Authority: High Court of Jammu & Kashmir and Ladakh, CJ Court (Chief Justice)

Order Date: 06.11.2026

Case Overview

  • Petitioners: M/S Dee Ess Construction Co., a partnership concern located at Channi Himmat, Jammu, represented by Advocate Priyanshu Sharma.
  • Respondents: Union of India and others, represented by Advocates Sumant Sudan and Vishal Sharma (DSGI).
  • The petition was filed under Section 11(6) of the Arbitration and Conciliation Act, 1996, seeking appointment of an arbitrator.
  • The petitioner was allotted "Provn of Officers MD ACCN under GE (P) Nagrota" vide CA No. CEUZ/NGT/24/2024-25 dated 07.12.2024 for a contract sum of ₹3,60,00,000, with an 18‑month completion period. The work order was issued on 23.04.2025.
  • A Bank Guarantee No.03431PBG2503001 dated 12.03.2025, valid up to 31.03.2029, was furnished to satisfy tender conditions.
  • The contract was split into Phase‑I, Phase‑II, and Phase‑III.
  • During Phase‑I, a water‑well was discovered on site; the petitioner informed respondents via letter No. CEUZ/NGT/24/2024-25/04 dated 20.05.2025. Approval was granted through letter No. 8024/CEUZ/NGT/24/2024-25/42/E8 dated 03.06.2025, and a Phase‑I completion certificate was issued on 09.06.2025.
  • In Phase‑II, the water‑well issue was again raised (letter No. CEUZ/NGT/24/2024-25/09 dated 18.06.2025). Respondents directed a meeting on 28.06.2025 (letter No. CEUZ/NGT/24/2024-25/11) to shift buildings back by approximately 4.5 m to accommodate the well.
  • The petitioner submitted a technical yardstick for review (letter No. CEUZ/NGT/24/2024-25/12 dated 30.06.2025) and reminded the department (letter No. CEUZ/NGT/24/2024-25/19 dated 18.08.2025). Respondents remained inactive despite flood alerts.
  • Respondents issued a coercive action threat under Condition 54 (letter No. 8024/CEUZ/NGT/24/2024-25/106/E8 dated 29.08.2025).
  • On 19.11.2025, the Chief Works Engineer (CWE) directed suspension of work due to rising groundwater, contrary to the General Conditions of Contract (GCC). Site Order No. 4 dated 26.11.2025 formally suspended the work.
  • The suspension fell under Condition 9 of GCC IAFW‑2249. Respondent No. 3 confirmed on 08.01.2026 (letter No. 8024/CEUZ/NGT/24/2024-25/201/E8) that works on Building 1 and Building 2 would remain on hold.
  • The petitioner repeatedly requested resumption; after non‑response, it treated the contract as abandoned and sought arbitration, issuing a notice on 23.05.2026 invoking Condition 70 of GCC IAFW‑2249.
  • The Additional District Judge (Commercial Court), Jammu, granted interim protection under Section 9 of the Arbitration Act, restraining encashment of the Bank Guarantee and directed initiation of arbitration within 90 days.

Final Outcome

  • The High Court allowed the petition and, with the parties’ consent, appointed Sh. Raj Kumar Sarkar, Chief Engineer, Railways, as the sole arbitrator.
  • The arbitrator is directed to conduct proceedings per the Arbitration Act and render an award within the statutory time‑frame, charging the prescribed fee and incidental expenses to be shared by the parties.
  • Respondents are at liberty to raise any objections before the arbitrator.
  • The Registry is instructed to forward a copy of this order to the appointed arbitrator.

Topics: Arbitration, Construction Contract