The existence of an arbitration clause mandates dispute resolution through arbitration, and mere allegations of fraud do not preclude this process.

JUDGMENT :

SHAMPA DUTT (PAUL), J.

1. The writ application has been preferred praying for a direction upon the Kolkata Environmental Improvement Investment Program (KEIPP) being the respondent No.2 herein to refund/reimburse the extra amount of Rs.5,46,10,108/- withheld by the respondent no.2 along with interest accrued thereof to the petitioner.

2. The petitioner’s case is that by a tender dated 25^th March, 2016, Kolkata Environmental Improvement Investment Program by a publication in a local newspaper invited bid for a project for sewerage and drainage network in Rania Box Catchment (Part of ward 111, 112, & 113) in Borough XI, Contract Package No.KEIIP/NCB/TR-2/SD10/2015-16, for an amount of Rs.76,02,79,999.80. The petitioner being eligible for such projects and adhering to the guidelines of the said tender, submitted its financial proposal on 17th October, 2016.

3. The respondent no.2 being the project director, by letter dated 17^th October, 2016 accepted the bid and/or financial proposal dated 25^th March, 2016 for execution of the sewerage and drainage network in Rania Box Catchment (Part of ward 111, 112, & 113) in Borough XI, Contract Package No.KEIIP/NCB/TR-2/SD10/2015-16 thereafter requested the petitioner to provide performance security in accordance of the clause 42.1 of Instruction of Bidders (ITB).

4. Thereafter as per the course of action to start the project the petitioner engaged its team at the project site initiating the project as soon as possible after receiving the notice to proceed dated 25^th January, 2017 and infused an amount of Rs.37,13,022/- for mobilization of the project, moreover the petitioner deposited an amount of Rs.10,31,395/- as retention money with the respondent no.2 and also furnished a Bank Guarantee dated 25^th November, 2016 valid till 22^nd November, 2020 for an amount of Rs.7,60,28,000/- to the respondent no.2.

5. The petitioner’s further case is that during a joint inspection conducted on 27th December, 2017 the respondents were satisfied with the quality of work, but subsequently there was some delay in implementation of the project and, as such, several letters were exchanged between the petitioner and the respondent no.2 in regard to the progress of the work, quality of work and delay in execution the work. In the meantime, an application under Insolvency and Bankruptcy Code, 2016 was filed before the National Company Law Tribunal (NCLT) Kolkata Bench by State Bank of India and others for initiation of corporate insolvency resolution process in the year 2018. Subsequently, by an order date 13^th March, 2019 the NCLT, Kolkata was pleased to admit the corporate debtor i.e., the petitioner herein in the corporate insolvency resolution process and accordingly an interim resolution professional was appointed, thereafter the company’s new committee of creditors was formed and subsequently, on 24^th February, 2020, EDCL Infrastructure Limited and US Constructions Pvt. Ltd. was confirmed as successful resolution applicant.

6. Without any notice to the petitioner, the respondent no.2 illegally invoked the Bank Guarantee provided by the petitioner of Rs.7,60,28,000/- on 21st August, 2018.

7. It is submitted that that at the time of termination, an amount of Rs.1,84,62,208.37 was due and payable by the respondent in regard to the work done till the purported termination of the contract by the respondent no.1 being bill no.RA-3 amounting to Rs.1,81,95,818.60 and bill No.RA-4, amounting to Rs.2,66,389.77.

8. Being aggrieved and dissatisfied with the action of the resp