The court affirmed that an entity can claim compensation for work performed under a non-finalized contract if the work was conducted at the direction of another party, underscoring the principle of quantum meruit.

JUDGMENT

Sachin Datta, J. (Oral)

IA No.19197/2023 (Exemption)

1. Allowed, subject to all just exceptions.

2. Application stands disposed of.

CAV 509/2023

3. Since, learned counsel for the respondent has entered appearance, the caveat stands discharged.

O.M.P. (COMM) 405/2023

4. The present petition under Section 34 of the Arbitration and Conciliation Act, 1996 impugns an arbitral award dated 16.06.2023. The said award has been passed in the background of an NIT dated 13.04.2016 issued by the petitioner in respect of survey, planning, supply, installation, testing, commissioning, integration with existing core network and Operation and Maintenance for five years (extendable by two years) of 2G GSM BSS Network in uncovered villages of Arunachal Pradesh and Karbi Anglong and Dima Haso Districts of Assam alongwith VSAT, HUB and radio back haul.

5. Pursuant to the above tender, the respondent/claimant's bid was accepted on 25.04.2017 and the respondent/claimant was declared as the successful L1 bidder. It was the case of the respondent/claimant before the learned sole arbitrator that advance pre-planning and preparation was required even in the course of finalization of the bid as the area in which the execution is to be done was not easily accessible.

6. On 01.03.2018, the petitioner is stated to have directed the respondent/claimant to initiate all preparatory actions and to give an unequivocal and unconditional acceptance for field test of live traffic for three months. In response, the respondent/claimant, vide letter dated 15.03.2018, accepted the additional field test requirement and sought issuance of Advance Purchase Order ("APO").

7. Thereafter, APO was issued by the petitioner on 21.03.2018 which is stated to have been unconditionally accepted by the respondent/claimant. The respondent/claimant is stated to have started deployment of resources and performance of project related work as per the requirements of the tender and the mandate of the petitioner; however, the petitioner did not issue the Purchase Order and ultimately withdrew the APO vide letter dated 10.02.2020.

8. In the above background, being aggrieved with the aforesaid withdrawal of the APO, the respondent raised following claims in the arbitral proceedings:

"36. It is the case of the Claimant that the aforesaid illegal withdrawal of APO has resulted in various losses which are suffered by it. On this basis, the following Claims are submitted before the Tribunal.