Disputes concerning alleged payments are referable to arbitration despite claims of prior resolution efforts, where the existence of disputes was upheld.

JUDGMENT

Neena Bansal Krishna, J. A Petition Arb. P. NO. 790/2020 under Section 11(6) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the Act) has been filed for appointment of a sole Arbitrator. A separate petition No.OMP(I)(Comm) 324/2020 under Section 9 of the Act has been filed against the respondent as well as against Army Welfare Housing Organization (hereinafter referred to as AWHO) for attachment of amount of Rs.2,58,03,143/- lying in the hands of AWHO who is indebted to pay the amount in order to enable the respondent to release the amount in favour of the petitioner.

2. The facts in brief, are that AWHO had awarded the work of construction of Twin Tower residential accommodation at Greater Noida, to the respondent vide CA No. AWHO/G.Noida/16/2010 dated 11.03.2011 (hereinafter referred to as Project). AWHO vide its Letter no. E/03002/CA16-2010/GND-PH-IV/597/AWHO dated 16.11.2011 approved the petitioner as "Specialist Firm" for carrying out electrification works in the said Project.

3. The respondent had awarded the Work Order for electrical works in the said Project exclusively to the petitioner vide Letter No. SPCL/AWHO/WO_ELE/08 dated 19.12.2011. The entire electrical work was solely executed by the Petitioner. The mechanism for executing the Work Order agreed between the parties was that the petitioner shall issue the running account bills (RA Bills) in respect of the work done which would be approved and confirmed by the respondent on the basis of joint inspection conducted by the AWHO and the Architect. Thereafter, the petitioner shall generate the Tax invoices after accepting the verification and certification, which the respondent shall receive and accept by making an endorsement and would make the payment on back-to-back basis.

4. The petitioner submitted the running account bill no. 40 dated 29.10.2018 for the sum of Rs.37,34,229/- in respect of the work done which was duly approved and confirmed by the respondent. The respondent made certain deductions on account of which Rs.20,87,437/- are still due and payable against Bill no. 40. Thereafter, the petitioner raised another running account bill no. 41 dated 01.03.2019 for the sum of Rs.41,44,500/- which was duly approved and confirmed by the respondent.

5. It is further asserted that a security @ 5% i.e., Rs.30,15,468/- was to be paid after the virtual completion of the Project in the month of May, 2018 as the AWHO had started handing over/allotting the flats in the month of May, 2018. The respondent is liable to pay the security amount along with interest @ 24% per annum on the said security amount w.e.f. 01.06.2018.

6. It is submitted that the Project was successfully completed vide Completion Certificate dated 25.03.2019 and a Letter of Appreciation dated 12.03.2019 was issued by AWHO in favour of the petitioner. It is asserted that as per the Ledger Account, an outstanding amount of Rs.59,76,574/- on which interest @ 24% per annum was payable.

7. A Demand Notice dated 19.04.2019 was served upon the respondent but they concocted a false and frivolous story vide its reply dated 08.05.2019 wherein it was claimed that the respondent was obligated to pay to the petitioner for the work done only upon the receipt of corresponding amount from AWHO. It is claimed that the respondent had been receiving the corresponding payment from the AWHO but it failed to make payments on back-to-back basis to the petitioner; rather the payments were made after the period of 6-8months. The disputes have thus, arisen between the parties.

8. The petitioner also submitted an application with MSME SAMADHAAN but no steps were initiated by the latter and the proceedings became void ab initio because of the statutory limit prescribed thereunder.

9. Consequently, C.P.(IB) No. 2734/2019 under Section 9 of the Insolvency and Bankruptcy Code (IBC) was filed by the petitioner against the respondent in NCLT, Mumbai for initiating corporate insolvenc