JHELUM INFRA PROJECTS PVT LTD TH ITS MANAGING DIRECTOR RAJ KUMAR GUPTA vs T A INFRA PROJECTS LTD TH MANAGING DIRECTOR

Item No.01
IN THE HIGH COURT OF JAMMU & KASHMIR AND LADAKH AT
JAMMU


Uploaded on: 29.05.2026
Arb P No. 01/2026
CM No. 3292/2026
Jhelum Infra Projects Pvt. Ltd. ...PETITIONER(S)

Through: - Mr. Samarjeet Singh, Advocate
Vs.
T. A. Infra Projects …RESPONDENT(S)
Through: - Mr. Sumit Moza, Advocate
CORAM: HON’BLE MR. JUSTICE SANJAY DHAR, JUDGE
ORDER
22.05.2026



1. The petitioner has filed the present petition under Sections 11(5) and
11(6) of the Arbitration and Conciliation Act, 1996 (hereinafter referred
to as “the Act of 1996”) seeking appointment of an Arbitrator for
adjudication and reference of the disputes and differences that have
arisen between the parties.
2. According to the petitioner, the respondent had participated in e-tender
bearing e-NIT No. 7 of 2012 dated 11.09.2012 relating to the work of
water supply of 07 MLD for Kishtwar Town from the Naigadh source.
Pursuant thereto, the respondent executed an agreement with the
Government of Jammu and Kashmir on 28.02.2013 through the
Executive Engineer, PHE Hydraulic Division, Kishtwar. Thereafter, on
03.05.2013, the respondent entered into a sub-contract agreement with

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the petitioner, whereby the petitioner undertook to execute and complete
the work allotted to the respondent, and the respondent agreed to release
98% of the amount received from the Government to the petitioner after
retaining 2% from each cheque value. The respondent further agreed to
open an ESCROW account for release of the said amount.
3. It has further been submitted that, pursuant to the aforesaid sub-contract
agreement, the petitioner started execution of its part of the contract.
However, the respondent failed to adhere to the terms and conditions of
the agreement, inasmuch as, it not only withheld an amount in excess of
the agreed 2% retention, but also failed to open the ESCROW account as
contemplated under the agreement. This prompted the petitioner to
institute a civil suit for specific performance of the contract before the
learned Commercial Court (Additional District Judge, Bank Cases),
Jammu. In the said suit, the respondent admitted the existence of the sub-
contract agreement between the parties but contended that, in view of the
arbitration clause contained therein, the disputes are liable to be referred
to arbitration. Accordingly, vide order dated 06.11.2025, the learned
Commercial Court directed the parties to resolve their disputes through
arbitration.
4. It has been submitted that disputes and differences have arisen between
the parties on account of the respondent having failed to release 98% of
the contractual payment in terms of the sub-contract agreement and
having withheld amounts beyond the agreed retention of 2%. It has
further been submitted that the respondent also failed to operate the
ESCROW account in accordance with the terms of the agreement. It has

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also been contended that the respondent illegally deducted TDS from the
payments, despite the same having already been deducted by the Jal
Shakti Department. According to the petitioner, a legal notice invoking
the arbitration clause contained in the agreement was served upon the
respondent, but no response thereto was received. Hence the present
petition.
5. The respondent has filed objections to the petition. In the objections, it
has been contended that the petitioner has not made any request for
reference of the disputes to arbitration and, therefore, in terms of Section
21 of the Arbitration and Conciliation Act, 1996, the arbitral proceedings
cannot be said to have commenced. It has further been submitted that the
legal notice annexed with the petition is undated and that the same was
never received by the respondent.
6. It has further been submitted that the respondent-company emerged as
the successful bidder and was awarded the work relating to water supply
of 07 MLD for Kishtwar Town from the Naighad source. In this regard,
intent dated 18.12.2012 valuing the contract at Rs. 34.23 crores came to
be issued by the Chief Engineer, PHE Department, in favour of the
respondent. It has been submitted that the petitioner approached the
respondent with an offer to execute the work and also to finance the
entire execution thereof, including obtaining all requisite bank
guarantees, such as, performance bank guarantee, mobilization advance
bank guarantee and security deposits guarantee etc. According to the
respondent, the petitioner assured that it was financially sound and fully
capable of executing the work successfully. Consequently, a sub-contract

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agreement came to be executed between the parties on 03.12.2013. It has
further been submitted that, vide amendment dated 08.02.2016, the
contract value of the work assigned to the petitioner was reduced to Rs.
26,68,26,100/- by deleting a portion of the work. It was also agreed
between the parties that the respondent would retain 3% on every
payment received besides an amount equivalent to the TDS, both under
Income Tax Act and the GST Act in addition to deduction of amount.
7. It has been submitted that the petitioner filed a suit for specific
performance of the sub-contract before the Commercial Court, Jammu in
which an interim order came to be passed on 03.04.2021. Before the said
Court, the respondent took a specific stand that the suit was not
maintainable in view of the provisions contained in Section 8 of the Act
of 1996. Thereafter, vide order dated 22.11.2024, the application of the
petitioner under Order 39 Rules 1 and 2 CPC came to be dismissed. It
has further been submitted that the suit was ultimately disposed of by the
learned Commercial Court vide order dated 06.11.2025, whereby the
parties were directed to resort to arbitration in terms of the arbitration
clause contained in the agreement.

8. I have heard learned counsel for the parties and perused the record of the
case.
9. The main objection raised by the respondent with regard to the
maintainability of the present petition is that the petitioner has not
invoked the arbitration clause, inasmuch as the legal notice annexed with
the petition is undated and the same was never received by the
respondent. In this regard, a perusal of the record reveals that although

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the legal notice initially annexed with the petition is undated, the
petitioner has subsequently placed on record, by way of an application,
another copy of the legal notice bearing the date 12.11.2025. The
petitioner has also produced a copy of the postal receipt, which shows
that the said notice was dispatched to the respondent through speed post
on the very same date. Thus, there is presumption of service of the legal
notice invoking the arbitration clause upon the respondent, particularly
when the address reflected in the postal receipt as well as in the legal
notice is identical to the address mentioned in the title of the present
petition.
10. So far as the existence of the arbitration agreement is concerned, the
same is not in dispute. Clause 12.2 of the sub-contract agreement
executed between the parties provides that all disputes and differences,
which are not resolved through mutual negotiations, shall be finally
referred to a sole Arbitrator in accordance with the provisions of the
Arbitration and Conciliation Act, 1996. It has been further provided in
the arbitration clause that the place of the arbitration shall be at Jammu
J&K and the proceedings shall be conducted in English language. It is
also provided therein that the arbitration charges for both the parties shall
be borne by the respondent-company.
11. As per the legal notice served by the petitioner upon the respondent, the
respondent was called upon to refer the disputes to arbitration within a
period of 15 days from the date of receipt of the notice. However, since
the parties have failed to mutually agree upon the appointment of an
Arbitrator, this Court is left with no option but to appoint an Arbitrator

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and refer the disputes and differences that have arisen between the
parties for adjudication through arbitration.
12. In view of the above, the petition is disposed o f by referring all the
disputes and differences covered by the agreement to the learned Sole
Arbitrator in the following terms:
(I) Hon’ble Mr. Justice Vinod Chatterji Koul, former Judge of this
Court, is appointed as the Sole Arbitrator to adjudicate upon the
disputes and differences between the parties arising out of and in
connection with the agreement referred to above.
(II) A copy of this order be communicated to the learned Sole Arbitrator
by the Registry of this Court within a period of ten days from today.
(III) The learned Sole Arbitrator is requested to forward the statutory
statement of disclosure under Section 11(8) read with Section 12(1)
of the Act of 1996 to the parties within a period of two weeks from
the date of receipt of this order.
(IV) The parties shall appear before the learned Sole Arbitrator on a date
and place to be fixed by the learned Sole Arbitrator.
(V) All the arbitral costs and fee of the Arbitral Tribunal shall be subject
to final award that may be passed by the learned Arbitrator in
relation to the costs.

(Sanjay Dhar)
Judge
Jammu
22.05.2026
Karam Chand

Whether the Order is speaking: YES/NO
Whether the Order is reportable: YES/NO

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KARAM CHAND
2026.05.29 12:43
I attest to the accuracy and
integrity of this document