HCL TECHNOLOGIES LIMITED Vs. MADHYA PRADESH COMPUTERIZATION

JUDGEMENT

(1.) This application under Section 11(5) and (6) of the Arbitration and Conciliation Act, 1996 (for short "the Act of 1996") has been filed by the applicant- M/s. HCL Technologies Limited, praying for appointment of sole arbitrator to adjudicate the disputes between the applicant and the nonapplicant, arising out of an agreement dated 27th September, 2012 (AnnexureA/4).

(2.) The applicant is a Company incorporated under the provisions of Companies Act, 1956, having its registered office at 806 Siddharth, 96, Nehru Place, New Delhi. The applicant-Company claims to have done research and development work and have innovation labs and delivery centers. It claims to be working in 46 different countries. It offers an integrated portfolio of products, solutions, services etc. to help enterprises re-imagine their businesses for the digital age. The non-applicant- Madhya Pradesh Computerization of Police Society, State Crime Record Bureau, Bhopal was desirous to implement the Mission Mode Project Crime and Criminal Tracking Network and Systems (for short "CCTNS") which is an initiative of National Crime Record Bureau under the Ministry of Home Affairs, Government of India. This was intended to create a comprehensive and integrated system for enhancing efficiency and effectiveness of policing at all levels, especially at the Police Stations level, through the principles of e-governance (hereinafter be called as "Project"). In order to implement the Project, the non-applicant issued a comprehensive Request for Proposal (for short "RFP") dated 20th December, 2011. The nonapplicant therein prescribed the technical and commercial terms and conditions for undertaking the Project. The applicant submitted its technical and financial proposals in response thereto. The applicant quoted Rs.86,46,41,753/- (Rupees Eighty-Six Crores Forty-Six Lakhs Forty-One Thousand Seven Hundred FiftyThree Only), inclusive of all taxes and dues etc., for the entire implementation and maintenance in response to the RFP. Subsequently, after applying "error correction" method as stated in Clause 4.2 Volume II of the RFP, the said amount was corrected and considered as Rs.86,45,88,236/- (Rupees Eighty-Six Crores Forty-Five Lakhs Eighty-Eight Thousand Two Hundred Thirty-Six Only). Since the applicant obtained the highest techno-commercial score, it was awarded the work of the Project by the non-applicant vide Letter of Intent dated 16th July 2012. The parties entered into the agreement on 27th September, 2012, according to which the applicant was to undertake the development and implementation of the Project, its roll out and sustain the operations of the Project. The State-wide Go-live activities were to be completed by the applicant before 30th June 2016. Additionally, as per the agreement the applicant was to provide necessary operations and maintenance support post the Go-live date for a period of five (5) years from the Go-live date. The applicant in terms of the agreement furnished an advance bank guarantee and performance security.

(3.) According to the applicant, it successfully prepared furniture, creation of LAN, electrical works etc. during the phase after verification and approval by the non-applicant. The applicant also provided support in deployment and commissioning of networking equipment and provisioning of desired connectivity required to support the functioning of the Core Application Software (for short "CAS") modules. Subsequently, parties executed an amendment to the agreement on 24th February, 2016, which was limited to the changes in the existing payment terms, timeliness associated with minimum deliverables, project implementation period and service level agreement for implementation of the Project, in the light of the decision of the State Cabinet, Government of Madhya Pradesh. According to the amended agreement, "Statewide Go-live" was required to be completed by the applicant by 30th June, 2016, which the applicant claims to achieved before that date. The Project went live on 01st July, 2016. The non-applicant required the applicant to show outstanding invoices since the Project was given "Go-live" by the State Apex Committee and approved by the State Cabinet. The non-applicant vide letter dated 22nd October, 2018 reiterated that as per the directions of the State Government, 01st July, 2016 will be taken to be the "Go-Live" date of the CCTNS Project in addition to considering the hand-holding support as completed after waiving off the same for the balance 163 Police Stations against a pro rata deduction in payment for the milestone. According to the applicant it has duly performed all its functions and obligations under the agreement and abided by the timeliness as envisaged in the agreement. The applicant thereafter issued invoices dated 30th November, 2018; 30th April, 2019; 26th September, 2019 and 26th September, 2019 for a total sum of Rs.9,06,05,419.72/- (Rupees Nine Crores Six Lakhs Five Thousand Four Hundred Nineteen and Seventy-Two Paise Only). In addition to this, invoices for a sum of Rs.58,20,861.84/- (Rupees Fifty-Eight Lakhs Twenty Thousand Eight Hundred Sixty-One and Eighty-Four Paise Only) also remained outstanding towards various bills which were pending since May, 2013. The applicant vide communications dated 13th September, 2019 and 14th October, 2019 requested the non-applicant to release the payment for 31/2 year periods i.e. July-December, 2016; January-June, 2017 and July-December, 2017 for the aforementioned O&M invoices, which were against the milestones of "Other Project Team for the Entire Project" and "O&M". On being demanded the applicant also produced documents on 16th August, 2019.