M/s Safety Controls and Devices Ltd. thru. its Authorized Representative Shri Prakash Chandra Joshi Vs Construction and Design Services, Jal Nigam (Nagariya), Lucknow, through its Director, and 4 Others

Neutral Citation No. - 2025:AHC-LKO:14630

Court No. - 4

Case :- CIVIL MISC. ARBITRATION APPLICATION No. - 112 of 2024

Applicant :- M/S Safety Controls And Devices Ltd. Thru. Its Authorized Representative Shri Prakash Chandra Joshi Opposite Party :- Construction And Design Services, Jal Nigam (Nagariya), Lucknow, Through Its Director, And 4 Others

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Counsel for Applicant :- Utsav Mishra,Gaurav Mehrotra,Pritish Kumar Counsel for Opposite Party :- Rishabh Kapoor

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Hon'ble Rajnish Kumar,J.

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This Court had passed the following order on 10.02.2025:-

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"1. Heard Sri Gaurav Mehrotra, learned counsel for the applicant and Sri Rishabh Kapoor, learned counsel for the respondent.

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2. This is an application under Section 11(4) of the Arbitration and Concilliation Act 1996 for appointment of arbitrator.

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3. Learned counsel for the applicant submits that the parties had entered into an agreement dated 15.03.2022 for construction of Homeopathic University and Hospital in Varanasi. In pursuance thereof mobilization advance of Rs.3,05,87,100/- was provided to the applicant. However, without intimating about the proceedings instituted by the farmers against the land acquisition, the bank guarantee which was taken from the applicant was got extended and when the writ petitions were allowed, it was informed by means of the letter dated 17.09.2024 and the applicant was directed to refund the mobilization amount alongwith interest with a threat of invoking the bank guarantee, in case the same is not refunded within three days of the letter. Therefore the applicant made a representation on 24.09.2024 for resolution of dispute in terms of Clause 24 of the agreement but no decision was taken thereon,therefore, the applicant approached to the Commercial court against the letter dated 17.09.2024 but no interim protection was granted,therefore the applicant had approached this Court and a limited interim protection was granted. Thereafter the commercial court also granted interim protection and ultimately the application under Section 9 of the Arbitration and Conciliation Act 1996 was allowed by means of the order dated 12.11.2024. The said order has been challenged by the respondent before this Court in appeal but till date no interim protection has been granted.

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4. He further submits that after execution of the agreement and providing the mobilization advance, certain investments have been made by the applicant in the project but despite letter dated 24.09.2024, the dispute had not been redressed, therefore, the applicant invoked Clause 25 and gave a notice dated 16.11.2024 under Section 21 of the Arbitration and

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Conciliation Act 1996 for appointment of arbitrator suggesting two names but there is no reply from the respondent. He further submits that the respondent has admitted in objection about dispute in paragraph 11 but thereafter denied it. Thus the submission of learned counsel for the applicant is that an independent arbitrator may be appointed by this Court for resolution of dispute between the parties.

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5. Per contra,learned counsel for the respondent , without disputing the execution of agreement between the parties, payment of mobilization advance and letter dated 17.09.2024 and other proceedings in regard to the land acquisition as well as letter dated 17.09.2024, submits that since the mobilization advance of 3,05,87,100/- is with the applicant and the actual claim is only to the extent of Rs.3 crores 80 lakhs and there is difference of only Rs. 75 lakhs, therefore, the application is misconceived and not tenable. He further submits that the bank guarantee has not been invoked till date. However, he could not dispute that the applicant had moved an application for redressal of dispute under Clause 24 of the agreement on which no decision was taken and the letter dated 17.09.2024, by means of which the mobilization advance has been demanded back alongwith interest admitting the expenditure of Rs.11 lakhs and odd in the letter written by the applicant. However submission is that the application is misconceived and not tenable and liable to be dismissed as there is no dispute at this stage.

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6. Having considered the submissions of learned counsel for the parties and gone through the records, it is apparent that the agreement dated 15.03.2024 and the dispute redressal Clause 24 and the resolution of dispute under clause 25 in the agreement are not disputed. It is also not disputed that the respondent had given mobilization advance of about Rs.3,05,87,100/- and the bank guarantee was also given by the applicant. However, it appears that on account of challenge to the land acquisition proceedings, the project could not be taken further by the respondent. It is not disputed that the mobilization advance has been demanded back alongwith interest even after admitting the expenditure of Rs.11 lakhs and odd. There is no specific response in regard to the other claims by the applicant in the notice dated 16.11.2024 by learned counsel for the respondent. The respondent has also in the counter affidavit admitted about the dispute but subsequently denied. This Court is of the view that the contention of learned counsel for the respondent that there is no dispute between the parties at this stage is misconceived and not tenable and there are disputes between the parties, which can be adjudicated by the independent arbitrator in terms of Clause 25 of the agreement only.

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7. In view of above, this Court proposes the name of Hon'ble Mr. Justice Faiz Alam Khan(Former Judge of this Court), resident of T06-0101,Tower 6,Alaknanda Enclave,Awadh Vihar Yojana,,Lucknow,U.P.,Pin Code226002, Contact No.8004906084 as Arbitrator to settle the dispute between the parties.

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8. Let the disclosures on the format and consent of Hon'ble Mr. JusticeFaiz Alam Khan(Former Judge of this Court) be obtained by the office in terms of the provisions contained in Section 11(8) read with Section 12(1) and IInd Schedule of the Arbitration and Conciliation Act, 1995 by sending a letter along with copy of this application to him.

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9. List this case immediately after receipt of consent of the proposed

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arbitrator."

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In pursuance of the aforesaid order Hon'ble Mr. Justice Faiz Alam Khan (Former Judge of this Court) has furnished the disclosure and accorded his consent to be an Arbitrator vide letter dated 27.02.2025.

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In view of above, Hon'ble Mr. Justice Faiz Alam Khan (Former Judge of this Court), resident of T06-0101, Tower 6, Alaknanda Enclave, Awadh Vihar Yojana, Lucknow,U.P., Pin Code-226002, Contact No.8004906084 is appointed as an Arbitrator to arbitrate with regard to the dispute between the parties herein.

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The application is disposed of accordingly.

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Office is directed to communicate a copy of this order to Hon'ble Mr. Justice Faiz Alam Khan (Former Judge of this Court), forthwith.

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...................................................................(Rajnish Kumar, J.)

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Order Date :- 10.3.2025 Haseen U.

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Digitally signed by :- HASEENUDDIN High Court of Judicature at Allahabad, Lucknow Bench

M/s Safety Controls and Devices Ltd. thru. its Authorized Representative Shri Prakash Chandra Joshi v. Construction and Design Services, Jal Nigam (Nagariya), Lucknow, through its Director, and 4 Others

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M/s Safety Controls and Devices Ltd. thru. its Authorized Representative Shri Prakash Chandra Joshi v. Construction and Design Services, Jal Nigam (Nagariya), Lucknow, through its Director, and 4 Others

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