- (1.) Heard Sri Vinay Khare, learned counsel for the appellant and learned Standing Counsel for the respondents.
(2.) The present appeal has been filed against the order rejecting the application filed by the appellant under Section 9 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as '1996 Act') by an order dated 7.12.2006 passed by the District Judge, Jhansi in Misc. Case No. 38 of 2006, M/s Shanti Constructions v. State of U.P. and others . The facts giving rise to the present appeal are that the appellant who is a registered partnership firm doing business of civil and supply contracts and is also registered as class 'A' Govt. contractor by the U.P. Public Works Department. By the department an agreement dated 9.1.2006 was executed for doing certain construction works, as a part of the agreement a bond was signed by the appellant depositing the requisite amount of security of Rs. 14,85,000/- in the shape of guarantee bond on 7.1.2006. As per the agreement 6 months time was stipulated for the purposes of completion of work but due to certain inaction on the part of the respondents the delay was caused in commencement of work such as without job mix formula, the work was not permitted to be undertaken for execution as the report of job mix formula was accepted to be delayed from C.R.R.I. New Delhi and I.I.T. Kanpur. The appellant vide its request letter dated 22.2.2006 also requested the respondents to make available the certified copy of the bond and drawing which were essentially required for day today reference and making planning of procurement of material and execute the work which were also not supplied causing delay in execution of work. By the letter dated 21.3.2006 the respondent expressed his inability to provide the land for establishing the plant stating that appropriate land was not available with the respondents. Due to inaction on the part of the respondents and notwithstanding the fact that market had gone high, the appellant applied for extension of time vide letters dated 7.7.2006 and 8.9.2006, but no extension has been granted and the contract of the appellant has been abandoned by the respondents, though there was a fault on the part of the respondents.
(3.) A notice was issued to terminate the contract and it was also threatened that the security deposit will be forfeited as there was an arbitration clause in the agreement between the parties. The appellant made an application under Section 9 of the Arbitration and Conciliation Act, 1996 before the Civil Court, Jhansi on 4.12.2006 alongwith an application which was registered as Misc. Case No. 38 of 2006, seeking an order to restrain the respondents from deducting Rs. 8,00,000/- from the security deposited by the appellant till the termination of the Arbitration proceedings. The appellant has also filed a Misc. Case No. 26 of 2006 under Section 9 of the 1996 Act regarding another bank guarantee of Rs. 6.85 lacs which relates to the same contract due to failure on the part of the respondents. The appellant has also made an application under Section 11 (6) of the Arbitration and Conciliation Act on 10.1.2006 before the Court of Hon'ble Chief Justice for appointment of an Arbitrator.;