UP Govt Cannot Evade Arbitration by Claiming Secretariat Distinction, Rules Bombay HC

The Bombay High Court has refused to interfere with an arbitral award directing payment of more than five crore rupees to Tata Consultancy Services (TCS), which had been engaged for an online recruitment process, firmly rejecting a challenge mounted by the UP Govt. under Section 34 of the Arbitration and Conciliation Act, 1996.

The Court held that none of the objections raised, whether relating to jurisdiction, frustration of contract or quantum, met the narrow threshold for setting aside an award, and concluded that the arbitral tribunal had taken a fully plausible view based on the evidence.

The Court emphasised that the UP Government could not defeat enforcement on the ground that the agreement had been signed through its legislative assembly secretariat, nor rely on the subsequent cancellation of the examination to argue that the contract had become void.

Justice Sandeep V Marne observed that “The award is not rendered invalid by reason of addition of State of UP while describing the UPLA Secretariat during the course of arbitration proceedings” and held that the objection was a “hyper-technical” defence aimed solely at defeating enforcement. The Court agreed with the tribunal’s reasoning that for the purpose of legal proceedings, the legislative assembly secretariat cannot be treated as wholly distinct from the UP Govt., particularly since the contract was signed by its principal secretary and all proceedings were defended through the same office.

It relied on the Supreme Court’s observations in Pashupati Nath Sukul that the term “Government” may include the Legislature depending on context.

The Court also extracted and accepted the tribunal’s conclusion that all services under the agreement had been completed, and further concurred with the finding that “there was nothing left to be done” when the examination had been conducted and all required data supplied by TCS.

On the plea of frustration, the Court quoted the Supreme Court’s ruling in Boothalinga Agencies to reiterate that Section 56 of the Contract Act cannot apply where the impossibility is “self-induced”.

The underlying dispute stemmed from an agreement entered into in 2015 for conducting an online recruitment examination consisting of application management, allocation, test administration, evaluation and result processing. The examination was conducted for over seventy-seven thousand candidates across two days and invoices were issued the same day.

Months thereafter, the competent authority cancelled the entire examination citing irregularities discovered in an unrelated recruitment handled elsewhere, following which TCS sought payment and invoked arbitration when no amount was released. A sole arbitrator was appointed by order of the High Court in 2019.

The tribunal upheld TCS’s claim, declared the termination illegal, awarded the full contractual value with interest, and rejected jurisdictional and statutory objections raised by the UP Government under Sections 16 and 23 of the Arbitration Act. These findings were challenged in the Section 34 proceedings decided in the present judgment.

Before the Court, the UP Govt. argued that the arbitral proceedings were void since the agreement was executed only with the legislative assembly secretariat and not the Government of Uttar Pradesh, and that no award could be enforced against the State because it was not a signatory. It was further submitted that the contract had become void under Section 56 due to cancellation of the examination, that non-publication of results meant that services were incomplete, and that at best TCS was entitled only to compensation for expenses incurred. These submissions were countered on the basis that the contract had been fully performed, no fault had been found in the examination actually conducted, and that the cancellation relied upon by the UP Govt. was unrelated to any act attributable to TCS.

The Court reviewed the contemporaneous correspondence, including repeated requests from TCS seeking data required to prepare results and the admission that such data had not been provided. It noted the tribunal’s detailed factual findings that no deficiency was recorded in the conduct of the examination, and that investigations concerning the unrelated recruitment did not implicate TCS.

Observing that the cancellation occurred after the examination was fully conducted, the Court held that the UP Govt. could not “take advantage of its own decision” to cancel the examination in order to invoke frustration. The Court stressed that once the arbitral tribunal had on evidence concluded that TCS had completed all services under the agreement, the doctrine of frustration could not be invoked at all. It further held that Section 70 of the Contract Act had no application since the contract was express and fully performed.

On the enforcement and jurisdictional aspect, the Court gave significant weight to the fact that the UP Govt. itself had, during Section 11 proceedings, sought the amendment that resulted in the State being impleaded through its legislative assembly secretariat. It held that the petition could not later be used to challenge its own procedural posture. Taking note that the petition under Section 34 was verified by the principal secretary of the secretariat, the Court found no prejudice caused and rejected the argument as inconsistent.

Case title: State of Uttar Pradesh through Uttar Pradesh Legislative Assembly Secretariat v. TCS

Bench: Justice Sandeep V Marne

Date of judgment: 25.11.2025