Disposed

Crest Digitel Pvt. Ltd. Thru. Auth. Signatory Vijay Kumar v. Uttar Pradesh Metro Rail Corporation Ltd.

Allahabad HC12 Aug 2024ARPL/38/2024

Case brief

AI extract

What is this about?

Section 37 appeal against rejection of a Section 9 application after termination of a Lucknow Metro in-building solution licensing contract, where respondents claimed assets at nil value. Court ordered reply filing, appointed commissioners to inventory equipment, and made the fresh tender subject to the appeal outcome pending next date.

What did the court decide?

Reply to be filed by next date; two commissioners appointed for inventory of equipment (honorarium Rs.50,000 each, shared equally); respondents' tender kept subject to appeal outcome till 12.08.2024.

Crest Digitel Pvt. Ltd. Thru. Auth. Signatory Vijay Kumar vs… — Arbitration | Allahabad HC (2024)

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Chief Justice's Court

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Case :- APPEAL UNDER SECTION 37 OF ARBITRATION AND CONCILIATION ACT 1996 No. - 38 of 2024

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Appellant :- Crest Digitel Pvt. Ltd. Thru. Auth. Signatory Vijay Kumar Respondent :- Uttar Pradesh Metro Rail Corporation Ltd. Counsel for Appellant :- Prashant Chandra(Sr. Adv.) and Sanjay Bhasin (Sr. Adv.) with Ritwick Rai, Sahil Narang, Aviral Raj Singh, Madhavam Sharma, Palash Banerjee, Ashutosh Verma, Anshuman Singh

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Counsel for Respondent :- Kumar Ayush, Pritish Kumar, Mohammad Irfan

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Hon'ble Arun Bhansali,Chief Justice Hon'ble Jaspreet Singh,J.

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Heard learned counsel for the parties.

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The present appeal is directed against order dated 11.07.2024, passed by the Commercial Court No. 1, Lucknow, whereby the application filed by the appellant under Section 9 of the Arbitration and Conciliation Act, 1996 has been rejected.

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The appellant was granted contract for licensing of space for In-building Solution/IBS for providing shared mobile (Cellular) coverage (2G/3G/4G) in tunnels section and underground stations of (CCS Airport, Hussainganj, Sachivalaya and Hazratganj) of North-Sought Corridor of Lucknow Metro. The said contract for licensing came to be terminated effective from 31.12.2023 by termination notice dated 29.01.2024, which was represented against by the appellant on 29.01.2024 and order dated 27.02.2024, dealing with the representation was passed indicating that license agreement stands terminated.

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When the appellant sent a communication dated 21.03.2024 seeking access in the stations and tunnels and share the

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schedule of power blocks in the tunnels for removing the material and the same was not permitted, the appellant filed application under Section 9 of the Act, seeking interim relief against the respondents, whereby directions were sought that either the appellant be permitted to remove the goodsequipments/assets or the respondents be restrained from dealing with the same. Another prayer was made seeking preparation of inventory of the goods in question. In response to the said application under Section 9 of the Act, the respondents relied on provisions of Clause 19.2 (c) to indicate that as goods were not removed within a period of 30 days from the date of issue of termination notice, the goods/assets have been taken over by the respondents at NIL value.

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The Commercial Court, after hearing the parties, inter alia, came to the conclusion that the respondents were justified in taking the action as the same was under the contract and rejected the application seeking injunction. Feeling aggrieved, the present appeal has been filed.

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Learned counsel for the appellant made vehement submissions that the action of the respondents in taking a plea regarding appropriating the equipments/assets on account of alleged failure to remove the same within the stipulated time is wholly contrary to the terms of the contract and the facts on record and that the respondents have been unfair in taking the stand as indicated. Submissions have been made that in the communication dated 27.02.2024, indications have been made that the license fee deposited by the appellant to the tune of Rs. 30,00,000/- for the period of January, 2024 to March, 2024 would be refunded, clearly shows that nothing was outstanding with the appellant and only on account of fact that the appellant purportedly did not seek removal of the goods within the stipulated period, it cannot be deprived of its assets.

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Learned counsel for the respondents supported the order impugned with the submissions that the terms of the agreement are very clear and specific providing for the eventuality at the end of specified period, which has come into force at the end of 30 days. Further submissions have been made that the appellant has entered into the contract with open eyes and therefore, cannot claim action of the respondents as high handed. Further submissions have been made that now a fresh tender has been issued, wherein the respondents has specifically stipulated that the selected bidder shall first utilize the telecommunication infrastructure of UPMRCL on commercial terms wherever technically feasible before considering alternate facility and that as the tender floated is at an advanced stage, the interim relief sought by the appellant, cannot be granted. However, it was submitted that insofar as the preparation of inventory is concerned, the respondents have no objection to the said preparation of inventory.

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In the circumstances of the case, we deem it appropriate and therefore, order that the respondents may file reply to the application seeking interim relief in the present appeal by the next date.

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Shri Manish Singh, learned Advocate and Shri V.P. Nag, learned Standing Counsel are appointed as Commissioners for the purpose of preparation of inventory of the equipments/electric appliances, fixtures, panels, installations installed and the tools and machinery on the licensed premises. They would be paid honorarium of Rs. 50,000/- each, which amount would be shared by the appellant and the respondents equally. The Commissioners would be free to take assistance of experts/persons in know of the equipments, etc. as may be suggested by the parties.

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List the appeal on 12.08.2024.

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Till the next date, the tender floated by the respondents shall remain subject to the outcome of the present appeal. Order Date :- 19.7.2024 Mukesh Pal/RK

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(Jaspreet Singh, J) (Arun Bhansali, CJ)

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Digitally signed by :- MUKESH PAL High Court of Judicature at Allahabad, Lucknow Bench

Crest Digitel Pvt. Ltd. Thru. Auth. Signatory Vijay Kumar v. Uttar Pradesh Metro Rail Corporation Ltd.

Case brief

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Crest Digitel Pvt. Ltd. Thru. Auth. Signatory Vijay Kumar v. Uttar Pradesh Metro Rail Corporation Ltd.

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