Tata Projects Limited vs. Chhattisgarh Infotech Promotion Society

Facts

The petitioner, Tata Projects Limited, filed a writ petition seeking various reliefs against Chhattisgarh Infotech Promotion Society (Respondent No. 1) and others. The primary reliefs sought were for payment of Rs. 351.03 crores (excluding GST) plus applicable GST for the continuation of the Bharatnet Project, and the release of a performance bank guarantee of Rs. 167.46 crores. The petitioner also sought to quash a letter dated May 2, 2024, from Respondent No. 1 directing the extension of this bank guarantee. The petitioner highlighted an alternate remedy available under Clause 1.36.1 of the Master Services Agreement (MSA) dated July 18, 2018, to approach the Commercial Court under Section 9 of the Arbitration and Conciliation Act, 1996, for interim relief. Respondent No. 1 had no objection if the petitioner approached the Commercial Court within two weeks.

Held

The Court acknowledged the petitioner's submission regarding the availability of an alternative remedy under Clause 1.36.1 of the Master Services Agreement (MSA) and the petitioner's desire to approach the Commercial Court under Section 9 of the Arbitration and Conciliation Act, 1996, for interim relief. Respondent No. 1 did not object to this course of action, provided the petitioner approached the Commercial Court within two weeks. Considering these submissions, the Court held that the interim order previously passed on July 2, 2024, would remain effective until the petitioner approached the Commercial Court within the stipulated two-week period. After this period, the interim protection would cease to be effective. The writ petition was disposed of with these observations and directions, without delving into the merits of the payment or bank guarantee disputes.

Key Issues

1. Whether the Court should entertain the writ petition given the availability of an alternative remedy under the Master Services Agreement (MSA)? 2. What interim protection, if any, should be granted to the petitioner pending their approach to the Commercial Court? The petitioner argued that the Court should grant the reliefs sought, including payment and release of the bank guarantee, to ensure the continuation of the Bharatnet Project. They also pointed to the existence of an alternate remedy under Clause 1.36.1 of the MSA and sought liberty to approach the Commercial Court under Section 9 of the Arbitration and Conciliation Act, 1996, for interim relief. The revenue/State (represented by Respondent No. 1) did not object to the petitioner approaching the Commercial Court within two weeks, implying a concession on the procedural aspect of approaching the appropriate forum.