1 2025:CGHC:52333 NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR ARBR No. 25 of 2025 M/s Aurionpro Solutions Ltd Through Its Authorized Representative Mr. Amit Patil Having Its Registered Office At Synergia It Park,plot R-270, T.T.C. Industrial Estate, Near Rable Police Station, Navi Mumbai, Thane, Maharastra ... Applicant versus Chhattisgarh Infotech Promotion Society (Chips) State Data Center Building, Near Police Control Room, Civil Lines, Raipur Chhattisgarh 492001 ... Respondent For Applicant : Ms. Manasi Chatpalliwar and Mr. Aniruddha Shrivastava, Advocates. For Respondent : Mr. Animesh Tiwari, Advocate. Hon’ble Mr. Ramesh Sinha, Chief Justice Order on Board 27.10.2025 1. This is an application under Section 11(6) of the Arbitration and Conciliation Act, 1996 for appointment of an Arbitrator. 2. The applicants have prayed for the following relief(s): a. Appoint an arbitral tribunal for adjudicating the disputes(s) and differences between the parties to the present petition in terms of Clause 5.19.3 RFP or as may PREETI KUMARI Digitally signed by PREETI KUMARI Date: 2025.10.30 11:00:35 +0530 2 be otherwise agreed between the parties before this Hon’ble Court; and b. Pass any such other further orders as this Hon’ble Court may deem fit and proper as per the facts and circumstances mentioned above. 3. The facts, in brief, as projected by the applicant are that the applicant, Aurionpro Solutions Ltd., is a public listed company incorporated under the Companies Act, 1956. The respondent, Chhattisgarh Infotech Promotion Society ("CHIPS") is the nodal agency and prime mover for propelling IT growth and implementation of the IT e-Governance projects in the State of Chhattisgarh. 4. On 09.09.2016, the respondent issued a Request For Proposal (for short, the RFP) for the ‘Selection of a System Integrator (SI) for implementing Centralized Project Management Software for the Government of Chhattisgarh’. The applicant submitted its bid in response to the RFP issued by the respondent and was declared the successful bidder. Consequently, the respondent issued a Letter of Intent (for short, the LoI) on 28.11.2016 to the applicant confirming that it had emerged as the successful bidder and. further requesting the applicant to issue an acceptance letter within seven days. Complying with the request, the applicant communicated its acceptance by way of an acceptance letter dated 02.12.2016. The applicant was formally engaged as the System Integrator (SI) for implementing the Centralized Project Management Software for Government of Chhattisgarh for five Departments of the Chhattisgarh Government, including the Public Works Department. In furtherance of the engagement under the RFP, the respondent issued the following work orders to the applicant for 3 execution of the work under the RFP: (i) Works Order Ref. No. 1719/CEO/CHIPS/CPMU/2016 dated 16.12.2016; (ii) Order No. 1266/CEO/CHiPs/CPMU/2017 dated 24.07.2017 (iii) Order No. 1364/CBO/CHES/CMU/2018 dated 03.07.2018, and (iv) Additional Work Order No. 2210/FGH/FIJK/CPMU/2018 dated 28.09.2018 5. Ms. Manasi Chatpalliwar and Mr. Aniruddha Shrivastava learned counsel for the applicant submits that the applicant duty performed and satisfactorily completed all tasks and scope of work as set out under the RFP and as outlined in the work orders. It deployed all necessary resources and executed the project in full compliance with the project requirements and within the stipulated timelines. The successful implementation of the Centralized Project Management Software System (CPMS) across the designated departments was duly acknowledged by the respondent through formal project sign-offs and positive feedback. The applicant's consistent adherence to its contractual obligations and the quality of its deliverables were further recognized through the conferment of the prestigious award, i.e., the 2nd edition of Dr. Abdul Kalam Award for innovation in IT applications category, thereby underscoring the effectiveness, reliability, and impact of the CPMS implemented by the Applicant. In consideration of the work successfully completed, the applicant raised invoices seeking payment of about INR 14,99,24,335/- (the ‘outstanding amount’). On 07.10.2021, the applicant issued a letter bearing reference No. ASL/CPMU/2021-22/007 to the Additional Chief Secretary, Hon'ble Chief Minister Secretariat, Government of Chhattisgarh requesting that 4 the respondent be instructed to release an amount of Rs.13,91,03,186/- against the completed work pertaining to the CPMU project. Pursuant to this letter, on 21.10.2021, the Additional Chief Secretary, Hon'ble Chief Minister Secretariat, Government of Chhattisgarh, issued a letter to the respondent, directing them to carry out the needful internal processes and to inform the applicant. The respondent, by its letter dated 18.01.2022 bearing reference No.120/CEO/CHIPS/CPMMU/2022, referred to the applicant's letter dated 07.10.2021, and informed the applicant that payment towards the outstanding amount would be made upon receipt of corresponding outstanding amounts from the Public Works Department. It further informed the applicant that a demand letter had already been sent to the Public Works Department. By way of a letter bearing reference No. ASL/CPMU/2023-24/0010 dated 24.03.2023, the applicant wrote to the Respondent and sought a further payment of Rs.1,08,21,149/-. A reminder letter bearing reference no. ASL/CPMU/2023-2024/0013 dated 30.05.2023, was also sent to the respondent requesting payment of the aforesaid amount. The applicant received no response to these communications. However, despite the acknowledged quality of the services rendered further evidenced by the prestigious award conferred the respondent has failed to make any payments towards the outstanding amount. The applicant has made repeated follow-ups requesting the release of payments; however, the respondent has wrongfully withheld the outstanding amount without any justification, causing significant financial prejudice to the applicant. 6. Learned counsel submits that the applicant is aware that its 5 communications dated 24.03.2023 and 30.05.2023 to the respondent, have been brought to the notice of the Public Works Department by the respondent by way of a communication dated 30.06.2023 sent by the respondent to the Public Works Department. However, no payment has been released by the respondent to the applicant, despite the fact that the communication dated 30.06.2023, addressed to the Public Works Department by the respondent, is a clear acknowledgment of the respondent's liability to the applicant. Despite issuing a final follow-up reminder as recent as 31.12.2024, and making sincere efforts to initiate negotiation as the dispute resolution mechanism under Clause 5.19.3 of the RFP, there has still been no release of the outstanding amount by the respondent. 7. The applicant owes a considerable sum from the respondent, which the respondent has failed to release. In light of this continued default, and the resultant financial prejudice to the applicant, a dispute has arisen under the terms of the RFP. Accordingly, the applicant issued a notice of arbitration dated 17.01.2025, under Section 21 of the Arbitration Act, invoking arbitration under Clause 5.19.3 of the RFP. The relevant clause reads as under: “5.19.3 Dispute Resolution Mechanism The Bidder and the CHiPS shall endeavour their best to amicably settle all disputes arising out of or in connection with the Contract in the following manner:- a) The Party raising a dispute shall address to the other Party a notice requesting an amicable settlement of the dispute within seven (7) days of receipt of the notice. b) Matter will be referred for negotiation between Officer nominated by CHIPS and the Authorized Official of the Bidder. The matter shall then be resolved between them and the agreed course of action documented 6 within a further period of 15days. In case any dispute between the Parties, does not settle by negotiation in the manner as mentioned above, the same may be resolved exclusively by arbitration and such dispute may be submitted by either party for arbitration within 20 days of the failure of negotiations. Arbitration shall be held in Raipur and conducted in accordance with the provisions of Arbitration and Conciliation Act, 1996 or any statutory modification or re-enactment thereof. Each Party to the dispute shall appoint one arbitrator each and the two arbitrators shall jointly appoint the third or the presiding arbitrator. The "Arbitration Notice” should accurately set out the disputes between the parties, the intention of the aggrieved party to refer such disputes to arbitration as provided herein, the name of the person it seeks to appoint as an arbitrator with a request to the other party to appoint its arbitrator within 45 days of the receipt of the notice. All notices by one party to the other in connection with the arbitration shall be in writing and be made as provided in this tender document. Each Party shall bear the cost of preparing and presenting its case, and the cost of arbitration, including fees and expenses of the arbitrators, shall be shared equally by the Parties unless the award otherwise provides. The Bidder shall not be entitled to suspend the Service/s or the completion of the job, pending resolution of any dispute between the Parties and shall continue to render the Service/s in accordance with the provisions of the Contact/Agreement notwithstanding the existence of any dispute between the parties or the subsistence of any arbitration or other proceedings.” 8. In the Notice of Arbitration dated 17.01.2025, the applicant nominated its Arbitrator and called upon the respondent to nominate its Arbitrator 45 days of receipt of the said notice, in accordance with Clause 5.19.3 of the RFP. The notice of arbitration was duly delivered to the respondent on 22.01.2025. However, despite the lapse of the period of forty-five days prescribed in the said notice, the respondent has neither responded nor nominated its arbitrator. In view of the respondent's failure to act in accordance with agreed procedure, the applicant is therefore constrained to approach this Court under Section 11(6) of the Arbitration Act, seeking the appointment of an arbitral tribunal, as envisaged under Clause 5.19.3 of the RFP. The applicant has a strong prima-facie case in its favour, as it has completed all contractual 7 obligations under the RFP and the work orders, and yet, the respondent has failed to make payment towards the outstanding amount against the duly raised invoices. The cause of action first arose when the respondent failed to clear the invoices raised by the applicant, despite the successful completion of work. It further arose when the applicant addressed letters dated 24.03.2023, 30.05.2023, and 31.12.2024, seeking release of payment towards the outstanding amount and made bona-fide efforts at negotiation in terms of Clause 5.19.3 of the RFP. The cause of action also accrued upon issuance of the notice of arbitration dated 17.01.2025 under Section 21 of the Arbitration Act. The cause of action is ongoing and continuing, as the respondent continues to wrongfully withhold the amounts lawfully due to the Applicant. As per Clause 5.19.3 of the RFP, the venue/place of arbitration is Raipur. Accordingly, this Hon'ble Court has the undisputed and exclusive jurisdiction to entertain and adjudicate upon this petition seeking appointment of an arbitral tribunal. 9. Learned counsel for the applicant prays that the dispute between the applicant and the respondent may be referred to arbitration by this Hon'ble Court. This present application has been made bona fide and, in the interest, of justice. 10. Mr. Animesh Tiwari, learned counsel appearing for the respondent relying on the return filed on behalf of respondent, opposes this arbitration request application on the ground that the respondent can make payment to the applicant only on receiving funds from the Public Works Department and the said Department has not been arrayed as a party in this petition. He further submits that the present arbitration 8 petition under Section 11(6) of the Arbitration and Conciliation Act, 1996, is not maintainable as the claims sought to be referred to arbitration are ex facie barred by limitation. As per the settled law laid down by the Hon'ble Supreme Court in Geo Miller & Co. Pvt. Ltd. v. Chairman, Rajasthan Vidyut Utpadan Nigam Ltd., the limitation for filing an application under Section 11 of the Act begins from the date on which there is a failure to act under the arbitration agreement after the issuance of notice under Section 21. In the present case, the invoices relating to the claim were last raised by the applicant as early as 2021. Correspondence relied upon by the applicant, including the respondent's letter dated 18.01.2021 (Annexure A-6), merely stated that the payment was contingent on the release of funds by the Public Works Department. Even assuming this to be an acknowledgment, it does not postpone the accrual of the cause of action indefinitely. He further submits that the last alleged communication from the respondent is dated 30.06.2023 (Annexure A/9), and the arbitration notice under Section 21 was issued only on 17.01.2025 i.e. well beyond the period of limitation prescribed under Clause 137 of the Limitation Act, 1963, which allows three years from the date when the cause of action first arises. Therefore, even if time is reckoned from the raising of invoice on 07.10.2021, the claim is hopelessly barred as the notice under Section 21 itself is beyond the limitation period. It is therefore submitted that the arbitration request must fail on the ground of delay alone. 11. Mr. Tiwari, further submits that the present petition under Section 11(6) of the Arbitration and Conciliation Act, 1996 is not maintainable as the claim is ex facie barred by limitation. The applicant's invoices were last 9 raised on 07.10.2021. The only reference to the claim is a communication dated 18.01.2021, which merely acknowledges the conditional nature of payment dependent on fund release from a third- party Government Department. This does not extend or reset the limitation period. The limitation for invoking arbitration under Section 21 of the Act must be computed from the date when the right to seek reference accrued and not from indefinite follow-up letters. Even computing from 07.10.2021, the arbitration notice dated 17.01.2025 is beyond the permissible three-year window under Clause 137 of the Limitation Act, 1963. The subsequent letters dated 24.03.2023 and 30.05.2023 are mere reminders and cannot extend limitation. It is settled that disputes involving elements of public interest, inalienable sovereign functions, or requiring adjudication of rights under a broader statutory or constitutional framework may be excluded from the scope of arbitration. The present dispute pertains to alleged non-payment of invoices linked with governmental funding and inter-departmental administrative approvals. The very basis of the applicant's claim is that CHiPS was to make payments subject to the release of funds by the Public Works Department a matter squarely within the realm of public finance and policy, involving third-party governmental coordination and appropriation of budgeted resources. Such disputes, involving public law elements and sovereign functions, are inherently non-arbitrable. Moreover, there is no concluded contract between the parties that provides for a binding obligation upon CHiPS to unilaterally make such payments. The applicant seeks to elevate a contingent correspondence or administrative assurance into a legally enforceable obligation, which 10 is impermissible. The so-called dispute raised by the applicant is premature, misconceived, and has not ripened into a justifiable conflict capable of reference to arbitration. The process of fund release is ongoing and cannot be adjudicated in a private arbitration forum. The respondent has not repudiated any contractual obligation but has merely reiterated the conditional nature of payment based on third-party fund disbursement. The process under Clause 5.19.3 of the RFP also mandates negotiation and documentation of a failed settlement attempt. The applicant has failed to establish that these pre-conditions were duly followed, thereby making the invocation defection and premature. As such, he prays for dismissal of this arbitration request. 12. I have heard learned counsel appearing for the parties, perused the pleadings and documents appended thereto. 13. Though the respondent has opposed this arbitration request petition, however, the fact of the matter is that there exists a Dispute Resolution Mechanism under Clause 5.19.3 of the RFP, which provides for arbitration proceedings, this Court deems it appropriate to refer the dispute involved in this petition to the Sole Arbitrator. As such, a query was made to the learned counsel appearing for the parties as to whether they are agreeable for any common name who can be appointed as the Sole Arbitrator, it has jointly been submitted by the learned counsel for the parties that Hon’ble Mr. Justice R.C.S. Samant, who is a retired Judge of this High Court, may be appointed as the Sole Arbitrator. 14. In view of the above consensus between the learned counsel for the parties, Hon’ble Mr. Justice R.C.S. Samant, a retired Judge of this 11 High Court, is appointed as the Sole Arbitrator for resolving the dispute between the parties. The respondent shall be at liberty to raise objections, if any, as has been raised in this petition, before the Sole Arbitrator, if so advised, which may also be looked into by the Sole Arbitrator. 15. The Registry is directed to communicate this order to Hon’ble Mr. Justice R.C.S. Samant in the proper address. 16. The remuneration of the Arbitrator shall be settled with the mutual consent of the parties. 17. The arbitration request petition, accordingly, stands allowed. Sd/- (Ramesh Sinha) Chief Justice Preeti