GMS Engineering vs Auro Mira Bio Power India Pvt. Ltd.

Satish K. Agnihotri, Actg. C.J.

This original petition has been filed under Section 11(6) of the Arbitration and Conciliation Act, 1996, for appointment of an Arbitrator for resolving the disputes between the petitioner and respondent.

The petitioner is stated to be a Civil Construction firm carrying on civil construction works. The respondent invited tenders for civil construction works for 18 Mega Watt Bio-Mass Power project at Shanmugapuram Village, V.K. Pudhur Taluk, Thirunelveli District.

It is submitted that the respondent issued work order for said construction work in Work order No. B001-14 dated 06.11.2009 for the estimated cost of 2.92 crores to the petitioner. The petitioner accepted the work order and commenced the construction work from 10.11.2009 and completed the contract work on 25.03.2011 and submitted 14 bills on various dates for the works done for the total value of Rs. 2,48,23,464.30. However, the payments were made by the respondent for only Rs. 2,22,02,314.25. According to the petitioner, the outstanding due payable to the petitioner is Rs. 26,21,150.

It is the case of the petitioner that in terms of the work order, a sum of Rs. 28,15,597.32 came to be deducted as retention money from the running bills at various stages. However according to the terms and conditions of the commercial contract, 50% of the retention money of Rs. 14,07,798/- is due and liable to be payable by the respondent on completion of major equipment package foundations and building works and the balance of 50% i.e., a sum of Rs. 14,07,799/- is payable on commissioning of the power plant.

It is the submission of the petitioner that the respondent have not returned the retention money to the petitioner inspite of several reminders. The petitioner had issued a legal notice on 13.05.2013 along with statement of accounts, calling upon the respondent to pay the balance outstanding bill amount of Rs. 26,21,150/- together with a sum of Rs. 22,48,367/- being the interest at 18% per annum. On receipt of the legal notice, the respondent company sent a letter dated 20.05.2013 informing the petitioner''s counsel that a formal reply to the legal notice would be sent within a period of 2 to 3 weeks, but till date, the petitioner has neither received the payment nor received any reply to their legal notice.

It is submitted that the petitioner by notice dated 29.06.2013 invoked the Arbitration Clause in the Agreement Work Order B001 14 dated 06.11.2009 to resolve the dispute arising out of execution of the work mentioned in the said Work order.

I have heard the learned counsel for the petitioner and perused the entire materials available on record.

The relevant clause of the Agreement/Work order dealing with resolution of disputes reads as follows:

Arbitration: In the event of any differences in the interpretation of these terms or dispute arising in executing the order, the same will be resolved by references to two arbitrators under provisions of Indian Arbitration Act, 1996. Any alterations or additions to this contract shall be valid only if made in writing and duly signed by authorised representatives of purchaser and GMS Engineering.

In the facts and circumstances of the case, without going into the merits of the case, I feel a retired High Court Judge can be appointed as the Sole Arbitrator in this matter, to decide the disputes between the parties.

Accordingly, as agreed by both parties, I hereby appoint Thiru A.S. Venkatachalamoorthy, Retired Chief Justice, High Court of Chhattisgarh, as the sole arbitrator to resolve the dispute between the parties. The learned Arbitrator shall enter upon the reference and after issuing due notices to the parties and upon hearing them, pass an award as expeditiously as possible. The learned Arbitrator is at liberty to fix the remuneration and other incidental expenses, which shall be borne by both the parties equally.

The original petition is accordingly allowed.