Bombay High Court Dismisses Cross Petitions, Upholds ₹96.20 Lakh Award Against TCS In Server Supply Dispute With Inspira
Sanchayita Lahkar
The High Court of Bombay Single Bench of Justice Sandeep V. Marne upheld an arbitral award directing Tata Consultancy Services Ltd. to pay about Rs 96.20 lakh to Inspira IT Products Pvt. Ltd., along with interest and costs, for losses on 207 servers and monitors purchased for a postal project but not delivered after TCS failed to finalise delivery locations. Dismissing cross-petitions filed under Section 34 of the Arbitration and Conciliation Act by both the implementing agency and the hardware supplier, the Court found no perversity or patent illegality in the 2023 award and accepted the arbitrator’s conclusion that TCS remained liable to pay for equipment it had caused Inspira to procure, while sustaining the deduction towards unrendered support services.
The dispute arose from three purchase orders issued by Tata Consultancy Services Ltd. (TCS) to Inspira IT Products Pvt. Ltd. for supply of IT hardware in connection with the Department of Posts project. The controversy concerned Purchase Order dated 24 June 2013 for 207 HP ProLiant Tower ML350 servers and 207 monitors valued at ₹4,08,82,385/-.
Inspira claimed that it procured the user-specific servers from Avnet Technologies vide invoice dated 27 December 2013 and held them in storage as TCS did not provide delivery locations within the contractual timeline. TCS asked for delivery of only eight servers on 21 October 2013 at multiple locations across different states. Inspira replied on 22 October 2013 that “piecemeal billing” was not possible and sought consolidated billing for all units. Inspira later requested approval to reverse the servers to HP; TCS asked Inspira to wait while it finalized delivery dates. Correspondence between TCS, Inspira and HP continued through 2014 regarding possible reversal of servers, which HP declined, stating they were user-specific.
Inspira eventually sold the servers to Comprint Computers for ₹2,23,14,600/- and reversed monitors worth ₹13,04,100/-. Inspira initiated arbitration claiming the difference between the purchase order value and the recovered amount. TCS challenged the award under Section 34; Inspira filed a cross-petition disputing deduction of support charges.
The Court recorded that the arbitral findings were based on correspondence demonstrating that TCS continued to treat the contract as subsisting even after the agreed delivery date. It noted the arbitrator’s examination of emails where TCS indicated willingness to accept delivery after 20 July 2013. The Court stated that “TCS itself never treated time as the essence of contract” and that disclosure of eight locations only on 21 October 2013 showed that TCS “expected delivery…after 21 October 2013”.
The Court observed that Inspira’s 22 October 2013 email reflected an objection to piecemeal billing, not refusal to supply. It recorded that “Inspira requested for timeline… and it is an admitted position that TCS never indicated any delivery location”. The Court also stated that when Inspira sought approval for reversal, “TCS responded…requesting it to wait for confirmation before proceeding further”.
The judgment noted extensive correspondence with HP showing TCS’s acknowledgment that servers were procured. TCS wrote to HP that UAT was scheduled in May 2014 and delivery was likely in June, which the Court quoted: “I did mention June as the likely date for us to have these delivered”. The Court recorded TCS’s email urging HP to divert the servers to other clients, describing it as “a request that I have from you as our Partner in this large Program”.
HP’s refusal to take the servers back was also noted: “these shipments were made…against a firm PO… It is not possible for us to take back this material”.
Regarding TCS’s allegation that Inspira never procured servers, the Court stated that such a plea was contrary to TCS’s own conduct, recording that “the correspondence… clearly reflects that far from TCS treating the contract as having come to an end, it always believed that it had liability to pay”. The Court further recorded that “the evidence on record thus clearly demolishes the case of TCS that Inspira had not procured the Servers”.
On mitigation, the Court noted that Inspira attempted reversal in November 2013 but TCS instructed it not to proceed. It stated “there was no occasion for Inspira to sell the servers immediately after 20 July 2013” and that Inspira ultimately “mitigated the losses by managing to sell the servers”.
The Court concluded that the arbitrator’s view was a plausible interpretation based on contractual clauses and evidence.
The Court recorded: “I therefore do not find any valid reason to interfere in the impugned Award. The Award of the Arbitral Tribunal does not suffer from any of the enumerated vices under Section 34 of the Arbitration Act. The approach of the learned Arbitrator in making the Award is judicial as the findings recorded by him are based on contractual clauses and evidence on record and the same are plausible. The learned Arbitrator has not rewritten any contractual terms nor has overlooked any material evidence before it. I therefore do not find any valid reason to interfere in the impugned Award.”
“Both the Arbitration Petitions are accordingly dismissed with no further order as to costs.” It additionally observed: “Since the Arbitral Tribunal has already awarded costs of arbitration in favour of Inspira with directions to pay interest @ 9% per annum with effect from 1 March 2016 till payment and/or realization, I deem it appropriate not to impose any further costs on TCS.”
Advocates Representing The Parties
For the Petitioners: Ms. Fereshte Sethna, Mr. Mohit Tiwari, Mr. Prakalathan Bathey, Ms. Naomi Ting, Ms. Sushmita Chauhan, Mr. Tarang Saraogi, instructed by DMD Advocates
For the Respondents: Mr. Rohan Savant, Ms. Vidhi Karia, instructed by Jayakar & Partners
Case Title: Tata Consultancy Services Ltd. v. Inspira IT Products Pvt. Ltd.
Neutral Citation: 2025: BHC-OS:23148
Case Number: CARBP 415/2024 with ARBP 372/2024
Bench: Justice Sandeep V. Marne
