The main legal point established in the judgment is the court's authority to appoint an arbitrator under the Arbitration & Conciliation Act, 1996, and the applicability of the limitation period and the encashment of conditional bank guarantees in arbitration proceedings.

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. 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 s