HIGH COURT OF JAMMU AND KASHMIR AT JAMMU

AA no. 20/2013

Date of order: 28.03.2014

Pir Panchal Company Pvt. Ltd. v. Union of India and ors

Coram:

Hon’ble Mr. Justice M. M. Kumar, Chief Justice

Appearing counsel:

For the Petitioner(s) : Mr. Himanshu Beotra, Advocate.

For the Respondent(s) : Mr. P. S. Chandel, CGSC.

i)

Whether to be reported in

Press, Journal/Media

:

Yes

ii/

Whether to be reported in

Digest/ Journal

:

Yes

M. M. Kumar, CJ

1.

The petitioner Pir Panchal Company Pvt. Ltd. has

approached this Court with a prayer for appointment of an

independent arbitrator under Section 11 of the Jammu and

Kashmir Arbitration and Conciliation Act, 1997.

2.

Few facts may first be set out to put the controversy in its

proper

perspective.

The

Deputy

Chief

Engineer,

Construction/Doubling Northern Railways issued NIT dated

28.09.2006 inviting tenders from eligible contractors for

construction

of

Railway

level/low

level

platform

at

Samba/Ghagwal and loading ramps at Samba block hut at

Basantar bridge, staff quarters and duty huts and lifting barrier

at level crossing between Jammu Ghagwal and other works

2

between

Vijaypur-Jammu-Ghagwal

in

connection

with

Jalandhar-Pathankot-Jammu Tawi doubling (Annexure A). The

petitioner was a successful tenderer. Accordingly acceptance

letter dated 02.08.2007 allotting the contract to the petitioner at

the rate of Rs. 2,20,00,244.67 was issued (Annexure B).

3.

The petitioner- company was directed to start the

execution of work vide letter 09.08.2007 (Annexure C). During

the execution of the work the petitioner-company was directed

to do some works in addition to the allotted work, which was

duly executed by it. According to the clauses of the contract

agreement it was provided that clear sites were available for

completion of various structures. A period of four months

commencing from 02.08.2007 was fixed. However, the

petitioner claims that on account of non-availability of clear sites

for execution of work there was delay in the execution which

was attributable to the respondents. The time therefore was

extended from time to time. It is appropriate to mention that

extensions were granted on many occasions and the work was

eventually completed in 49 months. It is alleged by the

petitioner that the total work on account of non-availability of the

site was reduced and in fact it resulted in financial losses to the

petitioner-company. Be that as it may, the work was completed

on 30.09.2011. In the Final Bill a large number of items of work

3

executed by the petitioner-company were not accounted for and

were found missing. The petitioner agitated and requested for

inclusion of the aforesaid items by letter dated 19.04.2012. A

sum of Rs. 7,37,36,975/- was claimed by the petitioner-

company. It is categorical case of the petitioner-company

pleaded in para no. 8 and 9, that there was pressure and undue

influence mounted on it to withdraw the claim made vide letter

dated 19.04.2012 and the petitioner was forced to agree for

release of undisputed amount of Rs. 20.74 lacs along with the

amount of performance bank guarantee, security deposit and

earnest money amounting to Rs. 25,13,904/-. It is positive case

of the petitioner that on account of undue influence, pressure

and threats the petitioner was forced to agree to accept the

undisputed amount by excluding the value of the additional

work executed. The respondents showed their inability to

process the final bill in presence of the claim made by the

petitioner in its letter dated 19.04.2012 because accepting such

a claim by respondents would have made the contract disputed

one which would cause disability to process the bill. Such a

course was considered contrary to t