Friday, March 15, 2024

In contractual dispute between the parties, no criminal liability arises: Justice Bibek Chaudhuri, Patna High Court

Bangalore based KEONICS, Datacon Technologies Pvt. Ltd conducted entire work of data entry establishment of data center, but IEMS not operational till date: Department of Prohibition, Excise and Registration, Bihar

In  Dileep Kumar v. State of Bihar, the judgement of Patna High Court's Justice Bibek Chaudhuri held that "this Court is of the opinion that for the dispute between the parties, no criminal liability arises. Therefore, I have no other alternative but to quash the criminal proceeding against the petitioners in both the writ petitions." In effect, his March 2024 judgement endorses the interim order passed by Justice Rajeev Ranjan Prasad in September 2022.

The case was filed on July 13, 2022 for quashing of FIR dated June 2, 2022 registered under Sections 353, 420, 406 and 120B of the Indian Penal Code (IPC) and all other consequential proceeding. The criminal writ was registered on August 3, 2022. The case arose out of PS. Case No.-82 Year-2022, Thana- Sachivalaya, Patna.

There were six petitioners including Dileep Kavitha, Director Datacon Technologies Pvt Ltd, South Bangalore, Bengaluru, Karnatka, Raghavendra Narayan Kulkarni, Amresh Singh, Ex Project Incharge, Datacon Technologies Pvt Ltd, Patna, Pramit Kumar Keshari System Administrator/ Data Centre Expert, Datacon Technologies Pvt Ltd, Dhanbad, Jharkhand and Datacon Technologies Pvt. Ltd. through its Director Dileep Kumar. The five respondents were Director General of Police, Bihar, Patna, Senior Superintendent of Police, Patna, Officer-In-charge, Sachivalaya Police Station, District Patna and Krishna Kumar, Deputy Commissioner, Prohibition, Excise and Registration Department, New Secretariat, Patna.

Bihar State Beverages Corporation Limited (BSBCL) and Karnataka State Electronics Development Corporation Limited (KEONICS) entered into a contract on January 16, 2017, by executing a Master Service Agreement (MSA) as Total Solution and Service Provider (TSSP) to implement the project of IEMS for the Department of Prohibition, Excise and Registration, Government of Bihar. KEONICS undertook the project of IEMS through its impanelled agency Datacon Technologies Private Limited. the sixth petitioner.  

The FIR alleges that he the KEONICS, the vendor has not completed the project by the prescribed time limit and the vendor of the Datacon Technologies Pvt. Ltd. failed to provide required infrastructure. There was some problem from very beginning of the project. The petitioner contended that the project could not be completed because of negligence on the part of the department. Despite issues raised by ‘KEONICS’ the department did not take remedial measures. It was pointed out that the agreement contains an arbitration clause. The petitioner's counsel submitted that the FIR reveals that the allegations are in the nature of a complaint with regard to deficiency in service which cannot give rise to a criminal proceeding. He submitted that the Deputy Commissioner, Prohibition, Excise and Registration Department, Bihar misused his position as a government servant and influenced the officer in-charge of Sachiwalaya police station to register a criminal case against the petitioners. 

On September 29, 2022, the Court had passed an interim order wherein it observed that the allegations are at best in the nature of a complaint against deficiency in service or a breach of contract by the vendor, the sixth petitioner.  Justice Rajeev Ranjan Prasad's interim order reads: "this Court directs that till further order, no coercive action shall be taken against the petitioners."     

The petitioners submitted that the Department committed contractual breach in the form of Master Service Agreement, which nowhere prescribed for criminal liability against the other party. Moreover, IEMS is having detailed provision for dispute resolution which includes escalation, mediation and provision of arbitration clause as per Arbitration and Conciliation Act, which can be invoked in case the complainant Department has any grievances against the vendor i.e. KEONICS. The respondents submitted that on behalf of KEONICS, Datacon Technologies Private Limited conducted entire work of data entry establishment of data center, but they have not made IEMS operational till date. 

The petitioners' contended that the entire dispute cropped up on the question of non-payment of money which the Datacon Technologies Private Limited claimed for their work through KEONICS.

The final judgement dated March 15, 2024 reads: "BSBCL, KEONICS and Datacon Technologies Private Limited are directed to sit together to resolve their grievances within four weeks from the date of this order, so that IEMS may be made operation, subject to any technical glitches and the question regarding payment or non-payment of the costs for the project shall be determined directly between BSBCL and KEONICS."

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