of Punjab State & Ors. In support of his contention he has referred the following decisions in the cases of Punjab State & Ors. vs. Dina Nath reported in AIR 2007 SC 2157 , Mallikarjun vs. Gulbarga University reported in AIR 2004 SC 716 , Naginbhai C. Patel vs. Union of India reported in 1999(2) Bom. CR 189, 1999(1) Mh.LJ 745 , Nandyal Coop. Spinning Mills Ltd. vs. K.V. Mohan Rao reported in (1993)2 SCC 654 . 6. Now the question has to be decided as to whether the Arbitrator had jurisdiction to decide the dispute referred to for arbitration depends upon Clause 23 of the agreement between both the parties. It is better to quote Clause 23 of the agreement. "Clause 23: In case any dispute or difference shall arise between the parties or either of them upon any question relating to the meaning of the specifications, designs, drawings and instruction, herein before mentioned or as to the quality of workmanship of materials used on the work, or as to the construction of any of the conditions or any clause or thing therein contained, or as to any question, claim, rights or liabilities of the parties, or any matter, or thing whatsoever, in any way arising out of, or relating to the contract, designs, drawings, specifications, estimates, instructions, order or these conditions, or otherwise concerning the work, or the execution, or failure to execute the same whether arising the progress of the work, or after the completion or abandonment thereof or as to the breach of this contract, then either party shall forthwith give to the other notice of such dispute or difference and such dispute or difference shall be referred to the Managing Director of the Corporation and his decision thereon shall be final, conclusive and binding on all the parties." 7. If it is held that Clause 23 is an Arbitration Clause then certainly the Arbitrator had jurisdiction to make the award. If it is held that Clause 23 is not an Arbitration Clause then there is no question of any arbitration by any Arbitrator. 8. in this case, there has been an agreement between the Bihar Rajya Pul Nirman Nigam Ltd., Govt. If it is held that Clause 23 is not an Arbitration Clause then there is no question of any arbitration by any Arbitrator. 8. in this case, there has been an agreement between the Bihar Rajya Pul Nirman Nigam Ltd., Govt. of Bihar undertaking and the M/s Pile Engineers (India) Pvt. Ltd. in B.P.N. Form No. 21 and signed by the Senior Project Engineer on behalf of the Corporation and the Managing Director on behalf of the Pile Engineers (India) Pvt. Ltd. on 12.10.1999. An extract of which is Annexure-1 of the Miscellaneous Appeal and the complete agreement is Annexure-5 of the Request Case No. 7 of 2002 and a counter affidavit has been filed by the Corporation in this Miscellaneous Appeal by filing an affidavit on behalf of the respondent. The contract was for labour work in piling for the construction of Kamathandhar Bridge in 17 kilometers in Purnia Murliganj Road. The conditions of the contract have been mentioned as Clause 1 to Clause 29. Out of them Clause 23 has already been noted above. 9. It appears from a careful reading of Clause 23 that for the redressal of the grievance and the difference or any dispute between the parties either on the question relating to the meaning of the specifications, designs, drawings and instructions, or as to the quality of workmanship of materials used on the work or as to the construction of any of the conditions or any clause or thing therein contained or as to any question, claim right or liabilities of the parties or any matter or thing whatsoever in any way arising out of or relating to the contract, design in any way arising out of, or relating to the contract, designs, drawings, specification, estimates, instructions order or there conditions or otherwise concerning the work or the execution or failure to execute the same whether arising the progress of the work or after the completion or abandonment thereof. Either party is required to give either side notice of such dispute or difference and such dispute or difference shall be referred to the Managing Director of the Corporation and his decision thereon shall be final, conclusive and binding on all the parties. This Clause has been considered by a Full Bench of this Court in the case of Shambhu Sharma Vs. State of Bihar reported in 2009(2) PLJR 1009 (supra). This Clause has been considered by a Full Bench of this Court in the case of Shambhu Sharma Vs. State of Bihar reported in 2009(2) PLJR 1009 (supra). From reading of Clause 23 mentioned in the Full Bench decision and Clause 23 of the agreement, the only difference in the Shambhu Sharma's case is that in case of dispute or difference the same was referred to "the Superintending Engineer of the Circle" and according to the Clause in question such dispute or difference is to be referred to "the Managing Director of the Corporation". Only this much is the difference meaning thereby that as per Clause 23 the power, which was given to the Superintending Engineer of the Circle in the Shambhu Sharma's case, was given to the Managing Director of the Corporation in the case in hand. This Clause 23 was placed before the designated Judge who felt the need to refer the matter before a Division Bench. The matter was referred to the Division Bench with the following reasons:- "4. The objection of the opposite party is that Clause 23 of the said agreement between the parties cannot be treated as an arbitration agreement as has been held by a Division Bench of this Court in the case of The State of Bihar and Others vs. M/s Shiv Shankar Construction Company (P) Ltd. reported in 2008(3) PLJR 453 . In the said decision the Division Bench of this Court has relied upon the three decisions of the Hon'ble Apex Court, namely, in the case of Bharat Bhushan Bansal Vs. Uttar Pradesh Small Industries Corporation Ltd., Kanpur, reported in AIR 1999 SC 899 and in the case of The State of Uttar Pradesh Vs. Tipper Chand, reported in (1980)2 SCC 341 as well as in the case of K.K. Modi vs. K.N. Modi and Others, reported in (1998) 3 SCC 573 ". 10. In the Full Bench decision, a number of decisions of the Hon'ble Supreme Court and the High Court have been considered. It appears that the issue in question has been considered in the case of Punjab State & Ors. Vs. 10. In the Full Bench decision, a number of decisions of the Hon'ble Supreme Court and the High Court have been considered. It appears that the issue in question has been considered in the case of Punjab State & Ors. Vs. Dina Nath reported in AIR 2007 SC 2157 and it has been held that Clause 23 is not an arbitration agreement and it was made clear by the Full Bench that the aggrieved party will be free to file a civil suit and the time during the pendency of the writ petition will be excluded while computing the period of limitation. With this observation the request for arbitration was rejected. 11. A similar matter came up before the Hon'ble Supreme Court in the case of Vishnu (Dead) by LRs. Vs. State of Maharashtra reported in (2014)1 SCC 516 . The question involved in that case was whether Clause 30 of the agreement (B-1 agreement) entered into between the Government of Maharashtra and the appellant is in the nature of an arbitration Clause or not. Clauses 29 and 30 of the B-1 agreements entered into between the parties have been considered in para-11 of that judgment. It is better to quote Clause 30 of the agreement:- "30. Except where otherwise specified in the contract and subject to the powers delegated to him by the Government under the Code Rules then in force the decision of the Superintending Engineer of the Circle for the time being shall be final, conclusive and binding on all parties to the contract upon all questions, relating to the meaning of the specifications, designs, drawings, and instructions hereinbefore mentioned and as to the quality of workmanship, or materials used on the work, or as to any other question, claim, right, matter, or thing whatsoever, if any way arising, out of, or relating to the contract designs, drawings, specifications, estimates, instructions, orders, or these conditions or otherwise concerning the works, or the execution, or failure to execute the same, whether arising, during the progress of the work, or after the completion or abandonment thereof." 12. In that case (2014)1 SCC 516 , a number of decisions have been considered including the judgments in the cases of Mallikarjun vs. Gulbarga University reported in AIR 2004 SC 716 , Punjab State & Ors. Vs. In that case (2014)1 SCC 516 , a number of decisions have been considered including the judgments in the cases of Mallikarjun vs. Gulbarga University reported in AIR 2004 SC 716 , Punjab State & Ors. Vs. Dina Nath reported in AIR 2007 SC 2157 (as referred to by the learned counsel for the respondent). 13. Reference made to the case of Naginbhai C. Patel vs. Union of India reported in 1999(2) Bom. CR 189 (supra) has no application in this case as in that case there was arbitration agreement in Clause 25 of the contract but in the case in hand there is no Arbitration Clause in the contract. 14. After considering the decisions in Mallikarjun's case and other cases it has been held that Clause 30 of B-1 Agreements is not an arbitration agreement and the trial court was not right in appointing the Chief Engineer as an Arbitrator and the appeal was dismissed. 15. In the present case, it can be safely held that Clause 23 is not an arbitral Clause. The Managing Director of the Corporation has been empowered to settle any dispute or difference arising between the parties relating to work, construction of any of the conditions or clause, claim, right or liabilities of the parties and his decision will be final, conclusive and binding on all the parties. Clause 22 of the agreement deals with works to be executed under the contract shall be executed under the direction and subject to the approval in all respects of the Deputy Project Manager (Works) or any officer of the Corporation so authorized for the time being who shall be entitled to direct at what point or points and in what manner they are to be commenced and from time to time carried on. After careful consideration of the entire agreement, in my opinion, it appears that there is no arbitral Clause in the agreement. 16. In view of the discussions made above, I have come to the conclusion that Clause 23 of the agreement is binding on both the parties and it has been agreed upon by both the parties that in case of dispute or difference, the decision of the Managing Director will be final. Since Clause 23 is not an arbitral Clause, the dispute cannot be referred for arbitration. Since Clause 23 is not an arbitral Clause, the dispute cannot be referred for arbitration. The appointment of the Arbitrator was not in consonance with the agreements between both the parties. In view of Clause 23 of the agreement made between both the parties, the Arbitrator had no jurisdiction to decide the dispute referred for arbitration. It appears from the pleadings of the parties that objection was raised before the sole Arbitrator. 17. It appears from Annexure-7, which is an affidavit filed on behalf of the appellants-Corporation, that on 24.10.2002 the Managing Director of the Corporation has already settled the claim of the respondent at the tune of Rs. 45,104/- which is final and binding on both the parties and it has been communicated to the respondent-contractor vide letter no. 305 dated 25.10.2002 (Annexure-4 to this appeal). As such, there is no question of appointment of any Arbitrator. After verifying the records the claim of the contractor has been settled for Rs. 45,104/- only out of his claim of Rs. 24,87,234.60 paise and the Corporation is ready to pay the aforesaid settled amount to the contractor and the claim before the Arbitrator was fit to be dismissed in limine. But in spite of the objection raised by the appellants, the sole Arbitrator has proceeded with the arbitration and has made arbitral award vide award dated 25.7.2004 and that award was challenged before the Sub-Judge-VI, Patna, vide Miscellaneous Case No. 26 of 2004 under Section 34 of the Act which has been dismissed by the impugned order dated 2.9.2006 by the learned Sub-Judge-VI, Patna. The learned Sub-Judge has considered the agreement dated 12.10.1999 made between both the parties but has not considered whether the Arbitrator had power to decide the matter and pass the arbitral award in view of Clause 23 of the agreement. The Arbitrator had no jurisdiction to decide the dispute referred to for arbitration in view of Clause 23 of the agreement between both the parties. 18. For the reasons aforementioned, the impugned award dated 25.7.2004 (Annexure-9) is not fit to be sustained. It is accordingly set aside. Consequently, the impugned order dated 2.9.2006 passed by the learned Subordinate Judge-VI, Patna, in Miscellaneous Case No. 26 of 2004 is also set aside. 19. In the result, the appeal is allowed. The parties will bear their own costs. 20. It is accordingly set aside. Consequently, the impugned order dated 2.9.2006 passed by the learned Subordinate Judge-VI, Patna, in Miscellaneous Case No. 26 of 2004 is also set aside. 19. In the result, the appeal is allowed. The parties will bear their own costs. 20. It is made clear that the respondent will be free to file a civil suit and the time during the pendency of the arbitration and this appeal will be excluded while computing the period of limitation.