MODI PROJECTS LIMITED Vs. THE STATE OF JHARKHAND

JUDGEMENT

(1.) Heard learned counsel for the parties.

(2.) Applicant contends that it has satisfactorily executed the agreement dated 16.10.2008 for construction of Flyover, approach road and high level R.C.C. Bridge over river Subarnarekha on NH-33 at Namkum in the State of Jharkhand (Job No. 033-JHR-2007-113) for an agreement value of Rs. 33,60,08,125.36 under agreement No. 09 SBD of 2009-09. The work was completed on 26.03.2013 to the satisfaction of the Respondents as per the certificate of completion contained in letter No. 952 dated 23.09.2014 issued by the Executive Engineer, National Highway Division, Ranchi and also enclosed at page 27 of the rejoinder affidavit of the Respondents. After completion of the work petitioner raised final bill through letter dated 21.03.2014, which is at Annexure-3 to the rejoinder affidavit of the petitioner dated 20.06.2017. The detail account of the total amount payable was submitted as per clause 57.1 "FINAL ACCOUNT" of Section 3 " Conditions of Contract" of the agreement. Annexure-1 is the summary of final accounts to the letter dated 21.03.2014. When the Respondents failed to make good the payment, petitioner had invoked the arbitration clause 25.3(a) and served notice on 13.07.2016 for appointment of nominee arbitrator on behalf of the Respondents. The applicant had proposed the name of Mr. Desh Deepak as their nominee arbitrator who was registered with the Indian Road Congress (IRC). Both arbitrator would select the third presiding arbitrator. Since the Respondents failed to appoint the second nominee arbitrator on their part nor did they make payments, the applicant invoked the jurisdiction of Hon'ble the Chief Justice under section 11(6) of the Arbitration and Conciliation Act, 1996.

(3.) Respondents contested the plea by filing counter affidavit on 14.6.2017. As per the averments contained therein, date of commencement of work was on 16.10.2008 and date of schedule completion was 15.10.2010. The execution of the work was monitored by this Court in W.P.(PIL) No. 803 of 2005 and work got actually completed on 26.03.2013. Extension of time was granted to the petitioner company up to 30.09.2011 vide letter dated 18.07.2011 of the Chief Engineer, National Highway Wing, Jharkhand and thereafter up to 31.03.2012 with the condition "without any financial benefits"(Annexure-A). Again extension was granted up to 26.03.2013 with the condition "The price adjustment beyond 31.03.2012 shall be considered only after approval of Ministry of Shipping Road Transport and Highways" vide letter dated 07.09.2013(Annexure-D). The third revised estimate for the work was sanctioned on 29.06.2015 (Annexure-E) by the Ministry of Shipping, Road Transport and Highways, Government of India. The Respondents denied receipt of letter dated 21.03.2014. According to them petitioner demanded Rs. 28,46,703/- vide letter No. 9347 dated 27.03.2014. It was paid on 28.03.2014 in 32nd running accounts bill. Another demand raised for Rs. 12,73,324/- vide letter No. 9348 dated 27.03.2014 was also paid on 28.03.2014. They have referred to I.A. No. 1596 of 2013 filed by the petitioner in W.P.(PIL) No 803 of 2005 before the learned Division Bench, wherein the Hon'ble Court observed that if there is no legal hurdle the contractor's (petitioner company) bill may be processed. According to the Respondents, all the grievance bills, as contained in I.A. No. 1596 of 2013 has been paid on 17.07.2015 after sanction of the Ministry of Shipping, Road Transport and Highway. There is no dispute that all dues including price escalation have been paid to the contractor on 17.07.2015. The retention money deducted from running bill as per SBD clause on 24.06.2013 (50%) and the rest 50% on 29.03.2014 have also been paid after completion of defect liability period. The performance security deposit in the form of bank guarantee were released on 27.03.2014 on completion of defect liability period. According to the Respondents all grievances including all bills, all price escalation as per performance security have been paid to the petitioner. In the absence of any dispute regarding the payment of dues, plea of the petitioner for appointment of an arbitrator is without any valid basis and not maintainable. Respondents have prayed for dismissal of the instant application.