M/S. Arti Infra Project Private Limited vs Uranium Corporation Of India on 3 July, 2026

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    Jharkhand High Court

    M/S. Arti Infra Project Private Limited vs Uranium Corporation Of India on 3 July, 2026

    Neutral Citation No. 2026:JHHC:19457
    
    
    
    
    IN THE HIGH COURT OF JHARKHAND AT RANCHI
                  Arbitration Application No. 50 of 2025
    M/s. Arti Infra Project Private Limited, Lead member of consortium
    of M/s. Aarti Infra Projects Private Limited & M/s. Khalatkar
    Constructions Consortium (JV), represented through Assistant Manager
    namely Pritam Chafale @ Pritam Sudhakar Chafale @ Preetam, aged
    about 25 years having Office at Block No. 310, Baba Santosh Palace,
    Opposite Haldiram Factory, Wardhman Nagar, Bhandara Road, P.O &
    P.S. Nagpur, Nagpur, Maharashtra - 440008.
                                                    ...    ...  Petitioner
                              Versus
    Uranium Corporation of India, represented through its Chairman and
    Managing Director namely Dr. Kacham Anand Rao, having its office at
    Corporation of India Limited, Jaduguda, P.O. and P.S.-Jaduguda Mines,
    Singhbhum (East), Jharkhand-832 102.
                                                  ...     ...      Respondent
                              ---------
    
    CORAM:              HON'BLE THE CHIEF JUSTICE
                              ---------
    For the Petitioner:       Mr Chandan Tiwari , Advocate
                              Mr Rishi Ranjan Vats, Advocate
    For the Respondent:       Mr Sudarshan Shrivastava, Advocate
                              ---------
    07/Dated: 03.07.2026
    
    1.     Heard the learned counsel for the parties.
    
    

    2. This application seeks appointment of arbitrator on the ground

    that some disputes have arisen between the parties in relation to

    SPONSORED

    agreement dated 27.04.2017 which provides for resolution of such

    disputes through arbitration.

    3. Since the agreement contains an arbitration clause i.e. 47.2, the

    learned counsel for the respondent was requested to address the Court

    regarding the objections raised by and on behalf of the respondent.

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    Neutral Citation No. 2026:JHHC:19457

    4. Mr Sudarshan Shrivastava, the learned counsel for the

    respondent, first submitted that the applicant cannot maintain this

    application seeking the appointment of an arbitrator because the

    applicant is under liquidation and the CIRP is ongoing.

    5. Secondly, Mr Shrivastava submitted that, in this case, the claims

    are frivolous and, in any event, were never raised within the 90-day

    period prescribed under Clause 47.2.1 of the agreement. This clause

    provides that if the claims are not raised within 90 days, the contractor

    will be deemed to have waived such claims, and the respondent shall be

    discharged and released of all liabilities under the contract in respect of

    these claims. Mr Shrivastava submitted that this is yet another reason

    why no arbitrator should be appointed in respect of such barred claims.

    6. Mr Shrivastava, after referring to paragraphs 15, 16 and 17,

    submitted that the claims regarding payments under the final bill,

    security deposit and retention money have already been cleared

    pursuant to the orders made by the NCLT, Mumbai. He submitted that

    the very same claims cannot now be raised in arbitration proceedings.

    He submitted that this is yet another ground why this application should

    be dismissed.

    7. Finally, Mr Shrivastava, relying upon Clause 47.1 of the

    agreement, submitted that the mandatory conciliation procedure was

    prescribed before the parties could be referred to arbitration. He

    submitted that the applicant never followed such procedure, and that

    this is also a valid ground for dismissing this application. Mr

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    Neutral Citation No. 2026:JHHC:19457

    Shrivastava relied upon paragraph 19 of the counter affidavit in which

    this objection has been elaborated.

    8. Mr Chandan Tiwari, who appears with Mr Rishi Ranjan Vats for

    the petitioner, submitted that the liquidation proceedings before the

    NCLT stand concluded by the order of the NCLT delivered on

    03.02.2023. He submitted that there can now be no bar to the applicant

    maintaining this application. He submitted that in any event, such issues

    cannot be raised in opposition to an application under Section 11(6) of

    the Arbitration and Conciliation Act, 1996 (said Act) and could always

    be left open to be raised before the Arbitral Tribunal, once it is

    appointed.

    9. Mr Tiwari further submitted that the issues like limitation or

    waiver, apart from being untenable, cannot be raised in an application

    to oppose the appointment of an Arbitral Tribunal under Section 11(6)

    of the said Act. He submitted that, at most, these issues could be left

    open for determination by the Arbitral Tribunal once it is constituted.

    10.Mr Tiwari submitted that even the objection regarding non-

    compliance with the conciliation mechanism is incorrect and, in any

    event, cannot be regarded as a bar to invoking the arbitration clause.

    He relied on M/s. Oasis Projects Ltd v. Managing Director,

    National Highway and Infrastructure Development Corporation

    Limited in Arb. P. No. 1364 of 2022 decided on 07.02.2023 by the

    Hon’ble Delhi High Court. He submitted that in any event, even this

    issue can be raised before the Arbitral Tribunal but the same cannot

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    Neutral Citation No. 2026:JHHC:19457

    be a ground to oppose the appointment of an Arbitrator or an

    Arbitral Tribunal.

    11. The rival contentions now fall for determination.

    12. At the outset, there can be no dispute about the existence of the

    arbitration clause in the agreement dated 27.04.2017 with which this

    Court is concerned. Quite fairly, no such dispute as to the existence of

    the arbitration clause was raised. Such arbitration agreement is

    contained in Clause 47.2 of the agreement dated 27.04.2017.

    13. The scope for consideration of an application under Section 11(6)

    of the said Act is extremely limited. It is limited to examining the prima

    facie existence of an arbitration agreement and does not extend to

    determining issues of limitation, etc., which are now sought to be raised

    on behalf of the respondent.

    14. In the case of Interplay Between Arbitration Agreements

    under Arbitration Act, 1996 & Stamp Act, 1899, In re, (2024) 6

    SCC 1, and in the case of SBI General Insurance Co. Ltd. v. Krish

    Spinning, (2024) 12 SCC 1, this proposition has been laid down and

    reiterated.

    15. The objections now raised by Mr Shrivastava have been

    incorporated in paragraphs 15 to 17 and 19 of the counter affidavits. At

    his request, these paragraphs are transcribed below for the convenience

    of reference:

    “15. That UCIL has paid the RA bills on regular basis to

    the party, however, it came to the notice through internal audit

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    Neutral Citation No. 2026:JHHC:19457

    that the Consortium is under liquidation and filed an

    application before NCLT, Mumbai being no. CP(IB)

    No.3884/MB/2018 dated 05/09/2018 under section 10 of

    Insolvency & Bankruptcy Code, 2016 to initiate Corporate

    Insolvency Resolution Process (CIRP). UCIL, therefore, has

    stopped to release the final bill, security deposit and retention

    money, as the party filed petition before NCLT. Hon’ble NCLT

    pronounced an order dated 01/05/2019 prohibits all kinds of

    transactions with the Corporate Debtor and the application was

    allowed. Party insisted to release the security deposit, retention

    money and final bill. UCIL has denied to release the same, as

    party is under liquidation. CA Ashish Soaji, Insolvency

    Professional communicated through a letter dated 10/02/2023

    to release Rs.58,22,457/- and Rs.95,70,373/ to a total tune of Rs.

    1,53,92,830/-.

    16. That CA Ashish Soaji, Insolvency Professional filed

    an Interlocutory Application (IA) no. 3707 of 2022 in Company

    Petition no.-3884 of 2018 before the NCLT, Mumbai and sought

    the relief from the Ld. Tribunal to release the withhold amounts

    with respect to Security Deposit and retention money. An

    interim order being no. IA/3707/2022 dated 21/06/2023 was

    pronounced by Hon’ble Tribunal to release the amount against

    Security deposit, retention money etc. to the party as applicable.

    17. That in compliance of the said NCLT order, UCIL

    has released the payment with respect to Security Deposit,

    Retention money and Final bill as detailed below:

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    Neutral Citation No. 2026:JHHC:19457

    M/s Aarti Infra Projects M/s Khaltkar Construction
    Pvt. Ltd TOTAL
    Description Payment Amount Payment Amount (In Rs.)
    Made on (In Rs.) made on (In Rs.)
    SD 15/11/2023 58,22,457.00 15/11/2023 30,97,306.00 89,19,763.00
    SD 15/11/2023 2,19,144.00 2,19,144.00
    Retention 07/12/2023 21,34,035.00 12/02/2024 20,93,079.00 42,27,114.00
    money
    Final Bill 06/11/2023 52,154.00 06/10/2023 72,074.00 1,24,228.00
    Total 82,27,790.00 52,62,459.00 1,34,90,249.00

    Statement of payment made against work executed

    SN Description Amount (in Rs.) Description Amount (in Rs.)
    1 Total order value 18,27,78,139.58 Amount paid through RA 13,37,51,885.00
    bill
    2 Total work done 16,55,19,948.00 Amount paid in Final bill 1,24,228.00
    3 LD deducted @ 1,82,77,814.00 Amount released by way 91,38,907.00
    10% order value of SD
    4 Amount released by way 42,27,114.00
    of Retention money
    5 Amount requires to 14,72,42,134.00 Total amount paid 14,72,42,134.00
    be paid

    19. That Clause 47.1 of GCC refers about conciliation. Clause

    47.1.1 Any disputes, differences, whatsoever, arising between

    the parties out of or relating to the construction, meaning,

    scope, operation or effect of this contract shall be settled

    between the employer and the contractor amicably. In case such

    amicable settlement is not possible, the parties shall take

    recourse to the conciliation proceedings for resolving such

    dispute, question, claim or differences. Clause 47.1.2 envisages

    about Conciliatory Committee comprises of the following:

                     A nominee of the Employer                                -Member
    
                     A nominee of the Contractor/Supplier                     -Member
    
                     Head of Law/Law officer of the employer                  -Member &
                                                                              Convener
    
    

    Clause 47.2 of GCC of NIT refers about Arbitration

    In the said clause it was mentioned the following:

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    Neutral Citation No. 2026:JHHC:19457

    “It is also a term of the contract that if the contractor does not

    make any demand for arbitration in respect of any claim(s) in

    writing within 90 days of receiving the intimation from the

    Corporation that the bill is ready for acceptance of the

    Contractor, the claim of the Contractor will be deemed to have

    been waived and absolutely barred and the company shall be

    discharged and released of all liabilities under the contract in

    respect of these claims”.

    16. As regards the objection regarding bar of limitation provided

    under Clause 47.2.1 or the objection that certain amounts that are now

    being claimed by the applicant have already been paid by the

    respondent to the applicant under the orders of the NCLT, these are

    matters that can be raised before the Arbitral Tribunal once it is

    constituted. The respondent has specific liberty to raise all such

    contentions. However, based upon such contentions, the very

    appointment of an Arbitrator or the constitution of an Arbitral Tribunal

    cannot be resisted.

    17. In the case of M/s. P.K. Agarwala v. MECON Limited and

    UCIL in Arbitration Application No. 34 of 2025, which is

    incidentally the respondent in the present matter disposed of on

    04.02.2026 by this Court, similar arguments were rejected by this Court

    after holding the scope of examination under Section 11(6) of the said

    Act is confined to the existence of an arbitration agreement and not to

    all other issues including the issue of “accord and satisfaction” that has

    been raised in the said matter.

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    Neutral Citation No. 2026:JHHC:19457

    18. No doubt, by mere appointment of an Arbitrator, the respondent

    is not precluded from raising all such issues before the Arbitrator.

    However, raising of such issues is not a very good ground to resist the

    appointment of an Arbitrator, given the limited scope of an application

    under Section 11(6) of the said Act.

    19. On the issue of the applicant’s competence to maintain the

    present petition, at least prima facie credence will have to be given to

    the order dated 03.02.2023 passed by the NCLT, which is enclosed with

    the rejoinder affidavit filed by the applicant. This order, in paragraph

    36, states that the resolution plan annexed to M.A. No. 329 of 2020 in

    C.P. 3884 of 2018 is approved and shall become effective from the date

    of the order and shall be deemed to be a part of the order. This order

    also specifies that the moratorium under Section 14 of the Code shall

    cease to have effect from this date.

    Thus, at least prima facie, it cannot be said that CIRP is on and

    consequently, the applicant is barred from maintaining the present

    application. In any event, as suggested by Mr Tiwari, even this issue is

    kept open to be raised before the Arbitrator once appointed.

    20. As regards the alleged non-compliance with the conciliation

    procedure provided in the agreement, this Court first finds that there is

    a dispute as to whether there has been compliance. The learned counsel

    for the applicant submitted that communications were addressed to the

    respondent to initiate the conciliation process, but the respondent

    avoided the same. This is no doubt disputed by the respondent.

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    Neutral Citation No. 2026:JHHC:19457

    However, no provision is shown under which it could be said that the

    alleged non-compliance operates as a complete bar to seek even the

    appointment of an arbitrator by filing an application under Section

    11(6) of the said Act.

    21. Therefore, even the issue of alleged non-compliance with the

    conciliation process, or the effect thereof, is kept open, and the

    respondent can raise the same before the Arbitrator once appointed.

    22. Thus, in short, by leaving open all contentions now raised by the

    respondent, a case is made out for the appointment of an Arbitrator.

    Such contentions can be raised before the arbitrator, and, if raised, the

    arbitrator will address them in accordance with law and on their own

    merits. However, as submitted earlier, such objections cannot serve as

    grounds to resist the very appointment of an Arbitrator.

    23. For all the above reasons, this application is allowed.

    Accordingly, Justice Dilip Kumar Sinha, a Former Judge of this Court,

    presently residing at D/4001, Green Residency, Nalanda Colony, Budha

    Vihar, Tetar Toli, Bariatu, Ranchi, is hereby appointed as the Sole

    Arbitrator to adjudicate the dispute between the parties under the

    agreement dated 27.04.2017.

    24. The fees of the Arbitrator shall be governed by Schedule IV of

    the said Act and, in the first instance, the same could be borne by both

    the parties equally.

    25. The learned Arbitrator is requested to forward the statutory

    statement of disclosures under Section 11(8) read with Section 12(1) of

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    Neutral Citation No. 2026:JHHC:19457

    the said Act to the parties within a period of three weeks from the date

    of receipt of this order.

    26. All contentions of the parties are left to be decided by the learned

    Arbitrator.

    27. Learned Arbitrator would endeavour to conclude the proceedings

    expeditiously by having regard to the mandate of the Legislature under

    Section 29-A of the said Act.

    28. This Arbitration Application is disposed of in the above terms

    without any order for costs. Pending I.A., if any, stands disposed of.

    (M. S. Sonak, C.J.)
    July 03, 2026
    N.A.F.R.
    Manoj/Sharda/Cp.2
    Uploaded on 04.07.2026

    Page 10 of 10



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