JUDGMENT : U. C. Dhyani, J. 1. Since the factual matrix of both the writ petitions is the same, therefore, they are being decided by this common judgment and order for the sake of brevity and convenience. 2. By means of Writ Petition no.2164/2013 (M/S), the petitioner seeks to issue a writ, order or direction in the nature of certiorari for quashing the impugned orders dated 21.06.2013 and 24.08.2013 passed by the Managing Director, State Industrial Development Corporation of Uttaranchal (Annexure-6 & 13 respectively of WPMS no.2164/2013). The petitioner also seeks to quash the order reference no.32/MD/SIDCUL/2013 dated 21.06.2013 passed by the Managing Director-respondent no.1 (Annexure-14 to WPMS no.2164/2013) and further prays to appoint an impartial and independent sole arbitrator in the matter of arbitration between the petitioner and the respondents arising out of the Agreement no.SIDCUL/15/2005-058 dated 19.12.2005. 3. By means of Writ Petition no.2165/2013 (M/S), the petitioner seeks to issue a writ, order or direction in the nature of certiorari for quashing the impugned orders dated 21.06.2013 and 24.08.2013 passed by the Managing Director, SIDCUL (Annexure6 & 13 respectively of WPMS no.2165/2013). The petitioner also seeks to quash the order Reference no.32/MD/SIDCUL/2013 dated 21.06.2013 passed by the Managing Director-respondent no.1 and further prays to appoint an impartial and independent sole arbitrator in the matter of arbitration between the petitioner and the respondents arising out of the Agreement no.SIDCUL/16/2005-058 dated 19.12.2005. 4. Brief facts of the case are that the petitioner is a company duly incorporated under the Companies Act. The company has passed necessary resolution dated 12.08.2013, by which, Mr. Anil Singla was authorized to engage counsel, sign and verify pleadings, make statements on affidavit and to do all other acts relating thereto. As such, the present writ petitions have been filed through Mr. Anil Singla. On 19.12.2005, the petitioner entered into an agreement with respondent no.1 (SIDCUL) for executing construction work of Infrastructure Road, PHE & allied civil works at IIE, Pantnagar, Phase-II, Package II. The relevant particulars of the contract are being given hereinbelow : “Contract Agreement No.SIDCUL/16/2004-05 PARA Name of work - Construction of Infrastructure Road, PHE & allied civil works at IIE, Pantnagar, phase-II (package I). Type of Contract - Item Rate contract to carry out work set forth the BOQ with drawings to be provided in accordance with the conditions of contract. Amount of Contract - Rs. Type of Contract - Item Rate contract to carry out work set forth the BOQ with drawings to be provided in accordance with the conditions of contract. Amount of Contract - Rs. 19,91,32,103.68 Owner/Employer shall mean State Industrial Development Corporation of Uttaranchal Ltd. i.e. SIDCUL Consultant/Development Manager/Construction Manager/Engineer shall mean SIDCUL or its authorized officer/agency i.e. Gheri Eastern Ltd. Date of Financial 25.11.2005 Letter of Acceptance 28.11.2005 Date of Agreement 19.12.2005 Original period of 10 months (19.12.2005 to 18.10.2006)” 5. Clause 25 of the said agreement relates to the arbitration. After signing the agreement, the petitioner requested the respondent No.2, vide letter dated 24.12.2005, for release of Drawing consisting Master Plan, Road cross sectional drawings, L-sections with slopes & FRL’s Survey CD etc. for carrying out work but the same were not supplied since it was not ready with the respondents. On 24.12.2005, a meeting was held, in which, it was resolved that preparations of Layout plan, Drawings L-sections etc. is under progress by CEPT and the Survey team of SIDCUL and drawing will be released by 9.01.2006. Thereafter, the petitioner informed respondent no.2, vide letter dated 16.01.2006 that the drawing for Road cross sectional details L-sections with FRL’s etc. are yet to be released. 6. Vide letter dated 27.01.2006, the petitioner again informed respondent no.1 that the drawing for Road cross section details, L-sections with FRL’s etc. are yet to be released and even drawings released on 10.01.2006 for water supply, sewerage etc. are incomplete. The petitioner also informed the respondent no.2 that there is abnormal difference in the bench marks given to petitioner. The respondents released drawings on 03.02.2006, but since there were gross mistakes in it, as such, the petitioner again sent a letter dated 06.02.2006 pointing out that the Drawing released on 03.02.2006 has gross mistakes, due to which, the work at the site can not be started and further informed that the petitioner has taken up the work of 45 meter wide road and started earth work on 05.02.2006. 7. 7. Since no action had been taken by respondents, as such, the petitioner sent letter no.SAB/Pantnagar/15/2013/513 dated 30.01.2013 under clause 19.1 of the agreement to the Construction Manager with a copy to the Managing Director of SIDCUL requesting him to make payment of Final Bill, but since inspite of expiry of 84 days from the date of receipt of said letter/notice, the Construction Manager had failed to convey his decision, as such, the petitioner issued a notice of intention to commence arbitration, vide letter dated 29.04.2013. It is further submitted that since clause 19.2 of the agreement provides that after issuance of notice of intention to commence arbitration, the parties shall make an attempt to settle the dispute amicably before commencement of arbitration. As per clause 19.2 of the agreement, the petitioner also called upon the respondents to make an attempt to settle the disputes amicably otherwise he was requested to appoint an Arbitrator to commence arbitration on or after the expiry of 56 days of issuance of notice dated 29.04.2013 in terms of clause 25 of the agreement. 8. Clause 19 of the special conditions of contract provides about the settlement of disputes between the parties. As per clause 19.1, in case of any dispute either party can approach the “Construction Manager” with the request to give decision on that particular dispute and after following the procedure, the Construction Manager is required to give his decision. Clause 19.2 provides about the amicable settlement and clause 19.3 provides for the arbitration. Clause 19.3 of the agreement is being quoted below for the sake of convenience: “19.3 Arbitration Any dispute in respect of which, (a) the decision, if any, of the Construction Manager has not become final and binding pursuant to Sub-Clause 19.1 and (b) amicable settlement has not been reached within the period stated in Sub-Clause 19.2, shall be finally settled, unless otherwise specified in the Contract, under the Rules of Indian Arbitration Act, 1996 by one or more arbitrators appointed under such Rules. The said arbitrator/s shall have full power to open up, review and revise any decision, opinion, instruction, determination, certificate or valuation of the Construction Manager related to the dispute. Neither party shall be limited in the proceedings before such arbitrator/s to the evidence or arguments put before the Construction Manager for the purpose of obtaining his said decision pursuant to Sub-Clause 19.1. Neither party shall be limited in the proceedings before such arbitrator/s to the evidence or arguments put before the Construction Manager for the purpose of obtaining his said decision pursuant to Sub-Clause 19.1. No such decision shall disqualify the Construction Manager from being called as a witness and giving evidence before the arbitrator/s on any matter whatsoever relevant to the dispute. Arbitration may be commenced prior to or after completion of the works provided that the obligations of the Employer, the Construction Manager and the Contractor shall not be altered by reason of the arbitration being conducted during the progress of the Works.” 9. Without fulfilling the precondition of Clause 19.2 of the agreement, the respondent No.2 through its General Manager, vide letter no.913/GM/SIDCUL/2013 dated 21.06.2013, informed the petitioner that the Managing Director has appointed Shri Y.S. Pundir, Architect Planner, State Industrial Development Authority as sole arbitrator to decide the disputes. From perusal of the said letter dated 21.06.2013, it is clear that the Managing Director has already given his decision and appointed Shri Y.S. Pundir, Architect Planner as sole arbitrator to adjudicate the dispute between the parties. 10. According to the writ petitioner, Shri Y.S. Pundir, Architect Planner is the subordinate officer of the Managing Director and an employee of the department. The Managing Director is the controlling authority of all the employees, who have been dealing with the subject matter of the present dispute and is also the controlling authority of the named arbitrator, therefore, the appointment of Shri Y.S. Pundir as sole arbitrator is totally partial and malafide. It is further submitted by the petitioner that once the Managing Director has taken a view regarding the said dispute, therefore, nothing is left to be decided, as such, the appointment of subordinate officer of the MD as an arbitrator is totally illegal and partial. 11. Thereafter, the respondent No.3 – Shri Y.S. Pundir, vide letter dated 20.07.2013 informed the parties that 1st preliminary meeting would be held on 01.08.2013. The petitioner sent a detailed representation dated 29.07.2013 to the Managing Director, SIDCUL, which is being reproduced hereinbelow: “That certain disputes and differences having arisen earlier between the parties and in order to adjudicate the same. Thereafter, the respondent No.3 – Shri Y.S. Pundir, vide letter dated 20.07.2013 informed the parties that 1st preliminary meeting would be held on 01.08.2013. The petitioner sent a detailed representation dated 29.07.2013 to the Managing Director, SIDCUL, which is being reproduced hereinbelow: “That certain disputes and differences having arisen earlier between the parties and in order to adjudicate the same. Hon’ble High Court of Uttaranchal under same arbitration clause had appointed retired Judge of High Court as sole arbitrator and later on even MD SIDCUL also appointed retired Judge of High Court relating to another agreement between the same parties relating to Pant Nagar under same arbitration clause. That during pendency of arbitration proceedings, further disputes regarding payment under Final Bill also arose and for the settlement thereof MD SIDCUL being appointing authority was requested to appoint sole arbitrator and your goodself instead of appointing some retired High Court Judge, has appointed an architect, vide order dated 21.6.2013. That interest of justice require that when earlier disputes and differences relating to payments due under Running Account Bills are pending before an arbitrator who is particularly a Retired High Court Judge, there is absolutely no justification whatsoever to appoint an architect to decide disputes relating to Final Bill. It is pertinent to point out that Disputes relating to R.A. Bills as well as Final Bill pertain to one and the same work as well as same Agreement containing same arbitration clause and between same parties as such interest of justice requires that for adjudication of disputes relating to Final Bill, some retired High Court Judge should be appointed as sole arbitrator more particularly when disputes relating to R.A. Bills are already pending before retired High Court Judge. In view of the above facts and circumstances, the appointment of an architect who is subordinate to your goodself being an employee of Corporation of which you are Managing Director is not justified at all, he being not an independent and an impartial person thus not fit person to act as sole arbitrator. That it is also relevant to point out that for settlement of disputes and differences relating to Agreement no.SIDCUL/03/2004-05 dated 04.10.2004 relating to work of Development of Infrastructure works at Industrial Estate Haridwar, Hon’ble Mr. That it is also relevant to point out that for settlement of disputes and differences relating to Agreement no.SIDCUL/03/2004-05 dated 04.10.2004 relating to work of Development of Infrastructure works at Industrial Estate Haridwar, Hon’ble Mr. Justice Lakshmi Bihari (retired) has been appointed as sole arbitrator by the Hon’ble High Court of Uttarakhand at Nainital, as such interest of justice require that some retired High Court Judge is appointed as sole arbitrator in the present case as well. That the arbitrator appointed by your goodself cannot be said to be an independent and impartial arbitrator as he is an employee of Corporation of which your goodself is Managing Director and interest of justice requires that arbitrator should be independent and impartial not under influence of either party so that justice is not only done to a party but it should be deemed to have been done. Hon’ble Supreme Court of India has also held and laid down law relating to appointment of an independent and impartial person as sole arbitrator in two cases referred as under: ………………………… That even Section 11(8) of the Arbitration & Conciliation Act, 1996 has been enacted with sole object of securing appointment of an independent and impartial person as sole arbitrator from an appointing authority even if the appointing authority may be Chief Judge or the person or the institution designated by him. This section is mandatory for every appointing authority even it may be Chief Judge or any other person including your goodself as Managing Director to appoint independent and impartial arbitrator. For ready reference Section 11(8) of Arbitration & Conciliation Act, 1996 has been reproduced as under: ………………………………… That even Section 11(8) of the Arbitration & Conciliation Act 1996 has been enacted with sole object of securing appointment of an independent and impartial person as sole arbitrator from an appointing authority even if the appointing authority may be Chief Judge or the person or the institution designated by him. This section is mandatory for every appointing authority even it may be Chief Judge or any other person including your goodself as Managing Director to appoint independent and impartial arbitrator. This section is mandatory for every appointing authority even it may be Chief Judge or any other person including your goodself as Managing Director to appoint independent and impartial arbitrator. For ready reference Section 31(8) of Arbitration & Conciliation Act, 1996 has been reproduced as under: The Chief Justice or the person or institution designated by him in appointing an arbitrator, shall have due regard to: (a) any qualifications required of the arbitrator by the Agreement of the parties and (b) Other considerations as are likely to secure the appointment of an independent and impartial arbitrator. Thus it is mandatory for appointing authority to appoint an impartial and an independent arbitrator to do justice to the parties. In view of the above facts and circumstances, you are requested to appoint an independent and an impartial arbitrator preferably Hon’ble High Court (Retired) by reviewing/considering order dated 21.06.2013 whereby Sh. Y.S. Pundir, Architect Planner, State Industrial Development Authority your own subordinate employee has been appointed sole arbitrator” 12. Vide letter dated 29.07.2013, the petitioner requested the respondent no.4 to adjourn the arbitration proceedings sine die till the final decision regarding appointment of an independent and impartial arbitrator is taken by the competent authority/court. The petitioner also requested the appointing authority, i.e., Managing Director, SIDCUL to review/recall its order dated 21.06.2013. Inspite of letter dated 29.07.2013 sent by petitioner, the adjudication proceedings were not adjourned rather heard the respondents in absence of the petitioner and passed an order dated 01.08.2013 fixing another date i.e. 05.08.2013 for preliminary meeting. 13. Pursuant to the order dated 01.08.2013, the petitioner again sent a detailed representation dated 10.08.2013 giving its view points to learned sole arbitrator for adjourning the proceedings sine die till the final decision regarding appointment of an independent and impartial person is taken by the competent authority/court and a copy of the same was also sent to the Managing Director, SIDCUL requesting him for expeditious decision of its representation dated 29.07.2013 and for issuing direction to sole arbitrator appointed by him not to proceed further with the arbitration proceedings. 14. In the representation, the petitioner has also requested the arbitrator to disclose in writing any circumstance likely to give rise to justifiable doubt as to his independence or impartiality under sub-Sections (1) & (2) of Section 12 of the Arbitration and Conciliation Act (hereinafter referred to as the ‘Act of 1996’). 14. In the representation, the petitioner has also requested the arbitrator to disclose in writing any circumstance likely to give rise to justifiable doubt as to his independence or impartiality under sub-Sections (1) & (2) of Section 12 of the Arbitration and Conciliation Act (hereinafter referred to as the ‘Act of 1996’). A bare perusal of sub-Sections (1) & (2) of the Section 12 of the Act of 1996 reveals that at the time of appointment of arbitrator and during the arbitral proceedings, the arbitrator is required to disclose in writing any circumstance likely to give rise to present case that the arbitrator did not inform the parties in writing that he (respondent no.3) is an employee of the respondent no.1. Consequently, in view of violation of the aforesaid mandatory provisions of sub-Sections (1) & (2) of Section 12 of the Act of 1996 and also in view of the possible bias and justifiable doubt as to his independence and impartiality, the order regarding appointment of arbitrator is deemed to have been terminated under Sections 12 & 14 of the Act of 1996. 15. Vide letter dated 24.08.2013, the Managing Director, i.e., appointing authority has decided and rejected the representation dated 29.07.2013 filed by the petitioner merely saying that the appointing authority has become functus officio and has no role in the matter. Learned counsel for the petitioner submits that the said order of the Managing Director is totally illegal and without jurisdiction. 16. The amount of claim of the petitioner is more than 20 crores, which has to be adjudicated by the sole arbitrator. 17. From perusal of the order (annexed as Annexure no. SCA No. 1, 2 & 3) seems that the said order was passed by the MD during the pendency of the writ petition from the back date, i.e., 21.06.2013. Since the said order was never communicated to the parties, therefore, the MD has no right to pass any such order in such a manner, i.e., from the back date and is liable to be quashed. 18. A short counter affidavit has been filed on behalf of the respondents no.1 & 2 alongwith certain annexures. Since the said order was never communicated to the parties, therefore, the MD has no right to pass any such order in such a manner, i.e., from the back date and is liable to be quashed. 18. A short counter affidavit has been filed on behalf of the respondents no.1 & 2 alongwith certain annexures. It has been indicated in the counter affidavit that the challenge of the petitioner is on the following grounds: “A. Since vide letter dated 21.06.2013 the Managing Director has already opened his mind regarding tenability and maintainability of the dispute, therefore, nothing remains for a subordinate employee to decide as an arbitrator, inasmuch as, he would be impartial and biased. B. The Arbitrator, Shri Y.S. Pundir is an Architect Planner and since he is an employee of SIDCUL, therefore, he would not be an impartial arbitrator; and C. Since another dispute inter-se the same parties i.e. the petitioner and the SIDCUL is under arbitration and Shri Laxmi Behari, Retired Judge, Hon’ble Allahabad High Court is the arbitrator, therefore, it would be proper to appoint a retired High Court Judge as arbitrator in the matter.” 19. In reply to the aforesaid ground no. A, it has been submitted in the counter affidavit that firstly letter dated 21.06.2013 has not been written by the Managing Director, SIDCUL. The letter dated 21.06.2013 has been written by the General Manager communicating the decision of the MD dated 21.06.2013. The order passed by the Managing Director, SIDCUL has been filed and marked as Annexure-SCA-1. A perusal of the said order clearly revels that no opinion whatsoever has been given by the Managing Director on the maintainability of the dispute and the General Manager is not the appointing authority of the arbitrator. 20. In reply to the ground no. B, it has been alleged in the counter affidavit that it is a well settled principle of law that it is usual practice of Govt. Departments to have employees of Govt. Departments as arbitrators. The mere fact that the arbitrator’s offer rank is lower than the officer who rejected the claim would not invalidate the arbitration or can be a reason for imputing bias to the arbitrator. It is now well settled that the arbitration agreements in Govt. contracts providing that an employee of the department will be the arbitrator are neither void nor enforceable. It is now well settled that the arbitration agreements in Govt. contracts providing that an employee of the department will be the arbitrator are neither void nor enforceable. All the decisions proceed on the basis that when senior officer of govt./corporation/public undertakings are appointed as arbitrators, they will function independently and impartial even though they are employees of such institutions/organizations. In the instant matter, Shri Y.S. Pundir, Architect Planner of the State Industrial Development Authority had nothing to do with the work or the contract. The State Industrial Development Authority is a regulatory body which is entrusted with the work of sanctioning maps of industrial units in the State of Uttarakhand. 21. In reply to ground no. C, it has been stated that an appointment of an arbitrator is the right of the Managing Director of SIDCUL under the Clause 25 of the Agreement, which clearly states that the petitioner had categorically agreed that he would have no objection for appointment of an arbitrator even if he is an employee of the corporation. Petitioner, therefore, cannot take a contrary stand to the agreed terms and conditions as contained in arbitration Clause 25 of the agreement. 22. Thereafter, a rejoinder affidavit has been filed by the petitioner indicating therein that it is false to state that in pursuance of the letter dated 29.04.2013, the M.D. passed the order (Annexure no.SCA-1) as alleged in the counter affidavit. The said order was neither passed on 21.06.2013 nor communicated to the parties. From perusal of this order, it is clear that this order was passed by the MD during the pendency of the writ petition from the back date, i.e., 21.06.2013, which is illegal and without jurisdiction. The alleged order dated 21.06.2013 has already been challenged in the writ petition. It is admitted that the order dated 21.06.2013 passed by the MD was communicated by the General Manager as well as to the arbitrator by the same letter by the MD and on the basis of the said letter, the arbitrator entered into the arbitral proceeding. It is true that the General Manager has communicated the order passed by the MD for appointment of arbitrator as it is. It is wrong to say and afterthought that while appointing the arbitrator, the MD has not given his decision that the claims raised by the petitioner are not tenable. 23. It is true that the General Manager has communicated the order passed by the MD for appointment of arbitrator as it is. It is wrong to say and afterthought that while appointing the arbitrator, the MD has not given his decision that the claims raised by the petitioner are not tenable. 23. In reply to the contents of paras 10 & 11 of the short counter affidavit, it has been stated in the rejoinder affidavit that Shri Y.S. Pundir, Architect Planner is the subordinate officer of the MD and is also an employee of the department. The MD is the controlling authority of all the employees, who is dealing with the subject matter and also the controlling authority of the named arbitrator therefore, the appointment of Shri Y.S. Pundir as a sole arbitrator is totally partial and malafide. Once the MD has already opened his mind and gave the findings that the claims raised by the petitioner are not tenable, nothing remains left to be decided by the arbitrator, who is the subordinate officer of the MD. Shri Y.S. Pundir, who has been appointed as sole arbitrator, is also acting as the Public Information Officer of respondent no.1-SIDCUL and he did not supply the required information to the petitioner deliberately under the Right of Information Act, inspite of repeated requests and reminders. Due to this reason, the petitioner was compelled to file an appeal before the appellate authority under Section 19 of the Right to Information Act, which is clear from letter dated 16.12.2014 sent by the respondent no.4 issued by the appellate authority. It is further submitted that respondent no.4 has also made payments in respect of works in question, vide letter dated 28.02.2014. In these facts and circumstances, it is clear that respondent no.4-Shri Y. S. Pundir cannot be said to be an independent and fit person to act as an independent arbitrator. It was also submitted by the petitioner that once the order of appointment is under challenge in the writ petition, the arbitrator has no jurisdiction to proceed with the arbitral proceedings. 24. Learned counsel for the petitioner relied upon a decision of Hon’ble Supreme Court in Indian Oil Corporation Limited & others vs. Raja Transport Private Limited, (2009) 8 SCC 520 , wherein it was observed: 23. 24. Learned counsel for the petitioner relied upon a decision of Hon’ble Supreme Court in Indian Oil Corporation Limited & others vs. Raja Transport Private Limited, (2009) 8 SCC 520 , wherein it was observed: 23. In Union of India v. M.P.Gupta, (2004) 10 SCC 504 , this Court was considering an arbitration agreement which provided for appointment of two Gazetted railway officers as arbitrators. But a learned Single Judge of the High Court while allowing an application under section 20 of the Arbitration Act, 1940, appointed a retired Judge as the sole arbitrator and a Division Bench affirmed the same. Reversing the said decision, this Court held that having regard to the express provision in the arbitration agreement that two Gazetted railways officers shall be the Arbitrators, a retired Judge could not be appointed as sole Arbitrator. 24. In Ace Pipeline Contract Pvt. Ltd. v. Bharat Petroleum Corporation Ltd., (2007) 5 SCC 304 , this Court considered a somewhat similar clause of another petroleum corporation which also provided that the arbitration will be by its Director (Marketing) or some other officer nominated by the Director (Marketing). The contractor expressed an apprehension about the independence and impartiality of the named arbitrator and prayed for appointment of a retired Judge as Arbitrator in his application under section 11(6) of the Act. 25. This Court in Ace Pipeline case (supra) held : “In the present case, in fact the appellant's demand was to get some retired Judge of the Supreme Court to be appointed as arbitrator on the ground that if any person nominated in the arbitration clause is appointed, then it may suffer from bias or the arbitrator may not be impartial or independent in taking decision. Once a party has entered into an agreement with eyes wide open it cannot wriggle out of the situation (by contending) that if any person of the respondent BPCL is appointed as arbitrator he will not be impartial or objective. However, if the appellant feels that the arbitrator has not acted independently or impartially, or he has suffered from any bias, it will always be open to the party to make an application under section 34 of the Act to set aside the award on the ground that arbitrator acted with bias or malice in law or fact.” 25. However, if the appellant feels that the arbitrator has not acted independently or impartially, or he has suffered from any bias, it will always be open to the party to make an application under section 34 of the Act to set aside the award on the ground that arbitrator acted with bias or malice in law or fact.” 25. An agreement was entered between the writ petitioner and the SIDCUL-respondents on 28.11.2005, Clause 25 of which reads as follows: “25.0 Arbitration Except where otherwise provided for in the Contract, all questions and disputes relating to the meaning of the specifications, designs, drawings and instructions herein before contained in this contract or as to the quality of the workmanship or materials used on the work or arising out of the terms and conditions of the contract whether during the progress of the work or after the completion or abandonment thereof, at the request of the aggrieved party in writing, shall be referred to the sole arbitration of the person nominated and appointed by the Managing Director, State Development Corporation of Uttaranchal Ltd. (SIDCUL), in respect of the contracts entered for and on behalf of the Corporation, by any officer/Authority of the Corporation. The parties of the contract agree that it will be no objection to any such appointment that the sole arbitrator so appointed is a Corporation employee. The Sole Arbitrator to whom the matter is originally referred being transferred or having vacated his office or being unable to act for any reason whatsoever, the Managing Director, SIDUL, as aforesaid at the time of such transfer, vacation of office or inability to act, shall appoint another person to act as arbitrator in accordance with the terms of the Contract. Such person as and when appointed shall proceed with the reference from the stage at which it was left by his predecessor in accordance with the rules, regulations and the law of the land. It is also a term of the contact that no person other than a person appointed by the Managing Director, SIDCUL, as aforesaid should act as Arbitrator and if for any reason that is not possible, the matter is not to be referred to arbitration at all. It is also a term of the contact that no person other than a person appointed by the Managing Director, SIDCUL, as aforesaid should act as Arbitrator and if for any reason that is not possible, the matter is not to be referred to arbitration at all. It is also the term of the contract that the party invoking the arbitration clause shall specify the disputes or differences to be referred to the arbitration under this contract together with the amounts claimed in respect of each such disputes or differences. In an arbitration invoked at the instance of either party to the Contact, the Arbitrator would be free to consider the counterclaims of the other party or even though they are not mentioned in the reference to arbitration. Subject as aforesaid, the provisions of the Arbitration and Conciliation Act, 1996 (no.26 of 1996) or any statutory modification or re-enactment thereof and rules made thereunder and for the time being in force shall apply to the arbitration proceeding under this clause. The Arbitrator shall give speaking award.” 26. Since the writ petitioner is a signatory to the aforesaid agreement, therefore, it does not lie in his mouth to say that Shri Y.S. Pundir, Architect Planner cannot be appointed as the sole arbitrator, inasmuch as, he is an employee of the Corporation. 27. The main plank of the contention of learned counsel for the writ petitioner in WPMS no.2165/2013 is the first paragraph of the letter dated 21.06.2013 (Annexure-6 of WPMS no.2165/2013) issued by the General Manager, SIDCUL. In the said letter, it was written that ‘that at the outset it is stated that only a sum of Rs. 7,42,351.16 only was payable to you and which has been paid by SIDCUL. The other claims raised by you are not tenable. The claims raised by you are also not arbitrable’. 28. Likewise, in WPMS no.2164/2013, the first paragraph of letter dated 21.06.2013 (Annexure-6) reads as under : “1. That the claims raised by you are not tenable. The claims raised by you are also not arbitrable.” 29. Then, in the second point mentioned in the letters dated 21.06.2013 of General Manager, SIDCUL in WPMS no.2164 & 2165 of 2015 reads as under : “2. That the claims raised by you are not tenable. The claims raised by you are also not arbitrable.” 29. Then, in the second point mentioned in the letters dated 21.06.2013 of General Manager, SIDCUL in WPMS no.2164 & 2165 of 2015 reads as under : “2. That without prejudice to the above contentions Managing Director, SIDCUL has appointed Shri Y.S. Pundir, Architect Planner, State Industrial Development Authority, 29, IIE (IT Park), Sahastradhara Road, Dehradun as the Sole Arbitrator to adjudicate the disputes between the parties.” 30. The question, which arises for consideration is – whether the SIDCUL has opened its mind while mentioning aforesaid first paragraph in both the letters dated 21.06.2013 or not? 31. Learned counsel for the petitioner placed reliance upon a decision of Hon’ble Supreme Court in Bipromasz Bipron Trading SA vs. Bharat Electronics Limited (BEL), (2012) 6 SCC 384 , wherein it was observed in para 49: “49. In this case, the petitioner had clearly pleaded that the named arbitrator is a direct subordinate of the CMD and employee of the respondent. CMD is the controlling authority of all the employees, who have been dealing with the subject matter in the present dispute and also controlling authority of the named arbitrator. Apprehending that the CMD, who had been dealing with the entire contract would not act impartially as an arbitrator, the petitioner had issued a notice on 20th May, 2011. In this notice, it was pointed out that while the entire process of the performance of the contract was going on, the CMD had issued a letter on 5th June, 2009 to the petitioner stating that as per the company’s directives, all pending supplies as on that date were “put on hold”. After the aforesaid communication, no communication was issued to the petitioner for supply of the goods as per the Purchase Order dated 3rd December, 2009. Even subsequently, there were difficulties when a further lot of 24 units were supplied. The detailed submissions made by the petitioner have been noticed in the earlier part of the judgment.” 32. Learned counsel for the respondents, on the other hand, placed reliance upon para 35 of the judgment of Hon’ble Supreme Court in Chairman and M.D., NTPC Ltd. vs. Reshmi Constructions, Builders & Contractors, (2004) 2 SCC 663 , wherein it was held: “35. Learned counsel for the respondents, on the other hand, placed reliance upon para 35 of the judgment of Hon’ble Supreme Court in Chairman and M.D., NTPC Ltd. vs. Reshmi Constructions, Builders & Contractors, (2004) 2 SCC 663 , wherein it was held: “35. Meaning the words "without prejudice" come up for consideration before this Court in Superintendent (Tech. I) Central Excise, I.D.D. Jabalpur and Others vs. Pratap Rai, (1978) 3 SCC 113 , wherein it has been held: "The Appellate Collector has clearly used the words "without prejudice" which also indicate that the order of the Collector was not final and irrevocable. The term "without prejudice" has been defined in Black’s Law Dictionary as follows: Where an offer or admission is made ‘without prejudice’, or a motion is defined or a bill in equity dismissed ‘without prejudice’, it is meant as a declaration that no rights or privileges of the party concerned are to be considered as thereby waived or lost, except in so far as may be expressly conceded or decided. See, also Dismissal without prejudice. Similarly, in Wharton’s Law Lexicon the author while interpreting the term ’without prejudice’ observed as follows: The words import an understanding that if the negotiation fails, nothing that has passed shall be taken advantage of thereafter; so, if a defendant offers, ’without prejudice’, to pay half the claim, the plaintiff must not only rely on the offer as an admission of his having a right to some payment. The rule is that nothing written or said ’without prejudice’ can be considered at the trial without the consent of both parties not even by a Judge in determining whether or not there is good cause for depriving a successful litigant of costs. The word is also frequently used without the foregoing implications in statutes and inter partes to exclude or save transactions, acts and rights from the consequences of a stated proposition and so as to mean ‘not affecting’, ‘saving’ or ‘excepting’. In short, therefore, the implication of the term ‘without prejudice’ means (1) that the cause or the matter has not been decided on merits, (2) that fresh proceedings according to law were not barred." 33. In short, therefore, the implication of the term ‘without prejudice’ means (1) that the cause or the matter has not been decided on merits, (2) that fresh proceedings according to law were not barred." 33. Reliance has also been placed by learned counsel for the respondents in a decision of Hon’ble Supreme Court in Department of Tele Communications vs. Gujarat Cooperative Milk Marketing Federation Ltd., (2010) 10 SCC 86 , wherein it was held: “21. We may next deal with the conclusion of the learned Single Judge that the award was invalid because it was made by an Arbitrator who was junior in rank, when compared to the officer who passed the appellate order dated 12.02.1998. It is a usual practice for the government departments to have the employees of the department (high level officers unconnected with the contract) as Arbitrators. The mere fact that the Arbitrator is of a rank lower than the officer who rejected the claim of the subscriber would not invalidate the arbitration or can be a reason for imputing bias to the Arbitrator (see Secretary to Govt., Transport Department v. Munuswamy Mudaliar – 1988 (Supp) SCC 651 and Indian Oil Corporation Ltd. v. Raja Transport (P) Ltd., (2009) 8 SCC 520 .” 34. Assuming for the sake of arguments that Shri Y.S. Pundir, Architect Planner is an impartial person, who would have conducted the arbitration in the most impartial way, but the question, which arises for consideration of this Court is – how a prudent man ought, under circumstances of this particular case, act upon the supposition that the aforesaid point no.1 mentioned in the letter dated 21.06.2013 (Annexure-6 of both the writ petitions) exists. Let us forget about the Judges and the lawyers. Let us consider aforesaid point no.1 mentioned in the alleged letters in the estimation of a common prudent man. A common prudent man would believe that since the claims raised by the writ petitioner are found to be ‘not tenable’ and ‘not arbitrable’, therefore, a subordinate officer to the Managing Director, SIDCUL would definitely decide the dispute in favour of the SIDCUL and not in favour of the writ petitioner. Here lies the and documents, in a proceeding relating to the limited issue of ingredients of ‘bias’, which may be either personal bias or pecuniary bias, or the bias as to the subject matter or a departmental bias. Here lies the and documents, in a proceeding relating to the limited issue of ingredients of ‘bias’, which may be either personal bias or pecuniary bias, or the bias as to the subject matter or a departmental bias. The letter dated 21.06.2013 reflects the departmental bias. In the words of Hon’ble Supreme Court in Indian Oil Corporation Ltd. vs. SPS Engineering Ltd., (2011) 3 SCC 507 , he (appointing authority) should have avoided the risks and dangers involved in deciding an issue relating to the tenability of the claim without necessary pleadings appointing an arbitrator. In the instant case also, the General Manager, while writing the letter dated 21.06.2013 (Annexure-6 of both writ petitions) should have avoided writing anything on the tenability of the claims of the writ petitioner or commenting anything upon the claim raised by the writ petitioner that they are not arbitrable. 35. A reasonable apprehension would, therefore, lie in the mind of a common prudent person that the sole arbitrator, so appointed, shall not decide the dispute in a fair and impartial way. At least, the alleged letters dated 21.03.2013 should not have reflected that the sole arbitrator, who was appointed by the Managing Director, would act in a particular fashion or manner, the appointing authority was biased and has predisposition to decide against the contractor. 36. The test of reasonable apprehension of bias in the mind of a reasonable man is, therefore, satisfied in the factual situation as has been held by Hon’ble Supreme Court in Ladli Construction Company Private Ltd. vs. Punjab Police Housing Corporation Ltd. & others, (2012) 4 SCC 609 , wherein it was observed: “28. Where parties enter into a contract knowing the role, authority or power of the Chief Engineer in the affairs relating to the contract but nevertheless agree for him to be arbitrator and name him in the agreement to adjudicate the dispute/s between the parties, then they stand bound by it unless a good or valid legal ground is made out for his exclusion. 29. Except raising the vague and general objections that the arbitrator was biased and had predisposition to decide against the Contractor, no materials, much less cogent materials, have been placed by the Contractor to show bias of the arbitrator. No sufficient reason appears on record as to why the arbitrator should not have proceeded with the arbitral proceedings. 29. Except raising the vague and general objections that the arbitrator was biased and had predisposition to decide against the Contractor, no materials, much less cogent materials, have been placed by the Contractor to show bias of the arbitrator. No sufficient reason appears on record as to why the arbitrator should not have proceeded with the arbitral proceedings. The test of reasonable apprehension of bias in the mind of a reasonable man is not satisfied in the factual situation.”……………… 37. The Court will act upon presupposition of a reasonable mind and, therefore, would hold that the sole arbitrator so appointed would not have acted in a fair and impartial way. The moment the appointing authority has mentioned in the letters that the claims raised by the writ petitioner are not tenable and are not arbitrable, the possibility of reasonable apprehension in one’s mind that the justice will not be meted out to the contractor cannot be ruled out. 38. Learned counsel for the respondents drew the attention of this Court towards Sections 11 & 12 of the Arbitration and Conciliation Act. Section 12 of the Arbitration and Conciliation Act says that an arbitrator may be challenged only if circumstances likely to give rise to justifiable doubts as to his independence or impartiality. This contention of learned counsel for the respondents does not help him, inasmuch as, the writ petitioner has been able to show that there are justifiable doubts as to the independence or impartiality of the sole arbitrator, which is being appointed by the appointing authority. It is made clear that the present order of this Court does not cast any aspersion on the integrity or independence of Shri Y.S. Pundir, Architect Planner. The only thing, which this Court wants to highlight is that the appointing authority should have avoided in writing what was written in point no.1 of the letters dated 21.06.2013 (Annexure-6 to the writ petitions), for the same would tend to project that the claims raised by the writ petitioner are not tenable, not arbitrable and, therefore, are not be allowed. 39. In view of above discussions, the impugned orders dated 21.06.2013, 24.08.2013 and 21.06.2013 (Annexures-6, 13 & 14 respectively to the writ petitions) passed by the Managing Director, SIDCUL are set aside. 40. 39. In view of above discussions, the impugned orders dated 21.06.2013, 24.08.2013 and 21.06.2013 (Annexures-6, 13 & 14 respectively to the writ petitions) passed by the Managing Director, SIDCUL are set aside. 40. The respondent no.2-Managing Director is, therefore, requested to appoint any independent person, but not a subordinate officer/employee of SIDCUL in the peculiar facts and circumstances of the case, as sole arbitrator to arbitrate the dispute between the parties, preferably within six weeks from today. 41. Both the writ petitions thus stand disposed of. 42. All pending applications also stand disposed of.