M/S Brij Systems Limited vs M/S Satspace Tel Pvt. Ltd

Claim No.,Amount (Rs.),On Account of

I.,"94,14,844/-","towards dues as per Invoice No. 2018-2019/STPL-

5 dated 01st August, 2018.

II.,"16,92,000/-","towards interest on the due amount @ 18% (from

1st August, 2018 till August, 2019).

III.,"3,82,490/-","towards dues as per Invoices dated 3rd October,

2016

for Rs. 1,33,400/-, 3rd October, 2016 for Rs.

82,340/- and 30th January, 2017 for Rs. 1,66,750/-

.

IV.,"1,94,037/-","towards interest on due amount in the above

invoices @ 18% from date of invoice (from 3rd

October, 2016 and 20th January, 2017) to August,

2019.

V.,"3,00,000/-",towards previous litigations and other expenses.

VI.,,Cost of the arbitral proceedings and legal fees.

4.1. The present petition has no merits and has been filed with the sole purpose of misusing the judicial process and to buy some more time to avoid,,

making the payment of the legitimate dues of STPL. BSL has not approached this Court with clean hands and has concealed material facts and the,,

documents.,,

4.2. In the cross-examination dated 15th September, 2020 of BSL, the three invoices were admitted as matching the three purchase orders which",,

were marked as exhibits RW1/RA, RW1/RB, RW1/RC. However, BSL has deliberately not filed the said purchase orders in this Court in order to",,

avoid adverse inference. In view of the admission on the part of BSL, the award of the Arbitrator with respect to the claims at serial Nos. I and III",,

are completely justified and call for no interference.,,

4.3. BSL has failed to prove the letter dated 8th September, 2018 and STPL’s acknowledgement to the same dated 25th September, 2018. These",,

documents were also categorically denied by STPL in its cross-examination. Thus, the learned Sole Arbitrator was correct in holding that the same",,

were not proved and could not be relied upon.,,

4.4. Countering the allegation of ignoring the letters dated 27th August 2019 and 20th September 2019, it was urged that the Arbitrator instead",,

considered the cross-examination of RW-1 dated 15th September, 2020 on this aspect. The witness admitted that the 3rd party had released the bank",,

guarantee and full and final payment to BSL. Thus, the alleged letters were issued after the AMC was over and final payment had been received by",,

BSL from DSA.,,

4.5. The counter-claim of BSL was rejected after appreciating the evidence and pleadings on record, and thus it cannot be said that it was rejected",,

mechanically. In support of this contention, reliance was placed upon the cross examination dated 15th September, 2020 to demonstrate that BSL",,

could not produce any document to prove its counter-claims. In absence of evidence to prove the loss as sought in the counter-claim, the finding of the",,

learned Arbitrator calls for no interference.,,

4.6. The learned sole Arbitrator rightly gave their finding after appreciation of evidence and cross examination of the parties. BSL admitted its liability,,

towards STPL’s invoice dated 1st August, 2018. In this regard, attention was drawn to the cross examination dated 14th September, 2020 of",,

BSL's witness (RW-1), during which he categorically admitted the receipt of email dated 10th August, 2018 as well as other emails sent by STPL to",,

BSL.,,

4.7. Regarding litigation cost, it was urged that STPL had to bear the cost of â€" (a) filing the petition for appointment of Arbitrator before this court,",,

(b) the fee of the Arbitrator for its claim as well as for the counter claim, according to the DIAC rules, which was 5 ½ Lakhs for each party, and (c)",,

fees of the advocate for litigation as well as for arbitration. Thus, the total cost of the litigation borne by STPL stood at Rs. 11 lakhs. Therefore, the",,

award of Rs. 10 lakhs is reasonable and completely justified.,,

4.8. The cost of contesting the present litigation of Rs. 2 lakhs should also be added to the cost awarded to STPL. Furthermore, going by the conduct",,

of BSL of denying payment on frivolous grounds, the court may bear in mind that STPL is likely to be further burdened with the cost of execution of",,

the arbitral award, in the future, even if they succeed in the present petition.",,

4.9. BSL had received the payment from DSA on or about 11th August 2018, yet the payment under the AMC has not been released, constraining",,

STPL to take recourse to legal remedies to recover its dues.,,

4.10. DSA is still using the services of STPL at various sites, apart from this AMC, as STPL enjoys a high reputation and goodwill in the field. Thus,",,

the claim of deficiency in service is untenable.,,

REJOINDER:,,

In rejoinder submissions, thereto, Mr. Das, counsel for BSL, reiterated BSL’s objections. He submitted that BSL’s defence with respect to",,

dissatisfactory and faulty service by STPL was wrongly rejected by the Arbitrator, and the findings thereto are contrary to the evidence on record. He",,

further argued that the finding of the learned Arbitrator with respect to letter dated 08th September, 2019, is blatantly wrong in light of STPL’s",,

reply dated 25th September 2018 which acknowledged BSL’s letter dated 8th September 2019 and both the above communications were brought,,

to evidence by STPL itself, and thus stood admitted by them. On the question of possession of DSA’s equipment, Mr. Das highlighted that in the",,

hearing before this Court on 05th May 2021, STPL denied having possession of DSA’s equipment as listed in the letter dated 08th September,",,

2018. However, this stand was not taken by STPL in its earlier letter dated 25th September 2018, which only flagged ‘certain discrepancies’.",,

Thus, the possession of DSA’s equipment is unequivocally with STPL. In case the impugned award is not struck down by this Court, BSL shall be",,

extremely prejudiced, as it would not only be disentitled from getting DSA’s goods returned from STPL, but instead, it will have to compensate",,

DSA for the goods illegally retained by STPL, without being able to recover the damages from STPL which may become payable to DSA due to",,

faulty service on part of STPL.,,

ANALYSIS:,,

The Court has considered the rival contentions of the learned counsels for the parties. The contentions urged by Mr. Das, have no merit as none of",,

the grounds urged by BSL call for interference under Section 34 of the Arbitration and Conciliation Act, 1996. It needs no reiteration that the scope of",,

interference by this Court under Section 34 of the Act is restricted and extremely limited. The Court does not sit in appeal against the impugned award,,

and enter into re-appreciation the evidence. Only if there is a patent illegality or perversity in the award, can the Court interfere. None of the grounds",,

urged by Mr. Das attract 34(2)(b)(ii) or (2A) of the Act. To merely contend that the award is perverse and patently illegal, or against public policy, is",,

not enough to invoke the jurisdiction of the court. Rather, the contesting party has to clearly demonstrate and establish the applicability of the above-",,

noted provisions.,,

The Claim at serial No. III for Rs. 3,82,490/- has been awarded to STPL towards three invoices. The findings of the learned Arbitrator on this issue",,

are as follows:,,

“72. Qua the other 3 invoices totalling a sum of Rs.3,82,490 i.e. the first invoice in the sum of Rs.1,33,400 dated 3.10.2016; the second",,

invoice in the sum of Rs.82,300 dated 3.10.2016 and the third invoice of Rs.1,66,750 dated 30.6.2017, again the liability of the Respondent",,

to pay this amount to the claimant is clear and unequivocal. This would be discussed in the below noted paras.,,

The purchase orders qua these three respective amounts have been proved as Ex.RW1/RA, Ex.RW1/RB and Ex.RW1/RC. In his cross",,

examination RW1 admitted that these 3 invoices were against the work carried out by the claimant against admitted payment terms. He,,

admitted that 3 purchase orders Ex.RW1/RA, Ex.RW1/RB and Ex.RW1/RC are against the invoice dated 3.10.2016, 3.10.2016 and",,

30.6.2017 for Rs. 1,33,400/-, Rs. 82,300/- and Rs. 1,66,750/- respectively. This witness however volunteered to state that these invoices were",,

nullified in terms of the mail dated 27.11.2017 sent by the respondent. This mail dated 27.11.2017 has been filed as an additional document,,

by the Respondent and was a document which had also been placed on record by the claimant. This mail has been scrutinized. Learned,,

counsel for the Respondent has vehemently relied upon this mail to advance his submission that the 3 invoices referred herein above in fact,,

got shot down by this mail.,,

Relevant would it be to extract this mail which had been sent by the respondent to the claimant and which inter alia reads here as:,,

xx … xx … xx,,

(…) This mail does not come to the aid of the respondent as after this mail of 27.11.2017 there are several other communications,,

exchanged between the parties and which have already been discussed supra particularly the letter dated 16.1.2018 to which a reply had,,

been given by the respondent on 22.2.2018. (…) These payments clearly related to the 3 invoices dated 3.10.2016, 3.10.2016 and",,

30.6.2017 which were the works carried out by the claimant for the respondent and for which he had not received his long overdue,,

payment for more than one year.,,

The fact that the payments were being made inter se the parties on a quarterly basis is clear from the terms of the AMC with particular,,

reference to clause 5.2. This has also been admitted by RW1 in his cross examination. The defence of the respondent is that the parties had,,

by an oral understanding agreed that the payments did not necessarily have to be adhered to on a quarterly basis and would be paid to the,,

claimant as and when the amount is received by the respondent from the third party. This submission has not been substantiated by the,,

respondent. Be that as it may even otherwise RW1 in his cross examination further admitted that full and final payment had been received by,,

the respondent from the their party/Indian Army in August 2018 even as per the stand of the respondents stand since he had received,,

complete payment from the Indian Army in August 2018 his liability to release the payments to the claimant within 2-3 business days became,,

clear. (sic),,

The aforenoted communications thus clearly establish that the payment which had to be released by the Respondent to the claimant in,,

terms of the mails/communications dated 16.1.2018. 3.2.2018, 22.2.2018, 10.8.2018, 16.8.2018 and 18.8.2018 were qua the aforenoted 3",,

invoices in the sum of Rs. 1,33,400, Rs.88,300 and Rs.1,66,750 total a figure of Rs. 3,82,490/- This amount is also liable to be paid by the",,

Respondent to the claimant.â€​,,

(emphasis supplied),,

The aforesaid findings of the learned Arbitrator are purely findings of fact, which have been returned on the basis of evidence led by the parties.",,

The Learned Arbitrator has meticulously examined the documents placed on record, which included the correspondence exchanged between the",,

parties as well as the testimony of the witnesses. The same cannot be reappreciated by this Court at this juncture. BSL’s grounds of challenge are,,

based on some selected documents, on the basis whereof it is contended that there is no admission on their part and the findings of the learned",,

Arbitrator are perverse. However, the above extract of the impugned award demonstrates that the findings of the learned Arbitrator, and conclusion",,

drawn by her that there was admission of liability on the part of BSL, are pursuant to a process of reasoning, discussion, analysis and consideration of",,

evidence. This cogent reasoning, based on facts and appreciation of evidence, after consideration of relevant provisions and material on record, calls",,

for no interference.,,

With respect to the Claim at serial No. I awarded towards STPL’s invoice dated 1st August, 2018 for an amount of Rs. 94,14,844/-, the",,

findings of the learned Arbitrator are as follows:,,

“69. On 10.8.2018 the claimant had written a mail to the Respondent with reference to their outstanding payments and particularly,,

payment against the services rendered for the period 1.1.2018 to 13.6.2018 i.e. against invoice 2018-19/STPL-5. The balance amount of,,

Rs.99,86,000 was claimed. This mail was answered on the dame date by Respondent at 21.34 hrs. wherein with reference to this invoice the",,

Respondent informed the claimant that the cheque should be deposited by the claimant only after the payment was received by the,,

Respondent. Relevant at this stage would it be to note that a cheque dated 5.8.2018 had been issued by the Respondent to the claimant in,,

the sum of Rs.90,000. This email reply of the Respondent at 21.34 was obviously in relation to this cheque. On 16.8.2018 the Respondent",,

wrote a mail to the claimant stating that they are in the process of clearing the payments. On 18.8.2018 the claimant clarified to the,,

Respondent that the outstanding payments are still due and payable to the claimant and in case these payments are not made they will go,,

ahead to deposit the cheque and all liability on this count would fall upon the Respondent.,,

The reference in these aforenoted 3 mails was to the invoice No.2018-19/STPL-5 which was raised by the claimant upon the Respondent,,

in the sum of Rs.94,14,844 dated 1.8.2018. A post dated cheque of Rs.90 lacs for a partial payment had been issued by the claimant to the",,

Respondent dated 5.8.2018 against this amount with the understanding was that this cheque would not be deposited by the claimant as the,,

Respondent was hopeful that as soon as he gets his payments from the Indian Army he would make the payment to the claimant. This is,,

evident from the mail of the Respondent dated ( 16.8.2018. In the subsequent mail written by the claimant on 18.8.2018 he sought payments,,

which had still not been released by the Respondent to the claimant; claimant informed the Respondent that he would go ahead to deposit,,

this cheque on 28.8.2018 in case his payments are not released for which all liability would have to be borne by the Respondent.,,

From the aforenoted correspondence it is clear that the Respondent had admitted his liability qua this invoice dated 1.8.2018 for,,

Rs.94,14,844; he had been requesting for time to make the payment against which he had already issued a PDC for Rs.90 lacs. This PDC",,

had in fact been presented by the claimant to the bank on two occasions but on both the occasions the cheque got dishonoured. The,,

claimant had also sent a notice to the Respondent under Section 138 of the Negotiable Instrument Act. The liability of the Respondent to pay,,

this amount of R.s.94,14,844 against which the invoice dated 1.8.2018 had been issued was clear and unequivocal. This amount is liable to",,

be paid by the Respondent to the claimant.â€​,,

The learned Arbitrator has analysed the correspondence, and also taken into account the issuance of the post-dated cheque and its dishonour, and",,

come to the conclusion that the liability is clear and unequivocal. It has been pointed out that BSL's witness (RW1), during his cross-examination on",,

14th September 2020, admitted the receipt of email dated 10th August 2018 sent by STPL to BSL wherein there is clear reference to the invoice qua",,

Claim at serial No. I. On this basis the Learned arbitrator concluded that BSL's liability towards STPL’s invoice dated 01st August 2018,,

amounting to Rs. 94,14,844/- stood admitted. It is well settled in law that Arbitral Tribunal is the master of evidence and the findings of fact arrived at",,

by the Sole Arbitrator on the basis of evidence on record is not to be scrutinised as if the Court were sitting in appeal. Thus, the aforesaid finding of",,

the learned Arbitrator does not call for any interference.,,

a),"Rs 7,60,500/-","Towards loss of Interest to Petitioner

on amount of Rs. 30,00,000/- (paid in advance to

BSL)

b),"Rs. 20,57,356/-","Towards liquidated damages as the same forms

part of the amount deducted by DSA from the

payment due to BSL.

c),"Rs. 5,00,000/-","Towards the rent for utilization of BSL’s

Guwahati office.

d),"Rs. 15,75,000/-","Towards the cost incurred by BSL for repair of

faulty sites.

e),"Rs. 30,88,000/-","Towards the cost incurred for repair work

between 1st July, 2016 to 26th October, 2016.

f),"Rs. 60,000/-","Towards transport of faulty equipment

from Guwahati to Delhi.

g),"Rs. 90,000/-","Towards delivery of UPS to DSA sites

for convenience of STPL.

h),"Rs. 45,00,000/-","Towards repair expenses and hiring of

experienced professionals for the repairing faulty

equipment.