( 1 ) THIS order shall dispose of the petition filed by the petitioner, a contractor under Section 9 of the Arbitration and Conciliation Act, 1996. By this application, the petitioner prays for the order restraining the respondent No. 1, its agents, servants and assigns from encashing the Bank Guarantee No. 62/95 dated 8th August, 1995 for an amount of Rs. 17,54,600. 00 issued by the respondent No. 2-bank and/or for direction to respondent No. 1 to release the aforesaid bank guarantee and also the cash security deposit to an extent of Rs. 16,62,695. 00 furnished by the petitioner, since the defect liability period of twelve months, during which the same could be retained by respondent No. 1, has already expired and the respondent No. 1 s alleged claim against the petitioner are only to the tune ofrs. 40,96,198. 00.

( 2 ) THE respondent No. 1 awarded a contract to the petitioner by a letter of acceptance of Tender dated 6th January, 1993 for civil , plumbing and internal electrical work ( including conduit for telephones/communication system) and site development work of the proposed office complex of the respondent No. 1 at NOIDA. The total contract-value of the work was Rs. 7,01,84,094. 23. The petitioner furnished a bank guarantee bearing No. 62/95 dated 8th August, 1995 issued by respondent No. 2 for Rs. 17,54,600. 00 towards initial security deposit being 2. 5% of the accepted value of the tender as stipulated in clause 2. 1. 2. 0 of the General Conditions of Contract. An amount of Rs. 58,44,000. 00 of the petitioner is also kept deposited with the respondent No. l being balance 7. 5% of the security deposit which was deducted from the bills of the petitioner. The aforesaid two amounts thus constitute a sum equal to 10% of the total value of the bills, as required to be deposited with the respondent No, 1 towards security deposit, as provided for in clause 2. 1. 0. 0.

( 3 ) IT is pleaded in the plaint that the work awarded to the petitioner could not be completed within the stipulated lime of the contract in view of various breaches on the part of the respondent No. 1 and accordingly, time for completion of the same was extended by the respondent No. 1 as there was delay by the respondent No. 1 to comply with its part of the contract. The entire work was to be completed within a short span of twenty two months and, therefore, the petitioner was put under tremendous pressure for mobilisation in terms of resources, labour and equipment. The petitioner mobilised his resources at the site and had taken every step to ensure timely execution of the work. However, there were delays in performance by the respondent No. 1 on its part of the contract. Finally, the work was virtually complete on 31st January, 1996 and the petitioner requested the respondent No. 1 to take over the building. According to the petitioner, a completion certificate was issued by the respondent No. 1 on 18th March, 1996.

( 4 ) PETITIONER submitted his final bill amounting to Rs. 1,35,73,060. 00 for the work upto31st January, 1996, on 29th February, 1996. The respondent No. l, however, by letter dated 10th August, 1996 imposed liquidated damages upon the petitioner of an amount of Rs. 40,96,198. 00 and asked the petitioner to deposit the same. The petitioner, however, refuted the aforesaid claim and stated by the letter dated 22nd August, 1996 that the question of imposition of liquidated damages did not arise and sought for release of its claim of Rs. 2,09,58,000. 00 inclusive of security deposit of Rs. 58,57,893. 00 besides release of security deposit of Rs. 17,54,000. 00. On 19th September, 1996, the petitioner by letter invoked the arbitration clause in the agreement and seeks reference of the disputes to the arbitrator in terms of the arbitration clause of the contract. The respondent No. 1, however, objected to reference of all the disputes for arbitration as, according to it, only notified claims could be sent for arbitration and desi