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2020 (5) TMI 289 - HC - Indian LawsMaintainability of Arbitral Award - outstanding dues in respect of the supply of Smart Cards made by the Petitioner to the Respondent - differential tax deposited by the Petitioner due to non-issuance of Sales Tax 'C' Forms by the Respondent alongwith interest - unutilized 49,500 Red Pre-printed Smart Cards/ White Smart Cards - non-procurement of referral Authentication Kits (RAKs) by the empanelled medical facilities - reimbursement of the costs/ expenditure incurred by the Petitioner in providing services to the Respondent for the period 1.06.2015 to 8.07.2015. Recovery of a sum of ₹ 30,239/- being the amount of outstanding dues in respect of the supply of Smart Cards made by the Petitioner to the Respondent - HELD THAT - No patent illegality can be found in the rejection of the said claim except to the extent of ₹ 2025/- which has been allowed towards the claim payable by Regional Centre, Hissar. It was for the petitioner to lead evidence to show that the invoices being filed in support of the claim pertained to the claim amounts, as also to show that the Smart Cards were actually delivered. In most of the claims under this Head, the petitioner failed to connect the invoices filed, with the amounts claimed while with respect to Regional Centre, Lucknow, the petitioner could not rebut the evidence of the respondent that the Smart Cards were even received - this part of the Award calls for no interference in judicial review by this Court under Section 34 of the Act. Recovery of a sum of ₹ 80,77,215/- on account of the differential tax deposited by the Petitioner due to non-issuance of Sales Tax 'C' Forms by the Respondent alongwith interest thereon @ 21% from the date of deposit till 28.02.2017 to the tune of ₹ 1 0587373/- - HELD THAT - There is no evidence for proving the Sales Tax Challans filed by the petitioner and nor were the originals produced. The deposition of PW-1, Rajendra Yadav, is noted wherein he admits that the amounts indicated in the Challan do not exclusively relate to the Smart Cards supplied to the respondent and also relate to the other parties as well - The Tribunal has come to a finding that the respondent is not a dealer under Section 2(b) of the Act nor a registered dealer with the Sales Tax Department under Section 7. Respondent has been established by the Ministry of Defence for providing Contributory Health Scheme to the beneficiaries under the Scheme and is not in any business so as to be termed as a registered dealer for selling or buying cards. The Tribunal also observes that the Smart Cards supplied to the beneficiaries will not be termed as a sale or a resale under the Act. Respondent was, therefore, not liable to give any Form C to the petitioner - Claim rejected. Recovery of a sum of ₹ 66,89,250/- on account of unutilized 49,500 Red Pre-printed Smart Cards/ White Smart Cards - HELD THAT - The Award suffers from no illegality leave alone a patent illegality. The respondent herein is right in its contention that the Agreement clearly underscored the need of the parties to stop the work in the last month of the Contract and hand over the software and the hardware to the respondent. The admitted position was that the petitioner required 25 days to deliver the cards towards any application approved and sent to it. Thus, on a given date in a given month, the Cards which were delivered were naturally ordered atleast 25 days prior thereto. The respondent had vide its email dated 28.04.2015 clearly reiterated that the Agreement would expire on 31.05.2015 and they had no intent to extend it beyond the said date. No applications as admitted by the petitioner were approved in the month of May 2015. Thus, the contention of the petitioner that it had suffered loss due to the unutilized cards on account of the act of the respondent is misplaced. Recovery of a sum of ₹ 2,97,67,500/- on account of non-procurement of referral Authentication Kits (RAKs) by the empanelled medical facilities - HELD THAT - The Tribunal in its wisdom has interpreted the word facilitate to signify recommendation or suggestion and not imposing or mandate. It is no longer res integra that interpretation of the Clauses of the Contract is the domain of the Tribunal. The Tribunal has given a particular interpretation to the Clause and in my view this is not only a possible but a plausible view requiring no interference. I find merit in the contention of the respondent that surely the respondent could not impose itself on the hospitals to procure the Kits from the petitioner. This was neither the mandate nor the obligation under the Contract nor can even be sustained in any commercial transaction or in the business common sense. Recovery of a sum of ₹ 4450440/- as reimbursement of the costs/ expenditure incurred by the Petitioner in providing services to the Respondent for the period 1.06.2015 to 8.07.2015 - HELD THAT - Having raised a claim, the onus of proving that the services were rendered by the petitioner was on the petitioner itself. Petitioner could not place any order on record by which the respondent had sought its services beyond the contractual period. On the contrary, Annexure C-19 was an email dated 28.04.2015 issued by the respondent to its Regional Centres, with a copy to the petitioner, that the petitioner should return all the hardware and software to the ECHS, in compliance with Clause 9.1.3 of the Agreement - also, this Claim was in clear contradiction to the claim for unutilized Smart Cards. On one hand, the petitioner complained about withholding the applications which proved that the Contract was to end on 31.05.2015 while on the other hand, it urged that it worked beyond the contractual period. RW-1 had clearly deposed and proved the email dated 28.04.2015, but no attempt was made by the petitioner to demolish the testimony of the witness, in cross-examination. This Court finds no reason to interfere with the said Award, there being no patent illegality or perversity - petition dismissed.
Issues Involved:
1. Non-issuance of Sales Tax C Forms. 2. Outstanding payments for supplied Smart Cards. 3. Claim for unutilized Smart Cards. 4. Non-procurement of Referral Authentication Kits (RAKs). 5. Costs for services rendered post-contract expiry. Issue-wise Detailed Analysis: 1. Non-issuance of Sales Tax C Forms: The petitioner argued that the respondent failed to issue Sales Tax C Forms, resulting in a higher tax burden. The Tribunal found no evidence proving the Sales Tax Challans related exclusively to the Smart Cards supplied to the respondent. The Tribunal noted that the price quoted by the petitioner included taxes, as evidenced by a letter dated 21.11.2008. The Tribunal also determined that the respondent was not a "dealer" under the Central Sales Tax Act, 1956, and thus not liable to provide Form C. The Court upheld this finding, noting that no loss was caused to the petitioner due to non-issuance of Form C. 2. Outstanding payments for supplied Smart Cards: The petitioner claimed outstanding payments from several Regional Centres. The Tribunal found that the petitioner failed to produce original invoices or authors of the documents. It was noted that the petitioner admitted during arguments that most dues were cleared except for a few specific amounts. The Tribunal allowed a partial claim of ?2025/- for Regional Centre Hissar but rejected other claims due to lack of evidence. The Court found no illegality in this part of the Award. 3. Claim for unutilized Smart Cards: The petitioner claimed losses due to unutilized Smart Cards. The Tribunal found no documentary evidence showing that any order was placed for the unutilized cards. It was noted that the respondent did not make monthly projections after November 2014, and no orders were placed after that period. The Tribunal concluded that the respondent could not be blamed for any unutilized inventory. The Court agreed with this finding, noting that the petitioner failed to provide evidence of the unutilized cards. 4. Non-procurement of Referral Authentication Kits (RAKs): The petitioner claimed losses due to the respondent's failure to ensure that empaneled hospitals procured RAKs. The Tribunal interpreted Clause 3.1.12 of the Agreement to mean that the respondent was only required to facilitate, not mandate, the procurement of RAKs. The Court upheld this interpretation, noting that the respondent could not impose itself on the hospitals to procure the Kits. 5. Costs for services rendered post-contract expiry: The petitioner claimed costs for services rendered after the contract expired. The Tribunal found no evidence proving that the respondent requested services beyond the contractual period. It was noted that the respondent had instructed the petitioner to return all hardware and software upon contract expiry. The Court agreed with this finding, noting that the petitioner failed to produce supporting documents for the claimed costs. Conclusion: The Court dismissed the petition, finding no reason to interfere with the Tribunal's Award. The Award was upheld, and the petition was deemed devoid of merits.
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