Directorate General, Border Security Force & Anr v. Niit Technologies Limited

NAVIN CHAWLA, J DECEMBER 24, 2019/Shikhar/rv

Page 1 * IN THE HIGH COURT OF DELHI AT NEW DELHI + O.M.P. (COMM) 220/2019 & I.A. No.7819/2019 Reserved on: 20.08.2019 Date of Decision : 24.12.2019 DIRECTORATE GENERAL, BORDER SECURITY FORCE & ANR. ..... Petitioners Through: Mr.Kirtiman Singh, CGSC with Mr.Prateek Dhanda & Mr.Waize Ali Noor, Advs. versus NIIT TECHNOLOGIES LIMITED ..... Respondent Through: Mr.Vikas Dutta, Mr.Siddharth & Mr.Chander Joshi, Advs. CORAM: HON'BLE MR. JUSTICE NAVIN CHAWLA 1. This petition under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the 'Act') has been filed by the petitioners challenging the Arbitral Award dated 14.01.2019 passed by the Sole Arbitrator adjudicating the disputes that have arisen between the parties in relation to the Acceptance of Tender dated 25.02.2010 issued by the petitioner in favour of the respondent awarding work of supply, installation and commissioning of BSF Intranet Prahari Project on Turnkey basis. 2. The Arbitral Award, while rejecting the counter claims of the petitioner no. 1 herein, granted claim nos. 1, 2, 3 and 7 (partially) of the Page 2 respondent herein, and granted the following relief in favour of the respondent:- "i) The respondent shall refund to the claimant the amount of Rs. 10,11,35,072/-, wrongfully deducted as LD along with simple interest of 9% p.a. w.e.f. 1.1.2014 till realization. ii) The respondent shall also refund amount of Rs. 3,72,35,418/- ,wrongfully deducted against the cost of cartridges for IPP project along with simple interest @ 9% p.a. w.e.f. 1.4.16 till realization." 3. The petitioner no. 1 had floated a tender for supply, installation and commissioning of BSF Intranet Prahari Project (IPP) on 23.10.2008. The respondent was awarded the said work on turnkey basis vide Acceptance of Tender (AT) dated 25.02.2010. 4. As per Clause 9 of the Schedule to the AT, the entire project was to be completed/ commissioned by 25.08.2010. Clause 9 further provided for the stages of delivery of the project, and is reproduced herein under:- STAGES TERMS OF DELIVERY/PROJECT DURATION (From the Date of AT) Stage- 1 Receipt of Hardware at all locations and physical survey of the same (i.e. good and working condition) On or before 25th May" 2010 Stage – 2 Successful Installation/Commissioning of the Hardware. On or before 25th July" 2010 Software development/Installation Data Creation/Porting Software Testing Page 3 Training simultaneously at all locations Stage – 3 Acceptance of project and submission of Project Report On or before 25th Aug" 2010 5. Clause 10 of the AT provided that the place of delivery was to be at the respective consignee locations provided for in Appendix 'A' attached to the AT. 6. Clause 12 of the AT stipulated for liquidated damages for delay in completion of the IPP on turnkey basis within the delivery period. The same is quoted hereinbelow:- "12. Liquidated damage for delay in supplies: In case the firm does not complete the supply and/or installation /commissioning of BSF Intranet Prahari Project on turn key basis within the delivery period, action will be taken against the firm as per Para 14. 7 (i) of General condition of the contract of Department of supply, Ministry of Commerce, New Delhi. The purchaser has the right to recover from the contractor under the provisions of Clause 14(7)(1) of the general conditions of the contract issued by Govt of India Ministry of Commerce, Department of Supply as liquidated damages if the contractor fails to commission the complete project within the specified period as mentioned in clause-9 above." 7. Clause 20(II) of the AT provided for a Guarantee/ Warrantee period of 24 months from the successful installation and commissioning of the entire project. 8. Clause 20(VI) of the AT further provided for an Annual Maintenance Contract (AMC) for a period of 5 years, beginning from the expiry of the Guarantee/ Warrantee period. Page 4 9. The respondent by letter dated 12.03.2010 suggested various amendments/c