JAYANT NATH, J.

IA No.17710/2014 (u/S 8 of the Arbitration and Conciliation Act, 1996)

1. The present application is filed by the defendant under Section 8 of the Arbitration and Conciliation Act, 1996 to refer the disputes as stated in the present plaint to arbitration by appointing an arbitrator/arbitrators.

2. The suit is filed by the plaintiff for recovery of Rs.2,60,19,069/-. The brief facts as stated in the plaint are that the defendant company placed two orders on the plaintiff i.e. (a) Purchase Order and (b) Work Order. The purchase order dated 08.05.2002 was for design and engineering charges, supply of equipment for Namrup-II & III, spares, testing charges, etc. for a net value of Rs.14,81,94,697/-. Certain amendments were made in the purchase order.

3. The work order dated 08.05.2002 was for unloading, handling, storage, assembly and erection at site, commissioning, etc. of the Urea handling system for Namrup-II and Namrup-III. The total contract price was Rs.1,16,52,500/-. The two orders constituted one single turn-key contract for the Urea & Bulk and Bag handling system for Namrup-II and III Revamp Projects. The total value of the contract was Rs. 15,98,47,197/-.

4. It is contended in the plaint that the work stated in the purchase order and work order were duly completed and the Final Acceptance Certificate for both after completion of the performance guarantee test was issued by the defendant under cover of letter dated 23.10.2007. The defendant thereafter also discharged two bank guarantees for performance security vide letter dated 03.05.2008. All payments as per the purchase order have been received by the plaintiff except a sum of Rs.2.41 crores. A part payment of Rs.88.95 lacs was received by the plaintiff on 31.08.2009 leaving a balance of Rs.1,52,00,000/-. It is urged that the present suit is for this balance amount of Rs.1,52,00,000/-and the interest on the belated payment received of Rs. 88,95,098/-.

5. The plaintiff further contends that the defendant has admitted its liability to pay the plaintiff the said sum of Rs.1.52 crores vide its letters dated 01.11.2011 and 09.01.2012. A reference is made to the various correspondences between the parties. Hence, the present suit.

6. The defendant has not filed its written statement. However, in the present application i.e. IA No. 17710/2014, the defendant has pointed out that under the terms of Clause 7.1 of the Special Conditions of Contract it is stipulated that the prices are inclusive of works and contract tax. The owner is bound to deduct tax at source. The contractor is responsible for getting their accounts settled with the sales tax authorities and is also obliged to submit no dues certificate from the competent sales tax authority before clearance of their final bills. It is urged that the said contractual obligation has been introduced with the object of securing any loss to the Exchequer on account of non-payment by the contractor of its tax liability arising from and in connection with the performance of the contract. It is further urged that the plaintiff has failed to comply with the said Clause and hence, the payments have been withheld. The so called admission letters of the defendant dated 01.11.2011 and 09.01.2012 have been denied. It is stated that the officers who have issued these two letters dated 01.11.2011 and 09.01.2012 had no authority or jurisdiction to issue the same. It is further stated that after obtaining a legal opinion, an enquiry has been initiated to find out how the said letters have been issued and that appropriate action would be taken in accordance with law against the delinquent officers. However, in view of the arbitration clause, it is urged that the matter be referred to arbitration.

7. On 05.05.2015 this court had noted the submission of the learned senior counsel for the plaintiff that apart from dismissing the present application under Section 8 of the Arbitration Act, this court can also pass a decree