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2016 Supreme(Del) 2311
IN THE HIGH COURT OF DELHI AT NEW DELHI
MANMOHAN SINGH, J.
INDUS TOWERS LIMITED – Petitioner
Versus
SISTEMA SHYAM TELESERVICES LTD. – Respondent
O.M.P. (I) (COMM.) No. 103 of 2016
Decided On : 08-07-2016
For the Petitioner:Mr. Rajiv Nayar, Senior Advocate with Mr. L.K. Bhushan & Ms. Raashi Beri, Advocates.
For the Respondent:Mr. Akhil Sibal, Mr. Shivek Trehan, Ms. Fareha Ahmad Khan, Mr. Utkarsh Saxena, Ms. Nidhima Sareen, Mr. Nikhil Chawla & Ms. Jhanavi Mitra, Advocates.
Headnote:
Arbitration and Conciliation Act, 1996 - Section 9 - Arbitration - Merger - Injunction - Exit charges - Recovery - There are many disputed question of facts - Controversy is to be determined by the Arbitral Tribunal, wherein it is to be decided as to whether Exit Chargers are payable by the respondent or not - Points raised by both the parties are kept open for determination by the Arbitral Tribunal - Condition is imposed that the petitioner would not oppose de-merger scheme directly or indirectly - Security of the amount for Rs. 23,83,21,37/- Amounts purportedly due in existing telecom circle - Demand of Rs. 23,83,22,374/- is denied by the respondent as being due - Parties sit together and reconcile the account - If any invoice(s) is missing from the record of the respondent, the copy(s) shall be handed over by the petitioner - Liberty is granted to the petitioner to move an application so that the appropriate orders be passed for securing the amount - Liberty is granted to move a fresh application before the Arbitral Tribunal for change of circumstances, which would be decided as per merit - Petitioner has unlawfully withheld the Security of Rs. 14,33,95,882/- - Upon expiry of 24 months from the date of Service Contract for each site, the petitioner is liable to refund to the respondent a sum equivalent to two months.
Arbitration and Conciliation Act, 1996 - Section 9 - Frustration of MSA - Denial of liability - Payment of Exit Charges - Petitioner has failed to prima facie establish its entitlement to the payment of Exit Amount in view of the early termination of the Service Contracts - Entire case of the respondent is that the termination of the service contracts by the respondent is on account of change of law - No insolvency event has occurred either - Liability of Exit Charges cannot be treated as pre-estimated damages - Charges are payable in the event of termination of a service contract under specific grounds as stipulated in Schedule 5 Part 2 read with clause 18.2 of MSA - If the case is made out in trial, then the petitioner might be entitled for compensation.
MANMOHAN SINGH, J.
1. The petitioner has filed the present petition under Section 9 of the Arbitration and Conciliation Act, 1996 praying for, inter-alia, directing Sistema Shyam Tele-services Limited, the respondent not to sell, transfer, alienate or otherwise dispose of its active infrastructure equipments, apparatus consisting of Base Transceiver Stations (BTSs), cables, antennas, microwave etc. all other assets, including movable or immovable properties of whatever nature, or whole or any part of its undertaking or any rights, title or interest therein and directing the respondent to keep the same in safe custody till the disputes between the petitioner and respondent regarding non-payment of dues and unpaid amounts to the petitioner have been settled through Arbitration, in terms of the Master Services Agreement signed between the parties.
2. Few facts are that petitioner on 10th January, 2008 was registered for Infrastructure Provider-Category-1 (IP-I) with the Department of Telecommunication, Ministry of Communication and IT, Government of India vide Registration Certificate No. 177/2008, to establish and maintain passive infrastructure and provide the same to the licensees of Telecom Services under Section 4 of the Indian Telegraph Act, 1885.
3. On 25th February, 2009, the petitioner and the respondent had entered into a Master Services Agreement (hereinafter referred to as “MSA”), whereby the respondent availed of the passive infrastructure services provided by the petitioner in various telecom circles throughout India, in consideration for fees to be paid to the petitioner as stipulated under the MSA.
4. The petitioner alleged that the petitioner regularly raised invoices on the respondent company for the same and the respondent never disputed the quality of services provided by the petitioner or the invoices raised. However, a number of invoices raised by the petitioner remained unpaid by the respondent company.
5. The MSA also stipulated that the respondent is liable to pay to the petitioner ‘exit amount’ as prescribed under Clause 19.2 and Schedule 5 of the MSA in the event that it terminates the MSA or exits from the telecom sites under the MSA prior to the expiry of its terms.
6. The Supreme Court of India on 2nd February, 2013 delivered judgment in the matter of Centre for Public Interest Litigation v. Union of India, W.P. (C) No. 432 of 2010 (2G Judgment) by which it cancelled the Unified Access Service Licenses granted to the respondent company in 21 Telecom Circles all over India.
7. The petitioner had received a letter from the respondent dated 21st February, 2013, whereby the respondent terminated its services in 10 service areas/telecom circles, out of which the petitioner was providing passive infrastructure services to the respondent at 133 sites in 3 telecom circles, namely Punjab, Haryana and Andhra Pradesh. In this letter dated 21st February, 2013, the respondent alluded to the judgment of the Supreme Court of India dated 2nd February, 2012 in the matter of 2G Judgment and stated that pursuant to the 2G Judgment, 21 of its licenses were cancelled and hence it was terminating its services with effect from 23rd March, 2013 in the said 3 circles. The respondent also stated that this circumstance was beyond its control, falling under the clause of Force Majeure and hence the respondent is not liable to pay the lock-in charges/exit amount consequent to the early termination of the services.
8. As per petitioner the exit amount is payable to the petitioner as per clause 19.2 of MSA due to the termination/exit by respondent from the telecom sites where it was availing the passive infrastructure services provided by the petitioner prior to the lock-in term mutually agreed in the MSA.
9. It appears that subsequent to this judgment of the Supreme Court the respondent Company took an internal commercial decision to not renew its Licenses in the fresh auction conducted by the Government of India for various tel
