Jhelum Infra Projects PVT LTD Th Its Managing Director Raj Kumar Gupta vs. T A Infra Projects LTD Th Managing Director

Held

The Court held that the Petitioner had successfully invoked the arbitration clause. While the initial legal notice was undated, the Petitioner subsequently produced a dated legal notice (12.11.2025) and a postal receipt showing dispatch on the same date. The Court found a presumption of service, especially since the addresses matched. The existence of the arbitration agreement, as per Clause 12.2 of the sub-contract, was not disputed. Given that the parties failed to mutually agree on an Arbitrator, the Court exercised its power under Section 11 of the Act. The Court appointed Hon’ble Mr. Justice Vinod Chatterji Koul, former Judge of the High Court, as the Sole Arbitrator to adjudicate all disputes arising from the agreement. The Court directed the Registry to communicate the order to the Arbitrator and requested the Arbitrator to submit a statutory disclosure. Parties are to appear before the Arbitrator, and arbitral costs and fees are subject to the final award.

Facts

Jhelum Infra Projects Pvt. Ltd. (Petitioner) filed a petition under Sections 11(5) and 11(6) of the Arbitration and Conciliation Act, 1996, seeking the appointment of an Arbitrator. The disputes arose from a sub-contract agreement dated 03.05.2013 (later amended on 03.12.2013 and 08.02.2016) between the Petitioner and T. A. Infra Projects (Respondent) for executing a water supply work. The Petitioner alleged that the Respondent failed to release 98% of the contractual payment, withheld amounts exceeding the agreed 2% (or 3% as per Respondent's claim) retention, failed to open an ESCROW account, and illegally deducted TDS. A civil suit for specific performance was filed, which was ultimately disposed of by the Commercial Court on 06.11.2025, directing the parties to resolve disputes through arbitration. The Respondent objected, claiming no request for arbitration was made and the legal notice was undated and not received.

Key Issues

1. Whether the arbitral proceedings have commenced in terms of Section 21 of the Arbitration and Conciliation Act, 1996, given the Respondent's contention that no request for arbitration was made and the legal notice was undated and not received? (Question of law) 2. Whether the Court has the power to appoint an Arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996, when the existence of an arbitration agreement is not in dispute and the parties have failed to mutually agree upon the appointment of an Arbitrator? (Question of law) Petitioner's arguments: The Petitioner argued that a legal notice invoking the arbitration clause was served, and the Respondent's failure to respond necessitated the current petition. They relied on the Commercial Court's order directing arbitration. The Petitioner also submitted a dated legal notice and postal receipt to counter the Respondent's claims. Respondent's arguments: The Respondent contended that the Petitioner did not make a request for arbitration as required by Section 21 of the Act, and the legal notice was undated and never received. They also claimed that the retention amount was 3% plus TDS under Income Tax and GST Acts, contrary to the Petitioner's assertion of 2%.