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
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CORAM: HON'BLE THE CHIEF JUSTICE
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For the Petitioner: Mr Chandan Tiwari , Advocate
Mr Rishi Ranjan Vats, Advocate
For the Respondent: Mr Sudarshan Shrivastava, Advocate
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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
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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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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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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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:19457that 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 1,34,90,249.00Statement 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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“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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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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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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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
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