Quick Summary: Bhartiya Samruddhi Finance Ltd. (Samruddhi) had a disagreement with the State of Maharashtra over a project to set up service centers in rural areas. The court supported a decision favoring Samruddhi, giving them compensation but no interest for the time before the decision.
In 2011, Samruddhi made a deal with Maharashtra to set up 1,362 Common Service Centers (CSCs) in rural areas. These centers were supposed to provide information about government services using technology. The agreement included financial help from the state, called "viability gap funding," to cover costs for the rural centers.
Samruddhi had trouble meeting deadlines because there wasn't enough broadband connectivity, especially in remote areas. They asked for more time, but the state said no, leading to a disagreement over payments. Samruddhi asked for about Rs. 7.66 crores, while the state wanted penalties for delays.
The group deciding the case agreed with Samruddhi, saying the connectivity problems were not their fault. They were given Rs. 7.66 crores, but no interest for the time before the decision. The group noted that the state had delayed funding, which made it harder to set up the centers.
The group found that Samruddhi couldn't be blamed for not providing the final part of the internet connection, as they weren't internet providers. The state was supposed to help with this using existing networks, which they didn't do well.
"The CSCs could evidently not have been rolled out where there was no telecom broadband connectivity."
The court mentioned a previous decision by the Supreme Court in the Kailash Nath case, emphasizing that losses must be proven. The decision not to give interest was also supported, as it was seen as a fair adjustment.
The court decided not to change the arbitration award, saying it was fair and based on strong evidence. Both challenges to the award were dismissed, and any money held as deposits was ordered to be released.
