ORDER Both the aforesaid cases have been heard together and are being decided by this common order as parties are same in both of them and they arise out of the same dispute. 2. I.A. No.5742 of 2012 has been filed on behalf of the petitioner in Request Case No.11 of 2010 for amending the prayer portion of request case due to fresh development with regard to the respondents? decision regarding encashment of bank guarantee by the Board. Hence it has become necessary for keeping the encashment of bank guarantee in abeyance. Considering the facts and circumstances of the case this interlocutory application is allowed and the prayer portion of the request case is amended accordingly. 3. Request Case No.11 of 2010 has been filed by the petitioner M/s Gammon India Ltd. (hereinafter referred to as „the petitioner? for the sake of brevity) against the Bihar State Electricity Board (hereinafter referred to as the „Board? for the sake of brevity) for appointment of a sole independent arbitrator according to the scheme of Appointment of Arbitrator under Arbitration & Conciliation Act, 1996. 4. Learned counsel for the petitioner submitted that petitioner is a company incorporated under the Companies Act 1956 having its registered office at Mumbai, whereas the sole respondent, namely the Board is a creation of statute and as such it is a State within the meaning of Article 12 of the Constitution of India. 5. Learned counsel for the petitioner stated that the respondent-Board had invited tenders for the construction of 220M Chimney at Muzaffarpur Thermal Power Station in the year 1995. The petitioner submitted its tender which was accepted by the respondent-Board and the petitioner company was instructed to take steps for execution based on the work order no.179 dated 26.04.1995 (hereinafter referred to as the said Agreement) before drawing up the formal agreement for signatures between the parties. 6. Learned counsel for the petitioner averred that petitioner started the work as per the above mentioned work order even before getting the mobilization advance under the Bank Guarantee as it was still under documentation. Thereafter the petitioner mobilized its manpower and machines and submitted Bank Guarantees towards Performance Security for Rs.44,93,750.00 only and mobilization advance for Rs.89,87,500.00 . 7. 6. Learned counsel for the petitioner averred that petitioner started the work as per the above mentioned work order even before getting the mobilization advance under the Bank Guarantee as it was still under documentation. Thereafter the petitioner mobilized its manpower and machines and submitted Bank Guarantees towards Performance Security for Rs.44,93,750.00 only and mobilization advance for Rs.89,87,500.00 . 7. Learned counsel for the petitioner asserted that the designs and drawings submitted by the petitioner as per the tender was subject to changes by the Chief Engineer (CV)of the Board and hence there was considerable delay in starting the work. According to the terms of the Agreement which was being documented, the Board was required to obtain clearance from the Pollution Control Board so that the work could go on smoothly. The respondent ensured the petitioner that necessary steps were being taken for the same and in the meantime requested the petitioner to carry on with the work. The petitioner complied with the directions and the works done were approved by the local officers of the respondent Board. 8. Learned counsel for the petitioner claimed that later the petitioner was instructed not to take up any work on the main chimney till further instructions from the Board in view of the pending case in the Hon?ble Supreme Court of India on a circular issued by the Pollution Control Board dated 10.01.2006. The petitioner waited for further orders and the site remained idle. On 31.10.1997 the Chief Engineer (CV) of the Board informed the petitioner to renew its bank guarantee up to 31.05.1998 and indicated to submit a proper formula for closure of contract. On 05.12.1998 the Board sent a letter stating that the second stage of the project will be accordingly enlarged and the height increased. However no decision of the closure of contract was intimated. 9. Learned counsel for the petitioner also claimed that the petitioner submitted a bill of Rs.332.92 lacs to the respondent Board for the works done according to their instructions. The bill submitted by the petitioner was not settled. Later the claim of the petitioner was referred by the respondent Board for examination to the committee constituted by them under order dated 12.02.2008 for settlement of bills and claims of the petitioner. The petitioner submitted all the relevant documents to the committee as required by them vide letter WSS/9/288 dated 08.05.2009. Later the claim of the petitioner was referred by the respondent Board for examination to the committee constituted by them under order dated 12.02.2008 for settlement of bills and claims of the petitioner. The petitioner submitted all the relevant documents to the committee as required by them vide letter WSS/9/288 dated 08.05.2009. The decision for the same was not communicated to the petitioner. In the meantime the petitioner came to know that the respondent Board wrote to Allahabad Bank, Mumbai on 16.02.2009 to encash the bank guarantees. The petitioner made enquiries and learnt that the committee referred to above had only taken a decision to consider the matter and hence the representative of the petitioner met the officials of the Board on 25.02.2009 requesting them not to encash the bank guarantees. The representative of the petitioner was told that the matter would be considered after the Holi vacation and the petitioner was requested to extend the bank guarantee by three months. This was duly done by the petitioner and was also intimated to the respondent. 10. Learned counsel for the petitioner further stated that however it was learnt by the petitioner that the respondent Board was taking steps to encash the bank guarantee without any decision taken by them jointly after consultation. It is to be mentioned that one of the conditions as per the Bank Guarantee is that it will be encashed by the Board only if the Board is put to any loss or damage because of any default whatsoever. Hence no loss having been caused to the Board because of any act or omission of the company, the bank was not entitled to encash the bank guarantee nor was the bank competent to do so. 11. Learned counsel for the petitioner also averred that in the above mentioned circumstances the petitioner moved this Hon?ble High Court vide CWJC No.4140 of 2009 for restraining the respondents from encashing the bank guarantees. The petitioner later filed interlocutory application for an interim stay/order bearing I.A. No.7021 of 2009 for keeping the encashment of the bank guarantee in abeyance. The Hon?ble High Court on 11.12.2009 granted time to the respondents to file their counter affidavit and directed that no coercive action including encashment of bank guarantee should be taken during the said period. The petitioner later filed interlocutory application for an interim stay/order bearing I.A. No.7021 of 2009 for keeping the encashment of the bank guarantee in abeyance. The Hon?ble High Court on 11.12.2009 granted time to the respondents to file their counter affidavit and directed that no coercive action including encashment of bank guarantee should be taken during the said period. The respondents filed their counter affidavit within the stipulated time and filed petition for vacating the stay granted vide order dated 11.12.2009 to the petitioner and for permission to encash the bank guarantee to recover the principal amount paid as Mobilization Advance to the petitioner company. The petitioner filed a rejoinder to the counter affidavit on 27.01.2010. The said matter is pending for adjudication under the heading „For Admission? before this Court. 12. Learned counsel for the petitioner further asserted that the petitioner submitted final bill with respect to the said Agreement after adjusting/credit of drawn mobilization advance from the Board for an amount of Rs.10,46,29,657.00 only on 20.04.2009. On 05.06.2009 the petitioner?s representative had a meeting with the member transmission in presence of the respondent where it was agreed that the petitioner and the respondent will amicably settle the long pending issues on the said project. The petitioner vide letter dated 26.05.2009 expressed its willingness to extend the bank guarantee and requested the Board not to encash the same. The said was duly executed by the petitioner. 13. Learned counsel for the petitioner argued that in the aforesaid facts and circumstances there was an agreement between the parties and there was also an arbitration clause in the said agreement and after completion of certain works by the petitioner a dispute had arisen due to non-compliance of their part of the agreement by the Board and hence the petitioner sent letter dated 12.11.2009 for appointment of an Arbitrator to settle the long standing dispute but the Board vide its letter dated 01.12.2009 rejected the petitioner?s request of arbitration. However, before issuance of the aforesaid rejection letter dated 01.12.2009 by the Board, petitioner had already filed CWJC No.4140 of 2009 for directing the respondent Board and its authorities not to take action prejudicial to the petitioner by encashment of bank guarantee furnished by the petitioner to the Board through Allahabad Bank, International Branch, Mumbai on 31.05.1995 which was extended by the petitioner up to June 2009 at the instance of the Board, whereafter the Deputy Director of the Accounts, Head Office of the Board had written to the Bank on 16.02.2009 for encashment of the aforesaid value of Bank Guarantee without settling the bills of the petitioner. The said writ petition was disposed of by this court vide order dated 25.04.2012 with a direction to the petitioner to submit a fresh application with copies of the bills showing works executed by the petitioner in accordance with the work order by the Board and if such application was filed by the petitioner the Board or any Committee constituted by it was directed to consider the same after calculating in accordance with law and to take a final decision within two months thereafter and till then no coercive step should be taken against the petitioner by the respondent. 14. Learned counsel for the petitioner also argued that in compliance of the said order of this court it filed an application whereafter the Board constituted a Committee on 31.05.2012 to examine the said application, whereafter the Committee submitted its report on 07.08.2012 accepting to pay only Rs.2,87,585.00 as against petitioner?s claim of Rs.332.92 lacs and stating the said facts both the parties filed their supplementary affidavit and supplementary counter affidavits in the instant case. Hence, learned counsel for the petitioner claimed that there was a need for appointment of an Arbitrator. 15. On the other hand, learned counsel for the respondent-Board submitted that no doubt work order dated 26.04.1995 contained arbitration clause as clause no.11, but there were additional conditions given in clause 17 and 21 including execution of agreement but no agreement was ever executed between the parties. It was admitted that Guarantee Bond was given towards Mobilization Advance on 31.06.1995, whereafter the work started in 1995 and stopped in 1996, whereafter the petitioner raised claim of money spent by it but never filed any writ petition nor even approached for arbitration. It was admitted that Guarantee Bond was given towards Mobilization Advance on 31.06.1995, whereafter the work started in 1995 and stopped in 1996, whereafter the petitioner raised claim of money spent by it but never filed any writ petition nor even approached for arbitration. However, much subsequently the petitioner raised several claims but did not submit the required supporting documents, but in spite of that petitioner insisted for full payment and was never willing for settlement. Hence, the Committee submitted its report dated 25.08.2008 holding that it was not in a position to arrive at any decision in that regard. 16. Learned counsel for the respondent-Board stated that petitioner filed CWJC No.4140 of 2009 which was disposed of on 25.04.2012 directing the petitioner to submit fresh application with copies of bills showing works executed by the petitioner as per work order within 15 days and directed the Board or any of its committee to consider the same after calculation in terms of agreement and in accordance with law and take final decision within two months. Thereafter the Board constituted a committee on 31.05.2012 and the said Committee submitted its report dated 08.08.2012 after considering the materials and claims of the petitioner in detail on every head after full calculation and only recommended that work done was worth Rs.2,87,585.00 whereas advance paid was Rs.89,87,500.00 hence Rs.86,99,915.00 was recoverable from the petitioner. The said report and its findings was accepted by the Board and recommended to be acted upon forthwith on 13.09.2012. But neither report dated 08.08.2012 nor the order of the Board dated 13.09.2012 was ever challenged by the petitioner in any fresh writ petition etc. He also stated that in that regard no interlocutory application can be legally filed in a disposed of case. In this regard, he relied upon a decision of the Apex Court in case of State of Uttar Pradesh vs. Brahm Datt Sharma and another, reported in AIR 1987 Supreme Court 943. 17. In the aforesaid circumstances, learned counsel for the respondents raised further four points, which are as follows:- (a) In absence of any agreement in writing no arbitration proceeding can be started. (b) Work started in 1995 and came to end in 1996 but claim for arbitration raised only in 2010, hence it is barred as per the provision of section 43 of the Arbitration & Conciliation Act, 1996. (b) Work started in 1995 and came to end in 1996 but claim for arbitration raised only in 2010, hence it is barred as per the provision of section 43 of the Arbitration & Conciliation Act, 1996. (c) Due to implication of complicated questions of facts, the matter in issue can only be fully, finally and properly decided by a Civil Court. (d) Encashment of bank guarantee cannot be stopped even if court appoints an Arbitrator. 18. With respect to the aforesaid question of limitation learned counsel for the petitioner relied upon three decisions of the Apex Court in case of Steel Authority of India Ltd. vs. J.C. Budharaja, Government and Mining Contractor, reported in (1999) 8 Supreme Court Cases 122; in case of Union of India vs. Momin Construction Company, reported in (1997) 9 Supreme Court Cases 97; and in case of Union of India vs. M/s. Momin Construction Company, reported in AIR 1995 Supreme Court 1927. 19. With respect to the point raised regarding disputed and complicated questions of facts, learned counsel for the petitioner relied upon a decision of the Apex Court in case of N. Radhakrishnan vs. Maestro Engineers and others, reported in (2010) 1 Supreme Court Cases 72. Furthermore, in support of his contention regarding prohibition of injunction for encashment of bank guarantee he relied upon two decisions of the Apex Court in case of Svenska Handelsbanken vs. M/s. Indian Charge Chrome and others, reported in AIR 1994 Supreme Court 626 and in case of The State Trading Corporation of India Ltd. vs. Jainsons Clothing Corporation and another, reported in AIR 1994 Supreme Court 2778. 20. Considering the averments made by learned counsel for the parties and the materials on record, it is quite apparent that in response to the advertisement inviting tenders by the Board, the petitioner submitted its tender which was accepted by the respondent and only thereafter work order was issued by the respondent. It was also not in dispute that the work order contained several clauses including clause of arbitration and in compliance thereof the petitioner fulfilled all the requirements and also deposited bank guarantee and the petitioner worked for a considerable period and hence the said work order will definitely come under the definition of agreement. It was also not in dispute that the work order contained several clauses including clause of arbitration and in compliance thereof the petitioner fulfilled all the requirements and also deposited bank guarantee and the petitioner worked for a considerable period and hence the said work order will definitely come under the definition of agreement. The said agreement had a clause of arbitration also and the dispute definitely exists between the parties with respect to the quantum of work done by the petitioner and quantum of money to be paid by the respondent. 21. So far the question of delay is concerned, section 43 of the Arbitration & Conciliation Act provides that Limitation Act, 1963 shall apply to arbitrations as it applied to proceedings in court, whereas under the Limitation Act the period of limitation prescribed for such step is three years from the date when the limitation starts running i.e. from the cause of action. In the instant case the issue is refusal of claim of the petitioner, which was done by the Board on 25.08.2008, whereafter the petitioner filed its application dated 12.11.2009 for appointment of Arbitrator which was refused by the Board vide its letter dated 01.12.2009, whereafter the instant request case was filed on 15.07.2010. In the said circumstances neither any question of delay has arisen nor any provision of limitation is applicable nor the decisions relied upon by learned counsel for the petitioner in that regard in case of Steel Authority of India Ltd. (supra); in case of Union of India (supra); and in case of Union of India (supra) are attracted. 22. So far the issue of complicated questions of facts are concerned, the said facts can very well be considered by the Arbitrator as in the instant case the claims of the parties are dependent on the terms of agreement according to which the petitioner was admittedly allotted the work by the respondent, whereafter some works had been done and hence there is no complication of facts rather the only matter in issue is the quantum of work done by the petitioner and the amount to which it is entitled as per the agreement. Thus this is a fit case requiring arbitration without going into the lengthy process of a title suit, specially when the instant case is covered by section 11 (6) of the Act and not by section 6 and 8 thereof. Thus this is a fit case requiring arbitration without going into the lengthy process of a title suit, specially when the instant case is covered by section 11 (6) of the Act and not by section 6 and 8 thereof. 23. So far the question of encashment of bank guarantee is concerned, there are two kinds of bank guarantees, namely the conditional and unconditional. In case of unconditional guarantee, the Board is at liberty to encash the same at its free will, but if the bank guarantee is a conditional one unless the condition is fulfilled the Board or anyone else cannot withdraw the bank guarantee. In the instant case clause 3 of the work order dated 26.04.1995 imposes certain conditions, whereas the guarantee bound towards Mobilization of Advance given by the bank dated 31.05.1995 also provides fulfillment of conditions contained in the work order. Hence there can be no encashment of the said bank guarantee by the bank unless those conditions are fulfilled. However, so far the question of encashment of bank guarantee is concerned the Arbitrator may also decide the said question along with the main issues of arbitration. 24. In the said circumstances, the decisions of the Apex court in case of Svenska Handelsbanken (supra) and in case of The State Trading Corporation of India Ltd. (supra) are not applicable to the facts and circumstances of the case as mentioned above, rather the well considered decision of the Apex Court in case of Hindustan Construction Co. Ltd. vs. State of Bihar and others, reported in (1999) 8 Supreme Court Cases 436 would squarely cover the instant case. In the said decision the Apex Court had also considered all the previous decisions of the Supreme Court and had come to a specific finding that the terms of the bank guarantee are extremely material and since the bank guarantee represents an independent contract between the bank and the beneficiaries, both the parties would be bound by the terms thereof and the invocation of such bank guarantee will have to be in accordance with the terms of the bank guarantee or else the invocation itself would be bad. 25. 25. Furthermore, CWJC No.4140 of 2009 was filed by the petitioner for directing the respondents not to take any action prejudicial to the petitioner by encashment of bank guarantee furnished by the petitioner to the respondent through Allahabad Bank, International Branch, Mumbai on 31.05.1995 which was extended by the petitioner up to June 2009 at the instance of the respondent, whereafter the authority of the Board had written to the Bank on 16.02.2009 for encashment of the aforesaid value of the bank guarantee and during the pendency of the said writ petition, the instant Request Case No.11 of 2010 was filed on 15.07.2010 for appointment of Arbitrator with respect to the same dispute. Both the cases were taken up together on 25.04.2012 and after hearing both the parties, the writ petition was disposed of directing the Board or its Committee to consider the claim of the petitioner after calculating in accordance with law and to take final decision within two months and till further order, the respondent was restrained from taking any coercive step against the petitioner, whereas the request case was adjourned for three months for waiting the final decision of the Board. This was done merely with a view to get the matter settled by the Board itself. Had it been so there was no occasion for continuance of the instant request case, but since the matter could not be settled by the Board rather its subsequent order dated 13.09.2012 on the basis of report of Committee dated 08.08.2012 further thickened the dispute, as the purpose of order dated 25.04.2012 passed by this court in CWJC No.4140 of 2009 has failed. 26. Considering the aforesaid facts and circumstances in their entirety and the materials on record, this appears to be a fit case for appointment of Arbitrator. So far the name of the Arbitrator is concerned, none of the parties agreed to the names suggested by other, hence this court appoints Justice S.K. Katriar, a former Judge of this court, resident of North of Planetarium, Bailey Road, Patna-1 and his present address being 90, Lawyers Chambers (C/o A.K. Srivastava), A.K. Sen Block, Supreme Court Compound, Bhagwan Das Road, New Delhi-110001, as Arbitrator for settlement of the aforesaid dispute between the parties. 27. 27. Both the parties are directed to approach the said Arbitrator within four weeks, whereafter the said Arbitrator will fix his remuneration and expenses, which would be borne by both the parties half and half. The said Arbitrator will also fix dates for expeditious disposal of the arbitration. 28. With the aforesaid observations/directions, this request case is disposed of. However, during the pendency of arbitration the encashment of bank guarantee submitted by the petitioner before the respondent shall be kept in abeyance. 29. M.J.C. No.4485 of 2012 has been filed by the petitioner for modification of order dated 25.04.2012 passed by this court in CWJC No.4140 of 2009 and for interim order of stay restraining the respondent from encashing the bank guarantee by the respondent till the final order/award passed in Request Case No.11 of 2010 filed by the petitioner. In view of the aforesaid order passed with respect to Request Case No.11 of 2010, M.J.C. No.4485 of 2012 is disposed of.