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ORDINARY ORIGINAL CIVIL JURISDICTION
COMMERCIAL ARBITRATION PETITION (L) NO.33165 OF 2024
MahaOnline Limited ....Petitioner
Mr. Kevic Setalwad, Senior Advocate with Mr. Jahan Lalkaka, Mr. Kunal Bhanage, Ms. Ayushi Doshi, Ms. Riya Pichaya and Mr. Animish
Dighe i/b M/s. Indialaw LLP for the Applicant
Ms. Alpana Ghone with Mr. Rashmin Khandekar, Mr. M.A. Kamdar, Mr. Hersh Choksi and Mr. Krishit Nandu i/b M/s. Kanga & Co. for the
Respondent .
PRON. ON: 05 DECEMBER 2025
JUDGMENT
1) By this Petition filed under the provisions of Section 34 of the Arbitration and Conciliation Act, 1996 (Arbitration Act), the Petitioner has challenged the Award of the learned sole Arbitrator dated 11 July 2024. By the impugned Award, the learned Arbitrator has awarded claim in favour of the Respondent in the sum of Rs.25,27,78,775/- alongwith interest @8% p.a. from the date of filing of the statement of claim till realisation. The Tribunal has also awarded costs of Rs.25,00,000/- to the Respondent.
2) Petitioner is an unlisted public company, which is a publicprivate joint venture between Government of Maharashtra and Tata Consultancy Services Ltd. Petitioner is engaged in the business of IT services and IT consulting. Petitioner has undertaken the process of facilitating digitisation and strengthening penetration of information technology in various departments of Government of Maharashtra. Through its website, Petitioner provides various online services to the citizens, particularly relating to providing digitised copies of 7/12 extracts, renewal of licenses / permits, etc. The Respondent, who was formerly known as ‘Unity Telecom Infrastructure Ltd.’ is a technology company delivering industry-specific solutions. On 7 April 2011, Petitioner was appointed by Rural Development Department (RDD) of the Government of Maharashtra to execute the project of e-Panchayat Raj Institute (e-PRI project) and Citizen Services using GSK Wallet (GSK Top-Up). Under the project, Petitioner was to provide inter alia requisite trained and skilled personnel for implementation and maintenance of the software projects at Divisional, Zilla Parishad, Panchayat Samiti and Grampanchayat levels. Government Resolution dated 26 April 2011 was issued, by which the State Government decided the rates of operators for implementation of the project.
3) Business Associate Agreement (BAA) dated 30 April 2012 was executed between the Petitioner and the Respondent, under which e- PRI project was subcontracted to the Respondent. The Respondent was to provide requisite trained manpower at Grampanchayat, Panchayat Samiti and Zilla Parishad level for implementation of e-PRI project. The personnel supplied by the Respondent were to be deployed to Petitioner’s location or the location of the clients for working at the digitization project along with Petitioner’s team. The personnel of Respondent were supposed to execute implementation and maintenance activities in connection with computer software applications. Under the Agreement, Petitioner appointed Respondent on non-exclusive basis as its Business Associate on “personmonth rate” basis. The term of the Agreement was for 5 years from 30 April 2012 to 29 April 2017. As a consideration, Petitioner was to pay to the Respondent as per the Schedule of Technical Fees. According to the Petitioner, the payments were to be released to the Respondent only after receipt of payment by Petitioner from RDD.
4) The Respondent commenced performance of the contract. The disputes arose between the Petitioner and the Respondent with regard to non-payment of amounts due to the Respondent under the Agreement. On 13 June 2019, Respondent filed Commercial Arbitration Application No.276 of 2019 under Section 11 of the Arbitration Act before this Court. By order dated 13 September 2019, the Arbitral Tribunal was constituted. The Respondent filed its Statement of Claim raising total four claims before the learned Arbitrator viz.
(i) Claim No.1 for Rs.40,10,36,755/- being unpaid amount of consideration under the Agreement (ii) Claim No.1A of Rs.10,90,26,900/- being unpaid amount for the work of accounting and data entry for Sangram project, (iii) Interest @ 18% p.a. (iv) cost of Rs.50,00,000/-. Petitioner filed statement of defence resisting claim of the Respondent. Parties led evidence in support of their respective claims.
5) The Arbitral Tribunal has made Award dated 11 July 2024 partly allowing the claim filed by the Respondent. The Arbitral Tribunal has awarded sum of Rs.25,27,28,775/- in favour of the Respondent being the amount of consideration under the contract. The Arbitral Tribunal has further awarded interest of 8% p.a. on Rs.25,27,78,775/- from the date of filing of Statement of Claim i.e. 14 November 2019 till realisation. The Respondent is also awarded costs of Rs.25,00,000/- by the Arbitral Tribunal. Aggrieved by the Award dated 11 July 2024 passed by the learned sole Arbitrator, Petitioner has filed the present Petition under Section 34 of the Arbitration Act. SUBMISSIONS:
6) Mr. Setalwad, the learned Senior Advocate appearing for the Petitioner would submit that the impugned Award is passed by ignoring the contractual clauses, under which the Respondent was to be paid only after release of the amounts by RDD. That the Arbitral Tribunal has failed to appreciate that the Petitioner did not have any independent contractual obligation to make any payment to the Respondent. That the Respondent had clearly agreed for payment of consideration only after release of payments by the RDD. That the learned Arbitrator has erroneously construed Clause 28(b) of the Agreement to mean a mere mechanism for releasing the payment when in fact the said clause is the arrangement agreed between the parties for making payments to the Respondent. That the Petitioner has acted as a intermediary between the Respondent and the Government of Maharashtra where it was entitled to receive mere commission on payments sanctioned by Government of Maharashtra to the Respondent. That the arrangement executed with the Respondent is not any standalone independent contract with the Petitioner. That the contract was ultimately for providing services to the RDD, who alone could certify execution of work and release payments therefor. That therefore it was an intertwined transaction between the RDD, the Petitioner, and the Respondent. That the Respondent has erroneously sought resolution of dispute with the Petitioner alone without involving RDD, who alone was in a position to certify the work allegedly performed by the Respondent. That under the contract, the Petitioner was not vested with any authority to certify the Respondent nor the Petitioner was to decide payment of consideration. That the rates were also prescribed by the State Government. That the Arbitral Tribunal, without appreciating the above position, has foisted a new commercial bargain on the Petitioner, which is not envisaged in the original contract. That the learned Arbitrator has rewritten the terms of contract and that therefore the Award falls foul of Section 34 of the Arbitration Act as held by the Apex Court in PSA SICAL Terminals Pvt. Ltd. V/s. Board of Trustees of V.O. Chidambranar Port Trust Tuticorin and others.[1]
7) Mr. Setalwad would submit that apart from rewriting the terms of contract, the learned Arbitrator has ignored the evidence on record suggesting back-to-back payments made to the Respondent after release of payments by the RDD. That the learned Arbitrator has erroneously held that the Petitioner did not specifically take the defence of back-to-back payment in the Statement of Defence ignoring contents of paragraphs 10 and 17 of Statement of Defence and paragraphs 4,8, 15,16, 2021 SCC OnLine SC 508 18, 32 and 45 of the Petitioner’s sur-rejoinder. He would submit that the claim was also barred by limitation.
8) Mr. Setalwad would further submit that the claim of the Respondent was barred by limitation and has been erroneously entertained and awarded by the learned Arbitrator.
9) Mr. Setalwad would further submit that the impugned Award suffers from patent illegality in granting the claim of Rs.25,27,78,775/only on basis of Petitioner’s letter dated 15 November 2019. That the said letter nowhere states that amount of Rs.25,27,78,775/- was due and payable by the Petitioner to the Respondent. That the letter merely called upon the RDD to pay the amount to the Petitioner. That the letter could not have been treated as admission of liability to make any payment to the Respondent. That the learned Arbitrator has misread the document in an unreasonable and perverse manner. He would rely upon judgment of the Delhi High Court in Indian Oil Corporation Ltd. (IOCL) V/s. IL&FS Paradip in support of his contention that perverse reading of a document constitutes a valid ground of challenge to the Award. Mr. Setalwad would submit that the said judgment is upheld in IL & FS Paradip Refinery Water Ltd. vs. Indian Oil Corporation Ltd. (IOCL)3. He would rely on judgment of Orchid Infrastructure Developers Pvt. Ltd. V/s. Five Star Constructions Pvt. Ltd.[4] as upheld in Five Star Constructions Pvt. Ltd.V/s. Orchid Infrastructure Developers Pvt. Ltd.5. Mr. Setalwad would further submit that the Respondent did not lead any evidence to independently prove its claim for payment of Rs.25,27,78,775/-. That the said amount was never claimed in the Statement of Claim, which was for 40 odd crores. That in absence of any supporting invoices, the learned Arbitrator erred in awarding claim by picking up stray amount reflected in letter dated 15 November 2019. Mr. Setalwad would submit that since the Petitioner’s liability to pay the Respondent arises only after release of payment by the RDD, it cannot be contended that there is an admission on the part of the Petitioner to pay Rs.25,27,78,775/- to the Respondent. That the letter uses
2022 SCC Online Del 2111 2024 1 HCC (Del) 163 (DB) the word ‘approximate’. That the amounts were payable to the Respondent only against each invoice and the learned Arbitrator erred in dealing the case of the Respondent by assuming admissibility of claim on ledger book basis. That the Agreement did not provide for maintenance of any running amount and each invoice was to be paid on back-to-back basis.
10) Mr. Setalwad would further submit that even if amount of Rs.25,27,78,775/- is to be momentarily accepted as the amount payable in respect of services allegedly performed by the Respondent, the RDD did not approve the work worth Rs.17,53,78,157.75/- which was to be treated as write-off. That since the RDD was the only certifying authority, the amount written off by the RDD cannot be claimed by the Respondent from the Petitioner. That the learned Arbitrator has totally ignored this aspect while erroneously directing payment of the entire amount reflected in the letter dated 15 November 2019. Without prejudice, Mr. Setalwad would submit that it was Respondent’s own case that the Petitioner was entitled to commission @ 6.5% on amounts released by the RDD. That in the pleadings, the Respondent admitted entitlement of the Petitioner to deduct the amount of claim. That the learned Arbitrator himself has referred to the said admission in paragraph 218 of the impugned Award where the Respondent had claimed amount of Rs.23.70 crores. However, the learned Arbitrator completely ignored these admissions and proceeded to award entire amount reflected in letter dated 15 November 2019. Mr. Setalwad would rely upon judgment of the Apex Court in Vijay Karia V/s. Prysmian Cavi E Sistemi SRL & Ors.[6] in support of his contention that failure to indicate breakup of amount of Rs.25,27,78,775/- warranted rejection of the entire claim. Mr. Setalwad would further submit that no reasons are recorded by the Arbitral Tribunal for awarding interest @8% p.a. That the contract did not provide for payment of interest. He would rely upon judgment of the Apex Court in Executive Engineer (R & B) & Ors. V/s. Gokul Chandra Kanungo (Dead) thr. his LRs.[7] in support of his contention of award of interest contrary to contractual clauses.
2022 SCC Online SC 1336 11) Lastly, Mr. Setalwad would object to award of costs of Rs.25,00,000/- by the learned Arbitrator. That the learned Arbitrator failed to appreciate that only half of the claim amount, is ultimately sanctioned and that therefore payment of costs of Rs.25,00,000/- was clearly unwarranted. He would rely upon judgment of the Delhi High Court in Union of India V/s. Roshan Real Estate Pvt. Ltd. 8. Mr. Setalwad would accordingly pray for dismissal of the Arbitration Petition.
12) The Petition is opposed by Ms. Ghone, the learned counsel appearing for the Respondent. She would submit that the Petition is filed by the Petitioner as if it is an appeal over findings recorded by the Arbitral Tribunal. She would highlight the extremely limited scope of interference in arbitral awards and relies upon following judgments:i. Associate Builders vs. Delhi Development Authority[9] ii. Ssangyong Engineering & Construction Company Limited vs. National Highways Authority of India (NHAI)10 iii. S. V. Samudram vs. State of Karnataka and Anr.11 iv. Batliboi Environmental Engineers Ltd. vs. Hindustan Petroleum v. Larsen Airconditioning and Regrigeration Company vs. Union of India & Ors.13 vi. Reliance Infrastructure Ltd. vs. State of Goa14 vii. MMTC Limited vs Vedanta Limited15 viii. Somdatt Builders-NCC-NEV (JV) vs. National Highways Authority of India & Ors.16
13) Ms. Ghone would further submit that the Arbitral Tribunal has not ignored or rewritten terms of the Agreement. That the learned Arbitrator has merely construed the terms of contract for holding that the Petitioner is liable to pay to the Respondent. That the learned Arbitrator has rightly held that clause 28(b) of the Agreement merely provided for mechanism and timeline for payments and the said clause did not create obligation to pay, which otherwise flows out of Clause 7.1. That the view adopted by the learned Arbitrator is a plausible view, if not correct view. That interpretation of contractual terms is within the purview of the Arbitral Tribunal and Court cannot substitute its interpretation for plausible view taken by the learned Arbitrator. In support, she would rely upon following judgments: i. Rashtriya Ispat Nigam Limited vs. Dewan Chand Ram Saran17 ii. Dyna Technologies Private Limited vs. Crompton Greaves Limited18 iii. Parsa Kente Collieries Limited vs. Rajasthan Rajya Vidyut Utpadan iv. South East Asia Marine Engineering and Constructions Limited (SEAMEC Ltd.) vs. Oil India Limited20 v. UHL Power Company limited vs. State of Himachal Pradesh21 vi. National Highways Authority of India vs. Hindustan Construction
14) Ms. Ghone would further submit that by raising the ground of ignorance of evidence on record, the Petitioner is actually urging this Court to re-appreciate the evidence. That the Petitioner is deliberately attempting to misread one stray sentence in the Award about the Petitioner not taking specific stand in the Statement of Defence about absence of liability to pay the Respondent. That liability of the Petitioner to pay is not determined merely on the basis of the pleadings of the Petitioner in the Statement of Defence, but the same is determined by interpreting the contractual terms. Ms. Ghone would further submit that the Petitioner has raised erroneous ground of letter dated 15 November 2019 constituting an admission. That the amount of Rs.25,27,78,775/- due on the part of the Petitioner is gathered by the Arbitral Tribunal after appreciation of oral and documentary evidence and this Court cannot be urged to enter into the realm of appreciation of evidence. That the ground of non-impleadment of the RDD is baseless as there is no contract between the Respondent and the RDD.
15) Ms. Ghone would further submit that the objection of limitation raised by the Petitioner is baseless as the Petitioner never disputed the liability to pay amounts to the Respondent. That various invoices are produced by the Respondent, which are marked in evidence. The Arbitration was invoked on 10 October 2018, and the objection of limitation is rightly rejected.
16) Lastly, Ms. Ghone would submit that the learned Arbitrator has awarded reasonable interest of 8% as against the demanded rate of 18% by the Respondent. That though the Respondent incurred costs of Rs.50,00,000/- the learned Arbitrator has awarded costs of only Rs.25,00,000/-. On above broad submissions, Ms. Ghone would pray for dismissal of the Arbitration Petition.
REASONS AND ANALYSIS
17) Under the Business Associate Agreement dated 30 April 2012, Petitioner, which is a joint venture between Government of Maharashtra and TCS, appointed the Respondent as a business associate on a non-exclusive basis to assist the Petitioner in implementation and maintenance of various projects for Petitioner’s clients on ‘person-month rate basis’.
18) Under the contract, the Respondent was to offer technical assistance to the Petitioner through services of its selected employees to work on computer software application development, implementation and maintenance of specific project to be identified and located by Petitioner on a fixed person-month rate basis. The Respondent was to deploy technical manpower as per the requirement of the Petitioner for work carried out by the Respondent. Petitioner agreed to pay technical fees as provided in Clause 7.[1] of the BAA.
19) Since the Respondent was not paid in respect of the services offered by it to Petitioner’s client - RDD, arbitration clause was invoked by the Respondent for following four claims:- a) Claim No.1 – Rs.40,10,36,755/- “being unpaid amount of the total consideration for the development, implementation and maintenance by providing technical assistance to various projects of the [Petitioner] by the [Respondent]”; Claim No.1A – Rs.10,90,26,900/- “being unpaid amount for the work of accounting and data entry under Sangram project for the National Health Mission”. b) Claim No.2 – Interest at 18% p.a. in terms of Section 31(7) of the Act from the sate the amounts fell due to the dates of payment. c) Claim No.3 – Costs of Rs.50,00,000/- in favour of the Respondent.
20) Learned Arbitrator has awarded only part of the first claim in the sum of Rs.25,27,78,775/- and claim No.2 by awarding interest @8% and claim No.3 by awarding cost of Rs.25,00,000/-. Claim No. 1A is not awarded.
OBJECTION OF LIMITATION
21) The first ground of challenge raised by the Petitioner is that the claim of Respondent was time barred. However, it is seen that Petitioner itself was pursuing the claim with RDD upto 15 November 2019. The invocation of arbitration is made by the Respondent on 10 October 2018 and therefore the objection of limitation is clearly misplaced and deserves outright rejection.
OBJECTION OF ABSENCE OF PETITIONER’S LIABILITY TO PAY TO RESPONDENT
22) The next ground of challenge raised by the Petitioner is about absence of any obligation for Petitioner to make any payment to the Respondent. According to the Petitioner, it was merely an intermediary and services were required to be provided by the Respondent to RDD and the RDD was to make payment to the Respondent. Reliance is placed on clause 28(b) of the Agreement in support of the contention that the Petitioner was only supposed to ‘release the payments after the same were paid to Petitioner by the RDD’. Petitioner has therefore contended that by directing Petitioner to pay part of the demanded amount, in absence of any contractual clause to that effect, the learned Arbitrator has rewritten the contract between the parties.
23) The Arbitral Tribunal has rejected the above contention of the Petitioner while answering issue No.2 relating to Petitioner’s liability for payment of amounts claimed in the arbitral proceedings. The Arbitral Tribunal has considered various contractual clauses and has concluded that upon reading of the Agreement on the whole, clause 28(b) thereof did not absolve Petitioner of liability of non-payment of amount by the RDD to the Respondent. The Tribunal held that clause 28(b) was a mere mechanism and arrangement of timeline for making of payment, which did not extinguish liability of Petitioner to make payment to the Respondent. The Tribunal held in paragraphs 194 and 210 of the Award as under:
194. The Tribunal finds that the contract, the said Agreement was executed between MahaOnline (a Joint Venture of the Government of Maharashtra and Tata Consultancy Services) and the Claimant. Tata Consultancy Services holds 74% shareholding in the Respondent whereas the balance is held by the Government of Maharashtra. The Respondent was incorporated for facilitating the digitization program of the Government of Maharashtra through its Rural Development Department. A perusal of the said Agreement shows business relationship between the Claimant and the Respondent. Clause 28(b) of the said Agreement needs to be considered harmoniously considering the purpose of Joint Venture, nature of Project which was to be executed and business relationship between both the parties. Clause 28 referring to financial arrangements specifically states "The payment to be made by the MOL to Unity shall be as follows". From the record, the said Agreement and considering various Government Resolutions, letters, the Tribunal finds substance in the submissions of the Claimant that the privity of Contract was between the Claimant and the Respondent. The Tribunal finds force in the submissions of the Claimant that clause 28(b) explains mechanism and arrangement as to when the payment was to be made but it does not extinguish the liability to make the payment as sought to be contended by the Respondent.
210. In the facts and considering the record placed, more particularly the said Agreement, the Tribunal holds that the Respondent is liable for making payment to the Claimant. The mechanism for releasing the amount is described under the clauses, more particularly clause 28(b). Considering the said Agreement on the whole and the record, the Tribunal holds that clause 28(b) of the said Agreement will not absolve the liability of the Respondent in case of delay or nonpayment of the amount by the RDD / Government of Maharashtra to the Respondent. The privity of contract was between the Claimant and the Respondent. The RDD or the Government of Maharashtra were not parties to the agreement executed between the Claimant and the Respondent. Clause 11 of the said Agreement states that all notices, requests, demands and other communications under the said Agreement or in connection therewith shall be given to or made upon the respective parties, i.e., the Respondent, MahaOnline and the Claimant, Aksentt Tech Services Limited (formerly Unity Telecom Infrastructure Limited). The Issue is answered accordingly.
24) The Arbitral Tribunal has thus construed the Business Associate Agreement as a commercial venture or business relationship between the Petitioner and the Respondent. Petitioner took shelter under clause 28(b) of the BAA to contend that payments were to be made to the Respondent only upon the same being released by the RDD. On the other hand, clauses 7.[1] to 7.[7] provided for payments as per the Schedule of Technical Fees. The Arbitral Tribunal was thus presented with the apparent conflict between Clause-7 and 28(b) of the Agreement. It would be apposite to reproduce both the Clauses.
25) There is error in numbering of clauses of the BAA. Para-6 bears the heading ‘Consideration’ and what is printed below, are paras 7.[1] to 7.7. Clause-6 under the heading ‘Consideration’ and Clauses-7.[1] to 7.[7] of the Agreement reads thus:
6. CONSIDERATION 7.[1] For the work to be carried out by UNITY for MOL, MOL shall pay UNITY technical fees as under:- (a) MOL will pay to UNITY at the rates agreed in terms of Schedule of Technical Fees attached hereto. A person month shall consist of minimum eight (8) hours per day multiplied by number of working days in a calendar month at the location of work. (b) All payments to UNITY in terms of clause (a) above shall be made in Rupees only as under:-
1. 80% of Invoice value within thirty (30) days of submission of invoice
2. balance payable within thirty (30) days' thereafter after proper scrutiny of the invoice submitted by UNITY.
(c) UNITY Employees shall not be entitled to any overtime charges or to work on any holidays as a compensation for the leave taken or absence from work on any other working days.
(d) All applicable taxes shall be deducted from the payments to be made to UNITY and/or in case of overseas assignment, from payments made on behalf of UNITY to its employees. 7.[2] All taxes and levies as applicable shall be borne by UNITY. The rates agreed above are inclusive of all expenses of the Employees. 7.[3] The above rate are subject to change as mutually agreed. 7.[4] In case, on verification of an invoice, it is found that the UNITY personnel have not worked for the number of hours invoiced, MOL shall be at liberty to adjust the invoice value proportionately. 7.[5] UNITY shall provide to MOL all documents, data and information about the salary and other benefits provided by it to its Employees as and when called upon to do so by MOL. However in the case of UNITY Employees sent on Overseas deputation UNITY shall provide this said information in the prescribed form every month. 7.[6] Income Tax at source will be deducted at the prevailing rates and necessary certificate will be issued to UNITY. 7.[7] MOL shall have the right to withhold payment under the following circumstances, (a) If, upon a request by MOL, UNITY has not replaced any Employee(s) within a period of fifteen (15) days from such request having been made, which Employee(s) is (are), in the sole discretion of MOL, incapable of performing the functions assigned to him/her/them by the MOL Project Leader and/or is otherwise considered by MOL in its sole discretion to be replaced for whatsoever reasons. (b) If, UNITY has not replaced the Employee(s) who has become incapable of performing the obligations of UNITY under the terms of this agreement, such incapability arising due to death, disease, resignation or by whatsoever means, within a period of fifteen days from such incapability.
(c) The amount that would be withheld is as stated in 4.[4] herein.
26) Thus, under Clause-7.1, Petitioner agreed to pay to the Respondent, the rates agreed in the terms of the Schedule and technical fees. 80% of the invoice value was to be paid within 30 days of submission of invoice and balance 20% payment was to be made after scrutiny of the invoices submitted by the Respondent. Under Clause-7.4, it was agreed that on verification of an invoice, if it was found that Respondent’s personnel had not worked for number of hours invoiced, the Petitioner was at liberty to adjust the invoice value proportionately. Clause-28 of the Agreement dealt with ‘Financial Arrangements’ and provided thus:
28. Financial Arrangements: The payment to be made by the MOL to Unity shall be as follows:- Unity will provide following required manpower and services at below mention cost Divisional Level:-
1. Network Administrator one in each Division (6) at the rate of 40000/- per head per month Zilla Parishad Level (ZP):-
1. Software Programmer services one per ZP (33) at the rate of 30000/- per head per month
2. Computer Operator five (5) per ZP(33) at the rate of 7500/- Panchayat Samiti (PS) Level:-
1. Computer Expert/Hardware Engineer one at each Panchayat Samiti (351) at the rate of 9000 per head per month.
2. Computer Operator Two (2) per PS at the rate of 7500/- Gram Panchayat Level:-
1. Computer Expert/Hardware Engineer one (1) for each Twenty Five (25) Gram Panchayat at the rate of 9000/- per head per month.
2. Providing Computer operation and Computer Consumable services:- Computer operator and computer consumable services and other cost like training, travelling and establishment etc. cost required to maintain computer setup at Gram panchayat at the rate of 7500/- (Rupees Seven Thousand Five Hundred only) per head per month. Following are the requirement of computer operation and consumables services at GP level. Sr. No. Place Gram Panchayat (Approximate count) Quantity Total Quantity
1. Gram Panchayat above 1000 population 20500 One per Gram Panchayat
2. Gram Panchayat below 1000 population 7500 One per Gram Panchayat Total 29000 23000 (a) All taxes except service tax shall be borne by Unity. (b) The payments will be release to Unity only when MOL will get payment form RDD for the services provided by Unity to RDD on behalf of MOL.
(c) The monthly invoice including MIS reports shall be submitted by Unity to the Officer-in-Charge of MOL.
(d) The No. of Computer Operation & other services required at GP and
Hardware Engineer required may change depend on the requirement of the Rural Development department/MOL. (emphasis and underlining added)
27) Petitioner has strenuously relied upon Clause-28 (b) which provided for release of payments to Respondent upon receipt of payment from RDD for services provided by the Respondent to RDD on behalf of the Petitioner. However, opening part of clause 28 of the BAA made Petitioner (MOL) liable to make payments to Respondent (Unity) and the latter part provided for the rates at which the payments were to be made to the Respondent.
28) Thus, under Clause-6/7 and even under Clause-28, the Petitioner undertook the responsibility of making payment to the Respondent as per the rates agreed therein. Admittedly, there is no privity of contract between the Respondent and RDD. RDD had awarded concerned work to the Petitioner who had subcontracted the same to the Respondent. This is not a tripartite agreement where some contractual arrangement existed between the Respondent and RDD. Since the Petitioner unequivocally undertook the responsibility of making payment to the Petitioner as per the rates agreed in the Agreement, it cannot be construed that Clause 28(b) totally absolved the Petitioner of contractual obligation to make payments to the Respondent. At the highest, Clause 28(b) can be treated as the timeline within which payment was to be made by the Petitioner to the Respondent. When stipulation under Clause 7.1(b) for payment of 80% invoice value within 30 days and balance amount within 30 days of proper scrutiny of invoice is read alongwith Clause 28(b) of the Agreement, the only possible construction is that while payment of invoice amount is the responsibility of the Petitioner, but could release the payment only after receipt thereof from RDD. Clause 28(b) cannot be read in isolation and construed to mean as if Petitioner was a mere intermediary in the transactions occurring between the Respondent and RDD. As a matter of fact, there is no transaction between Respondent and RDD and therefore there is no occasion for Petitioner to act as intermediary. There is absolutely no material to interfere in Petitioner’s role as a mere intermediary or commission broker as sought to be canvassed by the Petitioner. The learned Arbitrator could not have read into the contract a provision making Petitioner a mere intermediary in transaction between Respondent and RDD, which is expressly absent therein. Being a creature under the contract, the learned Arbitrator could not read into the contract a condition which parties never agreed upon.
29) In my view therefore, the Arbitral Tribunal has rightly construed the terms of the Agreement harmoniously by holding that Clause-28(b) merely explained the mechanism and arrangement as to when the payment was to be made and that the same did not extinguish the liability to make payment by the Petitioner. Apart from the fact that interpretation of the contract is an exclusive domain of the Arbitral Tribunal, this is not a case where any other interpretation of the Agreement is possible. Therefore, there is no warrant for interference in the Award upholding the contractual obligation of the Petitioner to make payments in respect of the invoices raised by the Respondent. The learned Arbitrator has not rewritten the terms of contract nor has foisted a new bargain on the parties. As a matter of fact, what Petitioner expected the learned Arbitrator to do would have been an act of rewriting the terms of contract and creating a contract between Respondent and RDD, with Petitioner as a intermediary, when no contract exists between Respondent and RDD. If the Arbitral Tribunal was to accept the contention that Petitioner was an intermediary in contract between Respondent and RDD, its Award would have fallen foul of the ratio of the judgment of the Apex Court in PSA SICAL Terminal (supra). The contention of absence of contractual obligation for Petitioner to pay to Respondent, based on alleged ‘back-to-back’ payment concept, sought to be raised on behalf of the Petitioner therefore deserves rejection.
AWARD OF CLAIM BASED ON PETITIONER’S LETTER TO RDD
30) Now I turn to the next objection raised by the Petitioner that the Arbitral Tribunal has awarded the claim in the sum of Rs.25,27,78,775/- merely on the basis of Petitioner’s letter dated 15 November 2019. Before proceeding further, it must be observed here that there appears to be no major debate between the parties that the sum ultimately awarded by the Arbitral Tribunal is the one reflected in Petitioner’s letter dated 15 November 2019. It would be apposite to reproduce the Letter dated 15 November 2019, which was addressed by the Petitioner to the Principal Secretary Information Technology (General Administrative Department), Government of Maharashtra and the same reads thus: दि. १५/११/२०१९ प्रति. श्री. एस. व्ही. आर. श्रीदि वास सर प्रधा सति व, मादिह ी ंत्रज्ञा, सामान्य प्रशास दिवभाग, महाराष्ट्र शास, मुंबई. दिवषय: संग्राम प्रकल्पां ग+ यंत्रणा असलेले महाऑ लाई े थकी ेय अ ा करणेबाब. सं भ+: महाऑ लाई सं ालक मंडळा ी बैठक (Board Meeting) दि. ३१/१०/२०१९ मा. महो य, पं ाय राज संस्थां े बळकटीकरण से त्यांच्या कामा सुसूत्र ा व पार श+क ा आणण्याच्या हे ू े क ें द्र शास ामार्फ + पं ाय राज मंत्रालय ई-पं ाय प्रकल्प (संग्राम प्रकल्प) हा महाराष्ट्र राज्या राबदिवण्या ये हो ा. महाऑ लाई े स र प्रकल्पाशी राज्यामध्ये एदिप्रल २०११ े तिडसेंबर २०१५ या कालावधीमध्ये यशस्वी अंमलबजावणी क े ली असू महाराष्ट्र राज्या से ग्रामदिवकास दिवभागास दिवदिवध पुरस्कारां ी गौरदिवण्या आलेले हो े. महाराष्ट्र राज्यामध्ये या प्रकल्पाच्या अंमलबजावणीसाठी महाऑ लाई लिलदिमटेड (महाराष्ट्र राज्य शास आणिण टाटा कन्सल्टन्सी सर्व्हिव्हसेस यां ी संयुक्त क ं प ी) या क ं प ी ी दि युक्ती करण्या अली हो ी. या प्रकल्पासाठी महाराष्ट्र राज्या ील सुमारे २८८१३ ग्रामपं ाय ी, से ३५१ पं ाय सदिम ी व ३४ जिजल्हा परिरष ा यां ा आवश्यक असलेले ांदित्रक आवश्यक ा व म ुष्यबळ महाऑ लाई लिलदिमटेड या क ं प ीमार्फ + पुरदिवण्या ये हो े. माहे तिडसेंबर २०१५ रोजी संग्राम प्रकल्प ग्रामदिवकास दिवभागा े स्थदिग क े ला हो ा. परं ु अद्यापही सुमारे रु. २५,२७,७८,७७५/- ेयका ी रक्कम महाऑ लाई ला येणे बाकी आहे. री आपल्या स् रावरू महाऑ लाई ला रक्कम रु. २५,२७,७८,७७५/- ात्काळ ेण्याबाब दि Uश व्हावे, से योग्य ी काय+वाही व्हावी दिह दिव ं ी. सोब जिजल्हादि हाय टाक ा जोड आहो. कळावे, आपला दिवश्वासू, प्रसा कोल े, मुख्य परिर ाल अतिधकारी महाऑ लाई
31) Alongwith the letter dated 15 November 2019, district-wise details of amount payable to the Petitioner was reflected. The said districtwise details are as under: e-PRI Outstanding As On 15/11/2019 Sr. No. District Payable to MahaOnline 1 NASHIK 2,24,47,298 2 THANE 1,57,04,641 3 AMRAVATI 1,50,75,977 4 YAVATMAL 1,44,39,510 5 BEED 1,38,35,114 6 SATARA 1,31,23,708 7 BULDHANA 1,30,72,251 8 PARBHANI 1,29,26,480 9 CHANDRAPUR 1,27,47,155 10 RATNAGIRI 99,29,862 11 NANDED 97,98,374 12 LATUR 97,69,582 13 NAGPUR 93,11,629 14 SOLAPUR 86,31,527 15 HINGOLI 80,13,888 16 KOLHAPUR 79,56,166 17 AHMEDNAGAR 76,96,704 18 GADCHIROLI 70,12,286 19 GONDIA 70,05,119 20 WARDHA 66,00,428 21 WASHIM 58,50,868 22 NANDURBAR 51,75,110 23 PUNE 44,87,796 24 DHULE 44,01,700 25 AURANGABAD 17,12,286 26 SINDHUDURG 15,67,966 27 BHANDARA 15,41,192 28 JALGAON 12,84,094 29 RAIGAD 7,11,056 30 PALGHAR 6,55,022 31 OSMANABAD 2,04,047 32 JALNA 89,939
32) Plain reading of the letter dated 15 November 2019 would indicate that the amount specified therein was payable ‘to MahaOnline’. The letter did not state that the amount was payable to Respondent. However, contents of letter dated 15 November 2019 are to be read with pleadings and evidence to understand its true purport. It is Petitioner’s own case that it acted as a mere intermediary in seeking payments from RDD and handing over the same to Respondent. Also, there is evidentiary admission by Petitioner’s witness that the amount indicated in the letter was the amount due and payable to the Respondent. If the evidentiary admission was not enough, there is also judicial admission by Petitioner in the pleadings about some amount due and payable to Respondent by it. Petitioner filed Sur-Rejoinder before the Arbitral Tribunal and contended in para-47 as under:
47. With reference to para 64 & 65, Respondent denies the contents of the para stated therein, and below are the table which the Respondent is following with the RDD: Outstanding receivable in MOL books Disputed write off Total 7,74,00,617.25 17,53,78,157.75 25,27,78,775.00 Respondent submit that the total Rs. 25,27,78,775/- is yet to receive from RDD and the Respondent are constantly following up with the RDD. In fact in the letter dated 30th December, 2016, Respondent had urged the Claimant to get actively involved in the follow up of the outstanding together with the representatives of the Respondent but the Claimant failed to do the same. Respondent once again reiterate that no claim of the Claimant is due and payable by the Respondent.
33) If the amount reflected in the above table was not due or payable to the Respondent, there was no reason for the Petitioner to urge to the Respondent to get the payment released from RDD.
34) According to the Petitioner, since the Respondent is the Claimant whose raised the claim for amount of Rs.40,10,36,755/-, the burden of proving that the claim amount was due, was on the shoulders of the Respondent who was required to discharge the burden by leading evidence. According to the Petitioner, the Agreement provided for invoicewise payment and therefore it was necessary for the Respondent to prove each and every invoice, as well as the work performed in respect of each invoice. It is contended by the Petitioner that the Respondents failed to discharge the said burden and merely relied upon ledger/running account which is not the agreed method of payment under the Agreement.
35) In my view, Tribunal’s criticism by Petitioner by accusing it of awarding claim in absence of evidence is incorrect. It is not that the Respondent did not lead any evidence in support of its claim. The Tribunal had both documentary as well as oral evidence. It has taken into consideration letters dated 29 July 2016 addressed by CEO of the Petitioner together with the details of invoices, communication dated 3 May 2021 by Chief Accountant of the Petitioner to RDD highlighting pendency of dues to the tune of Rs.27 crores from various Zilla Parishads