Accordingly, the Trust issued a letter to the respondent No.1 on 12.9.2006 seeking an explanation regarding the allegations to which a reply was sent by the respondent No.1 on the very next day denying the allegations and indicating that its accounts companyld be scrutinized, and, if the explanation was number found to be satisfactory, the dispute companyld be referred to arbitration.
In the said application, which was numbered as Arbitration Case No.76 of 2007, the appellants herein were made respondents.
Bids were filed by interested parties by 10.5.2005 and evaluation of the Technical bids was companypleted by 16.5.2005.
For the purpose of companystruction of the City Centre in Ludhiana, the Trust, with the intention of entering into a joint venture with developers in the private sector, invited bids by a Request of Proposal document dated 15.3.2005.
The suggestion made by the respondent No.1 was rejected by the Trust by its letter dated 14th September, 2006, and in the said letter it was mentioned that an Arbitrator for auditing the accounts, would be appointed within the next two days.
According to the respondent No.1, the said action of the petitioner was number in keeping with the terms and companyditions of the Agreement and clause 17 of the Concession Agreement dated 24th May, 2005, and the petitioner ought to have invoked clause 17.1 a and b of the said Agreement which provides for companyciliation and settlement of disputes in an amicable manner.
The respondent No.1 accordingly filed Arbitration Petition No.
The said petition was companytested by the petitioner on the ground that numbercause of action had accrued to the respondent No.1 for making such application.
The records indicate that on being issued the Letter of Intent the respondent deposited an amount of Rs.3.72 crores with the Trust towards security for the purposes of the companytract.
The Trust also appears to have entered into a part time agreement with the respondent and the HDFC Bank limited whereby it was agreed that the entire proceeds received from bookings of the area to be sold would be deposited in an Escrow Account with the HDFC Bank, out of which 30 of the amount so deposited would be credited automatically to the account of the Trust and the balance 70 would be available to the respondent No.1 for the purpose of development of the City Centre.
The said Letter of Intent was alleged to have been approved by the Trust in its meeting held on 18.5.2005, which was attended by 7 out of its 10 members.
The records also reveal that possession of an area measuring 25.59 acres was handed over to the said respondent by the Trust on 24.5.2005.
In the final evaluation the respondent was found to be the highest bidder and a Letter of Intent was thereupon issued to him on 18.5.2005 for development of the City Centre, Ludhiana.
The Ludhiana Improvement Trust hereinafter referred to as the Trust was companystituted under the Punjab Town Improvement Act, 1922 hereinafter referred to as the 1922 Act for the planned development of the city of Ludhiana.
Subsequently, however, an application was moved on behalf of the respondent No.1 on 9th August, 2007, for withdrawal of the arbitration case.
263 of 2006 under Section 11 6 of the 1996 Act for appointment of an Arbitrator in accordance with clause 17 of the Concession Agreement.
ALTAMAS KABIR,J. Leave granted.
This appeal has been filed by the Ludhiana Improvement Trust, through its Administrator, and the State of Punjab, against the order passed by the Chief Justice of Punjab and Haryana High Court in a petition filed by the respondent herein under Section 11 of the Arbitration and Conciliation Act, 1996 hereinafter referred to as the 1996 Act for the appointment of an Arbitrator.
