Bangalore District Court
M/S. Ascent Business & Consulting vs M/S Chetas Control Systems Pvt. Ltd on 30 November, 2016
IN THE COURT OF THE XLI ADDL.CITY CIVIL JUDGE
AT BANGALORE [CCH.No.42]
PRESENT: SRI.BASAVARAJ B.COM., LL.M.
XLI Addl. City Civil Judge
Dated this the 30th day of November 2016.
O.S.No.7680/2009
PLAINTIFFS : 1 M/s. Ascent Business & Consulting.
A proprietary Concern represented its
Proprietor Sri. Narendra Kumar Sarawgi,
No.E-1107, Jacaranda, Brigade
Millenioum, J.P.nagar 7th Phase,
Puttenahalli,
Bangalore-560 078.
2 Sri. Narendra Kumar Sarawgi,
Proprietor,
M/s. Ascent Business & Consulting,
No.E-1107, Jacaranda, Brigade
Millenioum, J.P.Nagar 7th Phase,
Puttenahalli,
Bangalore-560 078.
(By Sri. L.M.Chidanandayya, Advocate)
-Vs-
DEFENDANT M/s Chetas Control Systems Pvt. Ltd.,
A company registered under the
Companies Act 1956 having its registered
Office at Chetas House, Plot No.1, Survey
No.8+9, Siddhatek Society Near Pashan
Lake,
Pune-411 021.
And also having address
M/s Chetas Control Systems Pvt. Ltd.,
No.867, II Cross,
VIII Main, III phase, 3rd block,
Basaveshwarnagar,
2 O.S.No.7680/2009
Bangalore-560 079.
(By Sri. T.M.Gururaj, Advocate)
Date of Institution of the Suit: 01.12.2009
Nature of the suit
(Suit on Pronote, suit for Recovery of Money
declaration & possession, suit
for injunction)
Date of commencement of 27.02.2012
recording of evidence:
Date on which the Judgment 30.11.2016
was pronounced:
Total Duration: Year/s Month/s Day/s
7 0 29
JUDGMENT
The plaintiffs have filed this suit for recovery of Rs.34,56,034-80 from the defendant company being the balance commission of 3% of contract value in terms of the agreement dated: 08/09/2007 and to direct the defendant company to pay a sum of Rs.11,99,862-40 being the interest on Rs.34,56,034- 80 calculated at 18% per annum and to direct the defendant company to pay a sum of Rs.7,50,000/- incurred by the plaintiffs in connection with the winding up petition and 3 O.S.No.7680/2009 proceedings before Hon'ble High Court of Bombay and to pay the defendant future interest at 18% per annum from the date of suit till realization, to award costs and to grant such other reliefs.
2. The plaint averments in brief are as under:
The plaintiff No.1 is a proprietorship concern and the 2nd plaintiff is the proprietor of the 1st plaintiff proprietary firm and it is carrying on the business of marketing representations, business development consultancy and various other allied activities in the state of Karnataka. The defendant No.2 is a company registered under the Companies Act and the plaintiffs being aggrieved by the non-payment of the 1st part of the commission as agreed, is hereby filing the suit against the defendant.
The Bangalore Water Supply and Sewerage Board (BWSSB) had invited E-tender for supply, installation and 7 years maintenance of bulk flow meters in Bangalore city and accordingly issued tender notification No.BWSSB/CE(M)/TA-
9/2187 dated: 12/7/2007 calling upon all the interested companies and organization to participate in the E-Tender by 4 O.S.No.7680/2009 submitting two Envelopes containing Technical Bid and Price Bids to the Chief Engineer (M), BWSSB, Bangalore.
The defendant company had approached the plaintiffs and represented that they have all the material and machineries required for execution of the project for which the BWSSB has invited the E-tender i.e. supply, installation and 7 years maintenance of bulk flow meters. In that background the defendant requested the plaintiffs to become their marketing representatives for laisoning with BWSSB at Bangalore for securing an order/contract in its favour against the said E-
tender dated 12/7/2007 of BWSSB. The plaintiffs agreed to it and during the course of negotiation the defendant categorically informed the plaintiffs that the plaintiffs shall be paid commission of 13% on the total value of the order/contract awarded by BWSSB and out of which 3% shall be paid immediately on the issue of letter of intent by BWSSB in favour of defendant and the balance 10% shall be paid on pro-rata basis immediately against the receipt of payments from BWSSB from time to time. After finalizing the terms by both the parties a memorandum of agreement was entered into through a letter signed by both the parties on 8/9/2007 setting out the terms 5 O.S.No.7680/2009 and conditions under which the plaintiffs are required to work as the Marketing Representatives for securing the order/contract in favour of the defendant against the said Tender dated 12.7.2007.
The plaintiffs are entitled to the commission of 3% of the contract value at the time of issue of letter of intent and the present suit is filed only to the extent of 3% of the total commission out of 13% as agreed and the balance 10% is yet to be adjudicated and a separate suit will be filed on obtaining of Running Account Bills by the BWSSB. For the recovery of balance 10% commission, the plaintiff reserves all rights to take all possible legal recourses Pursuant to the agreement with the defendant, the plaintiffs swung into action as a Marketing Representative and purchased the E-Tender documents on behalf of the defendant for submitting the same to BWSSB and spent considerable amount of efforts, money and time in marketing activities and thereafter the plaintiffs assisted the representatives of the defendant to fill up/prepare the tender documents and submit the same to BWSSB. In the meanwhile, in order to enable the plaintiffs to participate in the Pre-bid Meetings of the BWSSB the defendant 6 O.S.No.7680/2009 wrote a letter to the Chief Engineer(M), BWSSB that the plaintiffs are the representatives of the defendant company.
On account of the expert advice given by the plaintiffs in filling up/preparing the tender forms and assisting the defendant in the tender process, the defendant became eligible to participate in the technical bid and Chief Engineer(M), BWSSB found that the defendant bid was the technically suitable bid. Thereafter, in order to enable the plaintiffs to attend the opening of the Price Bid, the defendant wrote a letter the Chief Engineer(M), BWSSB on 29/11/2007 informing them that their representative of the plaintiffs will be attending the Price Bid opening of the E-Tender of BWSSB on behalf of the defendant. On account of assistance rendered by the plaintiffs and on account of the scientific assessment of the competitive situation made by the plaintiffs, the defendant was found to be L1 in the said tender. By an E-mail dated 29.11.2007 the plaintiffs informed defendant about the competitive pressures applied by the competitors during the price bid opening by wrongfully trying to influence the tender process and how the plaintiffs did not allow the competitors to succeed by complaining to the Chief Engineer (M) of BWSSB. By another 7 O.S.No.7680/2009 email communication dated 29/11/2007 the plaintiffs communicated to the defendant the prices offered by the competitors as found in the price bid opening. Along with a third email dated 29/11/2007 the plaintiffs sent a draft letter to the defendant advising the defendant to write such a letter to BWSSB putting the defendant's lowest prices on records, and accordingly defendant have written a letter on 30/11/2007 to BWSSB on the same lines. By another email communication dated 26.12.2007, the plaintiffs informed the defendant that the BWSSB Board had approved the award of the contract to the defendant and that LOI will be obtained by the plaintiffs in favour of the defendant from BWSSB within a day or two. In the same email, the plaintiffs also requested the defendant to begin mobilizing to begin the works and to arrange the 3% commission against the issue of letter of intent as per the agreement dated 8/9/2007. The letter of intent was issued by the Chief Engineer (M) BWSSB in favour of the defendant for supply, installation and 7 years maintenance of bulk flow meters in Bangalore city.
On account of ability and defendant handing of the entire situation by the plaintiff and in the participation in the tender 8 O.S.No.7680/2009 process of BWSSB by the plaintiffs and due to timely and pro-
active actions taken by the plaintiffs to safeguard the interest of the defendant, the letter of intent was issued by BWSSB in favour of the defendant on 28.12.2007 by accepting the bid of the defendant and subsequently BWSSB entered into an agreement with the defendant in pursuance of the letter of intent for executing the said work.
After the issue of letter of intent the plaintiffs coordinated between BWSSB and the defendant regarding various formalities such as executing the prescribed agreement with the BWSSB. Accordingly, an agreement was executed between the BWSSB and the defendant setting out the terms and conditions of the work. After entering into the agreement, the work order was issued on 18.2.2008 by BWSSB in favour of the defendant for supply, installation and 7 years maintenance of bulk flow meters in Bangalore City. As per the agreement dated 8.9.2007 the defendant was required to pay 3% of the commission at the time of issue of letter of intent. Admittedly the plaintiffs were successful in getting the letter of intent issued on 28.12.2007 in favour of the defendant and in view of the issuance of the letter of intent by the BWSSB the defendant ought to have paid a 9 O.S.No.7680/2009 sum of Rs.41,08,654.80 being the 1st part of the commission equal to 3% of the contract value. Accordingly, the plaintiffs were requesting the defendant to pay the entire amount of Rs.41,08,654.80/- due and payable immediately against issue of letter of intent in favour of the defendant .
After issuance of letter of intent and after signing the agreement and after the issue of Work Order it was the contractual obligation on the part of the defendant to pay the 1st part of commission of 3% of the Contract Value on issuance of 'Letter of Intent' forthwith as the plaintiffs had completed their part of the contractual obligation of getting the Letter of Intent issued in favour of the defendant. Instead of paying the entire amount of Rs.41,08,654/- as agreed, the defendant has paid Rs.3,00,000/- on 13/12/2007, a sum of Rs.2,50,000/- on 1/1/2008 and Rs.1,02,620/- on 8/3/2008 in total Rs.6,52,620/- and there remains a balance of Rs.34,56,034.80 payable to the plaintiffs, in terms of the agreement dated 8.9.2007.
After making the part payment of the commission, the defendant did not make any further payments which necessitated the plaintiffs to visit personally Pune City 10 O.S.No.7680/2009 requesting the defendant to make the payment. In addition to that, several representations were made to pay the balance amount. At this stage, it is relevant to mention that after the receipt of the letter of intent the defendant became very lethargic and stopped even responding to the telephone calls of the plaintiffs for making the payment of balance of 3% of the contract value in terms of the agreement dated 8.9.2007. Since there was no response whatsoever the plaintiffs wrote a letter on 20.2.2008 requesting the defendant to pay the said amount. As referred to earlier after receiving the letter dated 20.2.2008 the defendant paid a sum of Rs.1,02,620/- only. In view of the non clearance of the payments due and payable to the plaintiffs, the plaintiffs wrote another reminder letter on 22.3.2008 by registered post with acknowledgment due requesting the defendant to pay the balance amount of 3% commission payable in terms of agreement dated 8.9.2007. The said letter was received by the defendant. Even after receipt of the letter dated 22.3.2008 the defendant did not respond and pay the balance amount of commission payable to the plaintiffs in terms of the agreement dated 8.9.2007.
11 O.S.No.7680/2009The intention of the defendant was only to make the plaintiffs to work and receive the letter of intent and the contract and the defendant did not have any intention to pay the commission as agreed. Before initiating appropriate action the plaintiffs wrote another letter on 29.4.2008 requesting the defendant to pay the balance amount immediately to the plaintiffs. The said letter was sent by registered post acknowledgement due and the defendant received the said letter on 3.5.2008.
After the receipt of the letter dated 29.4.2008 the defendant for the first time replied on 3.5.2008 interalia taking untenable defense that the plaintiffs failed to complete the assignment. The letter dated 3.5.2008 addressed by the defendant to the plaintiffs is a complete deviation from the terms and conditions of the agreement and the fraudulent intention on the part of the defendant was exposed. None of the defenses taken are sustainable because the plaintiffs were required to get the letter of intent issued in favour of the defendant and the claim made by the plaintiffs in all the letters is only to the extent of 3% of the commission payable to the plaintiffs against issue of LOI. 12 O.S.No.7680/2009 After the receipt of the letter dated 3.5.2008 the plaintiffs replied to the defendant on 3.6.2008 rebutting each of the false defenses set up and requested the defendant to pay the balance of 3% of commission on the contract value to the plaintiffs. The said letter was sent by Speed Post. The defendant in order to avoid the receipt of the said letter dated 3.6.2008 refused to receive the cover and the same was sent back to the plaintiffs By refusing to receive the letter the motive of the defendant was established and under those circumstances the plaintiffs instructed their Advocate to issue a Legal notice calling upon the defendant to pay the balance commission payable which was Rs.34,56,034/ along with interest calculated @ 18% and in terms of the instructions, the Counsel for the plaintiffs issued a legal notice on 19.8.2008 calling upon the defendant to pay the sum of Rs.34,56,034/0 being the balance of 3% commission payable against letter of intent in terms of the agreement dated 8.9.2007. The said legal notice was sent to the 3 addresses of the defendant. The legal notice sent to the Kruthi Industrial Estate, Pune Office of defendant was returned as not claimed. Similarly the legal notice sent to No.1032, Deep Bungalow, Pune address of defendant was also returned as not claimed. In so 13 O.S.No.7680/2009 far as the legal notice sent to Plot No.1, Sy.No.8 and 9, Siddhatek Society, Sutrwadi Pashan Pune-411 021, which is the registered office of the defendant was received by the defendant, but the acknowledgment was not signed by the defendant. In that background the Counsel for the plaintiffs wrote a leer to the Director, General Post Office, Kolkata on 1.10.2008 requesting to confirm whether the legal notice is delivered to the defendant. The Director, General Post Office, Kolkata replied vide letter dated 17.10.2008 stating that the Legal Notice is served on the defendant on 25.8.2008. The defendant received the said legal notice calling upon them to pay the said amount. After receiving the Notice, the defendant replied to the said legal notice through their Advocate on 29.9.2008 taking untenable defenses to the Legal Notice dated 19.8.2008. Since the defendant did not comply the demand made in the Legal Notice and since the defendant failed to clear the dues, the plaintiffs filed a Company Petition No.926/2008 in October 2008 in the High Court of Judicature at Bombay under Section 433(3), 434 and 439 of the Companies Act for winding up of the defendant company on account of its inability to pay the dues payable to the plaintiffs. The 14 O.S.No.7680/2009 Company Court i.e. High Court of Judicature, Bombay caused issue of Notice to the defendant for winding up of the defendant company calling upon them to show cause why the company petition should not be admitted and why the company should not be wound up for its inability to clear its dues. The contents of reply notice dated 29.9.2008 of the defendant was totally unacceptable and therefore the plaintiffs instructed their Advocate to send Rejoinder to the Reply Notice and accordingly the counsel for the plaintiffs sent a Reply Notice on 5.12.2008 replying and denying each of the false claims made by the defendant in the Reply to the Legal Notice issued by the plaintiffs.
The Company Petition No.926/2008 was posted before the Company Court on 25.2.2008 and the Company Court after hearing was pleased to pass an order directing the defendant to pay Rs.40,00,000/- within eight weeks and in the event the defendant does not make the payment necessary orders will be issued for winding up of the company and the court also issued instructions for publishing the said order in Gazette as well for winding of the defendant company. The order further stated that the plaintiffs were at liberty to adopt proceeding including 15 O.S.No.7680/2009 for the balance amount as well as for further interest. The defendant failed to comply the orders passed by the Bombay High Court and instead of honouring the court order the defendant had made an application to the Bombay High Court in application No.401 dated 23/3/2009 to recall the order dated 25/2/2009. The explanation offered by the defendant from not making the payment was found to be indefensible by the Company Court and Bombay High Court had ordered the defendant to pay the bank guarantee of Rs.20,00,000/- in favour of Prothonotory and Senior Master, High Court, Bombay within 3 weeks by its order dated 3/8/2009. Accordingly the defendant had given the Bank Guarantee dated 18/8/2009 through his banker Bank of India to the Prothonotary and Senior Master, High Court, Bombay agreeing to pay on demand a sum of Rs.20,00,000/- as ordered by the Company Court. Meanwhile the defendant submitted its affidavit dated 10.8.2009. Along with the said affidavit dated 10.8.2009 a fabricated document/annexure was produced by the defendant inter-alia contending that there are certain duties and responsibilities to be discharged by the plaintiffs and the plaintiffs having not discharged those duties and 16 O.S.No.7680/2009 responsibilities are not entitled to the payment of sales commission of 3% of the contract value. The plaintiff vehemently denied the existence of any such annexure stating that the so called annexure was neither signed by any party nor there was any mention of this annexure in the agreement dated 8.9.2007. Since the defendant was not in a position to pay the balance amount and started taking untenable defenses the plaintiffs requested the company court to order for winding up of the Company. In view of certain false defenses set up by the defendant the Company Court while hearing found that the defendant was liable to pay the dues and therefore by the Order dated 15.10.2009 directed the defendant to deposit the sum of Rs.15 lakhs within a period of 6 weeks with the Prothonotary and Senior Master, High Court, Bombay in addition to the Bank guarantee of Rs.20 lakhs already submitted by the defendant and further directed the plaintiffs to approach the competent court of law by way of filing the suit and claiming the amount due and payable to the plaintiffs. Further the company court was pleased to direct the plaintiffs to move the competent Court of Law for appropriating the deposit of Rs.15 lakhs deposited with the Prothonotary and Senior Master referred to above. 17 O.S.No.7680/2009 Further the Company Court was pleased to order that the Bank Guarantee of Rs.20 lakhs shall also be transferred to the Court which adjudicates the rights between the plaintiffs and the defendant and in all Rs.35.00 lakhs was to be deposited by the defendant in the Court and further the Hon'ble Company Court was pleased to observe that the plaintiff shall file a suit within a period of one week from the date of deposit of Rs.15 lakhs with the Prothonotary and Senior Master by the defendant . Further the Court was pleased to direct that in the event of the defendant not making the payment of Rs.15.00 lakhs by the defendant within a period of 6 weeks or failing to renew the Bank guarantee from time to time, the winding up petition will stand revived and shall stand admitted without reference to the Court. The court further directed that the plaintiff shall thereafter advertise the winding up petition in Newspapers. The defendant deposited the amount of Rs.15 lakhs with the Prothonotary and Senior Master and communicated the same to the plaintiffs counsel on 26.11.2009 and the plaintiffs received the said communication on 26.11.2009. The Hon'ble Company Court has granted a time of one week for filing the 18 O.S.No.7680/2009 suit and hence the suit is within the time stipulated by the Company Court by its order dated 15.10.2009.
The defendant is liable to pay a sum of Rs.34,56,034.80. The defendant having delayed the payments are also required to pay interest at the rate of 18% and accordingly the interest was calculated. In terms of the agreement dated 8.9.2007 the dues payable to the plaintiff is Rs.34,56,034.80. Similarly for the delayed payment of the said amount the defendant is required to pay the interest at the rate of 185. The claim of the plaintiffs is principal amount due is Rs.34,56,034.80, interest thereon at 18% p.a. from 29.12.2007 to 1.12.2009(704 days) is Rs.11,99,862.40 and costs incurred by the plaintiffs in connection with winding up petition in company court, Bombay is Rs.7,50,000/- and in all totally amounting to Rs.54,05,897.20.
The defendant is contractually bound to pay the said amount. All the defenses set up are false, baseless and unsustainable in law. On account of the faith and belief the plaintiffs worked as Marketing Representatives and in fact made lot of expenses in getting the Letter of Intent issued. Only on account of the efforts and skill exhibited by the plaintiffs in 19 O.S.No.7680/2009 finalizing the terms of the tender and filing the tender the defendant were successful in getting the tender. Except signing the tender forms the defendant has not done any work for obtaining the LOI and Work Order and the entire work for getting the LOI and work order in favour of the defendant is done by the plaintiffs and therefore after receiving the letter of intent it was contractually bound upon the defendant to pay the sum of Rs.41,08,654.80. The defendant have paid a sum of Rs.6,52,620/ and there remains a balance of Rs.34,56,034.80. The defendant is statutorily and contractually bound to clear the dues due and payable.
The defendant had released the money the plaintiffs would have utilized the money and would have derived interest at the rate of 18%. Since the transaction is a commercial transaction, 18% is a reasonable rate of interest, which is due and payable to the plaintiffs. The contract is sacrosanct and binding on both the parties and hence this suit for recovery of money amounting to Rs.54,05,897.20. Hence prayed to decree the suit.
20 O.S.No.7680/2009
3. The defendant appeared before the court through his counsel and filed written statement contending that the suit filed by the plaintiffs is false, frivolous, vexatious and not maintainable in law and it is filed only with an intention of harassing the defendant. This court has no jurisdiction to entertain the matter and as per the contract dated 8/9/2007 the subject matter of the above suit is admittedly executed at Pune and no cause of action arose within the jurisdiction of this court and no cause of action arisen for the plaintiffs to file this suit.
The plaintiffs have not approached the court with clean hands and they have suppressed the material facts and plaintiffs have deliberately with-held the annexure contained in the letter bearing ref.No.BWSSB/TA-9/2187/2007-08/FB/L- 485A dated 08/09/2007. It is the Annexure that contained the terms that were agreed to be performed by the plaintiff and which have not been performed at all. A mere reading of the letter produced by the plaintiffs by removing the Annexure reads as if the amount is agreed to be paid to the plaintiffs Graits without any obligations cast upon the plaintiffs. In fact 21 O.S.No.7680/2009 the portion of letter produced by the plaintiffs is liable to be deemed as a void contract for want of consideration.
The plaintiffs approached the defendant company by sending email on 14.8.2007, thereby offering their marketing service and other services to the defendant company. In the said email the plaintiffs offered the defendant to provide necessary support for securing the tender by liaisoning coordinating, regularly following up etc. The proposal of the plaintiffs was considered by the defendant company and the company decided to appoint the plaintiff as a marketing representative. The nature of the work to be carried out by the plaintiffs was indicated in the Annexure-I of the letter dated 8.9.2007. The payment if any was clearly agreed to be subject to the plaintiffs performing its obligations mentioned in the Annexure-I of the letter dated 8.9.2007. The nature of obligations cast upon the plaintiffs have been admitted by the plaintiffs in its letter dated 10.3.2008 wherein the plaintiffs have clearly mentioned the obligations that the plaintiff would carry out as agreed in the letter dated 8.9.2007.
After appointing the plaintiffs as its marketing representative it was noticed that the service of the plaintiffs 22 O.S.No.7680/2009 was not satisfactory and the BWSSB issued a letter on 26/4/2008 to defendant expressing its dissatisfaction that the speed of work for which the plaintiffs were primarily responsible as the plaintiffs did not carryout its work/duties and responsibilities properly. This matter was brought to the notice of plaintiffs by letter dated 3/5/2008. Even after receipt of the said letter, plaintiffs did not change its lacking attitude and due to it the defendant suffered loss of credibility and reputation. The plaintiffs even started ignoring telephone calls made by the defendant-company and the letters addressed in between 03/05/2008 to 06/09/2008 by the defendant were refused by the plaintiffs and as a result of it the defendant was constrained to terminate the appointment of the plaintiffs dated 06/09/2008 and the appointment of plaintiffs was terminated by the defendant by issuing termination notice on 6.9.2008. .
This defendant does not have any knowledge regarding nature of the business carrying on by the plaintiff's company and also not known that the 1st plaintiff is proprietorship concerned or not.
It is the plaintiff -company had approached the defendant by E-Mail dated 14/08/2007 after knowing that this defendant 23 O.S.No.7680/2009 is participating in the E-tender invited by the BWSSB. In that regard a memorandum of agreement was entered into between the plaintiffs and defendant at Pune and Annexure-1 of the said letter contain the terms and conditions of the work to be carried out by the plaintiff. The defendant admitted that the plaintiff was entitled to commission of 13% subject to the terms and conditions mentioned in the Annexure-1 of the letter dated 08/09/2007. Since the service of the plaintiffs were not satisfactory and the plaintiff's company neglected the calls made by the defendant, the service of the plaintiffs was terminated on 06/09/2008 and as a result of it plaintiffs were not entitled for any alleged commission.
After appointing the plaintiffs as the marketing representative of the defendant company the plaintiffs have not acted in the interest of the defendant company and service rendered by the plaintiffd was not satisfactory. The plaintiffs have started to raise exorbitant bills without participating in the tender processes actively. It is only because of the active participation by the defendant, the defendant-company was able to obtain the letter of intent from BWSSB. Since there is 24 O.S.No.7680/2009 no contractual obligation remains between the parties, this defendant is not liable to pay any amount as alleged.
The defendant after obtaining the work order in favour of defendant, defendant had paid a sum of Rs.6,52,620/- during the course of the price bidding towards the initial deposits and for the other expenditures of the plaintiff's company prior to the termination of the memorandum of agreement. It is pertinent to note that after receipt of the said amount the plaintiffs have not made use of the amount for the benefit of defendant-company.
The letter addressed by the plaintiffs dated 20.2.2008 and 22.3.2008 and 29.4.2008 allegedly sent requesting to release 3% commission amount was duly replied by the defendant company.
In the winding up proceedings initiated by the plaintiffs the defendant has deliberately not furnished registered address of the defendant company. The plaintiffs deliberately not furnished the registered address of the defendant and able to avoid the due service of the notice issued by the company court. Therefore, an order directing the defendant company to pay a sum of Rs.40,00,000/- was order by the company court in Company Petition No.926/2008. Thereafter, the defendant had 25 O.S.No.7680/2009 filed a petition to recall the order passed by the company court directing the defendant company to pay a sum of Rs.40,00,000/- and after hearing both the sides the Hon'ble court ordered the defendant company to deposit a sum of Rs.15,00,000/- before the prothonotary and senior master, High Court of Bombay and to furnish a Bank guarantee for a sum of Rs.20,00,000/ further the Hon'ble Court directed the plaintiffs to file necessary suit to recover the amount, if any from the defendant company before the appropriate court.
The memorandum of agreement entered between the plaintiffs and defendant was terminated by the defendant. There is no cause of action to this proceedings. Since the plaintiff's company has failed to carryout the work entrusted to it and the memorandum of agreement was duly terminated by this defendant there is no cause of action to this proceedings. The alleged cause of action is merely based on the imagination of the plaintiffs for the purpose of the above suit. This court has no jurisdiction to entertain this suit as the memorandum of agreement was signed by the parties in the head office of the defendant at Pune. Since the subject matter of this suit is the agreement entered between the plaintiffs and defendant on 26 O.S.No.7680/2009 8.9.2007, the above suit deserves to be dismissed in limine. Except above, the defendant has denied all other plaint averments. So prayed to dismiss the suit.
4. On the basis of the above materials, the following issues have been framed:
1. Whether the plaintiff proves that there was a contract between the plaintiff and the defendant for providing marketing representation services in connection with BWSSB Tender No. BWSSB/CE(M)/TA-92187 dt:12/07/2007?
2. Whether there was any agreement between plaintiff and defendant for payment of 3% commission on the total value of the order immediately on issue of letter of intent in favour of the defendant by BWSSB?
3. Whether the plaintiff proves that plaintiff has provided marketing representation services to the defendant for obtaining letter of intent or order from BWSSB against BWSSB tender No. BWSSB/CE(M)/TA-92187 dt: 12/7/2007?
4. Whether the defendant proves that the plaintiff has violated any terms and agreement related to payment of three percent sales commission?
5. Whether the defendant proves that the plaintiff is not appointed as marketing representative of the defendant in connection with the said BWSSB Tender?
6. Whether the plaintiff proves that the defendant is liable to pay the suit claim of Rs.54,05,897.20 to the plaintiff with interest and cost?27 O.S.No.7680/2009
ADDITIONAL ISSUES FRAMED ON 1/10/2011
1. Whether the plaintiff proves that this court has jurisdiction to try this suit?
2. Whether the defendant proves that the service of the plaintiff was terminated as per termination notice dt:6/9/2008?
3. Whether the defendant proves that the suit is bad for want of cause of action as the semblance of the cause of action shown is unlawful?
5. In order to prove the case, plaintiff has examined plaintiff No.2 as PW.1 and got marked 37 documents at Exs.P.1 to 37. On the other hand, defendant has examined its Manager as DW.1 and got marked 10 documents at Ex.D1 to 16.
6. Heard the arguments. Both the counsels also filed written arguments. Perused the records of the case.
7. My findings to the above points are as under:
Issue No.1: In the affirmative
Issue No.2: In the affirmative
Issue No.3: In the affirmative
Issue No.4: In the negative
Issue No.5: In the negative
Addl.Issue No.1-In the affirmative
Addl.Issue No.2: In the negative
Addl.Issue No.3: In the negative
28 O.S.No.7680/2009
Issue No.6: As per final order for the following:
REASONS
8. ISSUE NOs.1 AND 5: Since these issues are interconnected with each other hence they are taken together for common discussion in order to avoid repetition of facts and evidence.
9. The PW1 deposed that the Bangalore Water Supply and Sewerage Board invited E-tender for supply, installation and seven year maintenance of bulk flow meters in Bangalore City and accordingly issued tender notification No.BWSSB/CE(M)/TA-9/2187 dated 12.07.2007 calling upon the interested persons to participate in the E-tender by submitting technical bid and price bid to its Chief Engineer and in that background the defendant requested them to become their marketing representatives and entered into memorandum of agreement dated 08.09.2007. Ex.P.1 is the memorandum of agreement dated 08.09.2007 shows that it was signed by the plaintiff No.2 and signed by Managing Director on behalf of defendant No.2. The DW1 during the course of the cross- 29 O.S.No.7680/2009 examination admitted the signature of the Managing Director, which is as per Ex.P.1(a).
10. The defendant has not denied entering into Ex.P.1 but on the other hand contended as follows:
".....The plaintiff company was entitled for the alleged commission at the rate of 13% subject to the terms and conditions mentioned in the Annexure I of the Letter dated 8.9.2007...........(emphasis supplied)."
11. The plaintiff disputed the alleged Annexure to Ex.P.1, but from this it is clear that the plaintiff and the defendant entered into memorandum of agreement as per Ex.P.1. Though the defendant contended that the plaintiff is not appointed as Marketing Representative of it in connection with the Bangalore Water Supply and Sewerage Board Tender, but in support of this the defendant has not placed any evidence and hence the same cannot be accepted.
12. So the plaintiff proved that there was an agreement between the plaintiff and the defendant for providing marketing 30 O.S.No.7680/2009 representation services in connection with BWSSB Tender No.BWSSB/CE(M)/TA-92187 dt:12/07/2007 and the defendant failed to prove that the plaintiff is not appointed as marketing representative of the defendant in connection with the said BWSSB Tender. Hence, Issue No.1 is answered in the affirmative and Issue No.5 is answered in the negative.
13. ISSUE NO.2: PW1 deposed that during the course of negotiation the defendant categorically informed that they shall be paid commission of 13% on total value of order/contract awarded by the Bangalore Water Supply and Sewerage Board and out of which 3% shall be paid immediately on the issue of letter of intent by the BWSSB in favour of the defendant and the balance of 10% shall be paid on prorata basis immediately against the receipt to payment from Bangalore Water Supply and Sewerage Board from time to time.
14. It is relevant to reproduce the contents of Ex.P.1, which are as under:
".....In the event that we receive any orders/contracts against referred tender from 31 O.S.No.7680/2009 BWSSB, we will give you a sales commission of 13% (thirteen percent) on all orders/contracts against referred tender. This 13% sales commission will be paid by us to you at different stages as under:
3% (three percent) sales commission on total order/contract values will be paid to you by us immediately against release of letter of intent from Bangalore Water Supply and Sewerage Board in our favour and ................."
15. From the above clauses of Ex.P.1, it is very clear that the defendant agreed to pay 3% sales commission on total order or contract values to the plaintiffs immediately against the release of letter of intent from the BWSSB in favour of the defendant No.2. Apart from this admittedly the defendant has made part payment of Rs.6,52,620/- to the plaintiffs. Even the DW1 during the course of the cross-examination clearly admitted regarding the payment of 3% commission to the plaintiff when the letter of intent issued to the defendant by Bangalore Water Supply and Sewerage Board.
32 O.S.No.7680/2009
16. Thus the plaintiff proved that there was any agreement between the plaintiff and defendant for payment of 3% commission on the total value of the order immediately on issue of letter of intent in favour of the defendant by Bangalore Water Supply and Sewerage Board. Hence, Issue No.2 is answered in the affirmative.
17. ISSUE NO.3: It is the case of the plaintiff that it has provided marketing representation services to the defendant for obtaining letter of intent or order from Bangalore Water Supply and Sewerage Board against BWSSB Tender No. BWSSB/CE(M)/TA-92187 dt:12/07/2007.
18. The learned advocate appearing for the defendant vehemently argued that the plaintiff produced Ex.P.3 to P.5, which are the E-mails. As per Section 65(B) of Indian Evidence Act the copies of E-mails must be supported with certificate and the along with E-mails certificate ahs to be produced. In this suit the plaintiff produced the certificates after closing his evidence. Hence, the Ex.P.3 to P.5 cannot be looked into. 33 O.S.No.7680/2009
19. The Section 65(B) of Indian Evidence Act reads thus:
65(B) Admissibility of electronic records:
1) Notwithstanding anything contained in this Act, any information contained in an electronic record which is printed on a paper, stored, recorded or copied in optical or magnetic media produced by a computer shall be deemed to be also a document, if the conditions mentioned in this section are satisfied in relation to the information and computer in question and shall be admissible in any proceedings, without further proof or production of the original, as evidence of any contents of the original or of any fact stated therein of which direct evidence would be admissible.
2) The conditions referred to in sub-section (1) in respect of a computer output shall be the following namely:-
a) the computer output containing the information was produced by the computer during the period over which the computer was used regularly to store or process information for the purposes of any activities regularly carried on over that period by the person having lawful control over the use of the computer.34 O.S.No.7680/2009
b) During the said period, information of the kind contained in the electronic record or of the kind from which the information so contained is derived was regularly fed into the computer in the ordinary course of the said activities.
c) Throughout the material part of the said period, the computer was operating properly, or, if not, then in respect of any period in which it was not operating properly or was out of operation during that part of the period, was not such as to affect the electronic record or the accuracy of its contents; and
d) The information contained in the electronic record reproduces or is derived from such information fed into the computer in the ordinary course of the said activities.
3) Where over any period, the function of storing or processing information for the purposes of any activities regularly carried on over that period as mentioned in clause(a) of sub-section (2) was regularly performed by computers, whether-
a) by a combination of computers operating over that period; or
b) by different computers operating in succession over that period; or
c) by different combinations of computers operating in succession over that period, or
d) in any other manner involving the successive operation over that period, in whatever order, of one or more computers 35 O.S.No.7680/2009 and one or more combinations of computers, all the computers used for that purpose during that period shall be treated for the purposes of this section as constituting a single computer, and references in this section to a computer shall be construed accordingly.
4) In any proceedings where it is desired to give a statement in evidence by virtue of this section, a certificate doing any of the following things, that is to say,-
a) identifying the electronic record containing the statement and describing the manner in which it was produced;
b) giving such particulars of any device involved in the production of that electronic record as may be appropriate for the purpose of showing that the electronic record was produced by a computer
c) dealing with any of the matters to which the conditions mentioned in sub-section(2) relate, and purporting to be signed by a person occupying a responsible official position in relation to the operation of the relevant device or the management of the relevant activities(whichever is appropriate) shall be evidence of any matter stated in the certificate;
and for the purposes of this sub-section it shall be sufficient for a matter to be stated to the best of the knowledge and belief of the person stating it.
5) For the purposes of this section-
36 O.S.No.7680/2009
a) information shall be taken to be supplied to a computer it is supplied thereto in any appropriate form and whether it is so supplied directly or by means of any appropriate equipment;
b) whether in the course of activities carried on by any official information is supplied with a view to its being stored or processed for the purposes of those activities by a computer operated otherwise than in the course of those activities, that information, if duly supplied to that computer, shall be taken to be supplied to it in the course of those activities;
c) a computer output shall be taken to have been produced by a computer whether it was produced by it directly or (with or without human intervention) by means of any appropriate equipment.
20. In this regard, the learned Advocate appearing for the defendant relied on the ruling reported in (2014) 10 Supreme Court Cases 473(AnvarP.V. V/s P.K.Basheer and others), wherein their lordships held as under:
"It is further clarified that the person need only to state in the certificate that the same is to the best of his knowledge and belief. Most importantly, such a certificate must accompany the electronic record like computer printout, compact disc(CD), video compact disc(VCD), pen drive, etc., pertaining to which a statement is sought to be given in 37 O.S.No.7680/2009 evidence, when the same is produced in evidence. All these safeguards are taken to ensure the source and authenticity, which are the two hallmarks pertaining to electronic record sought to be used as evidence.
Electronic records being more susceptible to tampering, alteration, transposition, excision etc., without such safeguards, the whole trial based on proof of electronic records can lead to travesty of justice.
It may; be seen that it was a case where a responsible official had only certified the document at the time of production itself. The signatures in the certificate were also identified. That is apparently in compliance with the procedure prescribed under Section 65B of the Evidence Act. However, it was held that irrespective of the compliance with the requirements of Section 65-B which is a special provision dealing with admissibility of the electronic record, there is no bar in adducing secondary evidence, under Sections 63 and 65, of an electronic record.
An electronic record by way of secondary evidence shall not be admitted in evidence unless the requirements under Section 65B are satisfied. Thus, in the case of CD, VCD, chip, etc., the same shall be accompanied by the 38 O.S.No.7680/2009 certificate in terms of Section 65B obtained at the time of taking the document, without which, the secondary evidence pertaining to that electronic record, is admissible.
The appellant admittedly has not produced any certificate in terms of Section 65B in respect of the CDs Exts. P-4, P-8, P-9, P- 10, P-12, P-13, P-15, P-20 and P-22. Therefore, the same cannot be admitted in evidence. Thus, the whole case set up regarding the corrupt practice using songs, announcements and speeches fall to the ground."
21. So, as per the Section 65B of the Indian Evidence Act and also as held by their lordships in the above ruling it is mandatory on the part of the plaintiff to produce certificate with regard to the Ex.P.3 to P.5 at the time of producing the same to the court. From the records it is clear that the Ex.P.3 to P.5 were produced to the court at the time of arguments of the defendant's counsel. The certificate has to be produced along with the document when it was produced before the court. In other words the plaintiff might have produced the certificate at the time of filing of the suit itself and at the time of evidence the document along with the certificate has to be got marked. So, 39 O.S.No.7680/2009 when the material document, which is at Ex.P.3 to P.5 were not accompanied by the certificate under Section 65B of Indian Evidence Act, hence the same cannot be looked into.
22. Apart from Ex.P.3 to P.5 the plaintiff produced Ex.P.6 to P.9. The Ex.P.6 is the letter dated 30.11.2007 written by the defendant to the BWSSB stating that the plaintiff will attend the tender opening. Ex.P.8 is the letter of intent issued by the Bangalore Water Supply and Sewerage Board in favour of defendant was officially endorsed to the plaintiff. Ex.P.9 is the copy of the work order issued by the Bangalore Water Supply and Sewerage Board in favour of the defendant was officially endorsed to the plaintiff.
23. The Dw1 during the course of cross-examination admitted as under:
"..........It is true that the plaintiff was working as the representative of our Company with BWSSB (Emphasis supplied).
.............BWSSB gave the letter of intent to our Company during the end of December, 2007 or first week of January 2008. It is true 40 O.S.No.7680/2009 that Ex.P.8 is the letter of intent issued by BWSSB and a copy of it was also sent to the plaintiff. It is true that the letter of intent issued by BWSSB with the efforts of plaintiff.
The Work Order was issued during February 2008 as per Ex.P.9 and a copy of it was also sent to the Plaintiff. "
24. So, from the above admissions and Ex.P.6, P.8 and P.9 it is clear that the plaintiff provided marketing representation services to the defendant for obtaining the letter of intent or order dated 12.7.2007 apart from other services. Hence, Issue No.3 is answered in the affirmative.
25. ISSUE NO.4 AND ADDL.ISSUE NO.2: It is the case of the defendant that the plaintiff has violated terms of agreement related to payment of 3% sales commission and hence service of the plaintiff was terminated as per the termination notice dated 6.9.2008.
26. The DW1 deposed that after appointing the plaintiff as its marketing representative it was noticed that the plaintiff's performance was not satisfactory, hence the Bangalore Water 41 O.S.No.7680/2009 Supply and Sewerage Board issued letter dated 26.4.2008 expressing its dissatisfaction with the speed of work for which the plaintiff was primarily responsible as the plaintiff did not carry out its works/duties and responsibilities and then the defendant has immediately brought the same to the notice of the plaintiff vide letter dated 3.5.2008 and inspite of receipt of the said letter the plaintiff has not changed his attitude and because of which the defendant suffered loss of credibility and representation. By this time realizing that it was incapable of performing the obligations undertaken the plaintiff had even started ignoring telephone calls made by the defendant and letters addressed in the interim period 3.5.2008 to 6.9.2008 were refused by the plaintiff and hence the defendant terminated the service of the plaintiff by letter dated 6.9.2008.
27. Firstly there is no pleadings and proof regarding the alleged violation of any terms of agreement prior to the issuance of letter of intent by the Bangalore Water Supply and Sewerage Board. Secondly the allegations made by the defendant is after the issue of Ex.P.8. Under the Ex.P.1 sales commission of 3% has to be payable immediately upon issuance of letter of intent 42 O.S.No.7680/2009 by the Bangalore Water Supply and Sewerage Board. Thirdly the defendant has not explained what are the works/duties and responsibilities, which are not carried out by the plaintiff and which are the letters that were refused. So, the defendant vaguely stated regarding alleged performance of the plaintiff as not satisfactory. Hence, it cannot be said that the plaintiff has violated any terms of agreement related to payment of 3% sales commission. The defendant did not produce the termination notice dated 6.9.2008. So, the defendant failed to prove that the plaintiff has violated the terms of agreement related to payment of 3% sales commission and the service of the plaintiff was terminated as per the termination notice dated 6.9.2008. Hence, Issue No.4 and Additional Issue No.2 are answered in the negative.
28. ADDL.ISSUE NO.1: At para No.21 of the written statement the defendant took the contention that this court has no jurisdiction to entertain the suit as the memorandum of agreement was signed by the parties in the head office of the defendant at Pune. The DW1 during the course of cross- examination admits that the Ex.P.1 was signed by him in 43 O.S.No.7680/2009 Bangalore. In this regard, I would like to rely on the ruling reported in 1979(2) KLJ 410, wherein his lordship held as under:
"A contract is complete only when the offer made is accepted. It is acceptance of that offer that gives rise to the cause of action and not merely an offer. Hence, even though the offer is made from Bangalore, it cannot be said that part of the cause of action arose in Bangalore. In a suit, the cause of action will consist of making of the contract, its breach at a place, where it has to be performed and other facts. A suit for breach of contract can therefore be brought at the option of the plaintiff either at the place where the contract was made or where the breach was committed."
29. So, when the plaintiff accepted the offer of the defendant at Bangalore and at that place the cause of action will arose. So also the E-Tender, letter of intent and work orders were issued in favour of the defendant by the BWSSB from Bangalore. Hence, this court has got territorial 44 O.S.No.7680/2009 jurisdiction to try the suit. So, the Additional issue No.1 is answered in the affirmative.
30. ADDITIONAL ISSUE NO.3: The defendant at para No.20 it has contended that the alleged cause of action is merely based on imagination of the plaintiff for the purpose of above suit.
31. The plaintiff in para No.20 of the plaint clearly stated the cause of action originally arose for the purpose of filing of this suit starting from the Ex.P.1 memorandum of understanding dated 8.9.2007. As stated above, the defendant in his written statement contended that the Ex.P.1 is signed in Pune. The DW1 during the course of cross-examination admitted that Ex.P.1 is signed in Bangalore. Apart from the stating the date of cause of action on 8.9.2007 the plaintiff also stated in the plaint the arising of cause of action on different dates clearly. The dates of cause of action stated by the plaintiff is based on the documents, which are produced by him. The defendant has not explained how the cause of action shown in the plaint is imaginary one, unlawful etc. Hence, it cannot be 45 O.S.No.7680/2009 said that the suit of the plaintiff is bad for want of cause of action as the semblance of cause of action shown is unlawful. Hence, Addl. Issue No.3 is answered in the negative.
32. ISSUE NO.6: The learned Advocate appearing for the plaintiff argued and stated in the written arguments that the intention of the parties can be found from Ex.D.3. The Ex.P.1 being unambiguous and categorical and it would does not call for any interpretation. In view of the admission of the DW1 that because of the efforts of the plaintiff the letter of intent was issued by the BWSSB is proved. There is no law in India, which prohibits a contracting party to agree for a success fee. In any event this agreement is not available to the defendant as both the parties have acted upon the agreement and the Hon'ble Bombay High Court has accepted the validity of the agreement and its enforceability. The question of the plaintiff performing any other obligation under the agreement does not arise as the plaintiff has to procure tender to the defendant and nothing more. Hence, it cannot be said that the plaintiff had abandoned the agreement dated 8.9.2007. The role of the plaintiff was to follow up and liaison with BWSSB in the matter of award of 46 O.S.No.7680/2009 tender. The Hon'ble Bombay High Court has accepted and recognized the agreement between the parties being valid and legal and it attained finality. The only ground on which Bombay High Court felt that the matter be examined by the Civil Court of competent jurisdiction was for the reason that defendant contended in the course of hearing of the company petition that Ex.P.1 contained an Annexure. Since the existence of Annexure was in dispute the Hon'ble Bombay High Court felt that the said fact has to be ascertained. If the defendant were not to raise the said false and motivated contention regarding existence of an alleged Annexure to the Ex.P.1 the Hon'ble Bombay High Court would have directed the defendant to pay the money or would have proceeded to wind up the defendant.
33. The learned Advocate appearing for the defendant vehemently argued and stated in the written arguments that if the Court comes to the conclusion that the Ex.P.1 is a binding contract, then the same can be enforced by this Court. Since there is no consensus Ad-Idem between the parties and there is no consideration on the part of the defendant and thereby the contract is not enforceable and the alleged contract is opposed 47 O.S.No.7680/2009 to public policy and thereby it is void-ab-initio and hence the same cannot be enforced. The plaintiff is unable to prove the existence of valid contract, which is enforceable in law. Even if it is assumed that Ex.P.1 is written by the defendant agreeing to pay the amount unless corresponding duties and responsibilities are enumerated in Ex.P.1 it is only formal offer. To be an enforceable contract the terms of contract have to be certain and the parties must have understood and agreed the same. The terms and conditions are mentioned in Annexure-II Ex.P.1, which is not produced by the plaintiff. The contract said to be entered is for the purpose of influencing the government authorities to procure tender, which is opposed to public policy and hence the contract will become void-ab-initio.
34. Firstly, I would like to consider the contention of the plaintiff with regard to the Company Petition No.926/2008 filed by it. The plaintiff produced Ex.P.34, which is the certified copy of the interim orders passed by Hon'ble Bombay High Court in Company Petition No.926/2008, which shows that the plaintiff No.2 filed the same against the defendant to wind up the 48 O.S.No.7680/2009 defendant company stating that the defendant is liable to pay Rs.34,56,034.80 and wherein it was ordered as under:
"i) In the event the company paying to the petitioner a sum of RS.40,00,000/- within eight weeks from the date of being served with a copy of this order by the petitioner, the petition shall stand dismissed.
ii) In case of failure on the part of the Company to pay the amount as aforesaid, the Petition shall stand admitted and to be advertised in Free Press Journal, Maharashtra Times and Maharastra Government Gazette.
In that event the Petitioner to deposit an amount of Rs.10,000/- with the Prothonotary and Senior Master of this Court within four weeks from the date of default."
35. The Ex.P.35 the order of Hon'ble High Court of Bombay on the Company Application No.401/2009 filed by the defendant in Company Petition No.926/2008 discloses that after the aforesaid order the defendant given the bank guarantee of Rs.20,00,000/- as per Ex.P.34. The Ex.P.36 order of Hon'ble Bombay High Court in Company Petition No.926/2008, wherein it was ordered as under: 49 O.S.No.7680/2009
"i) The respondent company has already submitted a bank guarantee issued by the Bank of India to the tune of Rs.20,00,000/- in favour of the Prothonotary and Senior Master as directed by this Court by its earlier order. The respondent submits that in the event of the plaintiff filing a suit in respect of the amount claimed in the petition within the period stipulated hereunder, the said Bank Guarantee already submitted be treated as Bank guarantee furnished by the respondent in the said suit filed by the petitioner. The Bank Guarantee already submitted is for a period of one year and shall be renewed every year by the respondent company until the hearing and final disposal of the suit and orders passed therein by the appropriate Court."
36. So, from the above order of Hon'ble Bombay High Court, that the plaintiff was given liberty to approach the civil court with respect to the suit claim and if the suit is filed then the court has to decide the same on merits. With respect to the above order of Hon'ble Bombay High Court I am of the opinion that in the said company Petition No.926/2008 the validity of 50 O.S.No.7680/2009 the Ex.P.1 is not decided and in view of filing of the above suit by the plaintiff before this court this court has to decide the validity of the Ex.P.1. So the plaintiff cannot claim that the Hon'ble Bombay High Court accepted the Ex.P.1 and it attained finality.
37. It is convenient to reproduce the relevant contents of Ex.P.1, which are as under:
"With reference to above and discussion held with you, we are pleased to appoint your as our Marketing Representatives for follow up and liaisoning in connection with the referred Tender of Bangalore Water Supply and Sewerage Board. In this connection we hereby confirm as under:
".....In the event that we receive any orders/contracts against referred tender from BWSSB, we will give you a sales commission of 13% (thirteen percent) on all orders/contracts against referred tender. This 13% sales commission will be paid by us to you at different stages as under: 3% (three percent) sales commission on total order/contract values will be paid to you by us immediately against release of 51 O.S.No.7680/2009 letter of intent from Bangalore Water Supply and Sewerage Board in our favour and Balance 10% sales commission on total order/contract values will be paid to you by us on pro-rata basis immediately against receipt of payments by us from BWSSB from time to time.
We are forwarding you this letter of confirmation regarding you appointment as our Marketing Representatives and payment of sales commission in duplicate. Please sign and return one copy signifying your acceptance of the same. This letter signed by you and us will be treated as and abided by you as well as by us as legal and binding contract".
38. It is contended by the defendant in the written statement and also seriously cross-examined by the defendant's counsel to the PW1 that there was Annexure to the Ex.P.1 but the PW1 denied the same. In this regard, the learned Advocate appearing for the defendant relied on the ruling reported in (1990) 3 SCC 1 (Mayawanti V/s Kaushalya Devi), wherein the Hon'ble Supreme Court of India has held at para 18 as follows: 52 O.S.No.7680/2009
"............The stipulations and terms of the contract have therefore, to be certain and the parties must have been consensus ad idem. The burden of showing the stipulations and terms of the contract and that the minds were ad idem is, of course, on the plaintiff. If the stipulations and terms are uncertain and the parties are not ad idem, there can be no specific performance, for there was no contract at all.
In para 11 the Hon'ble Apex Court has observed as follows:
It is settled law that of a contract is to be made, the intention of the offeree to accept the offer must be expressed without leaving room for doubt as to the fact of acceptance or to the coincidence of the terms of acceptance with those of the offer. The rule is that the acceptance must be absolute and must correspond with the terms of the offer. If the two minds were not ad idem in respect of the property to be sold, there cannot be said to have been a contract for specific performance. If the parties themselves were not ad idem as to the subject matter of the contract the court cannot order specific performance............".53 O.S.No.7680/2009
39. As held by the Hon'ble Supreme Court of India, in the above said ruling the plaintiff and defendant did not came to the consensus Ad-Idem with regard to the certain terms and conditions that both the parties must act and the Ex.P.1 do not contain the terms and conditions as admitted by the PW1 during the course of cross-examination. During the course of cross-examination the PW1 deposed as under:
"The tender amount was 13 crores 69 lakh 55 thousand one hundred sixty. It is true that as per the terms and conditions we are agreed to pay 3% commission to the plaintiff when the letter of intent issued to the defendant by BWSSB".
40. So the terms and conditions on which 3% commission payable to the plaintiff is not available on record. During the course of the cross-examination of PW1, the defendant's counsel confronted the alleged Xerox copy of Annexure without any date and the witness denied the same and hence it was not marked. The defendant has also not produced the alleged Annexure to the Ex.P.1. The defendant produced Ex.D.9, wherein there is reference about the letter and its Annexure, which is denied by the plaintiff. So, the Ex.P1 does not contain 54 O.S.No.7680/2009 terms and conditions specifying the nature of work as held by the Hon'ble Supreme Court of India in the above ruling.
41. During the course of the cross-examination the PW1 was tested with regard to his alleged different duties under Ex.P.1 and for all those questions he has answered as the tender process etc. in the sealed cover. If such being the case there is no participation by the plaintiffs in the alleged different duties of it. The plaintiffs also not produced any document to show that what he exactly done with regard to the E-Tender of BWSSB. So the plaintiffs have not discharged the burden by producing the documents.
42. Now it is to be seen whether the Ex.P.1 fulfills the essentials of valid contract is that the consideration and the object is of lawful. Every agreement of which the object or consideration is unlawful is void. The Section 23 mentions the circumstances when the consideration or object of an agreement is not lawful. Section 23 of Contract Act reads as under:
55 O.S.No.7680/2009
"What consideration and objects are lawful, and what not- The consideration or object of an agreement is lawful, unless -
It is forbidden by law, or Is of such a nature that, if permitted, it would defeat the provisions of law; or Is fraudulent; or Involves or implied injury to the person or property of another, or the Court regards it as immoral, or opposed to public policy. In each of these cases, the consideration or object of an agreement is said to be unlawful. Every agreement of which the object or consideration is unlawful is void."
43. It is also pertinent to reproduce the illustration (f) of Section 23 of the Indian Contract Act, which is as under:
(f) A promises to obtain for B an
employment in the; public service and B
promises to pay 1,000 rupees to A. The
agreement is void, as the consideration for it is unlawful.
44. From the available materials on record placed by both the parties the agreement such as present one, which had been entered into with obvious purpose of influencing the 56 O.S.No.7680/2009 government authorities to procure the tender. The illustration
(f) of Section 23 of the Indian Contract Act directly applicable to the case on hand. The object of agreement is that the plaintiff should wield his influence with the government authorities in securing the tender and in turn the plaintiff would be given commission out of the tender value. To enforce such a contract although fixed tendencies to injure public welfare is manifest is not only to abdicate once public duty but to assist in securing the tender by influencing the authorities when they have to abide by law. So also every contract of which the object or consideration is unlawful is void. A contract whereby one party is to assist another and is to share in the proceeds of the action and such assistance is by wielding the influence on the authorities irrespective of the fact that the persons intended to be influenced or not amenable to such influence is opposed to public policy as per Section 23 of Contract Act and its illustration (f).
45. Further, the PW1 during the course of the cross- examination deposed regarding the nature of work done by him, which is as under:
57 O.S.No.7680/2009
a) Marketing representation of the defendant.
b) Finding out the competitive situation.
c) When the pre-bid meeting and any other official meeting will be held.
d) Attending the tender opening at Bangalore Water Supply and Sewerage Board.
e) Informing the defendant who are bidders and what is the process quoted by them.
f) Informing the defendant what is the progress of the tender in BWSSB.
g) What is the competition doing and when the letter of intent is likely to be placed by BWSSB and who is the lower bidder and who is likely to be get the order.
To highlight the BWSSB officers the merits of the defendant".
46. In Ex.D.3 it is stated by the plaintiff as under:
"We have excellent contracts and experience of dealings in BWSSB for no. of years and are confident of securing this business. Our proposal is that you appoint us as authorized marketing representatives for negotiating this Tender in your favour in consideration of a suitable sales commission. You will submit your bid directly to BWSSB. We will do the 58 O.S.No.7680/2009 follow and liaisoning on your behalf and get the order and payment released in your favour..................".
47. Section 24 of Contract Act reads as under:
"Agreement void, if considerations and objects unlawful in part : If any part of single consideration for one or more objects, or anyone or any part of anyone of several considerations for a single object, is unlawful, the agreement is void."
48. So, the Ex.D.3 makes abundantly clear that the plaintiff had access to the government authorities and was in a position to secure the tender allotted by wielding his influence and he would wield influence on the officers/officials of the BWSSB in getting the tender awarded in favour of the defendant and the PW1 wisely not deposed the same in the above cross- examination. From the materials placed on record by the plaintiffs and the defendant it can be very well said that the major work undertook by the plaintiffs was to influence the officials of the BDA to procure tender for the defendant and other works entrusted to the plaintiffs if any are negligible. As 59 O.S.No.7680/2009 per Section 24 of the Contract Act when the part of the consideration or object, which is unlawful cannot be separated from the other part, which is lawful, the Court will enforce that part, which is lawful and set aside that part, which is unlawful. If so such severance of illegal from the legal part is possible the whole of the agreement is void. The influencing of the officials of BDA and other duties if any under the Ex.P.1 cannot be separated. Hence, the entire Ex.P.1 becomes void and unenforceable as per Section 23 and 24 of the Contract Act.
49. In this regard, the learned Advocate for the defendant further relied on ruling reported in (1991) 3 SCC 67 (Rattan Chand Hira Chand V/s Askar Nawaz Jung(dead) by LRs.), wherein their lordship held as under:
"Every agreement of which the object or consideration is unlawful is void. The consideration or object of an agreement is unlawful when the court regards it as opposed to public policy. If anything is done against the public law or public policy would suffer in case a contract against pubic policy is permitted to stand. Public policy is a principle of judicial interpretation founded on the current needs of 60 O.S.No.7680/2009 the community. The law relating to public policy cannot remain immutable. It msut change with passage of time. A bargain whereby one party is to assist another in recovering property and is to share in the proceeds of the action and such assistance is by using the influence with the administration, irrespective of the fact that the persons intended to be influenced are not amenable to such influence is against protection and promotion of public welfare. It is opposed to public policy. In this view, we would hold that the plaintiff cannot enforce the agreement to recover the amount from the respondents."
50. He further relied on ruling reported in 2007(Supp.)Bom.C.R.925 (Reliance Natural Resources Ltd. V/s Reliance Industries Ltd., wherein it is held as under:
"93 Apart from that the following extracts from Chitty on Contracts (27th Edition), 1994 in para 12.053 is also useful:
Every contract is to be construed with reference to its object and the whole of its terms and accordingly the whole context must be considered in endeavoring to collect the intention of the parties, even though the 61 O.S.No.7680/2009 immediate object of inquiry is the meaning of an isolated word or clause"
51. So, as held by their lordships in the above said rulings, every contract has to be construed with reference to its object and the whole of its terms must be construed in its entirety. The general rule is that contract must be specifically enforced as above. The averments of the plaint, the evidence of PW1 and the documents of the plaintiff will clearly establish that the plaintiff demanded money for the purpose of influencing the authorities and not for any other reason. As such, the agreement urged by the plaintiff is being one unduly influence the government authorities to award the contract to one particular company is against the law and is opposed to public policy.
52. So for this reason that the Ex.P.1 is unenforceable agreement as the objects and consideration is unlawful and hence though the plaintiff proved the Issue Nos.1 to 3 and Additional Issue No.1 they are not entitled for the reliefs sought for. In the result, I proceed to pass the following: 62 O.S.No.7680/2009
ORDER The suit of the plaintiffs is hereby dismissed.
In the facts and circumstances of the case no order as to costs.
Draw decree accordingly.
(Dictated to the Judgment-writer on computer, typed by her, corrected and then pronounced by me in the open court, on this the 30th day of November 2016).
(BASAVARAJ) XLI Addl. City Civil Judge, Bangalore.
ANNEXURE I. List of witnesses examined on behalf of :
a) Plaintiff's side:
P.W.1 Narendra Kumar Sarawgi
b) Defendant's side:
D.W.1 Vijay Bagul
II. List of documents exhibited on behalf of :
a) Plaintiff's side:
Ex.P.1 Appointment letter
Ex.P.1(a) Signature of Managing Director
63 O.S.No.7680/2009
Ex.P.1(b) Signature of plaintiff
Ex.P.2 Letter dt.26.11.07
Ex.P.3 E-Mail Dt.29.11.07
Ex.P.4 E- Mail dt.29.11.2007
Ex.P.5 E-Mail dt.29.11.07
Ex.P.6 Letter from defendant dt.30.11.07
Ex.P.7 E-Mail dt.26.12.07
Ex.P.8 Copy of letter of intent dt.28.12.07
Ex.P.9 Letter dt.18.2.08
Ex.P.10 Computer Copy of the statement of
account maintained by Indian bank
Ex.P.11 Office copy of letter dt.20.2.08
Ex.P.12 Bill dt.20.2.08
Ex.P.13 Reminder dt.22.3.08
Ex.P.14 Postal receipt
Ex.P.15 Postal acknowledgment
Ex.P.16 Reminder dated 29.4.2008
Ex.P.17 Postal receipt
Ex.P.18 Postal acknowledgment
Ex.P.19 Letter of defendant dt.3.5.2008
Ex.P.20 & 21 Postal receipt
64 O.S.No.7680/2009
Ex.P.22 Postal cover with acknowledgment
Ex.P.23 Copy of legal notice
Ex.P.24 to 26 3 Postal receipts
Ex.P.27 & 28 Postal cover
Ex.P.29 Letter written by plaintiff Advocate to
postal department dt.1.10.2008
Ex.P.30 Postal endorsement dated 17.10.2008
Ex.P.31 Reply notice to plaintiff counsel by
defendant counsel dt.29.9.2008
Ex.P.31(a) Postal cover
Ex.P.32 Another notice issued by plaintiff's
counsel dated 5.12.2008
Ex.P.33 Postal receipt
Ex.P.33(a) Speed Post receipt
Ex.P.34 C/c of order passed by Hon'ble High
Court of Bombay in Company Petition
No.926/2008 dated 25.2.2009
Ex.P.35 C/c of order passed by Hon'ble High
Court of Bombay in Company
Application No.401/2009 dated
3.8.2009
Ex.P.36 C/c of order passed by Hon'ble High
Court of Bombay in Company Petition
No.926/2008 dated 10.10.2009
Ex.P.37 Certificate u/S 65(A) & 65(B) of
Indian Evidence Act
65 O.S.No.7680/2009
b) defendant side :
Ex.D.1 Ascent Business & Consultancy letter
Ex.D.1(a) Signature of PW1
Ex.D.2 Letter
Ex.D.3 E-mail dated 14.8.2007
Ex.D.4 E-mail letter dated 17.9.2007
Ex.D.4(a) Attachment of E-mail
Ex.D.5 Extract of resolution passed in the
meeting of Board of Directors of
defendant company
Ex.D.6 E-mail dated 7.9.2007
Ex.D.7 E-mail dated 25.9.2007
Ex.D.8 Letter issued by BWSSB to defendant
dated 26.4.2008
Ex.D.9 Letter dated 24.6.2008 issued by
defendant to the plaintiff
Ex.D.10 Information obtained under RTI from
BWSSB dated 1.4.2013
Ex.D.11 Copy of letter issued by Technical
Assistant, BWSSB dated 28.7.2007
Ex.D.12 Letter addressed to the Chief
Engineer by the Technical Assistant,
BWSSB dated 9.8.2007
Ex.D.13 Another letter dated 6.9.2007
66 O.S.No.7680/2009
Ex.D.14 Another letter dated 20.11.2007 issued by Technical Assistant, BWSSB Ex.D.15 Another letter dated 18.6.2008 issued by Technical Assistant, BWSSB Ex.D.16 E-mail dated 31.3.2008 by Technical Assistant, BWSSB addressed to Chief Engineer, Maintenance, BWSSB XLI ADDL.CITY CIVIL JUDGE BANGALORE