[Cites 6, Cited by 0]
Rajasthan High Court - Jodhpur
Prime Civil Infrastructure Private ... vs Jodhpur Development Authority ... on 29 April, 2026
[2026:RJ-JD:20508]
HIGH COURT OF JUDICATURE FOR RAJASTHAN AT
JODHPUR
S.B. Arbitration Application No. 17/2025
Prime Civil Infrastructure Private Limited, Having Its Head-Office
At A-203, Gokul Arcade, Swami Nityanand Marg, Ville Parle
(East), Mumbai-400057 Through Its Power Of Attorney Holder
Shri Goutam Jain S/o Shri Bhoor Chand Jain, Aged About 53
Years, Resident Of 85 Vaishali Enclave Near Dps Circle Jodhpur
Raj
----Petitioner
Versus
Jodhpur Development Authority, Through Its Commissioner,
Jodhpur.
----Respondent
For Petitioner(s) : Mr. Vineet Dave for Mr. Kaushik Dave.
For Respondent(s) : Mr. Rajat Dave.
HON'BLE MR. JUSTICE MUKESH RAJPUROHIT
Order
29/04/2026
1. Application herein is under section 11 of the Arbitration &
Conciliation Act, 1996 with the prayer to appoint a sole arbitrator
to decide/ adjudicate upon the dispute between the parties arising
out of a Bid Document being EOI/2015-16; NIT No.34 dated
24.11.2015.
2. Case set up in the application is that the Applicant is a
private limited company and is engaged in infrastructure
development projects throughout Rajasthan. The Government of
Rajasthan, through the Jodhpur Development Authority (JDA),
invited bids for constructing flats under the Chief Minister's Jan
Awas Yojana-2015 (CMJAY) aimed at Economically Weaker Section
and Low Income Group categories on government land (Khasra
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No. 136, Village-Tanawada, Jodhpur, Phase-I). According to the
policy, 75% of the land was to be used for construction, while the
remaining 25% was allotted free of cost to the developer as
compensation.
2.1 The applicant submitted its bid on 29.02.2016, which was
accepted as the lowest responsive bid on 04.07.2016. The
applicant was required to submit a layout plan for approval and a
bank guarantee worth 1% of the contract value within seven days
of receiving the Letter of Acceptance (LoA). The contract became
effective from 04.07.2016. The applicant complied by submitting
the layout plan and bank guarantee as stipulated.
2.3. On 19.08.2016, the JDA issued the LoA, confirming that the
layout and unit building plans were approved by the Local Level
Project Approval Committee, and directed the applicant to execute
the agreement.
2.4. The applicant commenced work as per the bid documents,
which detailed the rights and obligations of both parties, including
JDA's obligation to maintain financial capacity to fund the project
(Clauses 3.3 and 1.2). Payments were to be released through an
ESCROW account in eight stages, later revised to eighteen stages
in April 2021. However, JDA failed to maintain sufficient funds in
the ESCROW account, which impeded progress.
2.5. The applicant repeatedly communicated concerns about the
shortage of funds, delays in approvals for external development
works such as water supply and electrification, and the need for a
tripartite pari-passu mortgage agreement to secure financing.
Despite multiple requests, JDA did not respond.
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2.6. From 22.07.2022 onwards, the applicant sought formation of
a Dispute Review Expert/Board (DRE/DRB) as required by
Appendix-B of the contract, but JDA failed to constitute it.
Meanwhile, JDA issued show-cause notice 22.11.2023, alleging
project delays and threatening contract termination, ignoring their
own contractual lapses.
2.7. The applicant responded by highlighting the minimal funds
received in the ESCROW account, which was sufficient for only
about two days of work, and the absence of necessary approvals.
2.8. On 10.01.2025, JDA terminated the contract, debarred the
applicant, and forfeited the performance security, citing
insufficient progress. The applicant challenged these actions,
attributing delays to JDA's failures. Despite assurances during a
meeting on 26th December 2022, no DRE/DRB was formed.
2.9. Consequently, the applicant invoked arbitration as per
Appendix-B and Section 21 of the Arbitration and Conciliation Act,
1996, however, JDA refused arbitration citing a pending Section 9
application in Commercial Court No.1, Jodhpur, which the
applicant clarified was solely for interim relief.
2.10. Resultantly, the applicant now seeks the court's intervention
under Section 11 of the Arbitration and Conciliation Act, 1996,
requesting appointment of a sole arbitrator since JDA failed to
form the DRE/DRB and refused to nominate an arbitrator, thereby
violating the contract's dispute resolution mechanism.
3. Per contra, learned counsel for the respondent-non-applicant
contends that the applicant's application under Section 11(6) of
the Arbitration Act, 1996, is wholly misconceived and without
merit, as the applicant has not demonstrated the existence of any
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arbitral dispute justifying the appointment of an arbitrator. The
reliance on Clauses 2.0 and 3.0 of Appendix-B is unfounded
because Clause 2.0(d) allows for the formation of a Dispute
Resolution Board (DRB/DRE) only during the execution of work
which was discontinued in December, 2021. Furthermore, prior to
seeking arbitration proceedings, the applicant failed to first
approach the Dispute Review Board. Therefore, the dispute cannot
be referred to arbitration under Clause 3.0. Accordingly, the
application deserves to be dismissed, he urges.
4. I have gone through the record and heard the learned
counsel for the parties.
5. I am unable to persuade myself with the objection taken by
learned counsel for the non-applicant/ respondent that prior to
seeking arbitration proceedings, the applicant failed to first
approach the Dispute Review Board as per Clause (2) of the
contract signed between the parties. However, it seems that the
shoe is on the other foot. The applicant has been throughout
pursuing the respondents to seek resolution by regular
correspondence / communications and yet the respondents
turned deaf ears to the same without taking any steps.
6. It has been specifically pleaded so even in the application
that the applicant requested the respondents to form DRE/DRB to
facilitate the ironing out the differences between the parties vide
communication dated 22.07.2022, but to no avail.
7. The Clause-3 as contained in Appendix-B pertaining to
arbitration is reproduced herein-below :-
"3.0 Arbitration :
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(a) Any dispute in respect of which the recommendations
(fi any) of DRE/DRB has not become final and binding, shall be
finally settled by arbitration in accordance with the Indian
Arbitration and Conciliation Act, 1996, or any statutory
amendment thereof.
(b) The arbitral tribunal will comprise three members,
one each to be appointed by the Procuring Entity and the
Contractor. The third Member, who will also act as the
presiding member, will be appointed by mutual consent of the
first two members. If these two Members fail to reach an
agreement on the third members then, on request by either or
both parties, appointment will be made by the ACS, UDH,
Jaipur."
8. The aforesaid arbitration clause is not disputed. Moreover,
there is no quibble about the fact that there is an existing dispute
between the parties, but there is a dispute as to which forum
should adjudicate the same. However, on a court query qua the
pre arbitration proceedings as per Clause-3 ibid, it transpires that
nothing worthwhile has come forth after issuance of legal notice.
The dispute can, therefore, only be resolved by way of arbitration
as mutually agreed by executing the contract to the effect. Parties
are bound by the covenant already executed by them on mutually
agreeable terms.
9. It is not clear from the petition as to what is the total
outstanding amount against the work carried out by the applicant,
which he claims is unpaid as on today. Though in the legal notice
dated 07.10.2024 para 34 thereof, it is stated that as per the
show cause notice issued by the respondent, the applicant had
accomplished work only of Rs.14,09,58924/- against work order of
Rs.19,71,90,000/-. However, the same is disputed by the
respondent and subject matter of adjudication through arbitration
proceedings. It is not for this Court to make any observation qua
the same. The applicant is at liberty to raise its outstanding
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money claim before the learned arbitrator at the time of entering
into the reference by filing the claim petition in accordance with
law.
10. Be that as it may, in view of the undisputed arbitration
clause, the instant application deserves to be allowed.
11. Accordingly, Hon'ble Mr. Justice Mr. Vineet Kothari (Retd.),
Mobile No.9480822552, R/o- 947, 11th 'D' Road, Sardarpura, B.M.
Kothari Marg, Jodhpur, Rajasthan, is appointed as the sole
Arbitrator to adjudicate the dispute between the parties.
12. The intimation of aforesaid be given by the learned counsel
for the parties as well as by the Registry to Hon'ble Arbitrator. The
above appointment is subject to necessary disclosure being made
under Section 12 of the Act of 1996.
13. The parties are at liberty to participate in the arbitration
proceedings through video conferencing subject to the approval
and convenience of the learned Arbitrator.
14. All the disputes as well as defence raised before this Court is
left open to be adjudicated by the learned Arbitrator.
15. Application stands disposed of.
(MUKESH RAJPUROHIT),J
36-/Jitender//-
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