Point of Law: Arbitration - Appointment of Arbitrator - Court is not required to examine any other contentious issues regarding the disputes between the parties at the stage of referring the parties to arbitration.

JUDGMENT :

VIBHU BAKHRU, J.

1. The petitioner has filed the present petition under Section 11 of the Arbitration and Conciliation Act, 1996 (hereinafter the ‘A&C Act’) inter-alia, praying that an arbitrator be appointed to adjudicate the disputes that have arisen between the parties in connection with the agreement dated 21.11.2006 (hereinafter ‘the Agreement’) entered into by the petitioner with the respondent (hereinafter ‘SDMC’) for executing the works relating to “Improvement to Drainage System and Roads Ready Mix Concrete in Ward No. C-47 and 48 in the West Zone” falling under the Executive Engineer-XXIII, MC Primary School, 10 Block, Subhash Nagar, New Delhi-110027.

2. In terms of the Agreement, SDMC awarded the contract for execution of the works in question to the petitioner at a contract price of Rs. 25,30,28,517/- In terms of the tender conditions, SDMC called upon the petitioner to deposit the performance security in the form of a Bank Guarantee for an amount of Rs. 1,02,00,000/- which is equivalent to 5% of the contract price. The Agreement stipulated 06.12.2006 as the commencement date and 05.12.2008 as the date of completion of the works.

3. The petitioner completed the works on 31.05.2010, however, it claims that the execution of the improvement work was hampered due to various reasons attributable to the respondent including dismal condition of the approach roads; frequent shutdown of the RMC Plant; heavy rains; over hanging high tension line rendering it unsafe to deploy JCP Machine/RMC Batch Mix Truck; and daily intervention of rural village representatives. Notwithstanding the said hindrances, the petitioner completed the works on 31.05.2010 and SDMC issued the completion certificate on 27.01.2012.

4. The petitioner states that due to delay in the execution of works caused due to various hindrances, it was entitled to 1371 days of additional time for completion of the contract. The petitioner applied for an extension of time for completion of the contract to the concerned authority by an application dated 16.09.2010. However, the Executive Engineer claims that the said application was submitted by the petitioner on 14.11.2011. However, it is not disputed that the said request remained pending.

5. On 16.08.2011, the petitioner submitted its 24th and Final Bill for verification and payment. However, despite several requests, the same was not processed till March, 2017.

6. The petitioner claims that despite repeated requests to the concerned Executive Engineer, SDMC for payment of dues, the same was not cleared. The petitioner claims that it sent a notice to the concerned Executive Engineer, SDMC pursuant to which, a hearing was conducted on 11.08.2016.

7. The petitioner has also placed a letter dated 11.08.2016 issued by the Executive Engineer, SDMC on record. The said letter indicates that a meeting was held on that date (11.08.2016) and the Representatives of the petitioner had been heard in response to “the notice for litigation/arbitration” issued by the petitioner. The Executive Engineer had raised queries regarding delay and finalization of the contract and the letter indicates that he had been informed by the staff of SDMC that the delay was on account of various formalities that were to be completed by the petitioner and misplacement of record due to long illness and demise of the concerned Joint Engineer. According to the SDMC, the payment was pending for various reasons including non-finalization of extra items and substitute items and non-finalization of the petitioner’s request for extension of time. The said letter indicates that the petitioner was requested not to file any litigation/arbitration case and SDMC would finalize the contract within a period of three months.

8. The petitioner’s Final Bill was cleared on 01.03.2017, pursuant to which, Rs. 1,50,16,762/- was paid by SDMC to the petitioner.

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