HIGH COURT OF JAMMU & KASHMIR AND LADAKH AT JAMMU (Through Virtual Mode) Case: Arb P No. 4/2025 Date of Pronouncements : 31.10.2025 M/S Reliance Electric Works …Petitioner(s)/Appellant(s) Through: Ms. Anju Sharma, Advocate. V/s Chief Engineer Project Manager, JPDCL, Jammu …. Respondent(s) Through: Ms. Monika Kohli, Sr. AAG. CORAM: HON’BLE THE CHIEF JUSTICE ORDER 31.10.2025 01. The present petition has been filed under Section 11 of the Arbitration and Conciliation Act, 1996 (for short ‘the Act’) for appointment of an independent Arbitrator. 02. The petitioner–M/s Reliance Elektrik Works, being a corporate body engaged in the business of construction work participated in e-NIT package No. CE/PWJ/38 of 2017-18 dated 06.03.2018 for carrying out certain works, i.e., survey, Design, Engineering Manufacture, Type Testing, Inspection Supply, Erection Testing and commissioning of Plants and Equipments for construction of 33/11 KV sub stations, 33 KV lines, Distribution Sub stations along with associated line and related works on turnkey basis in Jammu District under DEEN DAYAL UPADHAUYA GRAM JYOTI YOJANA (DDUGJY) Package- A. The total estimated cost of the aforesaid contract was ₹ 28,91,78,560/-. In the said process, after the tender evaluation process and finding the petitioner successful, the respondent accepted the bid of the petitioner. The letter of intent for Turnkey contract of electrification works of Jammu District was issued in favor of the petitioner on 26.06.2018 and in terms of the award dated 11.08.2018, the work was required to be executed in twenty four months from the date of Sr. No. 12 -2- award of contract strictly in terms of the conditions and provisions contained in the agreement. 03. It is submitted that as per the directions of the respondent, the petitioner also executed the additional works in addition to the works already allotted to the petitioner. However, the respondent started making the part payment to the petitioner and not paid the whole amount of bills submitted by the petitioner– Firm. On account of the dispute which arose between the petitioner and respondent, series of communications were addressed to the respondents requesting for release of the balance amount. It is submitted that vide communication dated 29.07.2024, the petitioner invoked arbitration clause 39 of the contract and proposed the name of Sh. Shashi Kant (Retired SDG, CPWD & Engineer-in-Chief, PWD, Delhi) to act as arbitrator on his behalf. The respondent in response to the communication of the petitioner, vide letter dated 05.08.2024, informed the petitioner that the bills amounting to Rs.2,65,42,566/- were processed, however, the payment could not be released due to outage of server. It is stated that DDUGJ scheme got financially closed on 31.03.2023 and the liability of the petitioner to the aforesaid extent was reflected in the works program for the year 2023-24 in capex budget but no funds have been released to clear the liability. It is also stated to have been communicated to the petitioner, vide letter dated 21.05.2024, by the respondent that higher authorities have been requested for release of the requisite funds to clear the liability. On account of the said dispute of non-payment of final bill by the respondent, the petitioner invoked Clause 39 of GCC [Clause 34(II) of the Letter of Award] vide letter aforesaid letter dated 29.07.2024, which provides:- “34.ARBITRATION I. All disputes or differences in respect of which the decision, if any, of the Project Manager and/ or the Head of the Implementing Authority has not become final or binding as aforesaid shall be settled by arbitration in the manner provided herein below: II. The arbitration shall be conducted by three arbitrators, one each to be nominated by the Contractor and the JKPDD and the third to be appointed by both the arbitration in accordance with the J&K Arbitration and Conciliation Act 1997. If either of the parties fails to appoint its arbitrator within sixty (60) days after receipt of a notice from the other party invoking the Arbitration Clause, the arbitrator appointed by the party -3- invoking the arbitration clause shall become the sole arbitrator to conduct the arbitration. III. The language of the arbitration proceedings and tht of the documents and communications between the parties shall be English. The arbitration shall be conducted in accordance with the provisions of the J&K Arbitration and Conciliation Act, 1997 or any statutory modification thereof. The venue of arbitrators shall be headquarter of JKPDD. IV. The decision of the aforesaid of the majority of the arbitrators shall be final and binding upon the parties. In the event of any of the aforesaid arbitrators dying, neglecting, resigning or being unable to act for any reason, it will be lawful for the party concerned to nominate another arbitrator in place of the outgoing arbitrator. V. During settlement of disputes and arbitration proceedings, both parties shall be obliged to carry out their respective obligation under Contract. While offering section of work/ substation for commissioning and handling over, turnkey contractor shall provide pre-commissioning test report and detail checklist (format provided along quality guidelines at Volume-II: Section-I).” 04. Accordingly, as stated above, the petitioner proposed name of Sh. Shashi Kant (Retd. SDG VPWD & E in CPWD, Delhi) to act as arbitrator on his behalf and requested the respondent to appoint an arbitrator for deciding the dispute within 60 days. It is submitted that since the respondent failed to appoint an arbitrator within the stipulated period, therefore, the arbitrator proposed by the petitioner became the sole arbitrator, in terms of the contract, to decide the dispute between the parties. Accordingly, the said arbitrator vide letter dated 10.10.2024, informed the respondent to sign the agreement towards waiver of Section 12(5) of the Act but the respondent did not sign the same. 05. It is urged that since the respondent, despite letter dated 29.07.2024, neither agreed for settlement of the disputes through arbitration nor directed appointment of an arbitrator. Hence, the petition at hand. 06. Pursuant to the notice issued by this Court, the respondents had caused appearance and filed their response. The respondents in their reply, have, inter alia, submitted that the petition is not maintainable as there exists no arbitral dispute between the parties. It is submitted that delay in disbursement of payment is purely on account of non-release of funds by the Government of India, beyond the control of the respondent. It is further submitted that the claim of executing additional works by the petitioner is vague and without any documentary evidence. It is further urged that the contract entered into between the parties provides a defined mechanism for resolution of disputes but the petitioner instead -4- of resorting to the said procedure has approached this Court under Section 11 of the Act, and, as such, the petition is not maintainable. Further, the respondents have submitted that the bill submitted by the petitioner had already been processed and uploaded on PFMS Portal and post on 31.03.2023 but due to financial year closing, the funds for the said scheme have not yet been received from the Government of India, therefore, payment could not be made to the petitioner. 07. The existence of the arbitration clause, as aforesaid, and its invocation by the petitioner vide notice dated 29.07.2024, is not disputed. 08. Thus, in the given circumstances, learned counsel for the respondent, as always, fairly submits that let an arbitrator be appointed. But since the claim that is sought to be made by the petitioner is vehemently disputed/ denied, it is submitted that respondent be granted liberty to raise all possible pleas/ objections before the arbitral tribunal/ arbitrator in this regard. 09. Accordingly, in the wake of the position sketched out above and in terms of the statements made by the learned counsel for the parties, the petition is allowed. And, with consent of learned counsel for the parties, Mr. Justice J. P. Singh (Former Judge of the High Court of Jammu & Kashmir and Ladakh, Mobile No. 9018844000) is appointed as the sole arbitrator. Who shall proceed with the matter in accordance with the provisions of the Act. And to make an award within the time provided in the Act itself after charging the prescribed fee along with incidental expenses to be shared by the parties. The respondents are at liberty to raise all the objections as regards the subject matter before the learned Arbitrator. 10. Registry to send a copy of this order to the learned arbitrator. (ARUN PALLI) CHIEF JUSTICE Srinagar 31.10.2025 Abdul Qayoom, Secy. Abdul Qayoom Lone I attest to the accuracy and authenticity of this document 04.11.2025 12:13