Years, Working As Senior Manager v. Director of Public Instructions, Department of School Education, Government of C
Case Details
1 2025:CGHC:2033 NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR ARBR No. 24 of 2024 M/s Educomp Solution Limited, Having Its Registered OfÏce L-314 (Ground And First Floor), Gali No. 07, Mahipalpur (Near Mata Chowk) New Delhi- 110037 And Corporate OfÏce At 514, Udyog Vihar Phase-Iii Gurugram-122001, Haryana, Through Its Authorized Signatory Mr. Santosh Tiwari S/o Shri Ram Jawahar Tiwari, Aged About 44 Years, Working As Senior Manager. ... Applicant versus Director of Public Instructions, Department of School Education, Government of Chhattisgarh, Pension Bada, Raipur- 492001 (C.G.) ... Respondent For Applicant
Legal Reasoning
: Mr. Rishabh Garg, Advocate (through Video-Conferencing). For Respondent : Mr. S.S. Baghel, Deputy Government Advocate. PREETI KUMARI Digitally signed by PREETI KUMARI Date: 2025.01.17 11:22:36 +0530 13.01.2025 Hon’ble Mr. Ramesh Sinha, Chief Justice Order on Board 1. This is an application under Section 11(6) of the Arbitration and Conciliation Act, 1996 for appointment of an Arbitrator. 2. The facts, in brief, as projected by the applicant are that the applicant is a listed company incorporated under the provisions of Companies Act, 1956 and is a global diversified education solutions provider company in India. It was incorporated in the year 1994 with the vision to provide innovative solutions to critical problems relating to quality of education and access to 2 education for all and is also a pioneer in the business of e-education and e- educational aides that allow technology to be brought into the classroom. The present application is being filed through its Authorized Signatory Mr. Santosh Tiwari. The applicant filed an application under Section 10 of The Insolvency and Bankruptcy Code, 2016 before the NCLT, New Delhi to initiate Corporate Insolvency Resolution Process and the same was initiated by virtue of the order dated 30.05.2017 passed by NCLT, New Delhi and moratorium was declared. Vide Order dated 12.09.2017, the NCLT, New Delhi was pleased to appoint Mr. Mahender Kumar Khandelwal as Insolvency Resolution Professional of the Claimant Company. Vide Order dated 09.10.2023, NCLT, New Delhi approved the Resolution Plan submitted by Successful Resolution Applicant i.e. Ebix Singapore Pvt.Ltd. (hereinafter referred to as "SRA"). As SRA as on date did not come forward to take over the management of ESL, NCLT, New Delhi vide order dated 23.11.2023 appointed Mr. Mahender Kumar Khandelwal as caretaker RP with a direction that he would discharge all those functions as are required to be discharged by an IP as RP. 3. The non-applicant herein, is the Directorate of Public Instructions, Government of Chhattisgarh, having the statuary duty to provide quality education across government owned and operated schools in the State of Chhattisgarh. The non-Applicant herein had issued tender notice for inviting bids/bidders for supply of computer hardware, educational software and connected accessories, faculty and provision of IT Education Services in 1900 Government Secondary and Higher Secondary schools in three identified zones in the State of Chhattisgarh on build, own, operate and transfer ('BOOT') model. Pursuant to the tender process, the applicant was awarded the tender for the implementation of a computer education programme in 582 Government High and Higher Secondary Schools in 3 Zone 03, Sarguja District in Chhattisgarh. An agreement was thereafter entered into between the parties on 27.08.2011. The total value of the Contract was Rs. 60,72,00,600/-. In accordance with clause 12.1 of the Contract, the Applicant submitted a bank guarantee dated 15.07.2011 for a sum of Rs. 3.03,60,030/- which was valid up to 15.12.2016 to the Non- Applicant. It is stated as per Clause 4.1 of the Contract, the non- Applicant was required to provide to the applicant, within 7 days from the date of signing of the Contract, ie, by 03.09.2011, a list of the 582 schools in which the services were to be provided by the applicant. However, the non- applicant miserably failed in performing its part of the contract and the list of the schools was provided to the applicant only on 29.05.2012 i.e., after a delay of almost 9 months. The delay on the part of the non-Applicant in providing the list of schools not only delayed the commencement of the project but also led to a series of repercussions which hindered the performance of contractual obligations on the part of the applicant. It may be noted that the applicant had given its financial quotation, inter alia, on the basis of the price negotiated by it with the suppliers of the equipment and infrastructure. However, due to delay on the part of the non-applicant the project could not commence at the agreed time and during this period of delay, the Indian currency experienced an unprecedented devaluation as against USD. The said devaluation of Indian currency was unforeseen. The applicant Company being hugely dependent upon IT software and technological support from its suppliers in the West was one of the worst hit as the price of hardware, infrastructure, software etc, increased by more than 30%. The suppliers were no longer willing to supply the equipment and infrastructure at the rates agreed earlier. The applicant was therefore forced to renegotiate the rates with such suppliers. This completely disturbed the financial planning which the applicant had done at the time of submitting its 4 bid for the project. All this was an effect of the initial delay on the part of the non-applicant, in the absence of which the applicant would have been able to procure the necessary hardware, equipment, infrastructure etc, much before the escalation in the prices resulting from the downfall in the market. The applicant despite facing several hurdles requested the non-applicant to provide the extension of 90 to 120 days to implement the project. It was only after 4 months, the non-applicant partially accepted the request and extended for the performance of the contract by 2 months. However, to the utter shock of the applicant, the non- applicant imposed a penalty of 1% upon the applicant for delay in execution of the project, completely unmindful of the fact that the delay was to a large extent attributable to the Non-Applicant's own faults, delays and latches. The applicant despite facing several hurdles requested the Non-Applicant to provide the extension of 90 to 120 days to implement the project. It was only after 4 months, the non-applicant partially accepted the request and extended for the performance of the contract by 2 months. However, to the utter shock of the Applicant, the non-applicant imposed a penalty of 1% upon the applicant for delay in execution of the project, completely unmindful of the fact that the delay was to a large extent attributable to the Non-Applicant's own faults, delays and latches. Thereafter, the applicant completely dissatisfied by the conduct of the non-applicant, and since disputes had arisen between the parties which were not being resolved amicably despite various correspondences, in accordance with Clause 22 of the Contract for resolution of disputes, the applicant approached the Secretary of School Education Department Chhattisgarh to seek its assistance in resolving the issues between the parties. A meeting was held between the applicant, non- applicant and the Secretary, School Education Department on 10.07.2013. In the meeting, the applicant was given full support from the Secretary of 5 School Education Department. It was agreed that the applicant will be allowed to implement the project in three phases. 4. Mr. Rishab Garg, learned counsel for the applicant has submitted that the non-applicant had not given any direction to the applicant to stop any further work in relation to the implementation of the project. The applicant accordingly continued to work on the implementation of the project and also continued to update the non-applicant about the progress of the work, though the progress to a great extent was slowed due to the non-applicant's refusal to accord approval to the multimedia software. In the meantime, the applicant was also intimating the Secretary, School Education Department about the successful implementation of the projects in 50 schools and once again requested for formal extension of the project. With an intention to resolve the deadlock situation, the applicant approached the State Council for Education Research & Training ('SCERT'). A meeting had taken place between the parties. The applicant shared the progress of the project and also stated that the applicant is awaiting to go ahead with the remaining schools since 21.09.2013. The applicant further informed the SCERT that the non- applicant had not given ICT learner courseware clearance which has been pending since 2012, approval of multimedia school learning content which has been pending since August 2013 and inauguration of one of the schools pending since Sept. 2013. It came as an utter shock to the applicant, when the non- applicant instead of considering the options suggested by the applicant and formulating a way forward, issued a show cause notice dated 07.05.2014 asking the applicant to show cause as to why the Contract should not be terminated and the bank guarantee furnished by it should not be invoked for its failure to implement the Contract within the stipulated timeline. The applicant replied to the show cause notice vide its letter dated 10.05.2014 lodging its protest against the stand taken 6 by the Non-Applicant and further explained the challenges faced by the Applicant from the inception of the project. Further, the Applicant again reiterated the two options proposed by it and referred to the meeting with the Principal Secretary and requested the non-applicant to arrange a meeting to discuss the issue and find an amicable solution. The applicant further requested that a meeting may be scheduled to discuss the issues and to try and reach a mutually agreeable solution. Since the Applicant had already incurred expenditure for implementing the project, it conveyed to the Non-Applicant that it has no alternative but to try and reach an amicable solution to complete the implementation of the scheme in 50 schools despite not having received any amount whatsoever. The applicant aggrieved by the order passed by the Hon'ble Commercial Court in setting aside the award had filed an appeal under Section 37 of the Arbitration and Conciliation Act, 1996 before the this Court of Chhattisgarh in Arbitration Appeal No. 67 of 2021. Thereafter, this Court passed an order dated 05.03.2024 whereby,
Decision
this Court has disposed of the appeal of the applicant with a liberty given to the applicant to seek the appointment of a Sole Arbitrator afresh de novo as the statute provides. Since the non-applicant have till date not responded to the notice of arbitration dated 15.03.2024 in spite of the fact that one month have lapsed after the receipt of the notice, the applicant is now constrained to approach the Hon'ble High Court of Chhattisgarh under Section 11 of the Arbitration and Conciliation Act, 1996 for appointment of an Arbitrator. 5. Mr. S.S. Baghel, learned Deputy Government Advocate appearing for the respondent relying on the return filed on behalf of respondent/State, opposes this application, however, he submits that the respondent will have no objection if any Arbitrator is appointed by this Hon’ble Court for resolving the dispute that has arisen between the parties. He also submits that firstly, the applicant ought to have approached the Secretary, School Education for 7 settlement of the dispute in light of Clause 22 of the agreement which has not been done. 6. In response, Mr. Garg submits that the said recourse has already been taken by the applicant way back in the year 2014 which is evident from Annexure A/10 at page 69 of the petition. Even otherwise, clause 22 is not a mandatory condition to be complied with. 7. I have heard learned counsel appearing for the parties, perused the pleadings and documents appended thereto. 8. A query was put to learned counsel appearing for the parties as to whether they are agreeable for a common name who can be appointed as Arbitrator, learned counsel for the parties submitted that they would have no objection if any retired Judge of this High Court is appointed as the Sole Arbitrator. They further submit that Hon’ble Mr. Justice Dhirendra Mishra, who is a retired Judge of this High Court may be appointed as the Sole Arbitrator. 9. In view of the above consensus between the learned counsel for the parties, Hon’ble Mr. Justice Dhirendra Mishra a retired Judge of this High Court is appointed to act as the Sole Arbitrator to resolve the dispute involved in this arbitration request between the parties. 10. The Registry is directed to communicate this order to Hon’ble Mr. Justice Dhirendra Mishra in the proper address. 11. The remuneration of the Arbitrator shall be settled with the mutual consent of the parties. 12. The arbitration request petition, accordingly, stands allowed. Sd/- (Ramesh Sinha) CHIEF JUSTICE Preeti