MOHAMMAD RAFIQ,J. - (1.) Applicant M/s JIL-Aquafil (JV) has filed this application under Section 11 of the Arbitration and Conciliation Act, 1996, inter-alia with the prayer that an Arbitrator in terms of Clause 24.4 of the Contract be appointed for resolution of its dispute with the non-applicant, Rajasthan Urban Infrastructure Development Project.
(2.) Foundational facts essential for deciding the application are that applicant is a joint venture of M/s Jain Infra Projects Limited and M/s Aquafil Polymers Company Private Limited. Non-applicant Rajasthan Urban Infrastructure Development Project has been created by the Government of Rajasthan for development of infrastructure across the urban centers of the State of Rajasthan. Non-applicant on 28.01.2011 invited tenders to improve infrastructure facilities at Bundi. Applicant submitted its tender and was declared as a successful bidder to "Design, Construction, Supply, Erection, Testing, Commissioning and five years Operation and Maintenance of Sewage Treatment plant having a capacity of 8 MLD including all Civil, Electrical, Mechanical, Pumping and other allied works and Supply, Laying, Joining, Testing and Commissioning of Outfall Sewer, various Trunk sewers, collecting and lateral sewers along with all necessary manholes, appurtenances, etc. at Bundi town", under Contract Package for the accepted contract amount of Rs.34,73,78,358/-. A letter of acceptance in favour of the applicant was issued by non-applicant on 21.07.2011. In terms thereof, the applicant, from time to time, submitted performance security in the form of four different bank guarantees, each for a sum of Rs.5,41,21,818/-. The non-applicant issued notice to applicant of work order dated 09.09.2011 and directed it to commence mobilisation of the work. According to said notice, date of commencement of the project was 18.08.2011 and date of completion was 17.02.2014. In terms of the tender document, contract agreement (work) and contract agreement (operation and maintenance), both dated 21.09.2011, were executed between the parties. As per Clause 14.1 of Part III of the conditions of contract, the contractor in preparing the bid, was required to rely on the site investigation report, supplemented by any information made available to the bidder. According to the applicant, in terms of sub-clause (dd) of Clause 1 of Section VII i.e. General Condition of Contract, Site Investigation Reports are those that were included in the bidding documents being factual and interpretative reports about the surface and subsurface conditions at the site. Case of applicant is that a clear report was given by non-applicant that entire site was in their possession and that they would able to transfer possession of the site to applicant enabling them to proceed with the execution of work immediately. However, a "Handing over/Taking over of Sites" Note was also required to be prepared in terms of Clause 6.1.10.1 of the tender document, after physically visiting the sites detailing out any hindrances/encroachments, if any. Further, in terms of Clause 6.1.10.2 of the tender document, in case of such hindrances/encroachments, probable dates of removal of hindrances/encroachments were also required to be given by the Project Manager in the said Note, which was required to be jointly signed by the Project Manager as well as the Contractor.
(3.) Allegation of applicant is that non-applicant failed to provide possession of the required land and the Note of a "Handing over/Taking over of Sites" to them. Even then, non-applicant directed the applicant to proceed with the work with a representation that the project site is free from encroachment/hindrances. Applicant started preliminary works by setting up site office, proceeded for mobilisation of manpower, initiated the work for preparation of action plan, initiated the work regarding preparation and approval of equipment design and drawings etc. However, to utter shock and dismay of the applicant, it was found by them that the site is full of hindrances/encroachments and the basic mandatory obligation of providing hindrance free site has not been fulfilled by non-applicant. Some of the site area was either in possession of the Forest Department or encroached upon or occupied by certain khatedars/owners of the lands, and apparently applicant could never took possession thereof. Neither any survey was conducted nor due diligence was exercised by non-applicant before issuing above-mentioned tender for the proposed sewer project at Bundi and a false representation at the time agreement was given to the applicant. In the circumstances, applicant claims to have raised demand before the non-applicants and consequently a contract review meeting was held on 04.01.2012 with the officials of non-applicant at Investment Project Implementation Unit (IPIU) at Bundi. Applicant faced problems and agitation from local farmers/khatedars and also opposition from the forest department. Some of the khatedars/owners of plot, obtained interim orders in respect of the site area against non-applicant. Applicant claims to have again requested the non-applicant by letter dated 10.04.2012 to take steps for clearance of hindrances. It then, by letter dated 16.04.2012, yet again brought to knowledge of non-applicant that forest staff stopped the work for want of permission/work order and also prepared the challan after taking pock lane (excavator) in their custody. Request was made to obtain clearance from forest department. Non-applicant did not address/rectify any of the aforesaid issues. They rather, by letter dated 19.06.2012, arbitrarily raised various issues regarding delay in project work. Applicant, by letter dated 16.07.2012, sent a detailed reply requesting to provide land clearance for STP and 1MLD pumping station to complete the project at the earliest. Thereafter, applicant, by letter dated 29.08.2012 followed by letter dated 24.09.2012, again requested to provide the site. According to applicant, it thereafter again that vide communication dated 10.10.2012, 11.10.2012, 20.10.2012 and 26.10.2012, repeatedly raised the issue of site clearance and other related issues.;