The inaction of a party in fulfilling contractual obligations can create a dispute justifying arbitration, despite contractual conditions.

JUDGMENT :

1. The instant petition is filed by the petitioner under Section 11(6) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Act') seeking appointment of an Arbitrator.

2. The brief facts of the case are stated infra:

Due to various defaults/failures on the part of the respondents in complying the laws of land as well as fulfill reciprocal contractual obligations, performance and the progress of work allotted to the petitioner i.e. CA No: CELZ-01/2017-18, CONSTRUCTION OF OTM ACCN AT NIMMU, arbitration clause has been invoked by the petitioner by issuing a notice bearing No. PEBPL/CELZ/01/2017-18/146, dated 07.05.2022 requesting the respondents to appoint an arbitrator. The petitioner being eligible, participated in the tendering process and submitted its bid. The petitioner-firm emerged as lowest bidder and was allotted the contract bearing No. CELZ-01/2017-18 vide Chief Engineer Leh Zones communication bearing No. 180040/130/E8, dated 28.08.2017 for the lumpsum amount of Rs. 29,60,00,000.01 (Rupees twenty nine crore sixty lacs and paisa one only).

As per the terms and conditions of the contract, the petitioner was to execute the construction work after handing over of the site on 04.09.2017. The said buildings, structures etc. were required to be constructed in accordance with the drawings provided to the petitioner by the Chief Engineer. The initial completion period of the work was 42 months commencing from 04.09.2017 to 03.03.2021 and was further extended up to 30.11.2022. On account of various acts of commission and omission attributable to the respondents, the progress of the work got substantially delayed, and from time to time extensions were granted. During the currency of Contract, the Executive Magistrate, 1st Class, Nayabat, Leh issued notice in connection with the site and directed the contractor not to process the construction work onward. The site land is mentioned in the notice of the Executive Magistrate, 1st Class, Nayabat, Leh as disputed land. Thereafter, the petitioner approached the Respondent authorities time and again for getting the land freed from all encumbrances and hindrances which was the prerequisite condition before tender was floated and contract was allotted to the applicant/petitioner for commencement of the work. The Respondent authorities, instead of taking up the issue with the concerned authorities, started deviating from contractual obligations, forcing the petitioner to communicate a letter dated 03.01.2022, requesting therein for referring the matter to Dispute Resolution Board (DRB) as contemplated in condition 71 of IAFW-2249, which request of the petitioner was denied and instead, the respondents impressed upon for carrying out joint survey. Thereafter, the petitioner vide letter No. PEBPL/CELZ/2017-18/137, dated 17.02.2022 again informed the respondents that they have failed to „Firm up” the provisional quantities listed under the Contract Agreement within its original period of completion i.e. 03.03.2021, which period has since expired. The petitioner also pointed out that the respondents failed to record the quantum of work done on ground. It is only at the payment stage, the unwarranted observations are being raised by the respondents. The petitioner further raised the issue of curtailed payment by the respondents for which the petitioner claimed compensation in terms of Section 73 of the Indian Contract Act. The petitioner countered the contents of the communication dated 08th February, 2022 and reiterated the issue to be referred to DRB and has stated that the petitioner has rightly invoked the provisions of Condition 71 of IAFW-2249, CGC. The petitioner vide his communication dated 15.04.2022 apprised the respondents that the work in question is under deemed suspension w.e.f. 13.11.2021 on account of land dispute with Local Civil Authorities and the learned Executive Magistrate 1st Class, Nayabat, Leh had directed in terms of order dated 13.11.