Document Fragment View

Matching Fragments

11. As CVSIPL has sought to avoid the Contracts in the arbitral proceedings, it is incomprehensible and incongruent that it would like the contractual obligations (i.e., integration of the system) to continue during the arbitral proceedings. If ultimately CVSIPL succeeds in the arbitration, its stance will be declared absolute, and the Contracts be declared void/voidable, by way of the arbitral award. At that stage, CVSIPL could perhaps seek restoration to pre-contractual position, as contended by it before this Court, by relying upon Section 65 of the Contract Act. However, even that does not entitle CVSIPL to seek continuation of contractual obligations, which are presently being fulfilled inter-se the parties, on the strength of the Contracts, which are being avoided by it. The Court finds this stance taken by CVSIPL to be inherently contradictory to the relief claimed by it in the arbitration. It cannot approbate and reprobate its stand qua the Contracts as per its convenience.

13. Further, it has also to be borne in mind that the stand of CVSIPL with regard to the Contracts is evident from the Statement of Claim made by it. In addition to the relief of declaration that the Contracts are void or voidable at its option [as noted in para 4(I) and (II) of the Impugned Order], CVSIPL has also sought monetary claims, [as noted in para 4(I) and (II) of the Impugned Order] which, inter alia, includes the cost of installation of the ECP system; the amounts spent in purchasing talktime from CVSIPL; cost of integration with the system of BSNL and/or its third-party vendor, etc. These monetary claims are consequential to the relief of declaration. CVSIPL is seeking compensation towards damages it has allegedly suffered on account of a void/ voidable contract. If that is its stand, then all the more, the Court does not find any ground or reason for CVSIPL to insist that the integration of ECP with BSNL‟s system continue till such time they succeed in the arbitral proceedings.

17. In view of the foregoing, as well as the stand taken by CVSIPL that the Contracts are void/ voidable, the Court is unable to find any ground whatsoever for CVSIPL to insist that the ECP developed by them should not be allowed to be disintegrated from BSNL‟s system.

What was contemplated under the Contracts regarding the disintegration of systems upon expiry of term?

No merit in CVSIPL's contentions

21. It is also pertinent to note that CVSIPL had not approached the Tribunal under Section 17 of the Act, seeking a direction against BSNL to restrain it from disconnecting the software or for such other reliefs, beyond the term of the contract. Thus, the Court does not find any merit in the contention of CVSIPL that the balance of convenience lies in its favour or that it stands to lose a great deal in the event its equipment is disconnected. The Court is in fact unable to appreciate this argument, as the entire claim of CVSIPL before the Arbitral Tribunal is to declare the Contracts to be void or voidable and claim damages. In fact, CVSIPL vide notice dated 27th November, 2018, called upon BSNL to "treat the contract as Closed and the original agreement as cancelled" [as extracted in para 2.7 above]. This stand, coupled with the reliefs sought before the Tribunal, cannot, therefore, create a balance of convenience in favour of CVSIPL. In fact, CVSIPL‟s argument that unsold talktime already purchased by CVSIPL from BSNL can only be sold if the equipment is not disintegrated, is untenable. These concerns and vulnerabilities are overplayed and have no legal footing. This, in fact, amounts to seeking a specific performance of the Contracts, which is completely contradictory and incongruous to its claim that the contract is cancelled/ void/ voidable. Besides, even if there is some semblance of contractual obligations existing between the parties that entitles CVSIPL to continue to keep the systems integrated, the same cannot, by any extent of imagination, continue beyond the term of the Contracts. The monetary loss, if any, which is caused by such disintegration of the system, can only be the subject matter of a claim of damages, which CVSIPL is already seeking before the Arbitral Tribunal. Thus, the reasons set out by CVSIPL to contend that it would suffer loss are all in the nature of monetary claims, which cannot be a ground to foist liability on BSNL to continue with the integration beyond the term of the Contracts.