The Madras High Court has dismissed intra-court appeals by Chennai-based Gemini Communications Ltd seeking interlocutory injunction, restraining Bharat Sanchar Nigam Ltd (BSNL) from terminating its purchase order for supply, installation, commissioning and maintenance support of WiMax equipment for the Rural Wimax Project-II, a turnkey project designed to support the central government to implement national e-governance project using WiMax technology.
The legal dispute on a purchase order worth Rs 378 crore, placed by BSNL to Gemini Communications to supply, install and maintain WiMax equipment in June 2010, was triggered after BSNL issued a show-cause notice to the latter, indicating its decision to terminate the purchase order since the company did not complete the supply within the stipulated time. Gemini Communications has also alleged that BSNL was also planning to invoke the performance bank guarantee.
The value of the purchase order issued to Gemini Communications in June, 2010, was of Rs 378 crore, while the company argued that the value, as per the advance purchase order dated December 16, 2009, was around Rs 434.34 crore, which BSNL cut down unilaterally. For the purchase order of Rs 378 crore, the company had submitted a bank guarantee for a sum of Rs 19.27 crore.
The high court bench, has dismissed the intra-court appeals, stating that the observations and findings of the bench “would not stand in the way of the single judge deciding the civil suit on merits and as per law, uninfluenced by any such observation”.
The court has observed that BSNL was well within its authority to terminate the contract and because of the delay caused by Gemini Communications, BSNL was put to difficulties and in case the injunction was granted, the respondent (BSNL) would be put to irreparable loss and the public interest would suffer materially.
When contacted, Gemini Communications spokesperson abstained from comments stating that the matter was subjudice, since the matter was pending with the court.
The Rural WiMax Project-II is a part of the government's decision to provide connectivity to common services centres under the National e-Governance Project.
For which the total estimated cost of the tender was Rs 1,167 crore. The order was given to four companies including Gemini Communications, ZTE Corporation, ICOMM Tele and VMCL, of which BSNL has submitted to the court that the other three companies had completed their works within the time granted to them. BSNL was entrusted by the department of information and technology, Government of India, to implement the Rural WiMax Project-II.
Gemini Communications had bagged the order to install base station with respect to 2,707 project centres, while ZTE Corporation had 1,718 project centres. ICOMM had received order for 1,357 centres and VMCL for 949 centres, according to the details furnished by BSNL to the court.
BSNL has alleged that even after it had given extension of deadline to the Chennai-based firm, it did not complete the project and sought more time for completion. Gemini Communications,on the other hand, has submitted that BSNL was not ready to issue the 40 per cent of the invoice amount taking into account the quantity delivered.
The company argued that it has supplied 955 BTS and the 40 per cent of the invoice amount could have helped the company to deliver supplies on time. The supplies were also delayed since the purchase order and later the import licence were delayed by BSNL, the company argued. However, the court has rejected all the contentions raised by the company, dealing with one after another under specified heads.
The court, in its findings, said that the appellant (Gemini Communications ) was expected to complete the project originally by September 30, 2010, which was extended up to January 13, 2011, then to December 31, 2011 and later, in a final extension given on February 7, 2012, to April 30, 2012.
However, BSNL has issued the show-cause notice before the final extended deadline for which Gemini Communications replied with a request for further extension for a period of six months. The company also bagged an interim injunction against the move in the end of March, 2012, which was vacated by the court in September, 2012. It was against this decision, the company approached the division bench of Madras High Court with intra-court appeals.
