In a recent court decision, the Bombay High Court dealt with a disagreement between the State of Maharashtra and Bhartiya Samruddhi Finance Ltd. about a project involving rural service centers. The case was about missed deadlines, connectivity problems, and money disputes.
Back in 2011, Bhartiya Samruddhi Finance Ltd. (Samruddhi) made a deal with the State of Maharashtra to set up 1,362 Common Service Centers (CSCs) to provide information about state services. The plan was to roll these out over five years, but things didn’t go as planned. Samruddhi faced delays, blaming poor internet connections, especially in rural areas like Nandurbar district.
"The lack of internet in several villages was a major problem," Samruddhi claimed.
Samruddhi was supposed to earn through transaction fees and financial help from the state. However, they argued that they were owed about Rs. 7.66 crores, plus interest, because the state refused to pay for the CSCs that were delayed.
On the other hand, the state claimed it suffered losses due to these delays and wanted Rs. 7.62 crores in penalties.
The Arbitral Tribunal agreed with Samruddhi, saying they deserved the Rs. 7.66 crores, but without interest. They noted that expecting Samruddhi to provide the final connection to the internet was unreasonable.
"Samruddhi cannot be expected to provide telecom services on its own," the tribunal remarked.
Judge Somasekhar Sundaresan supported the tribunal's decision, emphasizing that the lack of connectivity was a significant barrier. The judge also pointed out that the state’s claim for penalties lacked evidence of actual loss.
"The claim for penalties without showing loss is not justified," the court concluded.
While Samruddhi challenged the lack of interest awarded, the court supported the tribunal's choice, noting the complexities both parties faced due to the connectivity issues.
The court upheld the decision that Samruddhi should be paid Rs. 7.66 crores without interest, as the state did not prove actual losses for their claim of penalties.
