Bangalore District Court
White Business Infotech Retail ... vs Mr.Kumar Gaurav on 21 November, 2022
1 Com.O.S.No.445/2022
In the Court of LXXXIV Addl. City Civil and Sessions
Judge (CCH-85 Commercial Court) Bengaluru
Dated this the 21st day of November 2022
Present : Smt.H.R.Radha, B.A.L., L.L.M.
LXXXIV Addl. City Civil and Sessions Judge,
(CCH-85 - Commercial Court)
Bengaluru
Com.O.S.No.445/2022
Plaintiff White Business Infotech Retail Research and
Development India Pvt. Ltd., registered office
at Nova Tech, #46/4, Kudlu Gate, Hosur
Road, HSR Extension, Bengaluru - 560 068
represented by its authorized signatory
Mr.Venugopal
(By Sri.Rakesh B.Bhatt, Advocate)
Vs
Defendant Mr.Kumar Gaurav, S/o Vishwanath Prasad,
aged about 36 years, W202, Tamara Pride
Apartment, West owners Court, Central Jail
Road, Kasavanahalli, Bengaluru - 560 035
(By Sri.M.A.Subramani, Advocate)
Date of Institution 19.03.2022
For damages for breach of
Nature of suit contract with counter claim
for recovery of money
2 Com.O.S.No.445/2022
Date on which the First Case
Management Hearing took 06.09.2022
place
Date of commencement of
23.09.2022
recording of evidence
Date on which judgment 21.11.2022
pronounced
Time taken for disposal Years Months Days
1) Total duration 00 08 02
2) From the date of First
Case Management Hearing 00 02 15
LXXXIV Addl. City Civil and Sessions Judge,
(CCH-85 Commercial Court), Bengaluru
JUDGMENT
This is a suit for damages of Rs.15,00,000/- from the defendant for breach of contract with cost of the proceedings and future interest at 18% p.a.
2. The plaintiff's case in brief is that they are an incorporated company engaged in the business of Information Technology related works including research and development of software. 3 Com.O.S.No.445/2022 Having developed first version of Sales and Services Management System ('SSMS' for short) to sell electronic goods and provide services during 2012-13, they approached Primo Vision for upgrading the software. The defendant, as an employee of Primo Vision handled the same and the software was delivered in 2013-14 and licensed to Horolab company; and the software was further upgraded to eSSMS 3.0. During 2017, the defendant approached them assuring to build new software on 'micro service architecture' platform with features like micro services applications as per their working requirement and entered into Non Disclosure Agreement on 01.08.2017. During December 2017, timeline for completion of the project was finalized and the defendant sent initial scope of work by email dated 19.12.2017 dividing the project into three phases and to take sabbatical so that the project could be completed in time. They issued purchase order dated 01.01.2018 for eSSMS BIRRD PRO for Rs.7,79,800/- and the defendant agreed to develop and deliver the software on or before 30.06.2018. They paid to the defendant Rs.5,57,000/- including TDS but he failed to carry out the work in timely manner; not even 40% of the work was 4 Com.O.S.No.445/2022 completed in June 2018. At this stage, the defendant wanted to hire more technical people as he was joining the company and assured to complete the work with short extension of time. By then they had invested huge sum of Rs.40,00,000/- and also lost various business opportunities due to delay attributable to the defendant. Therefore, legal notice dated 24.11.2020 was issued demanding damages of Rs.40,00,000/- and the defendant denied the liability by reply dated 23.12.2020. Besides suffering loss of Rs.40,00,000/- they have also incurred other expenditure to the tune of Rs.2,29,000/- but are confining the claim of Rs.15,00,000/-.
3. The defendant has filed the written statement with counter claim for Rs.6,47,800/- with interest at 6% p.a. contending that Mr.Pawan Hegde of the plaintiff approached him to develop new software on "micro service architecture and there was no concluded contract with regard to cost and time for completion of the project. The Purchase Order ('PO' for short) was sent on 31.01.2018 but he did not accept the cost mentioned therein. Mr.Pawan Hegde orally assured to take care of the payment and the cost to be paid depending upon the 5 Com.O.S.No.445/2022 volume of the work. In fact Mr.Pawan Hegde was aware that he was on sabbatical only for six months and also the project progress from January 2018 to June 2018. During the said period he has done more than what was discussed with Mr.Pawan Hegde. Despite joining the company back he continued to work on this project during spare time, but the plaintiff neither compensated for additional support after July 2018 i.e., procuring men and training them. The plaintiff has failed to make timely payments including the bill for June 2018 for Rs.2,22,800/-. He is not at fault and not liable for the alleged loss; the plaintiff's representative used to dictate unachievable timeline and the time short up due to expansion in the scope of work. Wakatime.com has captured the number of hours coded by him. As per Gitlab.com, a source code depository which has the software code, the last work done by him was on 01.06.2020. He has spent Rs.1,25,000/- towards additional features, Rs.50,000/- towards supporting WBMS development, including remuneration for additional hours and extended support and unpaid invoice and the plaintiff is liable to pay Rs.6,47,800/- with interest at 6% p.a. 6 Com.O.S.No.445/2022
4. The plaintiff has filed the written statement to the counter claim contending that the same is time barred and denying that Mr.Pawan Hegde approached the defendant assuring to pay handsomely for developing the new version of eSSMS software. It was the defendant who assured to develop the same within six months and based on the same, PO was issued. The invoice of June 2018 is in connection with PO, payment is made in furtherance of PO and thus they have acted on the PO. It was the defendant who sent overall system architecture based on micro services approach for development of the software but failed to complete the same and to hand over the technical documentation; admin micro service, repair micro service, invoice micro service, delivery micro service and report micro service attended to by the defendant are incomplete and none of the modules meet the acceptance criteria. The defendant has cheated them and made to part with more than Rs.5,00,000/-. Though they are not liable to pay any amount to the defendant, the counter claim is raised only to drag the proceedings and to cause them wrongful loss. 7 Com.O.S.No.445/2022
5. At the stage of admission and denial of documents U/O XI Rule 4 CPC as amended by Sec.16 of the Commercial Courts Act, Ex.P1 to P8 are marked for the plaintiff and Ex.D1 to D3 for the defendant subject to production of certificate U/s 65B of the Indian Evidence Act in respect of Ex.P2 to P4 and P8 and Ex.D1 to D3.
6. Based on the above, this court has framed the following:
ISSUES
1. Whether the plaintiff proves that the defendant had agreed to develop the software "eSSMS BIRRD PRO" for Rs.7,79,800/- within six months from 01.01.2018?
2. Whether the plaintiff proves that he has invested about Rs.40,00,000/-
in the project?
3. Whether the plaintiff proves that the defendant delayed completion of the project in spite of receiving Rs.5,57,000/- (including TDS) between 31.01.2018 and 13.06.2018?
4. Whether the defendant proves that there was no concluded contract between him and the plaintiff with regard to time and cost of the project?
8 Com.O.S.No.445/2022
5. Whether the defendant proves that he has been delivering codes, managing a team, providing support and training new people of the plaintiff even after June 2018?
6. Whether the defendant proves that his invoice for Rs.2,22,800/- for the month of June 2018 is unpaid?
7. Whether the defendant proves that he has incurred expenses of Rs.1,25,000/- for additional features and Rs.50,000/- for development of supporting WBMS?
8. Whether the defendant proves that the plaintiff is liable to pay Rs.1,00,000/- for additional hours from January to June 2018 and Rs.1,50,000/- for extended support?
9. Whether the plaintiff is entitled for damages of Rs.15,00,000/- from the defendant and interest at 18% p.a. from the date of suit, as prayed?
10. Whether the defendant is entitled for Rs.6,47,800/- from the plaintiff and interest at 6% p.a. from 15.07.2022 being the date of counter claim, as prayed?
11. What Order or Decree?
9 Com.O.S.No.445/2022
7. Pw1 and Pw2 are examined on behalf of the plaintiff and they have filed affidavits in lieu of examination in chief. Ex.P9 to P20 are marked through Pw1 and Ex.P21 to P28, through Pw2. The defendant confronted to Pw1, photocopy of the Board Resolution dated 16.03.2021 produced along with the plaint and it is marked as Ex.P29. Copy of the defendant's email dated 25.06.2018 sent to Pw2 and attachment to Ex.P8 confronted to Dw1 during cross examination are marked as Ex.P3(a) and P8(a) respectively.
8. The defendant is examined as Dw1; he has filed affidavit in lieu of examination in chief and certificate U/s 65B of the Indian Evidence Act is marked through him as Ex.D7. During Pw2's cross examination rejoinder dated 24.01.2021, computer printout of wakatime.com data, copy of the defendant's reply to plaintiff's email dated 31.01.2018 are confronted and got marked as Ex.D4 to D6 respectively.
9. Heard arguments.
10. My findings on the above issues are 10 Com.O.S.No.445/2022 Issue No.1: In the negative Issue No.2: In the negative Issue No.3: In the negative Issue No.4: In the affirmative Issue No.5: Partly in the affirmative Issue No.6: In the affirmative Issue No.7: In the negative Issue No.8: In the negative Issue No.9: In the negative Issue No.10: Partly in the affirmative Issue No.11: As per the final order for the following REASONS
11. Issues 1, 3 and 4: According to the plaintiff the cost of the project and the timeline within which it had to be completed was agreed upon but the defendant delayed the project despite receiving Rs.5,57,000/-. On the other hand, the defendant contends that there was no concluded contract with regard to the cost and time for completion and the delay is not attributable to him but to increase in the scope of work due to plaintiff's additional requirements. These issues thus involve discussion of common facts and evidence and are taken up together for discussion for convenience and to avoid repetition. 11 Com.O.S.No.445/2022
12. The learned counsel for the plaintiff argues that whether the plaintiff approached the defendant or the defendant approached the plaintiff for developing the new software eSSMS 4.0 is immaterial as there was acceptance on the part of the defendant with regard to the conditions of the proposal; the project details were discussed at length by the parties and emails were exchanged pursuant to which the plaintiff made payments and the defendant proceeded with the work, but failed to complete the project and deliver the product within six months as contemplated under Ex.P11, the PO dated 01.01.2018 for Rs.7,79,100/-.
13. The learned counsel for the plaintiff relies upon the following judgments in support of the contention that the defendant has accepted the proposal as per Ex.P11 by receiving advance and taking up the project work and therefore it is not open for him contend that there is no concluded contract with regard to timeline and the cost of the project or Ex.P11 is not a purchase order :
(a) Bharath Sanchar Nigam Ltd. & Anr. Vs BPL Mobile Cellular Ltd. & Ors reported in (2008) 12 Com.O.S.No.445/2022 13 SCC 597 where the Hon'ble Supreme Court explaining the scope of Sec.8 of the Indian Contract Act as clarified in Amrit Banspati Co's case [AIR 1966 All 104] held that the provision is based on the principle that if an offer is made subject to a condition, the offeree cannot accept the benefit under the offer without accepting the condition; he cannot take the attitude, "I shall accept the benefit but reject the condition".
(b) Union of India Vs M/s Rameshwarlall Baghchand reported in 1972 SCC Online Gau 111 where following the judgment in Amrit Banspati Co's case [AIR 1966 All 104] it is held that if the person making the offer to another intimates him expressly or impliedly a particular mode of acceptance, the offeree can adopt that mode to conclude a binding bargain."
14. Per contra, the learned counsel for the defendant argues that there was no concluded contract with regard to time is to be inferred from the conduct of the plaintiff suggesting additional features and allowing the defendant to work on the project beyond 30.06.2018; delay is the consequence of enlargement in the scope of work and not attributable to the defendant. He also argues that the email correspondence 13 Com.O.S.No.445/2022 between the parties should be taken into consideration to ascertain is Ex.P11 is a concluded contract or not.
15. In the context of his arguments, the learned counsel for the defendant relies upon the judgment in Rickmers Verwaltung GMBH Vs Indian Oil Corporation Ltd., reported in (1999) 1 SCC 1 where it is held that:
"The cardinal principle to remember is that it is the duty of the court to construe correspondence with a view to arrive at a conclusion whether there was any meeting of mind between the parties, which could create a binding contract between them but the Court is not empowered to create a contract for the parties by going outside the clear language used in the correspondence, except insofar as there are some appropriate implications of law to be drawn. Unless from the correspondence it can unequivocally and clearly emerge that the parties were ad idem from that material to infer whether the intention as expressed in the correspondence was to bring into existence a mutually binding contract. The intention of the parties is to be gathered only from the expressions used in the correspondence and the meaning it conveys and in case it shows that there had been meeting of mind between the parties and they had actually reached 14 Com.O.S.No.445/2022 an agreement, upon all material terms, then and then alone can it be said that a binding contract was capable of being spelt out from the correspondence."
16. Ex.D1, Pw2's email dated 19.12.2017 to the defendant informing the plaintiff's intention to take him as a consultant, to raise a PO for the software and offer 2% to 10% shares of the company linked to delivery schedule for BIRRD's eSSMS Pro, Pro Plus Business Solution, would demolish the plaintiff's claim that the defendant approached them claiming to be an expert in the field of software development and voluntarily offering to develop the new software.
17. Ex.P2 dated 19.12.2017 is the defendant's email to Pw2 with initial eSSMBO version as an attachment. It speaks to the effect that the defendant was yet to prepare estimate for project management module and additional APIs needed for mobile App. It is the plaintiff's case that the defendant proposed to complete the project in three phases and Ex.P10 provides the details of the same.
15 Com.O.S.No.445/2022
18. According to the learned counsel for the plaintiff, Ex.P10 should be read with Ex.P2. The defendant does not dispute this position. Ex.P10 sets out the details of the three phases proposed by the defendant for completing the project. It is pertinent to note that both Pw1 and Pw2 admit in clear terms that the proposed three phases, is not confined to six months period.
19. Pw1 admits that there cannot be a fixed time for developing the software and the time taken depends on capabilities of the software developer. Ex.P8(a) is the over all system architecture of eSSMS based on micro services approach and it was sent as an attachment to Pw2 by the defendant with his email dated 23.12.2017, Ex.P8 and it was informed that MBO would be updated based on new modules identified during the activity.
20. The evidence on record and the email correspondence point to the fact that the defendant majorly communicated with Pw2 in connection with this project. Pw1 admits about the plaintiff suggesting additional features depending on their 16 Com.O.S.No.445/2022 requirement during weekly update by the defendant. Pw2 too admits to have sent emails enquiring about additional features not covered under Ex.P11.
21. In the above circumstances and having regard to Pw2 to not denying the suggestion that he proposed changes/additional features to the software after the demo, it can be safely concluded that suggesting additional features, during the weekly updates and demo, led to increase in the scope of work entrusted to the defendant under Ex.P11.
22. The defendant is shown as the vendor in Ex.P11 which provided for payment terms, the cost of the project and timeline for delivery of the software. It also contemplated renegotiation in case of any non compliance / default by the vendor for GST and extension of time by three months if delays / reasons for non performance were to be notified in advance under specific approval.
23. The defendant though has tried to maintain Ex.P11 to be not a purchase order during cross examination of Pw1 and Pw2, Dw1 refers to it as the only purchase order relating to the 17 Com.O.S.No.445/2022 transaction between him and the plaintiff. There is absolutely no dispute that the defendant commenced the work on 01.01.2018. The plaintiff though claims to have forwarded a copy of Ex.P11 to the defendant on 01.01.2018, Ex.D6 disproves the same.
24. Pw1's evidence demonstrates that being an investor in the plaintiff company he does not have any access to the records; he has not sent any emails or addressed letters to the defendant in connection with eSSMS software development; he did not take part in the meeting between the defendant and the plaintiff's representative held during December 2017. Thus, there was absolutely no direct interaction between Pw1 and the defendant in connection with eSSMS software development. Such being the case, Pw1's affidavit evidence with regard to the plaintiff and the defendant agreeing on the cost and timeline of the project, cannot be looked into.
25. It is relevant to note that the defendant too has not registered any protest with regard to the terms of Ex.P11 in his reply to Pw2's email at Ex.D6 or within a reasonable time. He 18 Com.O.S.No.445/2022 admittedly received advance payments to the tune of Rs.5,57,000/- (including TDS) from the plaintiff upto 13.06.2018 without insisting on change of terms contained in Ex.P11. In such circumstances, it can be concluded that the defendant accepted performance of the conditions under Ex.P11, as laid down in the judgments relied upon by the plaintiff.
26. Now, the question is whether the parties intended Rs.7,79,800/- to be the final cost of the project and six months from 01.01.2018, the time for its completion?
27. Pw1 is an investor in the plaintiff company. Pw2 is a consultant working for the plaintiff company. Both admit that the three phases mentioned by the defendant in Ex.P2 is not confined to six months. The plaintiff suggested additional features not covered under Ex.P11 during weekly updates by the defendant and even sought information about the same in their emails.
28. As could be seen from Pw1's evidence Rs.7,79,800/- was agreed as the cost for the scope of work under Ex.P11 and it did not include the cost of additional features suggested by the 19 Com.O.S.No.445/2022 plaintiff depending on their requirement. Pw2 who was in constant touch with the defendant in connection with the project is also not clear as to whether the project entrusted to the defendant could be completed within six months.
29. Therefore, I am constrained to hold that the net value and delivery date mentioned in Ex.P11 related to the software described therein. The parties did not take into account the cost of additional features and the time that may be consumed for working on the same, at the time of this purchase order. The changes suggested during the course of the project not only enlarged the scope of work but also led to delay which cannot be attributed to the defendant.
30. That apart, Ex.P3 speaks of a clause for extension of time in the PO by a couple of months and contemplates submission of final invoice by the defendant once he completed the delivery; and that Ex.P3 should be used as an addendum to the purchase order, Ex.P11. Even according to the learned counsel for the plaintiff, time was extended upto 30.09.2018 without entering into fresh agreement. Pw2's evidence shows that the 20 Com.O.S.No.445/2022 defendant continued to work on this project on part time basis beyond June 2018 that too at the plaintiff's request. Such being the case, I am unable to accept the argument of the plaintiff that the defendant delayed the project or that Ex.P11 was a concluded contract with regard to cost and timeline. Therefore, Issues 1 and 3 are answered in the negative and Issue No.4 in the affirmative.
31. Issue No.5: Both Pw1 and Pw2 admit that the defendant was sending weekly updates with regard to progress of the work. Ex.P3(a) shows that the defendant by email dated 25.06.2018 asked for additional hands as he was joining the old company during July 2018. Pw2's evidence would show that there was a demo on 01.05.2018 and the defendant had completed nearly 50 to 55% of the work by then.
32. Dw1's evidence that he has delivered the software to the plaintiff is not denied or disputed. The only suggestion made to Dw1 in this behalf is that he has not delivered the technical documentation. It is not the plaintiff's case that the defendant delivered only the software and not the technical 21 Com.O.S.No.445/2022 documentation. Under such circumstances, it can be safely inferred that the defendant was delivering codes on time upto June 2018 and also provided support for the plaintiff's project after June 2018.
33. Admittedly, the defendant was on sabbatical when he took up this project for the plaintiff in January 2018 and joined his employer in July 2018. Pw2 has not denied that the defendant was managing a separate team to work on this project. That does not dispense with the burden on the defendant to prove that he had engaged a separate team for this project. No independent witnesses such as members of the team are examined to speak about the same. Further, the defendant has not adduced acceptable evidence with regard to incurring expenses in connection with training people and no invoice is raised by the defendant in this behalf. Accordingly, the issue for consideration is answered partly in the affirmative.
34. Issue No.2: It is the plaintiff's case that they have invested more than Rs.40,00,000/- in the project. The details are set out in para 14 of the plaint. Pw1 claims to be having 22 Com.O.S.No.445/2022 proof and invoices for the same. Pw2 states that the plaintiff suffered loss to the tune of Rs.40,00,000/- and claims to have produced 60% of the documents in the form of invoices raised in EDDIE's name for server maintenance.Ex.P21 to P26 are the invoices issued by Shic Heng Technology Co. Ltd. of Taiwan from 01.01.2019 to 01.12.2020 for Rs.1,00,000/- in all, towards the cloud system maintenance.
35. Except Ex.P21 to P27, the plaintiff has not produced any other document to substantiate that their investment in the project was to the tune of Rs.40,00,000/-. At the same time, it is not clear from Ex.P21 to P27 as to whether Shic Heng Technology Co. Ltd. maintained the cloud system in relation to this project and no one from the said company is examined to prove the same. Therefore, the issue for consideration is answered in the negative.
36. Issues 6 to 8: Since these relate to the defendant's counter claim, they are taken up together for discussion to avoid repetition.
23 Com.O.S.No.445/2022
37. Dw1's evidence demonstrates that he never claimed to have invested Rs.1,25,000/- for the additional features or Rs.50,000/- for development of supporting WBMS. In his reply dated 23.12.2020 all that the defendant claims is that the invoice for Rs.2,22,800/- is unpaid. Therefore, I am of the opinion that the defendant is not entitled for Rs.1,25,000/- for the additional features or Rs.50,000/- for development of supporting WBMS.
38. That apart, there was no claim in the reply to the plaintiff's notice for additional hours of work from January to June 2018 or the extended support. During cross examination Dw1 admits that there was no agreement to pay for additional hours of work. Thus, in the absence of an agreement the claim for Rs.1,00,000/- for additional hours of work from January to June 2018 and Rs.1,50,000/- for extended support cannot be sustained, more so, when the defendant has not chosen to raise any invoice for the extended support.
39. Pw1 admits that the plaintiff has not paid for the additional features and Pw2 too admits that the plaintiff has not 24 Com.O.S.No.445/2022 paid the defendant for the additional features and the invoice for Rs.2,22,800/- raised during June 2018 is not paid. As discussed earlier, Pw2 admits that 50% to 55% of the work was completed by the time the defendant gave a demo in the month of May 2018 and as per the acceptance criteria compared to the previous version.
40. It is not the plaintiff's case that the defendant did not do any work and not entitled for this amount for such reason. Therefore, in the absence of Pw2 clarifying in evidence the reason for non payment of Rs.2,22,800/- despite extracting the work from the defendant, I am unable to accept the argument of the learned counsel for the plaintiff that this amount was not paid owing to the defendant not doing any work. Accordingly, Issues 7 and 8 in the negative and Issue No.6 in the affirmative.
41. Issue No.9: Drawing attention to the penalty clause in Ex.P11 and relying on paras 9 to 12 of the judgment in Mahanagar Telephone Ltd. Vs Tata Communications Ltd., reported in (2019) 5 SCC 341, the learned counsel for the plaintiff argues that the defendant is liable to pay 60% of the 25 Com.O.S.No.445/2022 project cost as damages for having committed breach of the contract by not delivering the technical documentation.
42. Per contra, the learned counsel for the defendant argues that even if liquidated damages is provided for in Ex.P11, the same cannot be granted in the plaintiff's favour because the defendant has not committed any breach and the time shot up due to increase in the scope of work and the plaintiff also failed to make payment of the invoice raised by him.
43. It is not the case of the plaintiff that he has filed this suit for damages because the defendant has failed to handover the technical documentation. Nor has the plaintiff sought for a direction to the defendant to deliver the same. Even in the plaintiff's notice and the rejoinder, there is no demand for delivery of technical documentation.
44. To claim damages U/s 74 of the Indian Contract Act it is incumbent on the plaintiff to prove that he has suffered damage or loss because of the lapse on the part of the defendant. Dw1's evidence that eSSMS 4.0 is with the plaintiff and it is in workable condition is not seriously challenged during his cross 26 Com.O.S.No.445/2022 examination. The plaintiff has failed to adduce acceptable and convincing evidence to substantiate the alleged loss. As discussed earlier, the defendant is not responsible for delay in completion of the project. Under these circumstances, the question of awarding damages does not arise and accordingly, Issue No.9 is answered in the negative.
45. Issue No.10: In view of the findings on Issue No.3, 4 and 6 to 8, the defendant is entitled for Rs.2,22,800/- towards unpaid invoice amount together with interest at 6% p.a. from the date of counter claim i.e. 15.07.2022 till the date of realization and not for other counter claims and the issue is accordingly answered.
46. Issue No.11: The learned counsel for the defendant assails the suit on the ground that it is not duly instituted and draws attention to the evidence of Pw1 as also the provisions of Order V CPC, VI Rule 15A CPC and Order XXIX CPC, in support thereof.
47. On the other hand, the learned counsel for the plaintiff argues that interest of the plaintiff company should not be 27 Com.O.S.No.445/2022 defeated on mere technicality and procedural irregularity when Pw2 who is authorized under Ex.P9 is examined as witness.
48. Order V CPC provides for issuing summons only when the suit is duly instituted. Order VI Rule 15A CPC as amended by Sec.16 of the Commercial Courts Act mandates that every pleading in a commercial dispute be verified by an affidavit in the manner and form prescribed in the appendix to the schedule and it should be signed by the party to the proceedings or by any other person on behalf of such party who is proved to the satisfaction of the court to be acquainted with the facts of the case and who is duly authorized by such party.
49. Order XXIX Rule 1 of CPC provides that in a suit by or against the corporation, the Secretary or any Director or other Principal officer of the Corporation who is able to depose to the facts of the case might sign and verify on behalf of the company. It is well established that even in the absence of a formal letter of authority or power of attorney, a person referred to in Order XXIX Rule 1 of CPC can sign and verify the pleadings on behalf of the Corporation by virtue of the office he holds. 28 Com.O.S.No.445/2022
50. This suit is instituted through Mr.Venugopal, an investor in the plaintiff company. Ex.P29, copy of the Board Resolution dated 16.03.2021 was produced at the time of institution of the suit. Mr.Venugopal who is examined as Pw1 admits that his name is not found in Ex.P29. That apart, Pw1 is neither an employee nor the director of the plaintiff company or its shareholder. Thus, it is clear that Mr.Venugopal had no authority to represent the plaintiff as on the date of suit. Nor can he be said to be holding the office of the plaintiff company so as to enable him to represent the company without a formal letter of authority or power of attorney.
51. As elicited during Pw1's cross examination he did not have any access to the records of the company relating to the suit transaction. He did not directly interact with the defendant at any point of time in connection with software development. Nor as he aware of the defendant working with Primo Vision or the said company developing SSMS software for the plaintiff. Under these circumstances, the argument that Pw1 has knowledge of the suit transaction cannot be accepted. More so, when this witness states that as an investor he is voluntarily giving 29 Com.O.S.No.445/2022 evidence; the plaintiff did not ask him to do so and admits in unequivocal terms that he created Ex.P9 with the same date as Ex.P29 that to at the time of filing the affidavit evidence.
52. Pw2 is examined only as a witness and he has not signed the plaint. Therefore, this is not a case where the suit was though instituted without authority, the company subsequently ratified the actions of Pw1 by issuing a formal letter of authority or by passing resolution to that effect.
53. The effect a pleading not being verified in the manner provided under Sub Rule (1) of Order VI Rule 15A CPC, as amended by the Commercial Courts Act is that the party shall not be permitted to rely on such pleading as evidence or any of the matters set out therein. Therefore, the ratio in United Bank of India Vs Naresh Kumar & Ors reported in AIR 1997 SC 3 is of no avail to the plaintiff, as it was a case where the pleadings was signed by one of the officers of the bank and it was ratified subsequently. Therefore, even on this count the suit has to fail.
54. In the result, I pass the following:
30 Com.O.S.No.445/2022
ORDER Suit of the plaintiff is dismissed.
Counter claim of the defendant is decreed in part with cost. The defendant is entitled for Rs.2,22,800/- from the plaintiff with interest at 6% p.a. from 15.07.2022 till the date of realization.
Draw decree accordingly.
Issue copy of the judgment to the parties through email as provided U/o XX Rule 1 of CPC if email ID is furnished.
(Dictated to the Stenographer, transcribed and typed by her, corrected and then pronounced by me in the open court on this the 21st day of November 2022) (H.R.Radha) LXXXIV Addl. City Civil and Sessions Judge, (CCH-85 Commercial Court), Bengaluru 31 Com.O.S.No.445/2022 ANNEXURE List of witnesses examined for the plaintiff:
Pw1 Venugopal Pw2 Pavan Hegde
List of documents marked for the plaintiff:
Ex.P1 Copy of technology used lack of privacy policy Ex.P2 to P5 Email correspondence Ex.P6 Legal Notice dated 24.11.2020 Ex.P7 Legal Notice dated 23.12.2020 Ex.P8 Email correspondence Ex.P9 Cc of Board Resolution Copy of attachment sent with email dated Ex.P10 19.12.2017 Ex.P11 Copy of purchase order dated 01.01.2018 Ex.P12 Email correspondence Ex.P13 to P18 Invoice attached to email dated 02.02.2018 Ex.P19 Certified extract of bank statement Ex.P20 Certificate U/s 65B of the Evidence Act Ex.P21 to P27 Computer printout of invoices Ex.P28 Certificate U/s 65B of the Evidence Act Ex.P29 Cc of Board Resolution dated 16.03.2021 List of witnesses examined for the defendant:
Dw1 Kumar Gaurav 32 Com.O.S.No.445/2022 List of documents marked for the defendant:
Ex.D1 to D3 Email correspondences Ex.D4 Legal Notice dated 24.11.2020 Ex.D5 Wakatime.com extract Ex.D6 Email correspondences Ex.D7 Certificate U/s 65B of the Evidence Act (H.R.Radha) LXXXIV Addl. City Civil and Sessions Judge, (CCH-85 Commercial Court), Bengaluru