JUDGMENT :

[Anubha Rawat Choudhary, J.]

1. Heard the learned counsel for the parties.

2. This arbitration appeal has been filed under Section 37 of Arbitration and Conciliation Act, 1996 against the order dated 16.06.2009 passed by learned Subordinate Judge I, Ranchi in Misc. Case No. 54 of 2007, whereby the learned court below has refused to interfere with the award dated 23.07.2007 passed by the learned sole Arbitrator under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the Act of 1996). The learned Arbitrator has directed the appellant to pay Rs. 17,05,00,000/- to the claimant/respondent with interest @ 12 percent per annum from April, 2004 till the date of the award and has directed that if the said amount is not paid within the period of 30 days from the date of the award, the appellant shall pay the same with interest @ 14% from the date of the award till the date of payment. The learned Arbitrator has also awarded the cost of arbitration amounting to Rs. 1,56,000/-. The learned Arbitrator, however, rejected the counter-claim of the appellant amounting to Rs. 7,61,25,000/- against claimant/respondent.

3. The case of appellant, in brief, is that the appellant (Department of Information and Technology, Govt. of Jharkhand) has decided to provide Computer Education in 500 Schools in Jharkhand. M/s. Webel Technology Ltd. (claimant-respondent) made an offer to the Department to undertake Computer Literacy Programme in association with IBM in 500 Schools in the State of Jharkhand under scheme Build, Own, Operate and Transfer (BOOT) basis. The parties entered into an agreement on 2nd April, 2003. The broad terms of the agreement are that the respondent shall provide Computer Education Services in 500 Schools selected by the I.T. Deptt. (appellant) at the cost of Rs. 105/- per month per student. Payment to be made by the School authorities or by any other nodal agency to be identified by the information Technology Ministry. The Duration for the contract shall be for 5 years commencing from the date of signing the contract or commencement of operation in Schools whichever is later. There is a clause which provides for termination of the contract.

4. It is the case of the appellant-state that the claimant-respondent made an offer in the month of September, 2002 to undertake Computer Literacy Programme in 500 schools in the State of Jharkhand under the scheme “Build, Own, Operate and Transfer (BOOT) basis”. As per the BOOT model of implementation of any project, the government accords permission to the concessionaire to undertake the work relating to the project normally on the site owned by the government and the state has no financial liability on the project. It is the concessionaire who was to build the project, operate it and recover its investment and profit through charging from the services and after an agreed period, transfer the project to the State. The claimant had submitted a draft of agreement for implementation of the aforesaid project approved by the Government of Jharkhand and agreement between the parties was executed on 02.04.2003. As per the agreement, the aforesaid work was to be done in 500 schools at the cost of Rs. 105/- per student for total of 500 students per school. On 30.04.2003, the claimant intimated the State that it was ready to start with the computer education in 100 school by 31.05.2003 and requested to furnish the list of schools. In response, vide letter dated 30.04.2003 the claimant was informed that the list of the schools will be given shortly. It is further case of the State that before issuance of letter dated 30.04.2003, no approval of the government was taken and the authority who had issued the letter dated 30.04.2003 was the Secretary of Department of Information and Technology of the State and he was not competent to make any commitment to reimburse co