PONDICHERRY UNIVERSITY Vs. INFOPLUS TECHNOLOGIES PVT LTD

JUDGEMENT

(1.) This Original Side Appeal is directed against the order of a learned Single Judge, dtd. 11/1/2022 in Arb.O.P.No.332 of 2021 and A.No.1699 of 2021, thereby, dismissing the application filed by the Appellant to set aside the Arbitral Award under Sec. 34 of the Arbitration and Conciliation Act, 1966. B. The facts of the case:

(2.) The brief facts leading to the filing of the appeal is that the appellant, namely, Pondicherry University floated a tender inviting offers for design, development and delivery of 3D Visual E-Learning content for various courses. The respondent participated in the tender and was declared as the successful bidder. Accordingly, the appellant awarded the work on 27/4/2015, and a form of agreement in respect thereof was entered on 7/7/2015. As per Clause 9 of the said agreement, any dispute arising out of the agreement shall be settled through Arbitration. According to the respondent, they had delivered the Visual E-Learning Solutions for 32 subjects of Phase-I, which were verified, received and utilised by the University. The respondent submitted their initial invoice for Rs.84.74 Lakhs, which the Appellant/University did not pay. The respondent also submitted their further invoice valued at Rs.106.72 Lakhs in respect of the said subjects. The Appellant/University neither made any payment nor called upon the respondent to supply the content for the other remaining subjects. Therefore, the respondent invoked Arbitration proceedings.

(3.) Mr. P.H.Arvindh Pandian, learned Senior Counsel appearing on behalf of the Appellant/University, firstly would submit that the entire award is liable to be set aside as the contract itself is void. According to the learned Senior Counsel, the mandatory approval of the Academic Council and the Finance Committee were not taken note of and the very action of calling for the tender for entering into the contract was completely irregular. When a Public Sector Institution which is bound by its statutes having the force of law, proceeds with entering into a contract in total violation of said statutes, then the contract would be void ab initio. The learned Arbitrator did not consider this very basic fact about the contract being void ab initio. Thus the award is in violation of the Fundamental Policy of Indian Law and thus suffers from patent illegality and is liable to be set aside under Sec. 34 of the Arbitration and Conciliation Act.