Gujarat High Court
Jalaram Projects Pvt Ltd vs Ahmedabad Municipal Corporation on 3 September, 2021
Author: Ashutosh J. Shastri
Bench: Ashutosh J. Shastri
C/IAAP/22/2021 ORDER DATED: 03/09/2021
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/PETN. UNDER ARBITRATION ACT NO. 22 of 2021
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JALARAM PROJECTS PVT LTD
Versus
AHMEDABAD MUNICIPAL CORPORATION
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Appearance:
PARAS K SUKHWANI(8284) for the Petitioner(s) No. 1
MR NIKUNT K RAVAL(5558) for the Respondent(s) No. 1
NOTICE SERVED(4) for the Respondent(s) No. 2,3,4
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CORAM:HONOURABLE MR. JUSTICE ASHUTOSH J. SHASTRI
Date : 03/09/2021
ORAL ORDER
1. By way of this present petition under Section 11 of Arbitration and Conciliation Act, 1996 as amended from time to time, the present petitioner has requested the Court to appoint arbitrator to resolve the dispute arose between the parties to the present proceedings.
2. The case of the petitioner - Company is that for the purpose of construction of Duct of size 2.6 x 1.5 mt., from Aavkar Hall Junction, to Cozy Restaurant in South Zone of AMC area by Standing Committee Resolution No. 1366 dated 19.02.2015 for Rs.14,50,89,099.71, a contract was awarded to the petitioner and for that purpose a letter of intent was issued on 09.03.2015. In view of the terms of the contract and the direction, necessary bank guarantee was also furnished by the petitioner and further amount equal to 2% amounting to Rs. 227.68 lacs has been deducted from R.A. Bill as retention money. The petitioner further submits that 5% of the contract value as stated has also been deducted from R.A. Bill No. 3 and kept on hold. According to the petitioner, the work order was issued on 20.03.2015 with stipulated period of 12 months, Page 1 of 4 Downloaded on : Sun Jan 16 12:03:45 IST 2022 C/IAAP/22/2021 ORDER DATED: 03/09/2021 excluding monsoon,. As per the say of the petitioner, the work was completed in all respects on 31.07.2015 well before the stipulated period of completion. A test of complete work has also been undertaken wherein, no defects were found. As a result of this on 08.03.2016, a request was made to release the final payment. According to the petitioner on 13.03.2016, the Deputy City Engineer, informed that inquiry was conducted by Vigilance Department (Technical) and according to the report, excess payment was made and as such, considering the nature of penalty, an amount of Rs.25 lakhs is ordered to be recovered. On 29.07.2017, the petitioner made a request for release of the amount as indicated in para 6. Since, some part of the amount is paid as indicated in para 6 and 7 and ultimately on 01.09.2017, a request was made for release of security deposit and making payment of final bill which was required to be paid within 75 days as per the provisions of Clause-7 of the General Conditions of the Contract and as such, the total sum the petitioner is entitled in respect of the work which has already been undertaken, the figures of the said payment amount is indicated in para 9 of the petition. In respect of the said outstanding payment, since no attention was paid, the petitioner was constrained to issue notice in view of Clause-30 (1) of General Conditions of Contract, but then, at the relevant point of time, the Deputy Commissioner (South Zone) Maninagar agreed to pay the outstanding amount and hence the petitioner instructed learned advocate to withdraw the notice and therefore, vide communication dated 24.09.2019, notice dated 26.11.2018 came to be withdrawn. Pursuant to that, approval for payment was also sought from the Municipal Corporation which was granted vide Resolution No. 67 dated 07.10.2020, but since no payment was made despite repeated requests, which has constrained the petitioner to issue Notice on 09.11.2020 calling upon the authority to either make the payment of Rs.2,63,75,119.40 together with interest @ of 18% per annum from 16.04.2020 till realization and release Page 2 of 4 Downloaded on : Sun Jan 16 12:03:45 IST 2022 C/IAAP/22/2021 ORDER DATED: 03/09/2021 the Bank guarantee dated 10.03.2005 of Rs.72,54,460/- issued by HDFC, Ahmedabad or to appoint Sole Arbitrator from the following panel within a period of 30 days from the receipt of the notice. The Arbitrators panel is stated to be hereunder :-
(1) Shri S.I. Patel, Retired Secretary, State of Gujarat. (2) Shri B.J. Vasavada, Retired Member Secretary, SWSSB (3) Shri K.G. Prajapati, Retired Engineer, State of Gujarat.
3. Since the said notice has not been replied to nor any response is received from the authority concerned, the petitioner is constrained to approach this Court by way of present arbitration petition for seeking appointment of arbitrator to resolve the dispute.
4. In response to the notice having been given, the respondent authority has appeared and filed an affidavit-in-reply indicating that the claim which has been put forth is outside the purview of the contract and as such, not amenable to arbitration proceedings and since the dispute does not fall within the terms of Clause 30(1) of the agreement, the petition may not be entertained. To this reply, which has been submitted, detailed rejoinder is also filed and with this background, the petition is taken up for hearing.
5. On 06.08.2021, when the matter was taken up for hearing, learned advocate Mr. Nikunt Raval appearing on behalf of respondent no. 1 - Ahmedabad Municipal Corporation, who under the instructions expressed the desire of Corporation to give consent to the appointment of Shri S.I. Patel, Retired Secretary, State of Gujarat as a Sole Arbitrator to resolve the dispute between the parties and time was sought with a view to produce necessary declaration by the learned advocates and as such, the Page 3 of 4 Downloaded on : Sun Jan 16 12:03:45 IST 2022 C/IAAP/22/2021 ORDER DATED: 03/09/2021 matter was placed on 13.08.2021. Later on, when the matter was taken up for hearing, today, the learned advocates have submitted that with respect to the appointment of Shri S.I. Patel, Retired Secretary, State of Gujarat concurrence has been given.
6. In response to this concurrence, as required, a declaration in terms of Section 11(8) read with 12(1) (b) of the Arbitration and Conciliation Act, 1996 has been tendered on record, signed by Shri Shri S.I. Patel, Retired Secretary, R & B Department, State of Gujarat has given a declaration on 07.08.2021 and thereby requested all the disputes and rights and contentions to be left open for adjudication before the learned Arbitrator to be appointed and as such, jointly it is requested by the learned advocates to appoint and request Shri S.I. Patel, Retired Secretary, R & B Department, State of Gujarat, to resolve the dispute by acting as a Sole Arbitrator.
7. Since the aforesaid development has taken place during the pendency of the proceedings, the Court deems it proper to dispose of this petition by appointing and requesting Shri S.I. Patel, Retired Secretary, R & B Department, State of Gujarat to act as a Sole Arbitrator and resolve the dispute arising between the parties out of the works contract in question and parties to co-operate with the said arbitration proceedings.
8. With this observations and directions, the present arbitration petition stands disposed of.
Direct Service is permitted.
(ASHUTOSH J. SHASTRI, J) phalguni Page 4 of 4 Downloaded on : Sun Jan 16 12:03:45 IST 2022