IIT Jodhpur and Aakash manufacturer dispute reaches Supreme Court
The case between Canadian firm Datawind and IIT Jodhpur over the allegedly illegal en-cashing of a Rs. 50 lakh bank guarantee has reached the Supreme Court.
Datawind has alleged that the IIT fraudulently encashed the Rs 50 lakh bank guarantee as compensation for damages it suffered due to the Canadian firm’s failure to deliver the tablets on time, and pleaded with the court to appoint an arbitrator to resolve the dispute. The petition was admitted by Justice S S Nijjar, who further issued a notice to the IIT to respond to it within four weeks.
In its petition, Datawind claimed that “no losses were sustained by the IIT and that the petitioner was not even paid its dues for supply of LCADS already supplied to them. Invocation of the bank guarantee was totally fraudulent and illegal. It was the respondent whose omission and actions delayed the entire project.” Furthermore, the firm added that it had sent a communique to the IIT to appoint an arbitrator in accordance to the April 4, 2011 agreement, but the institute did not deign to respond.
Since the company was incorporated under British law, the firm claims that the arbitration will be an international commercial arbitration. The dispute dates back to April 2011 when the IIT placed a Rs 4,772 lakh order for 100,000 Low Cost Access-cum-Computing Devices — better known as Aakash – with Datawind.
However, soon after the firm supplied the first 500 tablets, the IIT rejected them as defective – in the quality of sound, ability to hang and swing them from charger port cable, loose flap and other such.
Datawind termed the rejection as arbitrary and claimed that the IIT’s role was limited to procuring the tablet and there was no input in terms of design, creation or manufacture of the tablet.