The main legal point established is that a party to a contract cannot absolve its liabilities and must comply with dispute resolution clauses, and claims must be within the period of limitation.

JUDGMENT

(Prayer: Arbitration Original Petition filed under Section 11(6)(a) of the Arbitration and Conciliation Act, 1996 to appoint a sole Arbitrator to adjudicate the differences and disputes between the parties hereto.)

1. This Arbitration original petition was filed for requesting the appointment of an independent and impartial arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996 (hereinafter called as “the Act”) for adjudication of disputes between the parties.

2. The learned counsel for the petitioner would submit that petitioner-company was incorporated under the provisions of the Companies Act, 1956 and it is a leading entity engaged in the business of providing engineering and contracting services for various infrastructures, industrial and housing projects all over India. The petitioner was awarded the work of construction of a Residential Township “Unity Enclave” consisting of 21 Towers, Club House, Commercial Buildings and Basements, including finishes, MEP works and external development at Mambakkam, Chennai by the respondent by way of Letter of Award dated 25.06.2014 bearing reference No.SBIOA/UNITYENCLAVE/CONS/LOA/01/2014-15. The said work was awarded to the petitioner pursuant to the petitioner''s offer dated 23.04.2014, in response to the respondents'' notice inviting tender dated 19.03.2014.

3. It was further submitted by the learned counsel for the petitioner that the petitioner and the respondent had entered into a Contract Agreement on 04.03.2015 for the execution and completion of the work at a value of Rs.547,88,09,797/-. The petitioner had completed the work as envisaged under the agreement on 07.08.2018, despite various constraints and subsequently, the respondent had issued a certificate dated 18.01.2019 confirming the virtual completion of the work on 07.08.2018.

4. Further, he would submit that the defects liability period of 12 months in terms of the agreement commenced on 08.08.2018 and had expired on 07.08.2019. Subsequent to the expiry of the defects liability period, the respondent had unlawfully invoked the Bank Guarantee furnished by the petitioner towards retention for a sum of Rs.5 crore and received the said amount on 26.09.2020 by such unlawful invocation. Due to the said act of the respondent, especially after the expiry of defects liability period, the petitioner suffered irreparable damages and loss.

5. Under these circumstances, the petitioner submitted it''s claims to the respondent on 28.09.2018 and 04.11.2020 for a net amount of Rs.93,43,93,381/-. Further on 25.11.2020, the petitioner submitted a claim for a sum of Rs.17,29,90,006/- to the respondent towards incremental quantity of wall putty work executed for ensuring the smooth surface for carrying out painting work. The learned counsel for the petitioner further submitted that another claim was made to the respondent on 02.12.2020 for a sum of Rs.4,45,90,305/- towards additional cost incurred by the petitioner for diesel due to increase from time to time in the rate of excise duty levied by the Central Government and Value Added Tax levied by the State Government. In terms of Clause 6.10.9 of General Conditions of Contract (GCC) provides that on receipt of the running account bills, an ad-hoc payment of 70% of the net payable amount shall be made by the respondent to the petitioner within 7 days after preliminary scrutiny and the balance payment shall be made by the respondent to the petitioner within 3 weeks after verification of the bills. Even after the submission of claims by the petitioner on 03.02.2021 for a sum of Rs.6,36,88,443/- towards the balance amount due against the certified running account bills, certified material advance bills and certified miscellaneous bills, the respondent had failed to make payment of the said amount to the petitioner.

6. Therefore, the learned counsel for the petitioner submitted that the petitioner submitted its total claim to the respondent for a sum of Rs.121,86,12,135/-.