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Title: GOVERNMENT OF NCT OF DELHI V M/S EDUCOMP SOLUTION LTD.

+ FAO (COMM) 122/2021

Decided on: 15th December, 2023

CORAM: HON’BLE MR JUSTICE YASHWANT VARMA

HON’BLE MR. JUSTICE ANISH DAYAL

Facts:
The respondent, a provider of technology-based educational products and services, submitted its bid and was awarded a contract for 28 government schools, 10 single shift schools and 9 double shift schools (“subject schools”) vide agreement dated 24.04.2002. Therefore, the limitation period of three years commenced only when the appellant finally refused to make the entire payment on 04.09.2008.
The appellant claimed a sum of Rs. 13,28,975/- towards restoration charges of the computer systems installed by the respondent. Both the Sole Arbitrator and the District Judge rejected the above claim on the ground that the respondent was under no obligation under the Contract to carry out repairs of the computer systems upon the expiry of the Contract.
Finally, on the aspect of imposition of interest in the absence of a clause in the Contract providing for the same, the District Judge held that the amount due to the respondent was unduly withheld by the appellant for a long period, and therefore, imposition of interest was warranted under the circumstances.

Laws Involved-

Section 37 of the Arbitration and Conciliation Act, 1996-

(1) 1[Notwithstanding anything contained in any other law for the time being in force, an appeal] shall lie from the following orders (and from no others) to the Court authorized by law to hear appeals from original decrees of the Court passing the order, namely:–

2[(a) refusing to refer the parties to arbitration under section 8;

(b) granting or refusing to grant any measure under section 9;

(c) setting aside or refusing to set aside an arbitral award under section 34.]

(2) Appeal shall also lie to a court from an order of the arbitral tribunal–

(a) accepting the plea referred to in sub-section (2) or sub-section (3) of section 16; or

(b) granting or refusing to grant an interim measure under section 17.

(3) No second appeal shall lie from an order passed in appeal under this section, but nothing in this section shall affect or take away any right to appeal to the Supreme Court.

Issues:
1. Was the respondent’s claim petition beyond the limitation
period?
2. Whether the respondent failed in discharging its obligations under the Contract?

3. Whether the onus to submit proof of payment of electricity and telephone/internet bills on the respondent?
   4. Whether the respondent was obligated to carry out repairs and replacements on the equipment and computer systems installed by it?
   5. Whether the imposition of interest on the awarded amount is outside the scope of the Contract?

Courts Judgement and Analysis:
In MMTC Ltd. vs. Vedanta Ltd., (2019) 4 SCC 163, the Hon’ble Supreme Court categorically held that in deciding an appeal under Section 37 of the Arbitration and Conciliation Act, 1996, the hands of the Court are tied since it cannot undertake an independent assessment of the merits of the case, and must limit itself to examining whether the exercise of power under Section 34 of the Act was within the ambit of the provision.
While exercising the appellate review under Section 37 of the Act, the court cannot second guess, (twice removed in a sense) the decision of the Arbitrator. For the preceding reasons, the Delhi High Court thought that there is no infirmity in the impugned judgment. Counsel for the appellant, however, adds that the onus to prove payment of bills raised was on the respondent.
Therefore, they found finds no patent illegality in the view adopted by the District Judge insofar as the appellant has failed to indicate which bills, if any, remain unpaid by the respondent. A bare perusal of Clause 9 and Clause 44 of the Contract reveals that the obligation to maintain equipment and other infrastructure in proper working condition exists only throughout the Contract period. The District Judge and the Sole Arbitrator have concluded that the alleged deficiencies for which restoration costs are being claimed were never raised during the subsistence of the Contract. Therefore, the District Judge has rightly held that no ground for interference with the Award is made out based on the above submission.
In view of the above discussion, the court found no reason to interfere with the impugned judgment in the exercise of this Court’s jurisdiction under Section 37 of the Arbitration and Conciliation, 1996. The appeal was, therefore, dismissed.

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Written by- Aditi

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