Delhi District Court
Inter Globe Technology Quotient vs Sharp Travels (India) Limited on 24 August, 2011
IN THE COURT OF MS. NEHA, CIVIL JUDGE03(SOUTH),
SAKET COURT COMPLEX, NEW DELHI
Suit no. 282/2011
IN THE MATTER OF:
Inter Globe Technology Quotient
Private Limited (ITQPL),
Through its Authorized Representative
Mr. Mukund Thakkar
Ground Floor, Central Wing,
Thapar House, 124, Janpath,
New Delhi110001 ......Plaintiff
Versus
Sharp Travels (India) Limited,
111113, Somdutt ChanberII,
9, Bhikaji Cama Place,
New Delhi110066. ......Defendant
DATE OF RESERVING THE ORDER : 04.08.2011
DATE OF DECISION : 24.08.2011
ORDER
Vide this order I shall decide the application of the plaintiff under Order 39 Rule 1 and 2. The facts of the case as per the plaint 1 are as under:
The plaintiff is engaged in the business of the provision of Travel related solution and service in the Travel Industry. The plaintiff is the sole and exclusive distributor of Global Distribution System known as Galileo System in India. The plaintiff made an offer to the defendant and the parties entered into the subscriber agreement on 01.10.2010 thereby the defendant agreed to use the Galileo System as its sole and exclusively GDS with only one exception. In consonance with the terms and conditions of the subscriber agreement, the plaintiff provided equipment to the defendant. Plaintiff has agreed to pay an upfront advance of Rs. 27 lakhs to the defendant which was to be set off against the incentive payments to be made by the plaintiff to the defendant. As per the agreement parties can terminate subscriber agreement only after either of the parties seize to carry on business or those into the liquidation. The defendant vide notice dt. 01.6.2011 terminated the subscriber agreement with effect from 01.7.2011. The plaintiff has replied to the said notice dt. 01.6.2011 and objected to the arbitrary act of the defendant in terminating subscriber agreement. It is alleged that the defendant has without any justification terminated the agreement. Hence, the plaintiff has filed the present suit for 2 permanent injunction thereby restraining the defendant from using any other GDS except Galileo System for its business activity and operation.
In application under Order 39 Rule 1 and 2 CPC, the plaintiff has prayed for interim injunction thereby restraining the defendant from using any other GDS except the Galileo system for its business activity in contravention to the subscriber agreement dt. 1.10.2010.
The defendant has filed written statement and reply to application under Order 39 Rule 1 and 2 CPC. The defendant has denied the allegation of the plaintiff in the plaint and has submitted that before the service agreement dt. 1.10.2010, the plaintiff and the defendant had earlier signed two agreement initially in the year 20082009 and subsequently 20092010. As per the terms of the agreement dt. 1.10.2010, the plaintiff has to provide subscription to their Galileo system along with the software and hardware terminals. However, on the expiry of the previous agreement on 30.9.2010, a fresh agreement has been signed but the terminals were not replaced by the plaintiff and the defendant was forced to work on old and out dated machines. As per the statement maintained by the defendant the total incentive of approximately Rs. 18,50,000/ has been adjusted by 3 the plaintiff. It is also alleged that the plaintiff has not come to court with clean hands. Therefore, it is not entitled to the equitable relief of interim injunction.
I have perused the material on record and carefully considered the submission of the Ld. Counsel for the parties.
It is a settled principle of law that before granting interim injunction a court must satisfy itself on three cardinal principles: (1) There must exist prima facie case in favour of the plaintiff.
(2) Balance of convenience must lie in favour of the plaintiff.
(3) Plaintiff must show that irreparable injury would be caused if relief is not granted.
All three principles must coexist.
The plaintiff has placed on record copy of subscriber agreement dt. 1.10.2010 in which Clause 6 of the agreement contains the consequences of termination. Ld. Counsel for the defendant has argued that the notice dt. 1.6.2011 was not given under Clause 6(b) but it was given under Clause 6(d) of the agreement. As per the agreement in case of unilateral termination by the defendant the plaintiff shall be 4 entitled to return of the total investment incurred by the plaintiff including the cost of the equipment and software and software products and any other equipment and such other amounts that have been paid by the plaintiff to the defendant together with interest at the rate of 18% per annum.
Ld. Counsel for the plaintiff has argued that the agreement was to remain in force for a period of two years w.e.f. 01.10.2010. Clause 6(b) of the agreement, provides the circumstances in which the agreement can be terminated and as per the agreement, the defendant shall use the Galileo system as the only GDS for any & all of its operation in India.
Ld. Counsel has relied upon judgment of Hon'ble High Court of Delhi in Frank Simoes Advertising (Pvt.) Ltd. Vs. Hada Leasing and Indus Tries Ltd. & Ors. 35 (1998) DLT 283 wherein Hon'ble Court has held that where negative covenant of agreement provided that the defendant shall pay and clear all outstanding dues before it enters into contract with any third party can be enforced.
On the other hand, Ld. Counsel for the defendants has argued that the clause 6(d) of the agreement provided for compensation in case of arbitrary termination of agreement by the 5 defendant company. Ld. Counsel has also submitted that due to poor service provided by the plaintiff company the defendant was left with no other option except to terminate the agreement.
Along with the WS defendant has filed, copy of emails sent to the plaintiff vide which the defendant has complained about old and outdated system and complaint regarding customer care executives of the plaintiff.
Plaintiff has not placed on record the reply sent to the defendant of these complaints and whether these grievances were redressed or not.
Perusal of the agreement dated 01.10.2010 shows that clause 2(a) of the agreement provides that the defendant shall use the Galileo System as the (only) GDS for any and all its operation in India.
Clause 6(d) of the agreement provide for consequences of unilateral termination by the defendant company. It provides that in case the defendant company terminates the agreement unilaterally without any cause, the defendant shall be liable to return the total investment etc. The agreement dated 01.10.2010 also does not contain any 6 negative covenant restraining the defendant from entering into agreement with any third party.
In the present case, communications (copy of emails) placed on record by the defendant shows that the service provided by the plaintiff was not upto the mark.
Ld. Counsel for plaintiff in written submissions has submitted that its a matter of evidence whether the services provided by the plaintiff was poor and defendant could not have done business of Rs.18.5 lakhs if the services provide by the plaintiff was poor. The plaintiff has relied upon clause 4(a) of the agreement which is 'as in where is' clause.
Plaintiff has admitted that about amount of Rs.15 lakhs has been earned as incentive . Ld. Counsel for the plaintiff has submitted that without paying compensation to plaintiff, the defendant can not enter into agreement with any third party.
However this court is of the opinion that the agreement does not contain any such negative covenant as in any case of Frank Simoes Advertising (Pvt.) Ltd. Vs. Hada Leasing and Indus Tries Ltd. & Ors. 35 (1998) DLT 283. The clause 6 (b) of the agreement specifically provides for compensation in case of unilateral 7 termination by the defendant.
In view of above discussion, this court is of the opinion that no irreparable injury will be caused to the plaintiff which can not be compensated in terms of money in the circumstances of the present case. One of the ingredient for granting interim injunction is not fulfilled in the present case.
Hence, the application of the plaintiff under Order 39 rule 1 and 2 CPC is dismissed and disposed off.
Nothing discussed herein above shall amount to expression of opinion on the merits the case.
Announced in the open court today .i.e. 24.08.2011 (NEHA) Civil Judge03(South) Saket, New Delhi.
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