Telecommunications Consultants India Ltd vs. M/S Frans Global Infotech Ltd.

$~
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment reserved on: 07.04.2026
Judgment pronounced on: 27.04.2026


+ O.M.P. (COMM) 119/2026
TELECOMMUNICATIONS CONSULTANTS INDIA LTD
.....Petitioner
Through: Mr. Amitesh Chandra Mishra,
Ms. Vishakha, Mr. Mrityunjai
Singh and Mr. Harshit S
Gahlot, Advocates.

versus


M/S FRANS GLOBAL INFOTECH LTD.
.....Respondent
Through: Mr. Rizwan, Ms. Sachi Chopra
and Mr. Samarth Sharma,
Advocates.

+ O.M.P. (COMM) 555/2025
M/S FRANS GLOBAL INFOTECH PVT. LTD .....Petitioner
Through: Mr. Rizwan, Ms. Sachi Chopra
and Mr. Samarth Sharma,
Advocates.
versus


TELECOMMUNICATIONS CONSULTANTS INDIA LTD.
.....Respondent
Through: Mr. Amitesh Chandra Mishra,
Ms. Vishakha, Mr. Mrityunjai
Singh and Mr. Harshit S
Gahlot, Advocates.

CORAM:
HON'BLE MR. JUSTICE HARISH VAIDYANATHAN
SHANKAR

Signature Not Verified
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By:NEERU
Signing Date:29.04.2026
10:27:23

J U D G M E N T
1. The present Petitions filed under Section 34 of the Arbitration
1
and Conciliation Act, 1996 , being OMP (COMM) 119/2026 filed by
2
Telecommunications Consultants India Limited and OMP (COMM)
3
555/2025 filed by Frans Global Infotech Private Limited , arise out
4
of a common Arbitral Award dated 24.09.2025 passed by the
5
learned Arbitral Tribunal , comprising a Sole Arbitrator, in disputes
inter se the parties.
2. It is noted that Frans was the Claimant before the learned AT,
whereas, TCIL was the Respondent.

3. By way of OMP (COMM) 119/2026 , TCIL has laid a challenge
to the Impugned Award insofar as it allows certain claims in favour of
Frans and rejects the counter-claims preferred by TCIL.
4. Conversely, by way of OMP (COMM) 555/2025 , Frans has
assailed the Impugned Award to the extent that its Claim Nos. 1, 2 and
6 have been rejected, pertaining to damages on account of termination
of the Purchase Order, payment under invoices dated 14.04.2023 and
01.05.2023, and damages for loss of reputation arising from the
blacklisting by TCIL, along with consequential claim for interest.
5. Since both petitions emanate from the same arbitral proceedings
and call into question different parts of the same award, involving
overlapping factual and legal issues, they were heard together and are
being considered by this common judgment.


BRIEF FACTS:

1
A&C Act
2
TCIL
3
Frans
4
Impugned Award
5
AT
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6. The disputes between the parties arise out of a tender for the
supply, installation, commissioning and maintenance of the Horizontal
Extension of State Wide Area Network.
7. A Request for Proposal dated 05.12.2022 was issued by the
6
Directorate of Information Technology , Government of Tripura,
for the execution of the said project. In pursuance thereof, TCIL
issued a Notice Inviting Tender dated 07.03.2023 for the selection of
an implementing agency.
8. Subsequently, TCIL issued a corrigendum dated 15.03.2023,
clarifying that the timeline for commencement of the work order
would be reckoned from 06.03.2023.

9. Frans participated in the tender process, and its bid was
accepted. A Letter of Intent dated 24.03.2023 was issued in its favour,
which was accepted on 27.03.2023.
7
10. Thereafter, a Purchase Order dated 28.04.2023 was issued
for the execution of the project. And in terms of Clause 3.2 of the
8
Special Conditions of Contract , Frans also furnished a
9
Performance Bank Guarantee dated 13.04.2023 in favour of TCIL
for an amount of ₹25,75,512/-, valid for 42 months, which was
submitted electronically on 13.04.2023 and physically on 17.04.2023.
11. The contractual framework envisages the supply, installation,
testing and commissioning of equipment within stipulated timelines,
along with maintenance obligations. The timelines for delivery and
execution formed a central component of the contractual obligations
between the parties.

6
DIT
7
Purchase Order
8
SCC
9
PBG
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12. During the execution of the project, disputes arose between the
parties with respect to timelines, placement of purchase orders, and
delivery of equipment. In this context, TCIL issued a communication
dated 11.05.2023 raising concerns of delay, followed by a Show
10
Cause Notice dated 18.05.2023 , which was responded to by Frans
disputing the allegations.
13. Thereafter, TCIL terminated the Purchase Order vide
termination notice dated 09.06.2023 and simultaneously imposed a
ban on Frans from participating in its future tenders for a period of
two years.
14. Following that, Frans approached this Court for the
appointment of an arbitrator by filing ARB. P. 769/2023 , wherein, vide
Order dated 06.11.2023, a Sole Arbitrator came to be appointed.
15. Before the learned AT, Frans raised claims inter alia on account
of alleged wrongful termination, non-payment of invoices,
encashment of the PBG, damages and challenge to blacklisting. TCIL
contested the claims and also raised counter-claims towards penalty,
risk purchase costs and other losses.
16. On the basis of pleadings, the learned AT vide its Order dated
24.05.2024 framed issues concerning, inter alia , the validity of
termination of the Purchase Order, entitlement to payments,
encashment of the PBG, claims for damages, legality of blacklisting,
and entitlement to counter-claims. For the sake of clarity and ready
reference, the issues framed by the learned AT, upon which the
disputes between the parties came to be adjudicated, are reproduced
herein under:
“ Issues

10
Show Cause Notice
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86 . The following Points of Determination/Issues were framed vide
Order dated 24.05.2024 (as revised by Order dated 10.07.2024):
i. Whether the termination of the Purchase Order dated 28.04.2023
by the Respondent vide its Notice dated 09.06.2023 is wrongful
& fraudulent? If yes, then whether the Claimant is entitled to
damages of Rs. 15,00,000/- or any other amount? OPC
ii. Whether the Claimant is entitled to an amount of Rs.
1,31,64,631/- against the invoice dated 14.04.2023 amounting to
Rs. 88,03,589/- and invoice dated 01.05.2023 amounting to Rs.
43,61,042/- raised by the Claimant? OPC
iii. Whether the encashment of the Performance Bank Guarantee
by the Respondent was wrongful and fraudulent? If yes, whether
Claimant is entitled to the cost of the Performance Bank
Guarantee amounting to Rs. 25,75,512/- or any other amount?
OPC
iv. Whether the Claimant is entitled to the loss of Opportunity Cost
of Rs. 35,00,000/- or any other amount? OPC
v. Whether the Claimant is entitled to re-imbursement of the
expenses to the tune of Rs. 15,00,000/- or any other amount?
OPC
vi. Whether, the blacklisting/debarment of the Claimant by the
Respondent from participating in future tenders/bids of the
Respondent is arbitrary, wrong and unjust? OPC
vii. Whether the Claimant is entitled to claim of Rs. 15,00,000/- or
any other amount towards loss of reputation on account of
banning and blacklisting of the Claimant by the Respondent
from participating in future tender bids of the Respondent? OPC
viii. Whether the Respondent is entitled to an amount of Rs. 94 72
000/- or any other amount towards penalty as per the Client
RFP/Tender dated 05.12.2022? OPR [Revised by Order dated
10.07.2024 passed by the Arbitral Tribunal]
ix. Whether the Respondent is entitled to an amount of Rs.
12,87,756.75/- or any other amount towards risk purchase cost?
OPR
x. Whether the Respondent is entitled to the claim of Rs. 5,00,000/-
or any other amount towards loss of business opportunities and
reputation? OPR
xi. Whether the parties are entitled to pendente lite and future
interest on the above-mentioned claims. If yes, then at what rate
and for what period? OPC/OPR
xii. Whether the parties are entitled to the cost and expenses. If yes,
then what amount? OPC/OPR”

17. Upon consideration of the pleadings, evidence and oral
submissions, the learned AT passed the Impugned Award, whereby
certain claims of Frans were allowed, while others were rejected, and
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the counter-claims of TCIL were also rejected. Aggrieved thereby, the
parties have preferred the present Petitions before this Court.

SUBMISSIONS ON BEHALF OF PARTIES IN OMP(COMM)
119/2026:

TCIL’s submissions:
18. Learned counsel for TCIL would submit that the Impugned
Award is vitiated by patent illegality and is liable to be set aside under
Section 34 of the A&C Act, inasmuch as the findings of the learned
AT are perverse, based on a misreading of contractual provisions and
non-consideration of material evidence on record. In this regard,
reliance would be placed on OPG Power Generation Pvt. Ltd. v.
11
Enexio Power Cooling Solutions (India) Pvt. Ltd. and Delhi
Airport Metro Express Pvt. Ltd. v. Delhi Metro Rail Corporation
12
Ltd. to submit that an award which is perverse, based on no
evidence, or ignores vital evidence, is liable to be interfered with.
19. Learned counsel would submit that the learned AT erred in
holding the termination of the Purchase Order to be premature, since
the material on record demonstrated persistent defaults on the part of
Frans, including failure to adhere to stipulated timelines and non-
performance of contractual obligations, which entitled TCIL to
terminate the contract in terms of Clause 2.18 of the General
13
Conditions of Contract .
20. He would contend that the learned AT has failed to consider
material evidence, including communications from Original
14
Equipment Manufacturers indicating non-payment and

11
(2025) 2 SCC 417
12
(2024) 6 SCC 357
13
GCC
14
OEM
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consequent delays, and has misinterpreted the contractual provisions,
including the SCC, without harmoniously construing the same.
Reliance would be placed on I-Pay Clearing Services Pvt. Ltd. v.
15 16
ICICI Bank Ltd. , Ram Kishore Lal v. Kamal Narayan , to submit
that findings rendered in disregard of material evidence and based on
an incorrect construction of contractual provisions are liable to be set
aside.
21. Learned counsel for TCIL would submit that the rejection of the
counter-claims of TCIL is unsustainable, as the same were based on
independent contractual provisions, including risk purchase and
termination clauses, and ought to have been adjudicated
independently.
22. He would also submit that the learned AT erred in holding that
17
Section 39 of the Indian Contract Act, 1872 , was inapplicable.
TCIL would submit that Frans’s conduct constituted an anticipatory
breach, entitling TCIL to terminate the contract. In this regard,
reliance would be placed on Maharashtra State Electricity
18
Distribution Co. Ltd. v. Datar Switchgear Ltd . .
23. Lastly, it would be submitted that the direction to refund the
PBG amount, along with interest and costs, is arbitrary and contrary to
the contractual framework and the evidence on record. He would
further contend that the Impugned Award of interest @ 12% per
annum is excessive and unwarranted, particularly in the absence of
any contractual stipulation justifying such a rate.

Frans Submissions:

15
(2022) 3 SCC 121
16
AIR 1963 SC 890
17
IC Act
18
(2018) 3 SCC 133
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24. Per contra , learned counsel for Frans would submit that the
challenge raised by TCIL proceeds on a fundamental misappreciation
of the scope of interference under Section 34 of the A&C Act,
inasmuch as it seeks a re-interpretation of the contractual provisions
and a re-appreciation of evidence, which is impermissible in law.
25. He would submit that the principal contention of TCIL pertains
to the application of Clause 3.9 of the SCC. Learned counsel would
contend that the learned AT has applied the said provision in the
context of the contractual framework and the facts on record, and has
arrived at a reasoned conclusion, which does not warrant interference
merely because TCIL seeks to advance an alternate construction of the
same provision.
26. He would further submit that the entire challenge of TCIL is
predicated on a reinterpretation of Clause 3.9 of the SCC, and once the
interpretation adopted by the learned AT is found to be a possible and
reasonable one, the foundation of TCIL’s challenge stands eroded.
27. He would further submit that the reliance placed by TCIL on
Section 39 of the IC Act is misplaced. Learned counsel would urge
that the doctrine of anticipatory breach is not attracted in the facts of
the present case, since there was no unequivocal refusal or conduct on
the part of Frans which could be said to have disabled performance of
the contract. He would contend that the learned AT has correctly
appreciated this aspect and declined to apply Section 39 of the IC Act.
28. Learned counsel would also submit that the findings of the
learned AT in relation to encashment of the PBG are based on a
proper construction of the contractual provisions and the surrounding
circumstances, and do not suffer from any infirmity warranting
interference.
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29. He would submit that the attempt on the part of TCIL is to read
the contractual provisions in isolation and in a manner favourable to
itself, whereas the learned AT has construed the contract as a whole,
keeping in view the commercial intent and the factual matrix.
30. Learned counsel would clarify that Frans has independently
assailed the Impugned Award in OMP(COMM) 555/2025 to the
limited extent certain of its claims have been rejected, and seeks
interference only to that extent.
31. Insofar as OMP(COMM) 119/2026 filed by TCIL is concerned,
he would submit that the same is devoid of merit and does not disclose
any ground warranting interference with the impugned award.

SUBMISSIONS ON BEHALF OF PARTIES IN OMP(COMM)
555/2025:

Frans submissions:
32. Learned counsel for Frans would submit that the Impugned
Award is liable to be set aside to the limited extent that the claims of
Frans have been rejected, despite the learned AT having returned
findings in its favour on material issues, including wrongful
termination and blacklisting.
33. He would submit that the learned AT, while holding the
termination of the Purchase Order to be wrongful and noting the
absence of notice under Clause 3.9 of the SCC, has nevertheless
rejected the claim for damages on the ground of lack of proof of actual
loss. Learned counsel would contend that such an approach is contrary
to settled principles of contract law, as once breach is established,
compensation cannot be denied merely for want of strict proof of loss
and for the same, the reliance would be placed by the learned counsel
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for Frans upon MSK Projects (India) (JV) Ltd. v. State of
19
Rajasthan .
34. In this context, he would submit that the learned AT has failed
to apply the aforesaid settled position of law and has erroneously
denied damages, thereby rendering the impugned award unsustainable
to that extent.
35. Learned counsel would further submit that the findings of the
learned AT in relation to rejection of claims towards payment for the
supply of equipment are contrary to the pleadings and the material on
record. It would be contended that the learned AT has accepted a
“back-to-back” or “pay-when-paid” defence in favour of TCIL,
despite the absence of any such foundational plea in the Statement of
20
Defence . It would be urged that such a defence was raised for the
first time during oral arguments and could not have been relied upon
in the absence of pleadings and proof.
36. He would further submit that even otherwise, there was no
material on record to establish that TCIL had not received payment
from the end client, and in the absence of such proof, the denial of
Frans’ claims on this basis is legally untenable.
37. Learned counsel would also submit that the learned AT has
failed to give effect to the contractual payment terms, which clearly
provided for the release of a substantial portion of the consideration
upon delivery of the equipment. He would contend that the delivery of
equipment having been admitted, the rejection of claims for payment
is contrary to the express stipulations of the contract.

19
(2011) 10 SCC 573
20
SoD
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38. Learned counsel would clarify that Frans supports the findings
of the learned AT insofar as they relate to the issue of wrongful
termination of the Purchase Order and the illegality of blacklisting.
The present challenge is confined to the rejection of Claim Nos. 1, 2
and 6, namely, (i) denial of damages on account of wrongful
termination; (ii) non-payment of amounts under invoices dated
14.04.2023 and 01.05.2023 for supply of equipment; and (iii) denial
of damages towards loss of reputation arising from wrongful
blacklisting.
39. He would, accordingly, submit that the Impugned Award is
liable to be set aside to the aforesaid limited extent, and the claims of
Frans deserve to be allowed.

TCIL Submissions:
40. Per contra , learned counsel for TCIL would submit that the
contention of Frans that, upon a finding of wrongful termination,
damages must necessarily follow, is misconceived. He would submit
that the learned AT has specifically recorded that Frans failed to lead
any credible evidence to establish actual loss, profitability, or any
proximate loss flowing from the alleged breach, and has, on that basis,
rightly rejected Claim No. 1.
41. He would contend that the challenge raised by Frans is, in
substance, directed against the appreciation of evidence by the learned
AT on the issue of quantum of loss, and does not disclose any
jurisdictional or legal error warranting interference under Section 34
of the A&C Act.
42. He would further submit that the reliance placed by Frans on
MSK Projects (supra) is misplaced. Learned counsel would contend
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that while the said judgment recognises that loss of expected profits
may be awarded in appropriate cases, the same is contingent upon
proof of breach and a rational basis for quantification.
43. Learned counsel would also submit that the rejection of the
claim for payment under invoices is in consonance with the
contractual framework, which envisaged a back-to-back arrangement
with the end client. He would contend that the so-called “pay-when-
paid” mechanism is not an independent defence but a consequence of
the contractual terms themselves, and the learned AT was well within
its jurisdiction to interpret and apply the same. He would urge that
Frans failed to establish an unconditional entitlement to payment,
particularly in the absence of satisfaction of the conditions precedent
under the contract.
44. He would further contend that the reliance placed by Frans on
Clause 3.1(i) of SCC is selective and ignores the overall contractual
scheme, as “delivery” in the present project cannot be construed as
mere physical supply but must be read in conjunction with
installation, commissioning, and readiness for acceptance. He would
submit that the findings of the learned AT in this regard are based on a
contractual and factual appreciation and do not warrant interference.
45. He would submit that the claim for damages towards loss of
reputation is wholly untenable and the finding of wrongful
blacklisting does not, by itself, entitle a party to compensatory
damages in the absence of proof of actual loss. He would urge that
such claims are governed by Section 73 of the IC Act and require
cogent evidence of loss and its nexus with the alleged wrongful act,
which is absent in the present case; thus, the learned AT has,
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therefore, rightly declined to award damages and cannot be faulted for
refusing to engage in speculation.
46. He would submit that the present Petition is liable to be
dismissed as it is an attempt to re-agitate issues already adjudicated by
the learned AT and does not disclose any ground for interference
under Section 34 of the A&C Act.

ANALYSIS:
47. This Court has carefully considered the submissions advanced
on behalf of both sides and, with their able assistance, has perused the
Impugned Award and the material placed before this Court by the
respective parties.
48. At the outset, it is apposite to note that this Court remains
conscious of the limited scope of its jurisdiction while examining an
objection petition under Section 34 of the A&C Act. There is a
consistent and evolving line of precedents whereby the Hon’ble
Supreme Court has authoritatively delineated and settled the contours
of judicial intervention in such proceedings.
49. In this regard, a 3-Judge Bench of the Hon’ble Supreme Court,
after an exhaustive consideration of a catena of earlier judgments, in
OPG Power (supra) , while dealing with the grounds of conflict with
the public policy of India, perversity and patent illegality, grounds
which have also been urged in the present case, made the following
observations, which are reproduced hereunder:
“ Relevant legal principles governing a challenge to an arbitral
award
30. Before we delve into the issue/sub-issues culled out above, it
would be useful to have a look at the relevant legal principles
governing a challenge to an arbitral award. Recourse to a court
against an arbitral award may be made through an application for
setting aside such award in accordance with sub-sections (2), (2-A)
and (3) of Section 34 of the 1996 Act. Sub-section (2) of Section
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34 has two clauses, ( a ) and ( b ). Clause ( a ) has five sub-clauses
which are not relevant to the issues raised before us. Insofar as
clause ( b ) is concerned, it has two sub-clauses, namely, ( i ) and ( ii ).
Sub-clause ( i ) of clause ( b ) is not relevant to the controversy in
hand. Sub-clause ( ii ) of clause ( b ) provides that if the Court finds
that the arbitral award is in conflict with the public policy of India,
it may set aside the award.
Public policy
31. “Public policy” is a concept not statutorily defined, though it
has been used in statutes, rules, notification, etc. since long, and is
also a part of common law. Section 23 of the Contract Act, 1872
uses the expression by stating that the consideration or object of an
agreement is lawful, unless, inter alia, opposed to public policy.
That is, a contract which is opposed to public policy is void.
*
37. What is clear from above is that for an award to be against
public policy of India a mere infraction of the municipal laws of
India is not enough. There must be, inter alia, infraction of
fundamental policy of Indian law including a law meant to serve
public interest or public good.
*
The 2015 Amendment in Sections 34 and 48
42. The aforementioned judicial pronouncements were all prior to
the 2015 Amendment. Notably, prior to the 2015 Amendment the
expression “in contravention with the fundamental policy of Indian
law” was not used by the legislature in either Section 34(2)( b )( ii )
or Section 48(2)( b ). The pre-amended Section 34(2)( b )( ii ) and its
Explanation read:
*
44. By the 2015 Amendment, in place of the old Explanation to
Section 34(2)( b )( ii ), Explanations 1 and 2 were added to remove
any doubt as to when an arbitral award is in conflict with the public
policy of India.
45. At this stage, it would be pertinent to note that we are dealing
with a case where the application under Section 34 of the 1996 Act
was filed after the 2015 Amendment, therefore the newly
substituted/added Explanations would apply [ Ssangyong Engg. &
Construction Co. Ltd. v. NHAI , (2019) 15 SCC 131 ].
46. The 2015 Amendment adds two Explanations to each of the
two sections, namely, Section 34(2)( b )( ii ) and Section 48(2)( b ), in
place of the earlier Explanation. The significance of the newly
inserted Explanation 1 in both the sections is two-fold. First, it
does away with the use of words : ( a ) “ without prejudice to the
generality of sub-clause (ii) ” in the opening part of the pre-
amended Explanation to Section 34(2)(b)(ii); and (b) “ without
prejudice to the generality of clause (b) of this section ” in the
opening part of the pre-amended Explanation to Section 48(2)( b );
secondly, it limits the expanse of public policy of India to the three
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specified categories by using the words “ only if ”.
Whereas, Explanation 2 lays down the standard for adjudging
whether there is a contravention with the fundamental policy of
Indian law by providing that a review on merits of the dispute shall
not be done. This limits the scope of the enquiry on an application
under either Section 34(2)( b )( ii ) or Section 48(2)( b ) of the 1996
Act.
47. The 2015 Amendment by inserting sub-section (2-A) in
Section 34, carves out an additional ground for annulment of an
arbitral award arising out of arbitrations other than international
commercial arbitrations. Sub-section (2-A) provides that the Court
may also set aside an award if that is vitiated by patent illegality
appearing on the face of the award. This power of the Court is,
however, circumscribed by the proviso, which states that an award
shall not be set aside merely on the ground of an erroneous
application of the law or by reappreciation of evidence.
48. Explanation 1 to Section 34(2)( b )( ii ), specifies that an arbitral
award is in conflict with the public policy of India, only if :
( i ) the making of the award was induced or affected by fraud or
corruption or was in violation of Section 75 or Section 81; or
( ii ) it is in contravention with the fundamental policy of Indian
law; or
( iii ) it is in conflict with the most basic notions of morality or
justice.
49. In the instant case, there is no allegation that the making of the
award was induced or affected by fraud or corruption, or was in
violation of Section 75 or Section 81. Therefore, we shall confine
our exercise in assessing as to whether the arbitral award is in
contravention with the fundamental policy of Indian law, and/or
whether it conflicts with the most basic notions of morality or
justice. Additionally, in the light of the provisions of sub-section
(2-A) of Section 34, we shall examine whether there is any patent
illegality on the face of the award.
50. Before undertaking the aforesaid exercise, it would be apposite
to consider as to how the expressions:
( a ) “in contravention with the fundamental policy of Indian law”;
( b ) “in conflict with the most basic notions of morality or justice”;
and
( c ) “patent illegality” have been construed.
In contravention with the fundamental policy of Indian law
51. As discussed above, till the 2015 Amendment the expression
“in contravention with the fundamental policy of Indian law” was
not found in the 1996 Act. Yet, in Renusagar Power Co.
Ltd. v. General Electric Co. , 1994 Supp (1) SCC 644 , in the
context of enforcement of a foreign award, while construing the
phrase “contrary to the public policy”, this Court held that for a
foreign award to be contrary to public policy mere contravention of
law would not be enough rather it should be contrary to:
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( a ) the fundamental policy of Indian law; and/or
( b ) the interest of India; and/or
( c ) justice or morality.
*
55. The legal position which emerges from the aforesaid discussion
is that after “the 2015 Amendments” in Section 34(2)( b )( ii ) and
Section 48(2)( b ) of the 1996 Act, the phrase “in conflict with the
public policy of India” must be accorded a restricted meaning in
terms of Explanation 1 . The expression “in contravention with the
fundamental policy of Indian law” by use of the word
“fundamental” before the phrase “policy of Indian law” makes the
expression narrower in its application than the phrase “in
contravention with the policy of Indian law”, which means mere
contravention of law is not enough to make an award vulnerable.
To bring the contravention within the fold of fundamental policy of
Indian law, the award must contravene all or any of such
fundamental principles that provide a basis for administration of
justice and enforcement of law in this country.
56. Without intending to exhaustively enumerate instances of such
contravention, by way of illustration, it could be said that:
( a ) violation of the principles of natural justice;
( b ) disregarding orders of superior courts in India or the binding
effect of the judgment of a superior court; and
( c ) violating law of India linked to public good or public interest,
are considered contravention of the fundamental policy of Indian
law.
However, while assessing whether there has been a contravention
of the fundamental policy of Indian law, the extent of judicial
scrutiny must not exceed the limit as set out in Explanation 2 to
Section 34(2)( b )( ii ).
*
Patent illegality
65. Sub-section (2-A) of Section 34 of the 1996 Act, which was
inserted by the 2015 Amendment, provides that an arbitral award
not arising out of international commercial arbitrations, may also
be set aside by the Court, if the Court finds that the award is visited
by patent illegality appearing on the face of the award. The proviso
to sub-section (2-A) states that an award shall not be set aside
merely on the ground of an erroneous application of the law or by
reappreciation of evidence.
66. In ONGC Ltd. v. Saw Pipes Ltd. , (2003) 5 SCC 705 , while
dealing with the phrase “public policy of India” as used in Section
34, this Court took the view that the concept of public policy
connotes some matter which concerns public good and public
interest. If the award, on the face of it, patently violates statutory
provisions, it cannot be said to be in public interest. Thus, an award
could also be set aside if it is patently illegal. It was, however,
clarified that illegality must go to the root of the matter and if the
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illegality is of trivial nature, it cannot be held that award is against
public policy.
67. In Associate Builders v. DDA , (2015) 3 SCC 49 , this Court
held that an award would be patently illegal, if it is contrary to:
( a ) substantive provisions of law of India;
( b ) provisions of the 1996 Act; and
( c ) terms of the contract [See also three-Judge Bench decision of
this Court in State of Chhattisgarh v. SAL Udyog (P) Ltd. , (2022)
2 SCC 275 ].
The Court clarified that if an award is contrary to the substantive
provisions of law of India, in effect, it is in contravention of
Section 28(1)( a ) of the 1996 Act. Similarly, violating terms of the
contract, in effect, is in contravention of Section 28(3) of the 1996
Act.
68. In Ssangyong Engg. & Construction Co. Ltd. v. NHAI , (2019)
15 SCC 131 this Court specifically dealt with the 2015
Amendment which inserted sub-section (2-A) in Section 34 of the
1996 Act. It was held that “patent illegality appearing on the face
of the award” refers to such illegality as goes to the root of matter,
but which does not amount to mere erroneous application of law. It
was also clarified that what is not subsumed within “the
fundamental policy of Indian law”, namely, the contravention of a
statute not linked to “public policy” or “public interest”, cannot be
brought in by the backdoor when it comes to setting aside an award
on the ground of patent illegality [ See Ssangyong Engg. &
Construction Co. Ltd. v. NHAI , (2019) 15 SCC 131 ]. Further, it
was observed, reappreciation of evidence is not permissible under
this category of challenge to an arbitral award [See Ssangyong
Engg. & Construction Co. Ltd. v. NHAI , (2019) 15 SCC 131 ].
Perversity as a ground of challenge
69. Perversity as a ground for setting aside an arbitral award was
recognised in ONGC Ltd. v. Western Geco International Ltd. ,
(2014) 9 SCC 263 . Therein it was observed that an arbitral
decision must not be perverse or so irrational that no reasonable
person would have arrived at the same. It was observed that if an
award is perverse, it would be against the public policy of India.
70. In Associate Builders v. DDA , (2015) 3 SCC 49 certain tests
were laid down to determine whether a decision of an Arbitral
Tribunal could be considered perverse. In this context, it was
observed that where:
( i ) a finding is based on no evidence; or
( ii ) an Arbitral Tribunal takes into account something irrelevant to
the decision which it arrives at; or
( iii ) ignores vital evidence in arriving at its decision, such decision
would necessarily be perverse.
However, by way of a note of caution, it was observed that when a
court applies these tests it does not act as a court of appeal and,
consequently, errors of fact cannot be corrected. Though, a
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arbitral award is only on limited grounds as set out in Section 34 of
the 1996 Act. A possible view by the arbitrator on facts is to be
respected as the arbitrator is the ultimate master of the quantity and
quality of evidence to be relied upon. It is only when an arbitral
award could be categorised as perverse, that on an error of fact an
arbitral award may be set aside. Further, a mere erroneous
application of the law or wrong appreciation of evidence by itself
is not a ground to set aside an award as is clear from the provisions
of sub-section (2-A) of Section 34 of the 1996 Act.
75. In Dyna Technologies (P) Ltd. v. Crompton Greaves Ltd. ,
(2019) 20 SCC 1 , paras 27-43, a three-Judge Bench of this Court
held that courts need to be cognizant of the fact that arbitral awards
are not to be interfered with in a casual and cavalier manner, unless
the court concludes that the perversity of the award goes to the root
of the matter and there is no possibility of an alternative
interpretation that may sustain the arbitral award. It was observed
that jurisdiction under Section 34 cannot be equated with the
normal appellate jurisdiction. Rather, the approach ought to be to
respect the finality of the arbitral award as well as party's
autonomy to get their dispute adjudicated by an alternative forum
as provided under the law.”


50. It is in the aforesaid backdrop that the rival challenges in OMP
(COMM) 119/2026 filed by TCIL and OMP (COMM) 555/2025 filed
by Frans are required to be examined.

I. TCIL’S CHALLENGE
Termination of Contract
51. At the outset, it is apposite to examine the principal challenge
raised by TCIL, which arises in the context of Issue No. 1 framed by
the learned AT, pertaining to the validity of the termination of the
Purchase Order. TCIL assails the finding of the learned AT holding
the termination to be wrongful and not in accordance with the
contractual provisions, whereas Frans supports the said finding and
seeks consequential relief on that basis. In the considered view of this
Court, the determination of this issue is foundational, since the claims
and counter-claims of the parties in both petitions are intrinsically
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dependent upon the validity of such termination. The relevant findings
of the learned AT on Issue No. 1 are reproduced hereunder:
“Analysis & Findings
132. The relevant facts for adjudication of the present issue are as
follows:
a) Pursuant to the Client's Tender (05.12.2022), a work order dated
06.03.2023 was issued by the end Client in favour of the
Respondent, subsequent to which the Respondent issued the
Tender (07.03.2023).
b) Subsequent to the issuance of the Tender, the Respondent issued
the Corrigendum (15.03.2023).
c) The Claimant submitted its bid on 20.03.2023 which was accepted
and the LOI (24.03.2023) was issued by the Respondent in favour
of the Claimant. The LOI was accepted by the Claimant vide email
dated 27.03.2023.
d) The Claimant submitted the PBG belatedly on 13.04.2023 (through
email) and on 17.04.2023 (hardcopy).
e) The said Purchase Order (28.04.2023) was issued by the
Respondent in favour of the Claimant.
f) As per the Claimant, it placed certain purchase orders on OEMs
after issuance of the LOI. Further purchase orders were placed
after the issuance of the said Purchase Order.
g) The Respondent followed up the progress of the purchase orders
placed by the Claimant on the OEMs and the Claimant provided
timelines. Various emails were exchanged between the Claimant
and the Respondent in this regard.
h) The Respondent received complaints from OEMs seeking its
intervention as the Claimant was not making payment to the OEMs
for the purchase orders provisionally placed on the OEMs by the
Claimant.
i) The end Client sent an email dated 08.05.2023/letter dated
06.05.2023 to the Respondent requesting to complete execution of
the work without any delay by the end of May 2023, pursuant to
which the Respondent sent emails to the Claimant, inter-alia,
seeking information/details pertaining to the delivery schedule and
installation timelines.
j) The Respondent issued a notice dated 11.05.2023 to the Claimant
with regard to the delay in the execution timelines of the project.
The said notice was replied to by the Respondent vide its email
dated 13.05.2023.
k) Thereafter, the Respondent issued the Show Cause Notice
(18.05.2023) to the Claimant, inter-alia, stating that the Claimant
had prima facie failed to provide any tangible details regarding the
purchase orders placed on the OEMs, the delivery schedule of the
goods and installation timelines resulting in serious delays in the
execution timelines of the project. By the Show Cause Notice, the
Respondent called upon the Claimant to show cause as to why the
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Respondent should not initiate action against the Claimant as
mentioned in the Show Cause Notice including termination of the
Tender. The Claimant was called upon to reply to the Show Cause
Notice within 3 days failing which necessary action would be
taken by the Respondent.
I) The Claimant replied to the Show Cause Notice vide its replies
dated 20.05.2023 (also sent vide email dated 22.05.2023) and
24.05.2023, inter-alia, stating that the Claimant is going as per the
timelines and trying its best to complete the project within the
stipulated timelines mentioned in the Tender. The Respondent
issued a pointwise reply dated 30.05.2023 to the above replies of
the Claimant. In the said letter dated 30.05.2023, the Respondent
directed the Claimant to complete the SITC part as per the project
requirements by 06.06.2023 (except for. Networking switches),
failing which action would be taken as per the Show Cause Notice
and the terms of the Tender.
m) The Respondent issued the Termination Notice (09.06.2023),
inter-alia, alleging that the Claimant had failed to take any tangible
action in furtherance of the said Purchase Order inspite of
opportunities provided to it. By the Termination Notice, the
Respondent terminated the said Purchase Order and banned the
Claimant for a period of 2 years from participating in future/new
works/tenders undertaken by the Respondent. The PSG was also
forfeited.
n) The Claimant made a representation dated 15.06.2023 to the
Respondent stating that the Termination Notice was issued
wrongly and erroneously. The Claimant requested for extension in
terms of Clause 3.14 of the Tender and also reinstatement of the
said Purchase Order. The Claimant stated that it was keen on
completion of the project and assured that the same shall be
executed within 45 days.
o) The Respondent replied to the above representation of the Claimant
vide its letter dated 20.06.2023 denying the extension sought by
the Claimant.
p) Thereafter, the Respondent issued a letter dated 03.07.2023 to the
Claimant informing that work had been awarded to a new vendor
i.e. Orbit at an additional cost of Rs. 12,87,756.75/- (Rupees
Twelve Lakhs Eighty-Seven Thousand Seven Hundred Fifty-Six
and Seventy-Five Paisa Only) which would be recovered from the
Claimant.
133. For the adjudication of the present issue, the first aspect which
needs to be decided is the timeline within which the Claimant was
to deliver the equipment as per the Tender.
134. The Delivery/Implementation Schedule is provided in Clause
3.6 of the SCC of the Tender which is set out hereunder:
"3.6 DELIVERY/IMPLEMENTATION SCHEDULE
As per Client's tender'
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135. The Implementation Schedule in the Client's Tender is
provided in Clause 7 which is set out hereunder:
"7. Implementation Schedule

136. The Claimant has contended that as per Clause 7 of the
Client's Tender, the time period for delivery of equipment and
installation is to commence from T, defined as the date of issuance
of the Letter of Intent or Work Order. As the LOI in favour of the
Claimant was issued on 24.03.2023, the commencement of the
delivery period has to be calculated from 24.03.2023 and the
stipulated period for delivery and installation of equipment other
than network switches would have elapsed on 24.06.2023 (T +3
months) and 24.09.2023 (T +6 months) for network switches.
Accordingly, the said Purchase Order was terminated prematurely
and wrongfully.
137. The contention of the Claimant is misconceived. The terms
"Service Provider/Selected Bidder/Selected Agency" and "Work
Order/Supply Order" are defined in Clause 2.1 (Definitions) of the
Client's Tender. The relevant clauses are reproduced as under:
"Service Provider/Selected Bidder/Selected
Agency' means "Successful Bidder', with
whom Govt. signs the Contract.
"Work Order/Supply Order'' means tasks/activities
which will be assigned or scheduled to the successful ·
Bidder'
138. The Selected Bidder means the "Successful Bidder" with
whom the end Client signs the Contract i.e. the Respondent herein.
The Work Order/Supply Order is the work order executed between
the end Client and the Respondent herein. In view of the above,
when in Clause 7 (Implementation Schedule) of the Client's
Tender, the term LoI/Work Order is used, it means the work order
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executed between the end Client and the Respondent i.e. the work
order dated 06.03.2023 (which has been referred to in the Letter
dated 06.05.2023 sent by the end Client to the Respondent) i.e.
Ex. RW1/S(Colly.).
139. Accordingly, as per Clause 7 of the Client's Tender, the
timeline for delivery and installation of equipment was to
commence on the date of the work order executed by the end
Client in favour of the Respondent i.e. 06.03.2023 and not
24.03.2023 as contended by the Claimant. Therefore,
commencement for the delivery period was from 06.03.2023.
140. The Respondent had issued the Corrigendum which
stated/clarified "T" as specified in Clause 7 of the Client's Tender
as 06.03.2023. The relevant portion of the Corrigendum is set out
hereunder:

The Corrigendum made it clear that the date of commencement is
06.03.2023 and that the date for delivery and installation of
equipment other than network switches is 06.06.2023 (T +3
months) and for the network switches is 06.09.2023 (T +6 months).
141. The Corrigendum is dated 15.03.2023 and was issued by the
Respondent prior to the Claimant submitting its bid on 20.03.2023.
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Further, by the Corrigendum, the Respondent also extended the last
date of submission of bids and the Claimant submitted its bid as
per the extended date mentioned in the Corrigendum. Accordingly,
the Claimant cannot contend that it was unaware of the
Corrigendum before submission of its bid. Further, the Respondent
is correct in contending that the Corrigendum being a public
document was readily available on the a-procurement portal and
the Respondent's website throughout the bidding period. The
Corrigendum is also
mentioned in the LOI as well as the said Purchase Order. In fact,
CW-1 in answer to Question 11 has admitted that when the
Corrigendum was mentioned in the LOI/said Purchase Order, the
Claimant did not raise any objection or concern regarding the
same. Therefore, the argument of the Claimant that no email or
letter communication exists apprising the Claimant of a change in
the delivery schedule cannot be accepted.
142. The contention of the Claimant that the Corrigendum
materially changed the Tender is misconceived. The Corrigendum
with respect to the delivery/implementation schedule was more in
the nature of a clarification and there was no material change in the
Tender. The judgments in Bhanwar Lal Verma (supra) and Parvati
Oevi (supra) do not support the case of the Claimant inasmuch as
the Corrigendum was issued prior to the submission of the bid by
the Claimant and there was no vested right in the Claimant that
was withdrawn or taken away by virtue of the Corrigendum.
143. Even as per the Claimant's own case, the Claimant had started
placing the purchase orders on the OEMs for procuring the
equipment immediately after the issuance of the LOI. The
Claimant placed the first purchase order on 29.03.2023 i.e. within
7 days of issuance of the LOI. The Claimant therefore was aware
and conscious of the strict timelines. The Respondent vide its email
dated 25.04.2023 had requested the Claimant to review the
timelines as the same were not in sync with the delivery timelines
of the end· Client and the Tender. It is for the first time vide its
email dated 10.05.2023 that the claimant took a stand that the "T"
is 24.03.2023. CW-1 in his cross-examination in answer to
Question 22 has deposed that the Claimant did not raise any issue
of delivery schedule prior to its email dated 20.05.2025 as the
Claimant was waiting for the OEMs to give the delivery schedule
to the Claimant, which was received only in the last week of May
2023
144. Even otherwise, if the obligation of the Respondent to the end
client is to deliver and install the equipment within. the timelines
specified in the Client's Tender, the Respondent cannot give a
longer time period to the Claimant for delivery and installation of
the equipment than what is specified in the Client's Tender. The
Claimant would have to comply with the timelines agreed to
between the Respondent and the end Client which are in line with
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the timeline of the Tender. The judgment in Novartis Vaccines
(supra) does not help the case of the Claimant.
145. From the above discussion, it is clear that the
commencement of the delivery period "T" has to be calculated
from 06.03.2023. Accordingly, the Claimant was to deliver and
install the equipment other than network switches by
06.06.2023 and the network switches by 06.09.2023.
146. The second issue which has to be considered is whether any
notice period was required to be given by the Respondent to the
Claimant prior to terminating the said Purchase Order/Tender.
147. The Claimant has contended that termination of the said
Purchase Order by the Respondent is wrongful as the Claimant was
not given the contractually stipulated notice period. In this regard,
the Claimant has relied upon Section 3 of the SCC of the Tender
which provides that the terms and conditions of the Tender are to
be applied on a back-to-back basis with the Client's Tender. The
Claimant contends that as per Clause 3.9 of the Tender, the
termination has to be in accordance with the Client's Tender i.e.
Clause 3.12 of the Client's Tender. In terms of Clause 3.12 of the
Client's Tender, it was entitled to a 45 day’ notice prior to
termination of the Tender by the Respondent and as the said clause
was not compiled. with, the termination by the Respondent is
unlawful. The Claimant contended that Clause 3.12 of the Client's
Tender would have been applicable, however, the Respondent
issued the Termination Notice in terms of Clause 2.18 of the
Tender.
148. The relevant clauses in the Tender regarding termination are
Clause 2.18 and Clause 3.9, which are reproduced as under:
"2.18 TERMINATION FOR DEFAULT
a) TCIL may, without prejudice to any other remedy for
breach of contract, by written notice of default, sent to the
supplier, terminate this contract in whole or in part.
- if the supplier fails to deliver any or all the services/goods
within the time period specified in the contract, or any
extension thereof granted by TCIL.
- if the supplier fails to perform any other obligation(s)
under the contract;
- if the supplier, in either of the above circumstances, does
not remedy his failure within a period of 15 days (or such
longer period as TCIL may authorize in writing) after
receipt of the default notice from TCIL
- Failure of the successful bidder to comply with the
requirement of submission of performance security shall
constitute sufficient ground for cancellation of the award of
work and forfeiture of the bid security.
................... .......... . ..... ....................
"3.9 TERMINATION OF CONTRACT
As per Client's tender'
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149. The clause regarding termination in the Client's Tender is
Clause 3.12 of the Client's Tender, which is set out hereunder:
"3.12. Termination
(i) Termination for Default:
If the Selected Agency/Service Provider fails to carry out
the award/work order in terms of this document within the
stipulated period or any extension thereof, as may be
allowed· by OIT, without any valid reasons acceptable to
OIT, OIT may terminate the contract after giving 45 days'
notice, and the decision of DIT on the matter shall be final
and binding on the Service Provider. Upon termination of
the contract, DIT shall be at liberty to get the work done at
the risk and expense of the Selected Agency through any
other
agency, and to recover from the Service Provider's
compensation or damages."
150. The Note under Section 3 of the SCC of the Tender mentions
that in case of any difference in the clauses in the Tender, the
conditions mentioned in the SCC of the Tender shall prevail. The
said Note is set out hereunder:
"Note : In case clauses/sub clauses have any difference
mentioned in this NIT at different places, the conditions
mentioned in this section shall prevail. The terms and
conditions of this section shall be on back-to-back basis
based on client's tender No. 22(44)/DIT/COMM/2022 for
"Request for Proposal for Selection of Agency for supply,
installation, commissioning & maintenance of Horizontal
Extension of SWAN (HSWAN)"."
151. Accordingly, Clause 3.9 of the SCC of the Tender would
prevail over Clause 2.18 of the GCC of the Tender and the
applicable clause for termination of the Tender will be Clause 3.12
of the Client's Tender. Clause 3.12 of the Client's Tender mandates
that upon failure to carry out the work "within the stipulated
period', a "45 days notice period' has to be given before
termination.
152. The Respondent contended that due to the Claimant's failure
to fulfill its obligations and abide by the stipulated timelines, The
Respondent reasonably apprehended that the Claimant would
default on the project execution schedule. Such delay would have
adversely impacted the end Client. Accordingly, in order to
safeguard its interests, the Respondent initially warned the
Claimant vide its email dated 01 .05.2023 to act urgently in the
interest of the project and thereafter issued a notice dated
11.05.2023 for rectification of the delivery timeline and expediting
the completion of work. The Claimant was also served with the
Show Cause Notice whereby the Claimant was given 3 days time
to respond with details on its plans to meet the delivery timelines.
Upon receiving an unsatisfactory response and being unconvinced
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by the· Claimant's proposed delivery schedule and lack of delivery
and execution on ground, the Respondent terminated the said
Purchase Order only after the timeline of 06.06.2023.
153. The contention of the Respondent is without any merit. The
Claimant could have issued the notice under Clause 3.12 only upon
the failure of the Claimant to deliver and install the equipment
within the stipulated time period i.e. other than networking
switches by 06.06.2023. Till 06.06.2023, the Claimant had not
defaulted in its obligations under the said Purchase Order/Tender.
Accordingly, no notice could have been issued by the Respondent
before the actual default on the Claimant's part.
154. Even upon the failure of the Claimant to delivery and install
the said equipment by 06.06.2023, the Respondent had to give 45
days notice to the Claimant as envisaged in Clause 3.12 of the
Client's Tender before terminating the said Purchase Order/Tender.
On the date the Show Cause Notice was issued, the stipulated
period had not expired. The Show Cause Notice is also not a notice
as envisaged under Clause 3.12 of the Client's Tender. In fact, no
notice as envisaged under Clause 3.12 of the Client's Tender was
issued by the Respondent to the Claimant. A notice under Clause
3.12 of the Client's Tender could only have been given after the
expiry of the term provided for performance of the contract. The
Respondent did not give the Claimant the contractually stipulated
notice period to execute the said Purchase Order in terms of the
Tender.
155. Accordingly, there is merit in the contention of the Claimant
that the termination of the said Purchase Order by the Respondent
is wrongful as the Claimant was not given adequate notice in terms
of Clause 3.12 of the Client's Tender.
156. The Respondent contended that delivery timelines shared by
the Claimant created an apprehension that the Claimant will not be
able to complete the delivery and installation by 06.06.2023 and
would eventually fail to meet its obligations as per the Tender. The
Respondent placed reliance on Section 39 of the Contract Act and
illustration (a) therein to contend that a non-defaulting party is not
required to wait till the last date of the contract if it can anticipate
that the defaulting party is not going to perform its obligations
under contract. In the present case, the Claimant had neither
refused to perform nor disabled itself from performing the said
Purchase Order/Tender. In fact, by its emails dated 20.05.2023 and
24.05.2023, the Claimant stated that it was trying to its best to
complete the project within the stipulated period mentioned in the
Tender. Subsequent to the Termination Notice, the Claimant by its
letter dated 15.06.2023 stated that it was keen on completion of the
project and assured that the same shall be executed within 45 days
and the Cisco Switches would be delivered by 30.09.2023. The
Claimant also sought extension and reinstatement of the said
Purchase Order to enable it to execute the project. The judgments
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relied upon by the Respondent with regard to anticipatory breach
i.e. HFCL Beze Telecom (supra), Air India Limited (supra) and
Deva Builders (supra) do not help the case of the Respondent.
Section 39 of the Contract Act is not applicable in the facts of the
present case. There was no repudiation of the said Purchase
Order/Tender by the Claimant.
157. The reliance of the Respondent on the complaints ·by the
OEMs do not help the Respondent as admittedly there was no
privity of contract between the Respondent and the OEMs. Further,
though the PSG was admittedly delayed by the Claimant, however,
the same cannot be a ground for termination after the Respondent
accepted"'1he same and issued the said Purchase Order in favour of
the Claimant.
158. The Respondent contended that the Claimant did not plead in
its reply to the Termination Notice or in the Statement of Claim
that the Termination Notice was not in terms of the Client's Tender
and it was for the first time during arguments that the Respondent
contended as an afterthought that the notice period of 45 days was
not given. The contention of the Respondent is misconceived. The
Claimant in Para 6 of its Statement of Claim has referred to,
reproduced and relied upon various clauses of the Tender and the
Client's Tender including Clause 3.12 of the Client's Tender.
Further, the Claimant has stated that the termination of the Tender
is to be in accordance with the Client's Tender. Therefore, it cannot
be said that this argument was only raised by the Claimant during
the final arguments or is an afterthought. The judgments in Ibrahim
Uddin (supra), Bajrang Lal (supra), Susaka Private Limited
(supra) and Mohammed Abdul Wahid (supra) relied upon by the
Respondent are not applicable in the facts of the present case.
159. The Arbitral Tribunal is of the view that the termination
of the said Purchase Order/Tender vide the Termination
Notice was not in terms of the 'Client's Tender or the Tender
as the 45 days' notice was not given by the Respondent to the
Claimant before termination. Accordingly, it is held that the
termination of the said Purchase Order by the Respondent vide
the Termination Notice is wrongful.
………”

52. Insofar as the first limb of challenge by TCIL is concerned, it
was held that the termination of the Purchase Order was not preceded
by a notice in terms of Clause 3.9 of the SCC, which, being a back-to-
back agreement, corresponds to Clause 3.12 of the Client’s Tender,
and such notice was a condition precedent to a valid termination;
further, the communications on record, including Frans’ letters dated
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20.05.2023 and 24.05.2023, disclosed a continued willingness to
perform the contract, thereby negating any inference of anticipatory
breach; consequently, the contention of TCIL under Section 39 of the
IC Act was rejected.
53. With respect to the second limb of Issue No. 1, the learned AT,
while holding the termination to be wrongful, declined to award
damages on the ground that Frans failed to lead any evidence to
establish the nature and quantum of loss. This Court proceeds to
examine the challenge to the aforesaid findings.
54. TCIL contends that the learned AT has misconstrued the SCC,
particularly Clause 3.9 thereof, and has failed to give due weight to
material evidence, including communications from the OEM, which,
it is urged, demonstrate delay and non-performance disentitling Frans
from any relief.
55. In this context, this Court finds that TCIL’s challenge to the
interpretation of the SCC is selective and lacks consistency. The
learned AT, while adjudicating the same issue relating to the date of
commencement of the work order, interpreted the relevant provisions
of the SCC and returned a finding which has not been disputed by
TCIL. However, insofar as the finding on termination is concerned,
TCIL seeks to challenge the award on the ground of an alleged
erroneous construction of the very same contractual framework.
56. Such a selective challenge to a unified contractual scheme
cannot be sustained. The doctrine of quod approbo non reprobo , that a
party cannot approbate and reprobate the same instrument, is well-
settled in Indian law. As held by the Hon’ble Supreme Court in
Rajasthan State Industrial Development & Investment Corpn. v.
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21
Diamond & Gem Development Corpn. Ltd. , a party cannot "blow
hot and cold" or "approbate and reprobate" where it has knowingly
accepted the benefits of a contractual framework; it is estopped from
denying its validity or binding effect when the same framework
operates against it.
57. TCIL, having accepted the learned AT's interpretation of the
SCC with respect to the commencement timeline and other findings,
cannot now resist the application of the same contractual scheme in
the context of termination.
58. Insofar as Clause 3.9 of SCC is concerned, which, as discussed
earlier, corresponds to Clause 3.12 of the client’s tender given the
back-to-back nature of the agreement, the contention of TCIL that the
termination was justified under Clause 2.18 of GCC cannot be
sustained. Clause 3.9 of SCC, read with Clause 3.12 of the client’s
tender, prevails over Clause 2.18 of the GCC and mandates a 45-day
notice period upon failure to perform within the stipulated period, as a
condition precedent to a valid termination.
59. It is an admitted position that no such notice was issued prior to
the termination dated 09.06.2023, and the Show Cause Notice does
not qualify as a notice under Clause 3.9 of SCC vis-à-vis Clause 3.12
of the client’s tender, since the mandatory period for performance had
not even expired on the date of its issuance.
60. The learned AT has interpreted and applied the said provision
in the context of the contractual scheme and the conduct of the parties.
The contention of TCIL essentially seeks an alternate interpretation of
the said clause. The judgments relied upon by TCIL, including OPG
Power (supra) and Delhi Airport Metro Express Pvt. Ltd. (supra) , do

21
(2013) 5 SCC 470
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not advance its case, as the present case is not one of absence of
evidence or perversity, but one of interpretation of contractual terms.
61. The contention that the OEM communications constituted
material evidence that has been wholly ignored is not borne out from a
reading of the impugned award. The learned AT has adverted to the
correspondence between the parties and assessed the same in its
totality. The mere fact that the learned AT did not assign to such
communications the probative weight sought to be ascribed by TCIL
does not amount to non-consideration of material evidence within the
meaning of I-Pay Clearing Services Pvt. Ltd. (supra). As clarified
therein, and in OPG Power (supra) , interference is warranted where
material evidence is completely ignored, and not where it has been
considered but found insufficient or unpersuasive.
62. In the present case, the learned AT has also recorded that there
was no privity of contract between the OEM and Frans. The
evidentiary value of such communications has thus been assessed in
the context of the contractual relationship between the parties. The
challenge of TCIL, in substance, seeks a re-appreciation of the
evidentiary weight assigned by the learned AT, which falls within its
exclusive domain and does not warrant interference.
63. The reliance on principles of contractual interpretation in Ram
Kishore Lal (supra) also does not aid TCIL, as the learned AT has
construed the contract as a whole and has not adopted an
interpretation contrary to the contractual scheme.

64. Consequently, this Court finds that the said conclusion flows
logically from the findings of the learned AT on termination and does
not warrant any interference by this Court.

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Section 39 of the IC Act
65. As regards Section 39 of the IC Act, it provides that where a
party to a contract refuses to perform or has disabled himself from
performing his promise in its entirety, the other party may put an end
to the contract, unless it has signified by words or conduct,
acquiescence in the contract's continuance. The learned AT has
recorded a reasoned finding that there was no repudiation or disabling
conduct on the part of Frans.
66. The learned AT, in its finding, has noted that Frans, through its
communications dated 20.05.2023 and 24.05.2023, expressed its
willingness to perform and sought to complete the project, and even
thereafter sought extension and reinstatement. The reliance placed by
TCIL on Maharashtra State Electricity Distribution Co. Ltd. (supra)
is misplaced, as the said judgment applies where the conduct of a
party clearly demonstrates an unwillingness or inability to perform,
which is not borne out in the facts of the present case; the conclusion
that anticipatory breach is not attracted cannot be said to be erroneous.
67. For the aforesaid reasons, this Court finds no ground to interfere
with the finding of the learned AT that the termination of the Purchase
Order was wrongful. The finding of the learned AT on this aspect is
cogent and based on the material on record, and does not warrant any
interference. Accordingly, the challenge laid by TCIL to this finding
in OMP (COMM) 119/2026 fails.

Refund of PBG
68. The challenge to the direction regarding refund of the PBG
arises in the context of Issue No.3 framed by the learned AT and is
intrinsically linked to the aforesaid finding on termination. TCIL has
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also assailed the said direction, contending that the encashment was
justified on account of the breach committed by Frans. The finding of
the learned AT on Issue No.3 in this regard is extracted herein below:
“Analysis & Findings
191. As per the Respondent, the encashment of the PBG was due
to the Claimant's breach of the Tender, particularly its failure to
deliver and install the required equipment within the stipulated
timeline. The decision to encash the PBG was due to the
Claimant's repeated non-performance and failure to adhere to the
terms of the Tender. The Arbitral Tribunal while deciding Issue
No. 1 above has held that the termination of the said Purchase
Order/Tender by the Respondent by the Termination Notice was
wrongful and premature and a breach of the terms of the Tender.
As the termination of the said Purchase Order was wrongful and
premature and a breach of the terms of the Tender, the encashment
of the PBG by the Respondent was also wrongful.
192. Accordingly, the Claimant is entitled to an amount of Rs.
25,75,512/- (Rupees Twenty-Five Lakhs Seventy-Five
Thousand Five Hundred and Twelve Only) from the
Respondent for the wrongful encashment of the PBG being the
cost of the PBG. Issue No. 3 is accordingly decided in favour of
the Claimant and against the Respondent.”

69. A perusal of the above-extracted finding indicates that the
learned AT has examined this contention in light of its finding on
Issue No. 1 and has held that the termination of the Purchase Order
was wrongful and not in accordance with the contractual provisions.
On that basis, the learned AT has concluded that the alleged breach
attributed to Frans could not be sustained.
70. In view of the above finding, the very premise on which TCIL
sought to justify the encashment of the PBG stands displaced. It was
the specific case of TCIL that such encashment was consequent upon
the alleged breach by Frans; however, the foundation of that
contention having been found to be unsustainable, the justification for
the invocation of the PBG does not survive. The learned AT has thus
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treated the encashment as a direct consequence of the wrongful
termination and has directed the refund of the said amount.

Interest
71. On the issue of interest, the Impugned Award also does not
warrant any interference. It is trite that the grant of interest falls within
the discretion of the learned AT under Section 31(7) of the A&C Act,
which empowers the learned AT to award interest at such rate as it
deems reasonable, in the absence of any agreement to the contrary.
The relevant finding of the learned AT at Paragraph Nos. 239 and 240
of the Impugned Award are reproduced herein below:
“239. While deciding Issue No.3, the Arbitral Tribunal has held
that the Claimant is entitled. to an amount of Rs. 25,75,512/-
(Rupees Twenty-Five Lakhs Seventy-Five Thousand Five Hundred
and Twelve Only) from the Respondent for wrongful encashment
of the PSG being the cost of the PBG. Therefore, the Claimant is
granted interest @ 12% per annum on the amount of Rs.
25,75,512/- (Rupees Twenty-Five Lakhs Seventy-Five Thousand
Five Hundred and Twelve Only) from the date of encashment of
the PSG till the date of the Award.
240. Accordingly, the Claimant is entitled to and is granted
simple interest on the amount of Rs. 25,75,512/- (Rupees
Twenty-Five Lakhs Seventy-Five Thousand Five Hundred and
Twelve Only) @ 12% per annum from the date of encashment
of the PBG till the date of Award. Issue No. 11 is decided
accordingly.”

72. In light of the above-stated finding, no contractual bar or
restriction on the grant of such interest has been demonstrated. The
learned AT has awarded simple interest @ 12%, which cannot be said
to be unreasonable or excessive so as to warrant interference under
Section 34 of the A&C Act, the determination thereof being within the
domain of the learned AT.
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73. Consequently, this Court finds that the said conclusion flows
logically from the findings on termination and does not warrant
interference.

II. FRANS’S CHALLENGE:
Issue no.1
74. Having upheld the finding of wrongful termination under the
first limb, this Court now turns to the second limb, being Frans' cross-
challenge against the rejection of its claim for damages flowing
therefrom. Frans has assailed the rejection of its claim for damages
despite a finding of wrongful termination, contending that once breach
is established, damages must follow. In this regard, reliance is placed
upon MSK Projects (supra) . The relevant finding of the learned AT at
Paragraph Nos. 160, 161 & 162 of the impugned award are
reproduced herein below:
“ 160. However, the Claimant has not led any evidence to prove
that it suffered any damages on account of the wrongful
termination of the said Purchase Order by the Respondent.
161. The annexure to the said Purchase Order contains the list of
the items/equipment that were to be supplied. As per the Claimant's
own case, it had delivered only the NGF and the NMS, however, as
per the Respondent only the NGF was delivered to the end Client,
and even that was not installed. Assuming the Claimant is correct
in contending that it had supplied the NGF and the NMS, even then
the Claimant has delivered only 2 items (out of 21 items)
amounting to Rs. 1,31,64,631/- (Rupees One Crore Thirty One
Lakhs Sixty-Four Thousand Six Hundred and Thirty-One Only)
out of the contract value of Rs. 8,58,50,387.06/- (Rupees Eight
Crores Fifty-Eight Lakhs Fifty Thousand Three Hundred Eighty-
Seven and Six Paise Only). The said 2 items were not even
installed or commissioned till the 06.06.2023. As till the stipulated
date, the Claimant had, even as per its own case, only delivered 2
items which were not installed or commissioned, amounting to
around 15% of the total value of the said Purchase Order, the
Claimant is not even entitled to nominal damages. The judgments
relied upon by the Claimant in A. T. Brij Paul Singh (supra) and
Bungo ·Steel Furniture (supra) do not support the case of the
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Claimant. Accordingly, the Claimant is not entitled to any
damages.
162. It is held that the termination of the said Purchase
Order/Tender by the Respondent vide the Termination Notice
is wrongful and premature and a breach of the terms of the
Tender. However, the Claimant is not entitled to any damages
as the Claimant has failed to prove that it suffered any the
damages in this regard. Issue No. 1 is decided accordingly. ”

75. As is evident from the findings extracted hereinabove, the
learned AT has rejected the claim for damages on the ground that
Frans failed to establish any actual loss, and has supported the said
conclusion with cogent reasoning. The learned AT has recorded that,
even as per the case of Frans, only a limited portion of the contractual
work was performed, with delivery of merely two items out of the
total scope of twenty-one items under the Purchase Order, which
themselves were neither installed nor commissioned within the
stipulated timeline. The value of such partial performance constituted
only a fraction of the overall contract value. In this factual backdrop,
the learned AT has concluded that no basis existed for awarding
damages, even in the nature of loss of profits.
76. While it is true that in appropriate cases loss of expected profits
may be awarded, the same is neither automatic nor can it be granted in
the absence of material enabling its quantification. The ruling in MSK
Projects (supra) does not dispense with the requirement of
establishing the foundational facts necessary for such a claim.
77. The finding of the learned AT that no such material was placed
on record, being based on an appreciation of evidence, cannot be said
to suffer from any perversity warranting interference.

Issue No. 2

78. Frans further challenges the rejection of its claim for payment
under invoices dated 14.04.2023 and 01.05.2023, which fell for
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consideration before the learned AT under Issue No. 2. It is contended
that the learned AT has effectively sustained a "back-to-back"
payment defence, i.e., that TCIL's obligation to pay Frans was
contingent upon receipt of corresponding payments from the DIT,
without TCIL having expressly pleaded such a contractual
arrangement. The relevant findings returned by the learned AT on
Issue No. 2, which bear upon the present challenge, are extracted
hereunder:
“Analysis & Findings
178. The Claimant relied upon Clause 3.1 (i) of Section 3 of the
Tender to claim the amounts of the invoices raised in respect of the
NGF and the NMS. Clause 3.1 of the SCC of the Tender provides
for the payment terms which is reproduced hereunder:
"3. 1 PAYMENT TERMS
(i) 80% of CAPEX amount will be paid after delivery of
equipment.
(ii) 10% ·of CAP EX amount will be paid after completion of
installation, commissioning, Testing & Final acceptance.
(iii) Remaining 10% of the CAP EX amount will be released
@3% per year at the end of 151 & 2'Jd year and remaining
4% will be release after end of 3rd year.
Note : Payment terms between the TCIL and vendor shall be
on back to back basis except in cases of advance payment
i.e. TCIL will release the payment of each stage only if
received from the client. Client payment terms will supersede
terms mentioned in this document'
(Emphasis Supplied)
179. The said Purchase Order also mentions the payment terms,
which are set out hereunder:
"5. PAYMENT TERMS
(i) 80% of CAPEX amount will be paid after delivery of
equipment.
(ii) 10% of CAPEX amount will be paid after completion of
installation, commissioning, Testing & Final acceptance.
(iii) Remaining 10% of the CAPEX amount will be released
st nd
@3% per year at the end of 1 & 2 year and remaining
4% will be release after end of 3'd year.
Note: Payment terms between the TCIL and vendor shall
be on back to back basis except in cases of advance
payment i.e. TCIL will release the payment of each stage
only if received from the client."
(Emphasis Supplied)
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180. In terms of Clause 3.1 of the Tender and Clause 5 of the said
Purchase Order, the payment terms between the Respondent and
the Claimant are on back-to-back basis except in cases of advance
payment i.e. the Respondent was to make payment to the Claimant
only upon receipt of payment from the end Client.
181. The Respondent has disputed delivery of the NMS and also
contended that the Claimant had not provided the license key for
installation of the NGF. Even otherwise, it was the understanding
of the Claimant that the payments were on back to back basis.'
182. In the letter dated 13.05.2023, the Claimant stated that it had
"placed all back to back POs to the concerned OEMs". This shows
that the Claimant was aware that the payments to be made to the
Claimant under the Tender were on back to back basis and the
payment would be made only after the Respondent is paid by the
end Client. In fact, the Invoice dated 01.05.2023 raised by the
Claimant for the NMS also mentions the Terms' as "Back to Back'.
This is also the reason the Claimant never sought payment for the
delivery of the equipment till termination of the said Purchase
Order/Tender. There is also nothing on record to show that the
Respondent has received payment from the end Client with respect
to the NGF and the NMS.
183. The contention of the Claimant that the Respondent failed to
raise the argument of existence of back-to-back contract in its
pleadings is misconceived. In Para 17 of the Statement of Defence,
the Respondent has referred to, reproduced and relied upon Clause
3.1 of the SCC of the Tender which refers to the payment terms
being on back to back basis and therefore it cannot be said that the
"Respondent did not raise this point in its pleadings. The judgment
in Prakash Rattan La/ (Supra) does not support the case of the
Claimant.
184. It is pertinent to note that the Claimant has not disputed that it
did not make payment to the OEMs in respect of either the NGF or
the NMS. In answer to Questions 25 to 28, CW-1 deposed that the
payment to the OEMs for the NGF and the NMS had been made in
form of credit notes after filing of the Statement of Claim. On the
other hand, the Respondent has stated that it had purchased the
NMS from Orbit. The Respondent has placed on record an invoice
dated 21.08.2023 of Orbit with regard to purchase of the NMS. If
the end Client or the Respondent had received the NMS from the
Claimant, there would have been no occasion for the Respondent
to order the same product again.
185. In the judgment in Kingston Enterprises (supra) relied upon
by the Respondent, it was held that
"24. Judicial precedents consistently uphold the ·
enforceability of 'pay-when-paid' clauses in back-to-back
contracts, provided these clauses are clear and
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unambiguous. Courts only intervene where there is gross
unfairness or ambiguity. In this case, the language of the
'pay-when paid' clause leaves no
room for interpretation : NBCC's obligation to pay the
Petitioner is strictly contingent upon receiving payment
from NSG.
25. Clause 24.2 of the GCC explicitly stipulates that
NBCC's liability to pay the Petitioner arises on its receipt
of funds from NSG. The NBCC, in its counter affidavit,
acknowledges an outstanding sum of INR 88,47,080/-, but
it is clear that this payment is contingent on receipt of
funds from NSG. Given the unambiguous terms of the
contract, the Court finds no basis to interfere, and the
Petitioner's right to payment is accordingly tied to
NBCC's receipt of funds from NSG.
26. It is a well-established principle of contract law that
parties are bound by the terms to which they voluntarily
agree. Once a contract is executed, neither party can
contest its terms unless they are arbitrary or violate public
policy. In this case, the Petitioner was fully aware of the
'contractual condition linking their payment to NBCC's
receipt of funds from NSG and willingly entered into the
agreement. There is no challenge to the terms of the
impugned agreement. Moreover, the Petitioner cannot
challenge the enforcement of the impugned contractual
stipulation under Article 226 of the Constitution. The
Court finds no merit in the Petitioner's claim for direct
payment from NBCC when NBCC's obligation to pay is
dependent on receiving funds from NSG."
Pertinently, in Para 14 of the said judgment, the Delhi High Court
has also dealt with the judgment in Harvinder Singh & Company
(supra) which has been relied upon by the Claimant .
186. It is accordingly held that the Respondent was to pay the
Claimant for the equipment delivered by it on back to back
basis i.e. upon receipt of payment from the end Client. It is not
the case of the Claimant that the Respondent had received the
amounts for the said items from the end Client. Accordingly,
the Claimant is not entitled to the amount of Rs. 1,31,64,631/-
(Rupees One Crore Thirty-One Lakhs SixtyFour Thousand Six
Hundred and Thirty-One Only) against the invoice dated
14.04.2023 amounting to Rs. 88,03,589 (Rupees Eighty-Eight
Lakhs Three Thousand Five Hundred and Eighty-Nine Only)
and the invoice dated 01 .05.2023 amounting to Rs. 43,61,042/-
(Rupees Forty-Three Lakhs Sixty-One Thousand and Forty-
Two Only) raised by the Claimant. Issue No.2 is decided
accordingly.”

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79. A perusal of the above finding indicates that the learned AT has
undertaken a detailed examination of the contractual framework
governing payments, including Clause 3.1 of the SCC and Clause 5 of
the Purchase Order, and has recorded a categorical finding that the
payment mechanism between the parties was on a “back-to-back”
basis, i.e., payments to Frans were contingent upon receipt of
corresponding payments from the end client.
80. The learned AT has further noted that Frans was itself aware of
and acted in accordance with such arrangement, including by placing
back-to-back purchase orders and reflecting the same understanding in
its own correspondence and invoices. It has also been recorded that
there was no material to show that TCIL had received payment from
the end client in respect of the equipment in question.
81. In this backdrop, the learned AT has rejected the claim for
invoices on the ground that the contractual condition precedent for
payment was not satisfied. The contention of Frans that such a defence
was not pleaded has also been specifically addressed and rejected by
the learned AT on the basis of the pleadings on record.
82. In view of the aforesaid, the finding so returned is based on a
reasoned interpretation of the contractual terms and appreciation of
evidence, and does not warrant interference merely because an
alternate view is sought to be advanced.

Issue No. 6

83. Frans has also assailed the rejection of its claim for damages
towards loss of reputation consequent upon the two-year ban imposed
by TCIL. While the wrongfulness of the blacklisting was decided in
favour of Frans under Issue No. 6, the core of the present challenge is
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to the finding under Issue No. 7, whereby the learned AT, despite
holding the blacklisting to be wrongful, declined to grant damages for
the reputation and commercial loss following therefrom.
84. In this regard, it is submitted that the learned AT, having held
the blacklisting itself to be wrongful, the legal consequences of such
wrongful act must necessarily include compensation for reputational
and commercial damage.
85. The principles governing such claims are instructive. Damages
for injury to reputation or goodwill, in a commercial context, are not
awardable on the basis of assertion alone and, as reiterated in M/s
22
Unibros v. All India Radio , must be supported by cogent evidence,
which may include, inter alia , demonstration of lost business
opportunities, cancellation of contracts, denial of future tenders, or
other concrete and quantifiable consequences flowing from the
blacklisting. In the absence of such material, the learned AT is neither
required nor empowered to award damages by speculation or
inference.
86. Considering the aforesaid principles, the learned AT, while
holding the blacklisting to be wrongful, has rightfully declined to
award any damages in the absence of any material produced by Frans
to establish such loss.
87. Accordingly, this Court finds no infirmity in the said approach,
as a claim for damages of such nature necessarily requires cogent
evidence, which was not forthcoming in the present case.

CONCLUSION:
88. In view of the aforesaid discussion, this Court finds that the
Impugned Award does not suffer from any infirmity falling within the

22
2023 SCC OnLine SC 1366
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limited scope of interference under Section 34 of the A&C Act. The
findings returned by the learned AT are based on a reasonable
interpretation of the contractual framework and an appreciation of the
material on record, and cannot be said to be perverse, patently illegal,
or in conflict with the fundamental policy of Indian law.
89. The challenge laid by TCIL in OMP(COMM) 119/2026 , insofar
as it assails the findings on wrongful termination, rejection of counter-
claims, and consequential directions including refund of the PBG with
interest, is found to be devoid of merit and is accordingly rejected.
90. Likewise, the challenge raised by Frans in OMP(COMM)
555/2025 , insofar as it assails the rejection of its claims for damages,
payment under invoices, and damages for loss of reputation, also does
not disclose any ground warranting interference under Section 34 of
the A&C Act, and is accordingly rejected.
91. In view thereof, both Petitions, being OMP (COMM) 119/2026
and OMP (COMM) 555/2025, along with pending applications, if any,
stand dismissed.
92. No order as to costs.

HARISH VAIDYANATHAN SHANKAR, J.
APRIL 27, 2026/jk


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