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2025 DAILYLAW 520 (JK)

M/S HASSAN ROADS CONSTRUCTIONS COMPANY PRIVATE LIMITED (HRCC) v. J AND K ECONOMIC RECONSTRUCTION AGENCY (ERA) AND ORS.

Arb P/47/2025 · 2026-02-27

body2025

Judgment text

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Sr. No. 06 IN THE HIGH COURT OF JAMMU & KASHMIR AND LADAKH AT SRINAGAR (THROUGH VIRTUAL MODE) Arb P No. 47/2025 M/s Hassan Roads Constructions Company …Petitioner(s)/appellant(s) Through: Mr. Muzamil Yousuf Bhat, Advocate. Vs. J&K Economic Reconstruction Agency and others. ...Respondent(s) Through: Mr. Waseem Gul, GA. CORAM: HON’BLE THE CHIEF JUSTICE O R D E R 27-02-2026 1. The present petition has been filed under Section 11(6) of the Arbitration and Conciliation Act, 1996, seeking appointment of an arbitrator. 2. The project “Up-gradation of Eastern Foreshore Road Lot 2 (PQC Road) at Baba Dam” was awarded to the petitioner for a contract value of Rs.17,26,73,702/- vide acceptance letter dated 08.01.2020. The project is stated to have been duly executed and completed by the petitioner. And the remedial measures recommended by the National Institute of Technology (NIT) Srinagar, and the Director Technical J&K ERA, were taken and implemented. 3. It is urged that despite satisfactory completion of the contract, respondents arbitrarily invoked Clause 35 of the Contract Agreement and encashed bank guarantee of Rs.36,00,000/- against retention money vide letter dated 22.08.2025 even though the defect liability period was valid till 29.08.2025. And the payment against the final bill is also stated to have been withheld by the respondents. The petitioner feeling aggrieved moved to the Court of Additional District Judge, Srinagar, under Section 9 of the Arbitration and Conciliation Act. The application came to be dismissed with liberty to the petitioner to initiate arbitration proceedings. Accordingly, the petitioner served a notice dated 20.09.2025, under Section 21 of the Act, upon the respondent invoking the arbitration clause (Clause GCC 24.04) of the contract nominating Mr. Basharat Jeelani Kawoosa, Retired Chief Engineer as its arbitrator and asking the respondents to nominate its arbitrator within 30 days. It is urged that since the respondents failed to nominate its arbitrator, the petitioner was left with no choice but to approach this Court under Section 11 of the Act. Hence this petition. 4. Pursuant to the notice issued by this Court, the respondents had caused appearance and filed their response. The respondents inter alia contend that the petition is not maintainable being misconceived. It is submitted that seeking performance of contractual obligations does not amount to existence of dispute. It is submitted that during the currency of Defects Liability Period, it was observed that the PQC has developed various cracks in some panels in addition to the surface deterioration which were asked to be rectified by the petitioner, however, the petitioner refused to do so. And in view of this, the respondents resorted to encashment of the bank guarantee. It is urged that the petitioner has suppressed the material facts, as such, the petition be dismissed. 5. The existence of the arbitration clause, as aforesaid, and its invocation by the petitioner is not disputed. 6. Although, as indicated earlier, the respondents have filed objections to the petition but during the course of hearing, learned counsel for the respondents pleads no objection in case the petition is allowed. 7. In the given facts and circumstances, coupled with statement made at the Bar by learned counsel for the respondents, the petition is allowed. Accordingly, with the consent of learned counsel for the parties, Mr. Muzaffar Hussain Attar, Judge High Court of Jammu & Kashmir and Ladakh,(Retd.) (Mob. No.9419000940) 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. 8. Registry to send a copy of this order to the learned arbitrator. (ARUN PALLI) CHIEF JUSTICE Srinagar 27.02.2026 Abdul Qayoom Lone Abdul Qayoom, Secy. I attest to the accuracy and authenticity of this document 02.03.2026 11:51