White Placard Technologies Private Limited vs Alireza Afzal Thaver

This is a Petition under Section 34 challenging an arbitral award dated May 13, 2022 (“ Impugned Award ”) in the sum of Rs.22.42 lakhs which was held as payable under an Agreement dated October 15, 2019 (“ Agreement ”) executed by the parties.

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Digitally signed byASHWINI ASHWINIJANARDANVALLAKATI JANARDANVALLAKATIDate: 2025.08.05 15:07:33 +0530

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The facts of the matter fall in a rather narrow compass. The parties executed the Agreement, reducing to writing the terms on which the Respondent was engaged for provision of consultancy services by

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Ashwini Vallakati

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the Petitioner in connection with the Ghaziabad Municipal Corporation (“ GMC ”) replacing conventional fixtures with LED fixtures.

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The Agreement is connected with a tender awarded by the GMC on November 16, 2015, which was approved finally on September 3, 2016 and led to execution of a Quadripartite Agreement dated December 28, 2016 executed by the Petitioner with the Urban Development Department of State of Uttar Pradesh, GMC and Pashchimanchal Vidyut Vitran Nigam Limited.

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The Quadripartite Agreement was terminated by GMC on July 24, 2020. The Respondent claimed that whatever had been earned pursuant to the contract during its subsistence would entitle him to his fees in terms of the percentage stipulated in the Agreement. He made the first claim sometime in September 28, 2020 and eventually a disclosure came to be made in the arbitral proceedings, which indicated that the amounts earned by the Petitioner from GMC pursuant to the tender was in the region of Rs.~8.97 crores.

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The core ground of challenge to the Impugned Award is that the Agreement had provided that if the Quadripartite Agreement were to be terminated, the Agreement would be null and void. No monies had been received after June 7, 201, and in any case, the Agreement was

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Ashwini Vallakati

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executed on October 15, 2019. Since shortly thereafter, the Quadripartite Agreement was terminated on July 24, 2020, it is contended that the Impugned Award goes way beyond the scope of the contract. The Impugned Award is assailed as patently illegal for ignoring the provision that the Agreement itself provided for it becoming null and void if the Quadripartite Agreement were to be terminated.

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The second ground of attack to the Impugned Award is that the various provisions of the Agreement would indicate that the consultant would ensure payments by GMC. Since the Quadripartite Agreement was terminated, the Respondent has not performed his part of the bargain. Therefore, the claim if at all would be a claim for damages and not for recoveries of a percentage of earnings, in terms of the Agreement. This too, the Petitioner would contend, has been missed, rendering the Impugned Award vulnerable on the ground of perversity and patent illegality.

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Analysis and Findings:

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Having heard Learned Counsel for the parties at length and having examined the record with their assistance, what becomes clear is that while the Agreement was executed on October 15, 2019, the recitals

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Ashwini Vallakati

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and the provisions in the Agreement themselves indicate that the contractual relationship between the Petitioner and the Respondent took effect on November 27, 2016. That is the effective date of the Petitioner having been appointed the Respondent. Earnings from the relationship were meant to be shared to the extent of 2.5% by the Petitioner with the Respondent. Therefore, the effective date of the Agreement, as a matter of conscious contract by the parties, is November 27, 2016, and not October 15, 2019.

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Indeed, the Agreement contains a reference to the rate of 5% in two places (Clause 2 and Clause 6), but that percentage is corrected by hand in Clause 2, the charging provision, to 2.5% and both parties have countersigned against the correction. Clause 6 remains without change to the percentage.

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Evidently, the Agreement, executed on October 15, 2019, merely reduced to writing the terms of engagement between the two parties, which commenced way back on November 27, 2016, and entailed sharing of revenues realised by the Petitioner, to the extent of 2.5% with the Respondent. The relationship as contracted had started more than three years earlier. The findings in this regard in the

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Ashwini Vallakati

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Impugned Award are impeccable and call for no interference in the jurisdiction of Section 34 of the Act.

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The contention that the Impugned Award is wrong for directing the sharing of revenues earned before the signing of the Agreement is untenable since the Agreement itself records that the engagement of the Respondent began on November 27, 2016.

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The Impugned Award also records in accurate detail, the fact that there was no grievance of breach of the contract by the Respondent, at all times relevant to the matter. The only grievance is that there had been no receipt after the date of signing the Agreement, and that none of the income earned prior to that date was to be shared with the Respondent. This contention has correctly been repelled for the aforesaid reasons.

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The other facet that presents itself is whether the use of the word null and void in relation to the Agreement upon the termination of the Quadripartite Agreement would mean the Agreement would cease to exist in the eyes of law. Although the terms null and void are used to provide for the consequence of termination of the Quadripartite Agreement, the provision does not use the phrase “ab initio” for rendering the Agreement null and void in a manner that it become non-

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Ashwini Vallakati

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existent (“non est”). Therefore, in my view, the Agreement would become null and void from the date on which the Quadripartite Agreement was terminated and would not alter the pre-existing rights that had already accrued under the Agreement. Therefore, in my opinion, the view taken by the Learned Arbitral Tribunal is an accurate view and indeed an eminently plausible view and which is consistent with the evident commercial intent of the parties at the relevant time.

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It is also noteworthy that the termination of the Quadripartite Agreement was subject matter of another arbitral proceedings and throughout the pleadings in those proceedings, the Petitioner has pointed out that the termination itself was the per se bad despite performance by the Petitioner.

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What transpires from the foregoing is that the termination of the Quadripartite Agreement cannot be point to any breach on the part of the Respondent, which caused the termination of that agreement.

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Clause 2 of the Agreement provides for monies being shared with the Respondent as and when received from GMC. Since the Agreement itself relates back to November 27, 2016, receipts between November 27, 2016 and July 24, 2020 (when the Quadripartite

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Ashwini Vallakati

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Agreement was terminated) would fall within the ambit of what is meant to be shared with the Respondent.

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The Learned Arbitral Tribunal has correctly held that the sharing percentage would be 2.5% as provided in Clause 2 and not 5% as provided in Clause 6, which is evidently the residual reference to 5% which remained to be corrected by the parties. The Learned Arbitral Tribunal has also accurately computed the amount of 2.5% on the sum of Rs. ~8.97 crores that had been received from GMC and arrived at the amount of Rs.~22.42 lakhs payable under the Agreement. Therefore, the contention that the amount awarded by the Learned Arbitral Tribunal is actually damages and that they were awarded without assessment of damages is untenable. The amount awarded cannot be regarded as damages and it is purely a measurement of fees payable as agreed in the contract between the parties.

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For the aforesaid reasons, the facts being as they are and the interpretation of the contract by the Learned Arbitral Tribunal being impeccable, no fault can be found within the contours of the Section 34 of the Act. The Impugned Award has had regard to the provisions of the Agreement under Section 28(3) of the Act, in an accurate manner. The grounds for challenge under Section 34 are not made out. The

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Ashwini Vallakati

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Impugned Award is neither patently illegal nor perverse, as contended by the Petitioner.

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Therefore, the Petition is dismissed and the Impugned Award is upheld.

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Learned Counsel for the Petitioner seeks four weeks’ stay on this judgement. The amounts that are already deposited shall be released by the Registry of this Court after a period of three weeks from the date of upload of this order. This would afford adequate time to the Petitioner to consider his prospects for launching further challenge in the next stage.

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Costs must follow the event. Considering the scale of the disputed amount, costs in the sum of Rs. 50,000 are awarded in favour of the Respondent. They shall be paid within a period of four weeks from the upload of this judgement on the Court’s website.

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All actions required to be taken pursuant to this order shall be taken upon receipt of a downloaded copy as available on this CourtLs website.

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[ SOMASEKHAR SUNDARESAN, J.]

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Ashwini Vallakati

White Placard Technologies Private Limited v. Alireza Afzal Thaver

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White Placard Technologies Private Limited v. Alireza Afzal Thaver

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