Delhi District Court
M/S Smg Interiors And Ors vs M/S Oravel Stays Pvt. Ltd on 23 February, 2026
IN THE COURT OF SH. SANDEEP YADAV, DISTRICT JUDGE
(COMMERCIAL COURT)-03 (SOUTH) SAKET COURTS, NEW
DELHI
CS (COMM) 145/2019
M/s SMG Interior
F-6/07, 1st Floor Vatika India Next
Sector-82, Gurgaon
Haryana 122004 .... Plaintiff no. 1
Shashank Goel
C-10, Third Floor
Panchsheel Enclave
New Delhi-110017 .... Plaintiff no. 2
Mohit Garg
F-6/07, 1st Floor Vatika India Next
Sector-82, Gurgaon
Haryana 122004 .... Plaintiff no. 3
Versus
M/s. Oravel Stays Pvt. Ltd. (OYO)
Office at Delhi Rectangle Regus
Level 4, Rectangle 1
Commercial Complex, D-4, Saket
New Delhi
Also at
9th Floor, Spaze Palazo
Southern Periphery Road
Sector-69
Gurgaon 122001
Haryana. ....Defendant no. 1
CS (COMM) 145/2019 1/16
M/s SMG Interior & Ors. Vs. M/s. Oravel Stays Pvt. Ltd. (Oyo) & Ors.
2. Jaspal Kharbanda
D-4, Lajpat Nagar-III
New Delhi-110024
Also at :
33, Siri Fort Road
Near Gargi College, New Delhi-110049 ....Defendant no. 2
3. Dharampal Vig
E-95, Saket, New Delhi-110017 ....Defendant no. 3
Date of institution of petition : 17.07.2019
Date of reserving judgment : 13.02.2026
Date of pronouncement : 23.02.2026
JUDGMENT
1. This suit for recovery has been filed by M/s. SMG Interiors and other plaintiffs against M/s. Oraval Stays Pvt. Ltd. (Oyo) (defendant no.
1), Jaspal Kharbanda (defendant no. 2) and Dharampal Vig (Defendant no.
3). Case of plaintiff may be briefly summarized as under :-
2. Plaintiff no. 1 is a registered partnership firm and plaintiff no. 2 & 3 are its partners. Plaintiffs are engaged in the business of providing construction related services including building new construction, renovating/repairing old constructions. Plaintiffs have provided their aforesaid services to the various properties which are operated by defendant no.1 in the past. Defendant no. 1 is a hospitality company having hotel network spread over 230 cities. With a view to increase occupancy CS (COMM) 145/2019 2/16 M/s SMG Interior & Ors. Vs. M/s. Oravel Stays Pvt. Ltd. (Oyo) & Ors. and revenue, defendant no. 1 connects to the owners of hotels/homes and commercial space. Defendant no. 2 & defendant no. 3 are the owners of property Dieu Donne Villa, Nalapani Road, Barlow Ganj, Mussoorie, Dehradun, Uttarakhand 248122 (hereinafter referred to as "the property"). As per the information of plaintiffs there exist business relations between defendant no. 2 and defendant no. 1 as one of the properties of defendant no. 2 is currently being operated by defendant no. 1.
3. In February/March 2018, plaintiff were engaged by defendant no. 1 for renovation/refurbishment/repair of property owned by defendant no. 2 & defendant no. 3. Plaintiffs were hired to renovate the property as per defendant no. 1's specifications. Since the property was to be operated as "Oyo Homes", Ms. Somya working as Head, Space Expertise of Oyo coordinated on behalf of defendant no. 1. Ms. Somya informed the plaintiffs that defendant no. 1 has entered into an agreement between defendant no. 2 & 3 whereunder defendant no. 2 & 3 have agreed that Oyo will operate the said property under 'Oyo Homes' brand. Ms. Somya further informed the plaintiffs that plaintiffs' services are required for renovation, restoration, refurbishment and repair of the property. Plaintiffs were assured by Ms. Somya on behalf of defendant no. 1 that 50 % of plaintiffs' fee will be paid in advance while balance 50 % fee will be paid after completion of work. Plaintiffs were further assured to be paid for the work done on actual basis as per percentage to be decided by parties subsequently. Plaintiffs, on being requested, visited the property in last week of February 2018 and presented their estimate of Rs. 17,95,500/- (excluding GST) vide e-mail dated 04.03.2018 alongwith description of goods and rates. After negotiations with defendant no. 1, the estimate was CS (COMM) 145/2019 3/16 M/s SMG Interior & Ors. Vs. M/s. Oravel Stays Pvt. Ltd. (Oyo) & Ors. updated and fresh discounted estimate of Rs. 14,87,500/- (excluding GST) was presented vide e-mail dated 05.01.2018. Defendant no. 1 through e- mail extended the scope of property and scheduled visit to the property and after visit to the property on 13.03.2018, fresh estimate of Rs. 19,14,300/- was given by plaintiffs and same was approved in the meeting of plaintiffs with defendant no. 2 and representative of defendant no. 1 on 14.03.2018. A sum of Rs.6 lacs was paid to the plaintiff on 21.03.2018 towards part advance payment. Despite non payment of assured 50 % of advance payment, plaintiffs' commenced the work on 26.03.2018. For easier coordination and speedy decision making, a whatsapp group was created by Ms. Somya which comprised of plaintiff no. 2, plaintiff no. 3, representative of defendant no. 1, defendant no. 2 and defendant no. 3. Due to bad weather and age of property, necessity of additional work emerged and accordingly, an understanding was reached between the parties that some additional renovation and consequent modification of plaintiffs' scope of work is required. At every stage whenever additional work was included, updated bills were duly shared with defendants and after approval, the advance work was executed. Further work was executed under the supervision of defendants' representative.
4. After continuous follow up of plaintiffs', a sum of Rs. 10 lac was paid on or around 06.04.2018 towards 50 % of balance amount. Subsequently on 14.04.2018 further payment of Rs. 4 lacs was made by defendants. On account of scope of work being increased more money was required and accordingly, plaintiffs requested the defendants to make the payment of Rs. 2 lacs. However, after repeated follow ups, Rs. 3 lacs were paid by defendants in several installments. In mid August 2018, plaintiffs CS (COMM) 145/2019 4/16 M/s SMG Interior & Ors. Vs. M/s. Oravel Stays Pvt. Ltd. (Oyo) & Ors. completed all the work in the property except some work to be done in relation to Outhouse for which approvals were pending at the end of defendants. Plaintiffs sent an e-mail to defendant no. 1 on 22.08.2018 informing about completion of work and called upon them to release the pending bills as per final bill till 22.08.2018 at the earliest. Same was also informed to defendant no. 2 & defendant no. 3 via common Whatsapp group. Final cost sheet of Rs. 64,76,771/- for work done by plaintiffs till 22.08.2018 was shared with defendants vide e-mail dated 22.08.2018. After deducting a sum of Rs. 23 lacs which was already received by plaintiffs, plaintiffs requested for payment of outstanding amount of Rs. 41,76,771/- and to decide the percentage for conclusion of plaintiffs' fee on work done on actual basis. Despite various reminders, plaintiffs' bills were not cleared. On the contrary, plaintiffs were asked by the defendants to undertake further additional work costing about Rs. 70,000/-. Plaintiff raised their final cost sheet of Rs. 65,48,574/-. After deducting a sum of Rs. 23 lacs, plaintiffs called upon the defendants to pay the outstanding fee of Rs.42,48,574/-.
5. Subsequently, defendant no. 1 vide e-mail dated 20.09.2018 made it clear that they will clear all outstanding bills after third party audit. The third party audit conducted by Koncept Consultancy confirmed payment due to plaintiffs. Thereafter, defendant no. 2 & defendant no. 3 insisted on another audit to be conducted by an auditor to be arranged by defendant no. 2 & defendant no. 3. However, defendant no. 2 & defendant no. 3 took no positive steps for conducting second audit. When all efforts of plaintiffs to get back their money failed, plaintiffs issued final notice dated 28.01.2019 to defendants calling up the defendants to pay a sum of Rs.
CS (COMM) 145/2019 5/16M/s SMG Interior & Ors. Vs. M/s. Oravel Stays Pvt. Ltd. (Oyo) & Ors. 42,48,574/- and to pay another amount of Rs. 2,89,723/- being plaintiffs' fee calculated at 10 % for work done on actual basis. When the said legal notice failed to evoke any response, plaintiffs filed the present suit.
6. Written statement filed by defendant no. 1 was taken off the record vide order dated 09.04.2024 as there was delay of about 1700 days (approximately in filing written statement). Written statement was filed by defendant no. 3 and same was adopted by defendant no. 2 as well. Defendant no. 2 & 3 raised a specific objection in the written statement that documents annexed with plaint cannot be read in evidence as all the documents are computer generated documents and were required to be proved with certificate under Section 65-B of Indian Evidence Act which has not been filed in the present case. On merits, defendant no. 2 & 3 took the plea that plaintiffs carried out the work on the instructions of defendant no. 1 and no approval or instructions was sought from or given by defendant no. 2 & 3 to the plaintiff for the amount claimed in the plaint. Thus, the main defence of defendant no. 2 & 3 is that defendant no. 2 & 3 never entered into any kind of contract or agreement with plaintiff and are not liable to pay any money to plaintiffs. Defendant no. 2 & 3 narrated the sequence of events leading to the management agreement between defendant no. 1 on the one hand and defendant no. 2 & 3 on the other hand with respect to the property to run the hotel under the name and style of 'Oyo'. It was specifically stated averred in the written statement that Ms. Somya, representative of defendant no. 1, might have hired the plaintiff to carry out the work and it was the understanding of Ms. Somya and plaintiff as to how the work was carried out within the scope of proposal provided to CS (COMM) 145/2019 6/16 M/s SMG Interior & Ors. Vs. M/s. Oravel Stays Pvt. Ltd. (Oyo) & Ors. defendant no. 2 & 3 vide e-mail dated 16.03.2018 signed by defendant no.
1.
7. After completion of pleadings, following issues were framed vide order dated 18.11.2024 :
1). Whether the plaintiff is entitled to a decree for a sum of Rs.
42,48,574/- as prayed for in the prayer clause (i) ? OPP
2). Whether plaintiff is entitled to a sum of Rs. 2,89,723/- towards plaintiff's fee as prayed for in the prayer clause (ii)? OPP
3). Whether the plaintiff is entitled to interest, if so, at what rate and for which period ? OPP
4). Whether the plaintiff is entitled to the cost of present suit ?
OPP
5). Relief.
8. I heard Mr. Avinash Trivedi, ld. Counsel for plaintiff, Mr. D. Archaya, ld. Counsel for defendant no. 1 as well as Mr.Pradeep Bhardwaj, ld.Counsel for defendant no. 2 & 3, at length and considered the rival submissions. Parties have also filed their written submissions.
9. Issue-wise findings of the Court as under :-
10. Issue no. 1 & issue no. 3 are interconnected and are being decided together.
CS (COMM) 145/2019 7/16M/s SMG Interior & Ors. Vs. M/s. Oravel Stays Pvt. Ltd. (Oyo) & Ors.
Issue no. 1 - Whether the plaintiff is entitled to a decree for a sum of Rs. 42,48,574/- as prayed for in the prayer clause (i) ? OPP Issue no. 3 - Whether the plaintiff is entitled to interest, if so, at what rate and for which period ? OPP
11. In the prayer clause of plaint, plaintiff are seeking decree of Rs. 42,48,574/- and Rs. 2,89,723/- against defendants. It is specifically averred in para 8 of plaint that plaintiffs were engaged by defendant no. 1 to provide their services in relation to renovation/refurbishment/repair of the property. These averments in the plaint convey that defendant no. 2 & 3 were nowhere in the picture when plaintiffs were engaged by defendant no. 1 for renovation/refurbishment/repair of the property. It is then averred in para 9 of the plaint that Ms.Somya, working as Head, Space Experience, at Oyo (defendant no. 1) furnished various information and assurances to plaintiffs via e-mail Ex. P-1/2. Therefore, even at this stage, defendant no. 2 & 3 were not in contact with plaintiff and all communications were being exchanged between plaintiff and defendant no. 1. It is then mentioned in para 10 of plaint that after several e-mails exchanged with defendant no. 1, estimate was updated and discounted estimate of Rs. 14,87,500/- was presented vide e-mail dated 05.03.2018, Ex. P-1/3. Here also, defendant no. 2 & 3 were not in the loop and all communications regarding total estimate was between plaintiff and defendant no. 1 as per the averments of plaint. Even discussion for extending scope of work took place between plaintiff and defendant no. 1.
CS (COMM) 145/2019 8/16M/s SMG Interior & Ors. Vs. M/s. Oravel Stays Pvt. Ltd. (Oyo) & Ors.
12. It is mentioned in the plaint that defendants paid various sums of money from time to time. However, plaintiffs have not clarified as to which of the defendants paid those sums of money and by what mode. It was revealed only during cross examination of PW 1 Shashank Goel and during final arguments that these payments were made by defendant no. 2 & 3 in cash. Thus, plaintiffs sought to conceal the material fact about part payment made by defendant no. 2 & 3 in cash to the plaintiff.
13. It is next mentioned in para 22 of plaint that after plaintiffs raised final cost sheet of Rs. 65,48,574/-, defendant no. 1 vide e-mail dated 20.09.2018 Annexure P/11 (Colly) categorically stated that they will clear all outstanding bills after the third party audit. This e-mail was also exchanged between plaintiff and defendant no. 1 and there is no mention of defendant no. 2 & 3 in the said e-mail.
14. Although, prints out of e-mails exchanged between parties and whatsapp conversations are not admissible in evidence as will be discussed in the later part of this judgment, however, even from the contents of these e-mails it becomes abundantly clear that all the e-mails regarding engagement of plaintiffs for renovation of the property, payment schedule, additional work, etc. were exchanged between plaintiffs and defendant no. 1 and even copy of same was not marked to defendant no. 2 & 3. Therefore. Mr. Pradeep Bhardwaj, ld. Counsel for defendant no. 2 & 3, was right in submitting that there was no privity of contract between plaintiffs and defendant no. 2 & 3. Plaintiffs were never hired or engaged by defendant no. 2 & 3. Defendant no. 2 & 3 never assured the plaintiff about any payment, advance or otherwise. The fact that some part payment was made CS (COMM) 145/2019 9/16 M/s SMG Interior & Ors. Vs. M/s. Oravel Stays Pvt. Ltd. (Oyo) & Ors. by defendant no. 2 & 3 will not fasten any liability on defendant no. 2 & 3 in the absence of any agreement between plaintiff and defendant no. 2 & 3 regarding renovation of the property. Hence, it is concluded that defendant no. 2 & 3 are not liable to pay any money to plaintiff.
15. It can be seen from the averments of plaint, documents filed with the plaint, evidence by way of affidavit of PW 1 Shashank Goel and documents exhibited in the testimony of PW 1 that entire case of plaintiffs rests on e-mail's prints out and whatsapp conversations. As per the list of documents exhibited in the testimony of PW 1 Shashank Goel, out of total 19 exhibited documents, 14 documents are prints out of e-mails, photographs and whatsapp conversations.
16. As discussed above, it is the case of plaintiffs that all initial communications regarding renovation of the property, consent for additional work, negotiations regarding final estimate, final cost of work done by plaintiffs were discussed/settled on e-mail/whatsapp conversations. In-fact, in response to a pointed query during cross examination, PW 1 Shashank Goel deposed that all the agreements were made through e-mails and whatsapp.
17. Similarly, on being asked as to whether negotiations were verbal or written, PW 1 Shashank Goel deposed that plaintiffs have mailed each and every quotation every time. Therefore, entire case of plaintiff is based on electronic evidence i.e. prints out of e-mail and whatsapp conversations. Defendant no. 2 & 3 in their written statement took a specific plea that those electronic record are not admissible in evidence in the absence of CS (COMM) 145/2019 10/16 M/s SMG Interior & Ors. Vs. M/s. Oravel Stays Pvt. Ltd. (Oyo) & Ors. certificate under Section 65-B of Indian Evidence Act. Despite such an objection forthcoming from defendant no. 2 & 3, plaintiffs did not file any certificate under Section 65-B of Indian Evidence Act/Section 63(4) of the Bharatiya Sakshya Adhiniyam. Plaintiffs filed a declaration, by way of an affidavit, under Section 65-A & 65-B of Indian Evidence Act on 28.04.2025. This declaration was filed without obtaining leave of Court as required under Order 11 Rule 1(4) or 1(5) CPC. Therefore, same cannot be deemed to have been taken on record and cannot be relied upon by plaintiffs.
18. In any case, the said declaration was not proved in accordance with law as PW 1 Shashank Goel has already been examined before the said declaration was filed. The net result is that there is no certificate required under Section 65-B of Indian Evidence Act/Section 63(4) of the Bharatiya Sakshya Adhiniyam to prove prints out of e-mails and whatsapp conversations which are relied upon heavily by plaintiffs. Hence, these e- mails and whatspp conversations are inadmissible in evidence being not supported by any certificate as required under Section 65-B of Indian Evidence Act/Section 63(4) of the Bharatiya Sakshya Adhiniyam. Once, it is held that electronic record being relied upon by plaintiffs were not proved in accordance with law, the whole case of plaintiffs is wiped out.
19. Even if the written statement of defendant no. 1 was not taken on record, plaintiff had the primary responsibility to prove its case on the threshold of preponderance of probabilities. When written statement is not taken on record on account of not having been filed within the time stipulated under Order 8 Rule 1 CPC, the Court has two options under CS (COMM) 145/2019 11/16 M/s SMG Interior & Ors. Vs. M/s. Oravel Stays Pvt. Ltd. (Oyo) & Ors. Order 8 Rule 10 CPC i.e. either to pronounce the judgment against defendant whose written statement has been taken off the record or make such other order in relation to suit as the Court thinks fit.
20. It is clear from the record that the Court adopted the second option i.e. directed the plaintiffs to lead evidence to prove its case after written statement of defendant no. 1 was taken off the record vide order dated 09.04.2024. That being so, it was incumbent upon plaintiffs to prove their case by adducing credible evidence. However, plaintiff miserably failed to discharge the burden of proof as plaintiff mainly relied upon the prints out of various e-mail and whatsapp conversations to prove its case against defendant no. 1 and failed to prove these e-mails and whatsapp conversations in accordance with law.
21. Reference in this regard can be made to Outlook Publishing India Pvt. Ltd. Vs. R.R. Solution decided by Hon'ble High Court of Delhi on 06.05.2025. Facts of this case are that this Court in a different case took a view that the fact that defendant is ex-parte will not mean that plaintiff is absolved from the responsibility of proving its case as per law and that plaintiff has miserably failed to prove its case on the basis of preponderance of probability and the suit of plaintiff was dismissed. The order dismissing the suit was upheld by Hon'ble High Court of Delhi in Outlook Publishing India Pvt. Ltd. Vs. R.R. Solution.
22. Mr. Avinash Trivedi, ld. Counsel for plaintiffs, submitted that no affidavit of admission denial of documents has been filed with the written statement of defendant no. 2 & 3. This objection is being taken by plaintiffs CS (COMM) 145/2019 12/16 M/s SMG Interior & Ors. Vs. M/s. Oravel Stays Pvt. Ltd. (Oyo) & Ors. at such a belated stage as after filing of written statement, issues were framed on the basis of averments of plaint and written statement and trial took place in respect of those issues. Therefore, written statement filed by defendant no. 2 & 3 cannot be taken off the record at this stage on account of non-filing of affidavit of admission denial of documents.
23. Mr. Avinash Trivedi, ld. Counsel for plaintiffs, during the course of arguments, relied upon Bharat Sanchar Nigam Ltd. Vs. Vihaan Networks Ltd., 2025 SCC Online Del 2670. In this case, Hon'ble Delhi High Court discussed the doctrine of quantum meruit incorporated in Section 70 of Indian Evidence Act and upheld the conclusion of ld. Arbitral Tribunal that claimant was entitled to reimbursement of expenses incurred by it notwithstanding the absence of concluded contract as provided under Section 70 of Indian Evidence Act.
24. In the present case, plaintiffs have miserably failed to prove that any work was done by plaintiffs for any of defendants or that any expenditure was incurred by plaintiffs as no receipt of purchase of any material for carrying out the renovation work at the property was proved by plaintiffs. It is, therefore, obvious that plaintiff miserably failed to prove that plaintiffs are entitled to decree of Rs. 42,48,574/- alongwith interest against the defendants.
25. Accordingly, issue no. 1 & 3 are decided against the plaintiffs and in favour of defendants.
CS (COMM) 145/2019 13/16M/s SMG Interior & Ors. Vs. M/s. Oravel Stays Pvt. Ltd. (Oyo) & Ors.
26. There is another important aspect of case which must not be lost sight of. Plaintiffs claimed that plaintiff no. 1 M/s. SMG Interiors is a registered partnership firm constituted vide partnership deed dated 20.06.2016. To prove that plaintiff no. 1 is a registered partnership firm, plaintiffs have placed on record copy of registration certificate issued by Registrar of Firms which was taken on record as Ex. P-1/1 (Colly). Plaintiffs have not placed on record original certificate issued by Registrar of Firms regarding registration of plaintiff no. 1. On being questioned by ld. Counsel for defendant no. 2 & 3 as to whether document Ex. P-1/1 has been signed by any official from the office of Registrar of Firms, PW 1 Shashank Goel deposed in cross examination that it is a digital copy and same needs no signatures. PW 1 Shashank Goel further deposed that he does not remember from where he has obtained the copy.
27. As per Section 64 of Indian Evidence Act, documents must be proved by primary evidence except in cases mentioned in Section 65 of Indian Evidence Act. Primary evidence is defined in Section 62 of Indian Evidence Act as a document itself produced for the inspection of Court. Since, the original certificate of registration was not produced by plaintiffs, photocopy thereof becomes inadmissible in evidence as plaintiffs' case is not covered by any of the clauses of Section 65 of Indian Evidence Act which deals with secondary evidence.
28. Furthermore, no official from the office of Registrar of Firms was examined by plaintiffs to prove the document Ex. P-1/1. PW 1 Shashank Goel was not competent to prove this document. In other words, certificate of Registrar of Firms was not proved in accordance with law. The necessary CS (COMM) 145/2019 14/16 M/s SMG Interior & Ors. Vs. M/s. Oravel Stays Pvt. Ltd. (Oyo) & Ors. corollary is that plaintiffs failed to prove that plaintiff no. 1 is a registered partnership firm. Hence, the suit was otherwise barred by Section 69 of Indian Partnership Act.
29. Issue no. 2 - Whether plaintiff is entitled to a sum of Rs. 2,89,723/- towards plaintiff's fee as prayed for in the prayer clause (ii)? OPP
30. Burden of proof of this issue was on plaintiffs. PW 1 Shashank Goel deposed that plaintiffs were assured to be paid for the work done on actual basis as per percentage to be decided by parties at a later stage. This must have been a vital component of agreement between the parties and must be proved on the basis of documentary evidence. Plaintiffs have not placed on record any documents to show that plaintiffs were assured to be paid for the work done on actual basis as per the percentage to be decided by parties at a later stage. Oral testimony of PW 1 Shashank Goel in this regard will not be sufficient. PW 1 Shashank Goel has only referred to copy of notice issued through e-mail Ex. P-1/6 to prove that certain percentage was to be paid for the work done on actual basis. However, there is no document to show that defendants agreed for certain percentage of amount that was to be paid to plaintiffs on actual basis. It is, therefore, obvious that plaintiffs failed to discharge the burden to prove that plaintiffs are entitled to a sum of Rs. 2,89,723/- as prayed for in the prayer clause (ii) of the plaint. Accordingly, issue no. 2 is decided against plaintiffs and in favour of defendants.
CS (COMM) 145/2019 15/16M/s SMG Interior & Ors. Vs. M/s. Oravel Stays Pvt. Ltd. (Oyo) & Ors.
31. Issue no. 4 - Whether the plaintiff is entitled to the cost of present suit ? OPP
32. In view of findings of Court on issue no. 1, 2 & 3, it is held that parties will bear their own cost.
33. Issue no. 5 - Relief
34. In view of above mentioned findings on issue no. 1, 2 & 3, the suit of plaintiffs is dismissed.
Decree sheet be prepared accordingly.
File be consigned to Record Room.
Digitally signed SANDEEP by SANDEEP YADAV YADAV Announced in open Court Date: 2026.02.25 14:28:05 +0530 (Sandeep Yadav) District Judge (Commercial Court)-03 South/23.02.2026 CS (COMM) 145/2019 16/16
M/s SMG Interior & Ors. Vs. M/s. Oravel Stays Pvt. Ltd. (Oyo) & Ors.