SPS KONSTRUCTION KONSORTIUM (SPV) PVT LTD Vs. HIMACHAL PRADESH BUS STANDS MANAGEMENT AND DEVELOPMENT AUTHORITY

JUDGEMENT

(1.) Present petition has been filed under Sec. 11(6) of the Arbitration and Conciliation Act, 1996 for appointment of the Arbitrator for resolving the dispute between the parties to the petition. The dispute is alleged to have arisen out of the contract entered between the parties vide Concession Agreement for development, operation and maintenance of integrated Bus Terminal-cum-Commercial Complex at Parwanoo (Annexure P-2)).

(2.) The main dispute amongst others alleged in the petition is that though the petitioner company had initiated the pre-construction work at the Project Site by removing the over burden of the hillock and leveling the site in order to achieve the construction of the Project timely as per agreement but District Mining Officer on 29.1.2012 had instructed the petitioner company not to carry out any further work for want of written permission from the Department of Mining, Government of Himachal Pradesh to be obtained by the respondent authority and therefore, the respondent has failed to provide the site for work to be undertaken and completed under the agreement, resulting into suspension of pre-construction related activities at the site and thereafter the site was got demarcated by the petitioner company, whereupon it was found that only 947 square meters was available instead of 1795 square meters on the spot. It is alleged that again there was delay on the part of respondent authority with respect to the approval of designs or other necessary acts to be performed by the respondent resulting into the petitioner company to issue the notice of termination of agreement in accordance with Clause 22 of the Concession Agreement, (Annexure P-2). It is further case of the petitioner that after issuing termination notice, a total claims/losses to the tune of Rs. 98,26,454.00 suffered by the petitioner company for the omission and commission of the respondent were also submitted vide letter dated 18.11.2013. Whereafter, on the basis of report of the Committee constituted by the respondent authority an amount of Rs.5,23,745.00 was approved to be payable to the petitioner company. Objections against the said report, filed by the petitioner company vide letter dated 20.3.2017, were rejected vide letter dated 25.4.2017, whereupon the petitioner, having left with no other option, requested the respondent authority vide letter dated 16.6.2017 to make payment of Rs.5,23,745.00 as the petitioner company was already suffering huge financial losses with further request to conduct a meeting to settle the remaining issues/claims arising between the parties. However, for receiving an amount of Rs.5,23,745.00, respondent authority had asked the petitioner company to submit the affidavit and accordingly under duress and in order to cover up the huge financial losses, petitioner company submitted the affidavit desired by respondent vide letter dated 11.7.2017 so as to receive a part of the amount released by the respondent authority. After receiving the said amount, petitioner company vide letter dated 29.11.2017 communicated the respondent authority for withdrawal of the affidavit dated 11.7.2017 claiming that same was submitted under duress and financial pressure and payment of balance amount of Rs.93,02,709.00 was also requested. On receiving no response from the respondent authority, letter dated 20.2.2018 was issued to the respondent authority for invoking the Clause 27.2.2 and when no response thereof was received by the petitioner company, present petition has been filed, wherein an additional ground has been taken that under the provisions of Sec. 12(5) of the Act read with Schedule 7 of the Act the Secretary (Law) to the Government of H.P. is not a competent person to act as an Arbitrator in present case.

(3.) Arbitration Clause 27 in the agreement, reads as under:-