Delhi High Court - Orders
To File Additional Documents) ... vs Minisry Of Statistics And Programme ... on 13 September, 2023
Author: Sachin Datta
Bench: Sachin Datta
$~45
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ O.M.P. (I) (COMM.) 301/2023 and IA No.17795/2023 (seeking leave
to file additional documents)
LTIMINDTREE LTD. ..... Petitioner
Through: Mr. Rajiv Nayyar, Sr. Adv. along
with Mr. Vikas Dutta, Mr. Shiva
Sambyal, Mr. Siddharth Silwal and
Mr. Siddhant Chader Joshi, Advs.
versus
MINISRY OF STATISTICS AND PROGRAMME
IMPLEMENTATION & ANR. ..... Respondents
Through:
CORAM:
HON'BLE MR. JUSTICE SACHIN DATTA
ORDER
% 13.09.2023 IA No.17796/2023 (Exemption) Allowed, subject to all just exceptions.
Application stands disposed of.
O.M.P. (I) (COMM.) 301/2023
1. The present petition filed under Section 9 of the Arbitration and Conciliation Act, 1996 seeks the following reliefs:
"(a) Pass an order thereby restraining the Respondent No.2 from releasing the amount of Rs. 15,15,70,231/- of Performance Bank Guarantee bearing no.PEBBOM920657 dated 16.01.2020 and amended vide letter dated 13.10.2020 in terms of Respondent No.1 letter dated 06.09.2023;
(b) Alternatively, in case the amount of Performance Bank Guarantee bearing no.PEBBOM920657 dated 16.01.2020 and amended vide letter dated 13.10.2020 is released in favour of Respondent No.1, the Respondent No.1 be directed to return the same to the Petitioner or This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 16/09/2023 at 19:09:00 deposit the same with this Hon'ble Court;
(c) Pass an order thereby restraining the Respondent No.1 from terminating the Master Services Agreement dated 13.11.2020 entered between the Petitioner and the Respondent No.1;
(d) Pass an order thereby restraining the Respondent No.1 from giving effect or taking any coercive action in terms of Termination Notice dated 06.09.2023;
(e) Pass any such further order(s) as may be deem fit and proper in the facts and circumstances of the case mentioned above."
2. Learned senior counsel for the petitioner has raised the following contentions:-
(i) First it is submitted that the purported termination dated 06.09.2023 of the Master Services Agreement dated 13.11.2020 is in flagrant breach of the relevant terms and conditions of the said agreement. In this regard, attention is drawn to Clause 15.1 thereof which reads as under:
"15. TERMINATION 15.1 Material Breach a. In the event a Party materially breaches its obligations under this Agreement, the non-defaulting aggrieved Party may terminate this Agreement upon giving a one month's written notice for curing the Material Breach to the other Party. In case the Material Breach continues, after the notice period MOSPI or Bidder, as the case may be will have the option to terminate the Agreement. Termination of this Agreement will be without prejudice to any other rights and remedies that a non-defaulting may have under this Agreement or at law or in equity. Any notice served pursuant to this clause shall give reasonable details of the Material Breach, which could include the following events and the termination will become effective: b. If the Bidder is not able to deliver the Services as per the SLAs defined in RFP and or the work order which translates into Material Breach, then MOSPI may serve a 30 days written notice for curing this Material Breach. In case the Material Breach continues, after the expiry of such notice period, MOSPI will have the option to terminate this Agreement provided that MOSPI may only exercise such right to terminate for SLA failure after the SLA penalty cap is exhausted by MOSPI. Further, MOSPI may at its sole discretion afford a reasonable opportunity to the Bidder to explain the circumstance leading to such a This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 16/09/2023 at 19:09:00 breach.
c. MOSPI may, upon its sole discretion, by giving a one month's written notice, terminate this Agreement if there is a change of control of the Bidder has taken place. For the purposes of this clause, in the case of Bidder, change of control shall mean the event stated in Clause 6 and such notice shall become effective at the end of the notice period as set out in clause 6 (c).
d. In the event that Bidder undergoes such a change of control, MOSPI may, as an alternative to termination, require a full Performance Guarantee for the obligations of Bidder by a guarantor acceptable to MOSPI or its nominated agencies. If such a guarantee is not furnished within 30 days of MOSPI's demand, MOSPI may exercise its right to terminate the Agreement in accordance with this clause by giving 15 days further written notice to the Bidder.
(e) MOSPI may terminate this Agreement at any time upon 60 days for material breach with a prior written notice to Bidder. In the event of any such termination under this clause, MOSPI will only be liable to make any payments which are hereunder to Bidder for work performed in accordance with the terms and conditions herein up to the date of such termination."
It is submitted that the requisite prior notice that is mandatorily required to be given in terms of the aforesaid provision was never given to the petitioner and as such, the purported termination is in flagrant breach of the contract;
(ii) Secondly, it is contended that even though the termination letter refers to an amount of Rs.5,39,32,165/- (Rupees Five Crores Thirty Nine Lakhs Thirty Two Thousand One Hundred Sixty Five) being leviable as penalty upon the petitioner for non-adherence to the project milestone(s), the respondent has purported to invoke the performance bank guarantee(s) for an amount of Rs.15,15,70,231/- (Rupees Fifteen Crores Fifteen Lakhs Seventy Thousand Two Hundred Thirty One Only). It is submitted that the same is therefore improper being contrary to the respondent's own understanding as to their entitlement; it is submitted that if the performance This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 16/09/2023 at 19:09:01 bank guarantee is allowed to be encashed in the aforesaid circumstances, the same would result in irretrievable injury to the petitioner.
3. Issue notice to the respondents, on necessary steps being taken by the petitioner, through all permissible modes, including electronically and also through the concerned Standing Counsel.
4. In view of the factual conspectus set out hereinabove, till the next date of hearing, the respondent no.1 is restrained from acting in furtherance of the letter dated 06.09.2023, addressed to respondent no.2 bank whereby the performance bank guarantee number PEBBOM920657 dated 16.01.2020 has been sought to be invoked. Further, the respondent no.2 shall not release the amount of Rs.15,15,70,231/- (as demanded vide the said letter dated 06.09.2023) to the respondent no.1 till the next date of hearing.
5. List on 25.09.2023.
6. Copy of the order be given dasti under the signatures of court master.
SACHIN DATTA, J SEPTEMBER 13, 2023/cl This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 16/09/2023 at 19:09:01