JUDGMENT : Heard Mr. Aayush Agarwala, learned counsel for the petitioner who appears through Video Conferencing, Mrs. Linda L. Fambawl, learned Addl. Advocate General for the respondent Nos. 1 to 3 and Mr. A.R. Malhotra, learned counsel for the respondent No. 4. The petitioner who is a company incorporated in the year 2003 having its corporate Office at A-28 Sector, Noida, Uttar Pradesh and its registered Office at C-84 Greater Kailash-I, New Delhi through its Chief Financial Officer has filed the instant writ petition with the following prayer:- “In the premises aforesaid it is most humbly prayed that Your Lordship may graciously be pleased to admit this petition, call for the Record, issue Rule calling upon the respondents to show cause as to why the petition should not be allowed as prayed for .After hearing the parties be pleased to direct the respondents 1-3 not to release any further payment to the respondent No-4 without any specific authorization of the petitioner and the respondents No 1-3 be directed to repay Performance Security of Rs. 12,52,86,404/- and half the total amount of retained money of Rs. 13,28,61,597/- to the petitioner. And pass any order or orders Your Lordship may deem fit and proper in the facts and circumstances of the case. Pending disposal of the petition, be pleased to stay the operation of impugned letter dated 14.07.2022 in the interest of justice.” 2. Be it stated herein that during the pendency of the writ petition, the performance security which according to the petitioner is due to the petitioner company was released on 03.04.2023 and therefore, the cause of action only in respect of half of the retention money survives as submitted by the counsel for the petitioner. 3. Brief facts of the case as projected by the petitioner is that the respondent No. 2 awarded contract work to the petitioner company for improvement and up-gradation of Chhumkhum - Chawngte road from Km 0.00 - Km 41.53 for a sum of Rs. 245,65,54,236/- and a contract agreement was executed on 17.09.2014 to this effect. Performance security to the tune of Rs. 12,52,86,404/- and retention money of Rs. 13,28,61,597/- were accordingly obtained by the State respondents to ensure due performance of the contract through the State Bank of India and Canara Bank. 4. 245,65,54,236/- and a contract agreement was executed on 17.09.2014 to this effect. Performance security to the tune of Rs. 12,52,86,404/- and retention money of Rs. 13,28,61,597/- were accordingly obtained by the State respondents to ensure due performance of the contract through the State Bank of India and Canara Bank. 4. The said work was given to the respondent No. 4 by way of Sub-contract with the permission of the State respondents and a Memorandum of Understanding (MoU) dated 17.04.2017 was executed between the petitioner company and the respondent No. 4 stipulating that the work is to be completed within 19 months from the date of execution of the agreement inclusive of rainy season. 5. Thereafter, another MoU was executed by the petitioner and the respondent No. 4 on 24.10.2017 at Delhi wherein it was agreed that payment will be released to the respondent No. 4 by the petitioner after credit of payment into the account of the petitioner by the authority for the said works executed by the respondent No. 4 and entered in the Initial Payment Certificate (IPC) released by the authority to the petitioner where 14 months was given for completion of the work including rainy season. 6. That as the escrow account operated by the petitioner was put on hold by the Banker due to some problems that cropped up, the petitioner vide letter dated 09.10.2019 (Annexure-V) requested the respondent No. 3 to release 11% of the total amount (9% petitioner’s and 2% TDS) plus Rs. 25 lakhs (machinery and equipment hired charges) to the petitioner and to directly release the balance payable to the respondent No. 4 in respect of IPC only. However, the respondent No. 3 continued to release all the bills directly to the respondent No. 4 and therefore, the petitioner submitted a number of request to the respondent No. 3 but the same was to no avail. The petitioner vide letter dated 07.07.2021 submitted a letter to the respondent No. 3 requesting among others that no further payments be made to the respondent No. 4 without authorization from the petitioner and that the performance security as well as the retention money be repaid to the petitioner as the entire work has been completed and the defect liability period is over as well. The respondent No. 3 instead instructed the petitioner to reopen escrow account for making further payment to the petitioner and to the respondent No. 4 within the specified time and failing which, payment will be made directly to the respondent No. 4. Aggrieved, the petitioner is before this Court. 7. Mr. Aayush Agarwala, learned counsel for the petitioner submits that the petitioner is the principal contractor, respondent Nos. 1 to 3 are the employer and the respondent No. 4 a sub-contractor. He submits that for the improvement and up-gradation of the said road concerned, an agreement was signed between the employer and the petitioner on 17.09.2014. The learned counsel submits that Clause 1.1(f) and (aa) defines the contractor and a sub-contractor. Clause 7.1 provides that the contractor may sub-contract with the approval of the engineer and that sub-contracting shall not alter the contractor’s obligation. Clause 7.3 provides that if payments are proposed to be made directly to the sub-contractor, the same shall be subject to specific authorization by the prime contractor so that the contractor’s liability or obligations is not altered. The learned counsel therefore submits that it is clear from the said provisions that despite sub-contracting, the main contractor remains obligatory to the contract. 8. The learned counsel further submits that Clause 24 and 25 provides for disputes and procedure for disputes. He submits that if the contractor believes that a decision taken by the engineer was outside the authority given to the engineer or the decision was wrongly taken, the decision shall be referred to the Adjudicator within 14 days of the notification of the engineer’s decision. The Adjudicator should be in position before “notice to proceed with work” is issued to the contractor and an agreement should be signed with the Adjudicator jointly by the employer/contractor in the form provided in Appendix 3 of the agreement. The learned counsel further submits that there is no provision for settling the disputes through the Adjudicator when all the three (3) parties i.e., Contractor, Sub-Contractor and Employer are involved. Therefore, Clause 24 and 25 does not preclude the petitioner from approaching this Court through the instant writ petition. The learned counsel has also drawn the attention of this Court to Clause 43 of the agreement which is regarding payment to be made. Therefore, Clause 24 and 25 does not preclude the petitioner from approaching this Court through the instant writ petition. The learned counsel has also drawn the attention of this Court to Clause 43 of the agreement which is regarding payment to be made. He submits that payments are to be adjusted for deductions for advance payment, retention or recoveries in terms of contract and taxes to be deducted at source (TDS) as per the applicable law. The employer shall pay to the contractor the amount certified by the engineer and in case of delay, the contractor shall be paid interest in the next payment. 9. The learned counsel has also drawn the attention of this Court to Clause 48 of the agreement which is regarding retention by the employer from each payment due to the contractor in the proportion stated in the SCC until completion of the entire works. He submits that Clause 48.2 provides that on completion of the whole of the works, half of the total amount retained shall be paid to the contractor and half when the defect liability period is over upon due certification by the engineer. The learned counsel submits that the proportion of payments which can be retained as retention money shall be 6% from each bill subject to the maximum of 5% of final contract price. 10. The learned counsel submits that a MoU was signed between the petitioner and the respondent No. 4 on 24.10.2017. He submits that as per Clause 1.5 of the MoU, payment should be made to the respondent No. 4 through the petitioner after the amount is credited into the accounts of the petitioner by the authority. Similar provision is provided for in Clause 1.17 of the MoU. As per Clause 1.10, the petitioner reserves the right to forfeit the retention money if the respondent No. 4 does not complete the work for any reason whatsoever. The learned counsel submits that Clause 1.29 provides for settlement of disputes through Arbitration but the same cannot be insisted upon in the instant case as the employer is also involved apart from the petitioner and the respondent No. 4. 11. The learned counsel submits that for convenience of the parties concerned, particularly for the interest of the respondent No. 4, an escrow account was operated by the petitioner and there was no issue till IPC 39. 11. The learned counsel submits that for convenience of the parties concerned, particularly for the interest of the respondent No. 4, an escrow account was operated by the petitioner and there was no issue till IPC 39. However, due to some problems, the escrow account operated by the petitioner was put on hold by the Banker and therefore, the petitioner wrote to the employer on 09.10.2019 to directly release payment for IPC 40 to the respondent No. 4 so that the progress of the work do not suffer. However, the employer issued the impugned Communication dated 14.07.2022 instructing the petitioner to make necessary arrangement for reopening the escrow account so as to make payment to the petitioner as well as the respondent No. 4 within a period of 14 days and failing which, direct payment, if any, will be made to the respondent No. 4. The learned counsel submits that escrow account was operated by the petitioner for the convenience of making payment to the respondent No. 4 and the said account is not a part of the agreement signed between the employer and the petitioner. Therefore, the employer cannot insist upon the petitioner to open an escrow account. The agreement signed between the petitioner and the employer on 17.09.2014 clearly stipulates that all the payments are to be made to the contractor directly and the contractor shall release whatever is due to the Sub-contractor in turn. Therefore, the prayer of the petitioner being the enforcement of the contract agreement, any objection coming from the respondents about the maintainability of the writ petition will not be sustainable. In support of his submission, the learned counsel relies upon the following authorities:- (1) ABL International Ltd. & Anr. -Vs- Export Credit Guarantee Corporation of India Ltd. & Ors. (2004) 3 SCC 553 and (2) Zonal Manager, Central Bank of India -Vs- Devi Ispat Limited & Ors. (2010) 11 SCC 186 . 12. The learned counsel thus submits that under the facts and circumstances, the writ petition may be allowed as prayed for by the petitioner. 13. Mrs. Linda L. Fambawl, learned Addl. Advocate General appearing for the State respondents referring to the affidavit-in-opposition of the State respondents submits that on the request of the petitioner vide letter dated 11.12.2017, payment for IPC 41 was made to the contractor and the sub-contractor as requested. 13. Mrs. Linda L. Fambawl, learned Addl. Advocate General appearing for the State respondents referring to the affidavit-in-opposition of the State respondents submits that on the request of the petitioner vide letter dated 11.12.2017, payment for IPC 41 was made to the contractor and the sub-contractor as requested. The reason given in the letter was that whatever payment was made to the escrow account will be transferred to their loan account. She submits that as per the MoU signed between the petitioner and the respondent No. 4, the work to be executed was between Km 0.00 - Km 30.00 and the program from Km 30.00 - Km 41.530 was to be submitted by the petitioner in due course of time. Since no proposal for the stretch beyond 30 km was submitted by the contractor till 23.01.2020, e-mail was sent to CMD on 23.01.2020 of the petitioner company giving time limit up to 03.02.2020 to submit the program for Km beyond 30.00 km and failing which, contract payment will be made to the sub-contractor as per the percentage payment payable to them in terms of the MoU signed between the petitioner and the respondent No. 4. Since no further response was received from the petitioner in the matter, payment for the executed work was made in the arrangement suggested i.e., in the ratio of 9:91 till the final bill i.e., 19.05.2022. 14. Mr. A.R. Malhotra, learned counsel for the respondent No. 4 adopts the argument of the submission made by the learned Addl. Advocate General and further submits that the writ petition is not maintainable in view of the fact paragraph Nos. 24 & 25 of the Contract Agreement dated 17.09.2014 between the petitioner and the respondent No. 2 contains the procedure for resolving the disputes between the parties through the Adjudicator. He submits that the writ petition is also not maintainable due to the fact that an arbitration clause is also available in the MoU signed between the petitioner and the respondent No. 4. He submits that the petitioner has raised complex question of facts and the contractual disputes cannot be adjudicated by this Court in exercise of its powers under Article 226 of the Constitution of India. Therefore, the writ petition is liable to be dismissed as not maintainable. In support of this submission, the learned counsel relies upon the case of Union of India & Ors. Therefore, the writ petition is liable to be dismissed as not maintainable. In support of this submission, the learned counsel relies upon the case of Union of India & Ors. -Vs- Puna Hinda (2021) 10 SCC 690 . The learned counsel further submits that the admitted position is that the respondent No. 4 was initially engaged as sub-contractor for improvement and up-gradation of the said road up to 30 km only (75% of the work) and later on, due to non-response by the petitioner on the request of respondent No. 3 regarding the balance work (25% of the work), the balance work was also assigned to the respondent No. 4. Therefore, the respondent No. 4 has completed/constructed the total length of 41.53 km as per the contract. The learned counsel submits that the entire work since August, 2017 had admittedly been completed by the respondent No. 4 and the retention money was deducted from the bills of the respondent No.4. Therefore, the petitioner has to honor the MoU dated 24.10.2017 which was also approved by the employer wherein, the revenue sharing arrangement between the respondent No. 4 and the petitioner is 91:9. Therefore, from the retention money, the petitioner cannot have any claim except 9% as agreed under the MoU dated 24.10.2017. The learned counsel further submits that in terms of the relevant provisions of the MoU signed between the petitioner and the respondent No. 4, the respondent No. 4 has invoked the arbitration clause and the Arbitral Tribunal comprising of three (3) Arbitrators are conducting the arbitration proceedings and the next sitting for recording of evidence by the Arbitral Tribunal is scheduled on 11.03.2024. Such being the position, pending final adjudication by the Arbitral Tribunal, the retention money lying with the employer be kept in a fixed deposit and the same may be released to either of the parties as per the decision arrived at by the Arbitral Tribunal. 15. I have heard the submissions made by the learned counsels for the rival parties and I have perused the materials available on record. As may be noticed, out of the two (2) prayers made by the petitioner, what remains to be considered is the release of half the total amount of retention money which is retained by the employer. 15. I have heard the submissions made by the learned counsels for the rival parties and I have perused the materials available on record. As may be noticed, out of the two (2) prayers made by the petitioner, what remains to be considered is the release of half the total amount of retention money which is retained by the employer. There is no dispute to the fact that the work has been completed and that the defect liability period is also over. Under the facts and circumstances and as per the agreement signed between the employer and the petitioner, the retention money has to be released to the contractor. However, it is also an admitted position that the petitioner has not executed the entire work and in fact has entered into a sub-contract with the respondent No. 4 as permissible under the agreement dated 17.09.2014. It is the contention of the respondents that the respondent No. 4 performed the contract work from 0.00 km - 30.00 km stretch which comes to 75% of the work and from 30.00 km onwards up to 41.530 km, the petitioner was required to submit a detail program to the employer. Since the same was not done, a notice in the form of email dated 23.01.2020 was sent to the petitioner asking the petitioner to submit a detail program for works beyond 30.00 km by 03.02.2020 and failing which, respondent No. 4 will be engaged for the work and payment will be made directly to the respondent No. 4 as per the arrangement in the MoU signed between the petitioner and the respondent No. 4. The petitioner having failed to submit the program for work beyond 30.00 km, the work is said to have been executed by the respondent No. 4 and for which, they have received payment only for 91% of the work done in terms of the MoU and after deductions were made towards retention money. Pleadings to this effect can be seen from the affidavit filed by the respondent No. 4 on 25.10.2022. 16. While such is the position, the respondent No. 3 on 27.07.2022 (Annexure-2 to the additional affidavit filed by the petitioner) had written to the petitioner enclosing a list of damaged pavement and permanent structures along with C-C road as per the verification conducted by the Senior Assistant Engineer (CC Road, PIU). 16. While such is the position, the respondent No. 3 on 27.07.2022 (Annexure-2 to the additional affidavit filed by the petitioner) had written to the petitioner enclosing a list of damaged pavement and permanent structures along with C-C road as per the verification conducted by the Senior Assistant Engineer (CC Road, PIU). Therefore, as per Clause 35 of the Contract Agreement, the petitioner was instructed to rectify the damages within the extended period of defect liability period. If the defects were not rectified, the respondent No. 3 put the petitioner to notice that Clause 36.1 of the Contract Agreement will be enforced. Further, the petitioner has also placed reliance upon the Communication dated 03.04.2023 (Annexure-3 to the additional affidavit of the petitioner) written by the respondent No. 3 to the petitioner informing that defect liability period ended on 31.03.2023 and that an amount of Rs. 1,35,41,479.00/- will be deducted from performance security amount for correction of uncorrected defects existing till the end of the defect liability period for which notice for correction was already issued and the balance amount of performance security will be released. It is therefore the projection of the petitioner that if the respondent No. 4 had indeed completed the improvement and up-gradation of the entire stretch of the road, how come the contractor/petitioner has been saddled with the liability for correcting the defect and/or make deductions from the performance security which is due to the petitioner at the end of the completion of the work and also the defect liability period. 17. The learned counsel for the petitioner has argued that the arbitration clause provided in the Agreement dated 17.09.2014 or the MoU signed between the petitioner and the respondent No. 4 on 17.04.2017 and 24.10.2017 will not be attracted to resolve the present dispute in view of the fact that the Agreement or MoU was signed either between the petitioner and the employer or the petitioner and the respondent No. 4 separately. In other words, there is no Tripartite Agreement or MoU signed between all the three (3) parties and therefore, this Court is not debarred from resolving the controversy. 18. It may however be seen that in so far as the employer is concerned, there is no dispute as regards the amount to be disbursed either to the contractor or to the sub-contractor. 18. It may however be seen that in so far as the employer is concerned, there is no dispute as regards the amount to be disbursed either to the contractor or to the sub-contractor. The dispute or controversy is as to how much of the retention money should go to either of the parties i.e., the petitioner or the respondent No. 4 or whether the entire amount should be released exclusively to one of the parties to the exclusion of the other. This Court has been informed that the respondent No. 4 has opted for arbitration and the Arbitral Tribunal comprising of three (3) Arbitrators are in the midst of considering the dispute and dates have been chalked out for recording of evidence starting from 11.03.2024. 19. Therefore, under the facts and circumstances, considering the dispute raised by the parties, the pendency of the arbitration proceeding and also the interest of the parties concerned, this Court is of the considered view that the writ petition cannot be allowed as prayed for and instead, it is hereby directed that the amount due to be released as retention money by the employer should be kept in a fixed deposit in a nationalized bank renewable periodically by the employer. The amount so deposited along with all the interest accrued therefrom shall be payable to the party/parties concerned in terms of the decision to be arrived at by the Arbitral Tribunal. 20. Having come to the above conclusion, reference of the authorities relied upon by the parties will not be necessary. With the above observations and directions, the writ petition accordingly stands disposed of. No cost.