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2019 DIGILAW 1035 (RAJ)

Kalyani Constructions v. NG Projects Limited

2019-04-05

ALOK SHARMA

body2019
ORDER : Alok Sharma, J. 1. This application under Section 11(6) of the Arbitration and Conciliation Act, 1996 (hereafter 'the Act of 1996') has been filed for appointment of an arbitrator in view of clause 19 of the work order dated 15-7-2016. 2. The facts of the case are that the applicant firm was engaged in the business of construction, supply of building material. On being satisfied with its quotation following a notice inviting tender it was issued work Order No. NGPL-DCPL-JV/Kalyani Constn/AB Doubling/2016-17/1016/02 dated 15-7-2016 by respondents for the contracted work of construction of station buildings, staff quarters and other structures at Rajgarh on Alwar-Bandikui doubling to the tune of Rs. 5 crore. The applicant firm completed the work of Rs. 1,36,02,528.33, out of which it claims only Rs. 68,67,372/- has been paid as on 31-7-2017. Its case is that despite submitting all bills, vouchers regarding the aforesaid work the remaining amount of Rs. 67,35,156.33 has not been paid. Despite several demands when the due and outstanding amount was not paid, the applicant sent a registered demand notice on 14-10-2017 for payment of due and outstanding amount. But to no avail. Aside of aforesaid amount due to the applicant firm, its raw material to the tune of Rs. 4,09,250/- also laying on the work site which has been wrongly detained by the non-applicant. Thus a total amount Rs. 71,44,406.33 in the aggregate is outstanding recoverable from respondents and payable to the applicant. Besides, the respondents have also deducted a sum of Rs. 1,39,623/- towards TDS from the applicant's PAN account No. 26 and the same has not been transferred to the tax authorities and is also yet to be accounted for to the applicant firm's satisfaction. 3. In the circumstances, the applicant sent legal notice on 15-11-2017 through his counsel to the non applicant firm for referring the disputes to the arbitrator as per clause 19 of terms of the work order dated 15-7-2016. On receipt of notice dated 15-11-2017 the respondents vide letter dated 25-11-2017, instead of referring the dispute to the Arbitrator sought to delay the matter, and with that intent required the applicant to settle the disputes agitated by it by mutual consultation with the Managing Director of M/s. Deem Construction company. Pursuant to letter dated 25-11-2017 although the applicant approached the Managing Director but in vain. Hence this application for appointment of an arbitrator. 4. Pursuant to letter dated 25-11-2017 although the applicant approached the Managing Director but in vain. Hence this application for appointment of an arbitrator. 4. The defence in the reply to the application under consideration is that the applicant has not resorted to the requirement of mutually resolving any dispute qua the work order dated 15-7-2016 by approaching the Managing Director of M/s. Deem Construction Co. Pvt. Ltd. Jaipur. And until it is so done and attempt at a mutual settlement on the disputes seriously made, the Arbitrator cannot be appointed and hence this application is not maintainable. Further in any event no amount is due and payable to the applicant. All payments due for work done have been made. No dispute obtains to be arbitrated. 5. Heard counsel for the parties and perused the material available on record. 6. Clause 19 of the work order 15-7-2016 provides that any dispute resulting from the agreement shall be first attempted to be settled amicably by mutual consultation by the Managing Director of M/s. Deem Construction Co. Pvt. Ltd. Jaipur, and only in the event that an amicable settlement is not reached within 30 days on any particular issue, the dispute shall be referred to arbitration to be resolved in accordance with and subject to the provisions of the Indian Arbitration Act, 1996 and any statutory modifications thereof. A dispute comes into existence when a fact is asserted by one and denied by the other. On that test there clearly is a dispute between the applicant and non applicant with regard to payment of amounts yet unpaid for work done under the work contract dated 15-7-2016. Indeed the claimant and non claimant have different views on the assertions made, and that is the dispute. So too qua the applicant's raw material at the site of the non-applicant and regarding TDS. 7. In view of the fact that the disputes between the parties have not been resolved despite the Managing Director of M/s. Deem Construction Co. Pvt. Ltd. Jaipur being approached as stated by the applicant and still an amount of Rs. 71,44,406.33 is alleged to be due and payable to the applicant aside of accounting of Rs. 1,49,623/- deducted toward TDS remaining, clause 19 of the work order dated 15-7-2016 becomes operative. 8. I am of the considered view that therefore this application deserved to be allowed. Hon'ble Mr. 71,44,406.33 is alleged to be due and payable to the applicant aside of accounting of Rs. 1,49,623/- deducted toward TDS remaining, clause 19 of the work order dated 15-7-2016 becomes operative. 8. I am of the considered view that therefore this application deserved to be allowed. Hon'ble Mr. Justice M.A.A. Khan, is appointed as sole Arbitrator to adjudicate all disputes/differences between the parties regarding the work order dated 15-7-2016. The Arbitrator shall if warranted make requisite disclosure under Section 11(1) of the Act of 1996. Payment of the cost of Arbitration proceedings and arbitration fee shall be made as per the fourth schedule of the Act of 1996 as amended from time to time and so computed as directed by the Arbitrator. 9. A copy of this order be communicated to Hon'ble Mr. Justice M.A.A. Khan for entering upon the reference and proceed thereon as per the Act of 1996 as amended from time to time and adjudicate all disputes/differences between the parties arising out of/relating to the work order dated 15-7-2016. 10. The application stands allowed accordingly.