A K ENGINEER Vs. UT OF J&K

JUDGEMENT

(1.) The present petition has been filed under Sec. 11(6) of the Arbitration and Conciliation Act, 1996, seeking appointment of an arbitrator.

(2.) The petitioner being a Private Limited Company engaged in execution of civil contract works and registered under the Companies Act, 1956, participated in the bidding process initiated by respondent no.4 on 26/7/2019 for "Design and Construction of 160 Mtrs (03-Spans any economical arrangement as per GAD) double lane motorable Bridge on EPC Mode (Engineer Procurement & Construction) along with Footpath 1.20 Mtr on both sides and approaches on both sides over Nallah Jhajjar on Panthal Jhajjar road Km 1st from Jhajjar side (Complete Job) under CRF. Post evaluation of the technical and financial bids, the contract valued at Rs.1939.50 lacs was awarded in favour of the petitioner by the Chief Engineer-respondent no.2 vide his letter dated September 9, 2019. And the contract work was required to be completed within a period of 15 months. It is stated that petitioner started execution of the work and by the end of June, 2020, 60% of the contract work valuing at Rs.11.50 crores was executed, out of which a meagre amount of Rs.1.35 crores was released in favour of the petitioner and the respondent department expressed its inability to release the balance amount due to non-availability of funds. A number of requests are stated to have been made by the petitioner for release of the balance amount but to no avail. And owing to the non-availability of adequate funds, the petitioner could not proceed further with execution of the work. However, an amount of Rs.10.60 Crores, which includes amount of Rs.1.35 Crores released earlier, came to be released in favour of the petitioner. It is submitted that, owing to non-availability of funds, the respondents remained silent with regard to execution of the balance work and after a period of two years, the respondent no.4 issued a show cause notice to the petitioner seeking resumption of the work within five days. The petitioner replied the show cause notice and agitated before the respondents that the contract work got delayed on account of non-payment of amounts due to the petitioner and a considerable period has lapsed since allotment of the contract work resulting in escalation of market prices. And, accordingly, the respondents were requested by the petitioner either to pay price variation prices along with 6% GST or pre-close the contract work. Thereafter, a number of communications were made by the respondents seeking execution of the balance work but the stand of the petitioner remained all along the same. And finally when the respondents did not accede to the request of the petitioner, the respondents terminated the contract and debarred the petitioner company from participating in tendering process in Pir Panjal Zone.

(3.) And the petitioner having failed in his attempt to persuade the respondents for foreclosure of the contract or paying him the escalated rates, was constrained to issue notice dtd. 30/9/2024 invoking the arbitration clauses 23 and 24 of the General Conditions of the Contract. Further, it is submitted that, despite service of the said notice, the respondents have failed to act and direct appointment of an arbitrator. Hence, this petition.