Bangalore District Court
M S Vaps Techno Soft Pvt Ltd vs The State Government Of Karnataka on 21 March, 2024
1 Com.O.S.No.7555/2015
KABC170003362023
IN THE COURT OF LXXXII ADDL.CITY CIVIL & SESSIONS
JUDGE, AT BENGALURU (CCH.83)
THIS THE 21st DAY OF MARCH 2024
PRESENT:
SUMANGALA S BASAVANNOUR., B.COM, LL.M.,
LXXXII ADDL.CITY CIVIL & SESSIONS JUDGE,
BENGALURU.
Com. O.S.No.7555/2015
BETWEEN:
M/s Vaps Techno Soft
Private Limited, (A
company registered under
the companies Act), No.
72, MIG, 1st Stage, KHB
Colony, 4th Main, 6th
Cross, Basaveshwara
Nagar, Bangalore - 560
079, represented by its
Deputy Manager, Finance,
M. Govindaiah. [
: PLAINTIFF
(Rep. by Sri. A.M. Surya
Prakash - Advocate)
AND
2 Com.O.S.No.7555/2015
1. The State Government
of Karnataka, Health and
family welfare
department, Medical
Education, Vikas Soudha,
Dr. Ambedkar Veedhi,
Bangalore - 560 002,,
represented by its Chief
Secretary.
2. Government Dental
College and Research
Institute, Victoria Hospital
Premises, Fort, Bangalore
- 560 002, represented by
its Director.
: DEFENDANTS
(Defendant No.1 placed
exparte as per order dated
06.01.2016 and Defendant
NO.2 is rep. by Sri.
Ravishankar R.H - Advocate)
Date of Institution 01.09.2015
Nature of the suit Recovery of money
Date of commencement of
recording of evidence 03.10.2017
3 Com.O.S.No.7555/2015
Date on which judgment was
pronounced 21.03.2024
Total Duration Year/s Month/s Day/s
08 06 20
(SUMANGALA S. BASAVANNOUR),
LXXXII Addl.City Civil & Sessions Judge,
Bengaluru.
JUDGMENT
This suit is filed by the Plaintiff for recovery of a sum of Rs.38,47,073/- with interest at the rate of 18% from the date of the suit till the realization.
2. The Brief facts of the Plaint are as follows:-
The plaintiff is engaged is providing software development and supply of computer hardware as allied business to support the software products developed by them. The Plaintiff has given demonstration of its software to the defendant institution on 08-04-2009. The defendant Institution was impressed with the functioning of all the modules of office automation and technology offered to them by the plaintiff. This was also reflected by the letter of the Dean cum Director of the 4 Com.O.S.No.7555/2015 defendant institution No. GDCRI/ADM/2/09-10 dated 29-03- 2010. the plaintiff has taken part in the tender process for the supply of various modules of software and also hardware required for the implementation of the project by depositing the Ernest money of Rs.2,00,000/- The plaintiff made a bid in the tender for Rs.70,18,000/- for the various modules of the software and hardware required for the implementation of the project. The tender was opened on 28-04-2010. The technical committee meeting has taken place on 11-05-2010 and the plaintiff's tender was accepted on 15-05-2010. The defendant has communicated the work Order by issuing the order to the plaintiff on 20-05-2010. Further submitted by the plaintiff that the "Contract providing services" was entered between the plaintiff and the defendant on 21-05-2010 under which the rights and obligations of both the plaintiff and defendant was defined. To this document there was an annex document named "Statement of Work" in which the scope of work of the plaintiff was clearly defined. In this regard the plaintiff executed"
Performance Security Form" which was executed by M/s. Bank of India on behalf of the plaintiff which is valued to the extent of Rs.3,50,900-00. Similarly on the insistence of the defendant another document " Agreement for exchange of Confidential Information" was also executed on 21-05-2010.5 Com.O.S.No.7555/2015
Official Memorandum" dated 04-06-2010 the defendant has appointed Dr. Namitha Shanbag as the Nodal Officer to supervise the project on behalf of the defendant. The Plaintiff implementation of the project by first undertaking supply of Hardware like servers, computers, smart cards, Bio-metric Sensors, Bar Code Readers etc., as per the work Orders. Along with these supplies, the warrant certificates to the individual products as offered by the manufacturer of these products were also handed over to the defendant with a covering letter dated 26-04-2011 by the plaintiff which was duly acknowledged by the defendant. The warranty certificate clearly mentions the date of the commencement of the warrant and its expiry. After the commencement of the work, the plaintiff supplied all the required hardware and implemented each and every module of the software as per the tender and at every stage, the concerned persons from the defendant have inspected and provided work completion certificate. In In accordance with the Tender Notice as per Clause No.7 the defendant shall pay 50% of the payment along with the work Order, 25% shall be paid after receiving the delivery of all hardware and networking components and the balance 25% shall be paid after the successful implementation of the project. The total tender amount is Rs.74,83,763-00 which includes the VAT and Service Tax. The defendant has paid sum of Rs.35,00,000/- as advance.6 Com.O.S.No.7555/2015
He defendant failed to release the second payment of 25%. Hence after the completion of the work, the plaintiff raised a proforma invoice for the total amount due and made a formal demand as per the plaintiff's letter dated 07. 07-2011 and sought for the full and final settlement of the dues. This letter 07-2also followed by a reminder dated 27-07-2011. In response to this reminder, the defendant released a sum of Rs. 17,50,000/- on 06-08-2011 being the 25% of the tender amount. The defendant instead of clearing the balance has sent a letter dated 06-08-2011 informing the plaintiff that though the project implementation was completed, the full and final settlement would be made only after the 3rd party inspection. The plaintiff observed that the warranty period on the hardware supplied by the plaintiff was going to expiry on 04-08-2011 and the System Administrators support was going to expire on 01- 08-2011. Hence the plaintiff informed the defendant by their letter No. Vaps/GDCRI/2011-12 /176 dated 12-07-2011 informing the defendant to get the Annual; Maintenance Contract renewed for the uninterrupted service. In the said letter it was clearly stated that demanding the defendant to confirm on or before 15-07-2011 if there was any pending work or if any hardware required to be delivered as per the tender. It was also further stated that if the system administrator deployed by the plaintiff was required after 01-08- 2011, then 7 Com.O.S.No.7555/2015 the defendant shall have to pay a sum charges of Rs.3,000/- per day. No third party inspection was agreed between them in the agreement/tender. The defendant insisted and hence inspection was conducted by the Senior Programmer, Director of Health and Family Welfare Department and he on 20-08-2011 by his letter certified that the project has been successfully implemented as per the tender. Once the project was implemented the defendant shall have to refund the Earnest Money deposit of Rs.2,00,000/- to the plaintiff. After repeated follow up and demand by personal visit and letter dated 22-08- 2011 and 06-09-2011 by the Plaintiff, the defendant refunded the Earnest money deposit of Rs.2,00,000/- to the plaintiff on 23-09-2011. The refund of the Earnest Money also proves that the project was successfully implemented by the plaintiff as per the tender.
The plaintiff further stated that they raised a Tax Invoice bearing No.34 dated 31-03-2012 for the total amount of Rs.74,83,763-00. Out of that as stated above the defendant has cleared a sum of Rs. 52,50,000/- on two dates Once Rs.35,00,000/- on 11-06-2010 and second time by Rs.17,50,000/-ed 6-08-2011 Thus the balance which has to be cleared by the defendant is Rs. 22,33,763-00. Despite several remainders the defendant failed to clear the amount due to the 8 Com.O.S.No.7555/2015 plaintiff. Further the annual maintenance contract was not renewed by the defendant. Thus due to the act of the defendant the warranty for the material supplied were expired. If at all the defendant needs the services of the plaintiff, the defendant has to pay charges of the services to be rendered. The plaintiff further submits that he ran from pillar to post in the defendant's institution and also the concerned Government department for payment due to them. Whereas the Minister for the Medical Education, Government of Karnataka Ordered on 19-01-2012 for yet another 3rd party inspection of the project by M/s Solastek Network Systems Pvt., Ltd., On the basis of the Order of the Hon'ble Minister, the Secretary Health and Family Welfare Department passed an Order as per NO. A.KU.KA/58/MSF 2012 dated 18-05-2012. Being aggrieved by this Order, the Plaintiff approached the Hon'ble High Court of Karnataka in W.P. No.21064 of 2012 for relief to quash the Order No. A.KU.KA/58/ MSF 2012 dated 18-05-2012, and for a direction to pay the amount due to the plaintiff. the plaintiff that the Hon'ble High Court of Karnataka by its Order dated 03-07-2013 quashed the said Order and suggested joint inspection to be carried out by both the plaintiff and the defendant to find out if there were any defects. The Hon'ble High Court also directed the plaintiff to furnish the copy of the Order to the defendant within 2 weeks from the date of the receipt of the copy of the Order and also 9 Com.O.S.No.7555/2015 stated that if the defendant desire for joint inspection, the defendant shall fix the date for joint inspection within 3 weeks from the date of the intimation of the Order to the defendant. Accordingly the plaintiff sent a notice on 31-07-2013 along with the copy of the Order passed by the Hon'ble High Court of Karnataka seeking for fixing a date for the joint inspection. But the defendant neither complied with the Order not responded to the notice issued by the plaintiff. Hence after waiting for about
3 months from the date of the Order of the Hon'ble High Court sent to the defendant, the plaintiff send a legal notice on 19-10- 2013 calling the defendant to clear the dues of Rs.22,33,763/- with in 15 days from the date of the receipt of the notice. The plaintiff that subsequent to this there was a meeting on 07-10- 2014 between the plaintiff and the defendant in the presence of the Principle Secretary, Health & Family welfare department for resolving the dispute and to exhibit proper functioning. The Plaintiff was ready to cooperate subject to the terms of the tender and the warranty terms applicable to the hardware and software products supplied by the plaintiff. Pursuant to the meeting it was found that some of the hardware material supplied by the plaintiff was missing, some of them were not functioning, some were functioning and some of them were in irreparable condition. all the hardware, soft ware were installed by the plaintiff in a good and working condition which was 10 Com.O.S.No.7555/2015 certified by the defendant. If at all there is any problem within one year from the date of the installation, the plaintiff was always ready and willing to carry out the required service and repairs during the warranty period without seeking any further charges. The defendant has not reported any mistake or non working condition of any of the installation made by the plaintiff within one year from the date of the installation. Not only that they have not informed any such problem till today. Only at the time of the meeting after more than 4 years it has come to the knowledge of the plaintiff. If any defect is found in the working condition of the installation after the one year warranty period, the plaintiff is ready and willing to correct the same on the payment of the charges for them. Further the defendant has not entered into annual maintenance charges agreement with the plaintiff. Hence the plaintiff is not liable to effect any repairs or maintenance or defects found after one year For the joint inspection the defendant has not acted in terms of the Orders passed by the Hon'ble High Court. Hence the plaintiff is legally and morally not liable to effect any repairs that may be required to the installations made by the plaintiff with out any charges since the defendant has not entered into any maintenance contract with the plaintiff. the plaintiff that in this regard the defendant wrote a letter dated 30-10-2014 stating that after confirming that the works of the plaintiff was done in 11 Com.O.S.No.7555/2015 accordance of the tender and then the defendant would effect the payment due to the plaintiff and also take further per action for the Annual Maintenance charges. Though the representative of the plaintiff was present, he has not given any assurance in this regard. Inspite of plaintiff was present, he has not is if the representatives of the plaintiff has agreed to demonstrate the computers by 31-12-2014. The plaintiff representative has not given any such assurances. Immediately the plaintiff company has sent a letter dated 19-11-2014 about the facts that has taken place in the meeting. The copy of the installations and their working condition and those which are missing and those which are not working are mentioned in the letter dated 07-11- 2014 prepared by the plaintiff and sent to the defendant which was acknowledged by the defendant. But the defendant has not given any reply to this letter dated 07-11-2014. Unless the defendant agree for the charges to be paid to the plaintiff for the works to be carried out as per the report given by the plaintiff on 07-11-2014, the plaintiff is not liable to carry out the repair works which is more than 3 years after the expiry of the warranty period of the installation. Hence the plaintiff is not liable to take out the repairs. Plaintiff further submits inspite of several reminders and requests the defendant failed to clear the dues Rs 22.33.763/- to the plaintiff. Hence a final legal notice was issued to the defendant on 15-04- 2015 calling upon 12 Com.O.S.No.7555/2015 the defendant to clear the dues to the plaintiff with interest. Both the defendants acknowledged the receipt of the legal notice on 20-04-2015. But they failed to either send a reply or to comply with the legal notice. Hence, the suit.
3. The defendant resisted the claim of the Plaintiff and filed written statement. Defendant has contended that the present suit filed by the plaintiff is not maintainable either in law and/or on facts. The suit is wholly misconceived and abuse of the process of this court, completely baseless and meritless and same is liable to be dismissed on following grounds Class 7 of general condition of contract provides that the balance of 25% amount shall be paid to the plaintiff after successful implementation of project. Admittedly there were defects in software and hardware supplied by the Plaintiff and the said project was not successfully implemented. Therefore the Plaintiff is not entitled to claim any money for the alleged work done. It is undisputed fact that Plaintiff in the contract for providing service dated 21.5.2010 has specifically promised to provide the services and remedy defects in conformity in all respects. The plaintiff has failed to provide services and remedy the defects in hardware and software supplied by it. Therefore the Plaintiff cannot seek any payment for the task which it has not performed. Hon'ble high court of Karnataka in WP No. 13 Com.O.S.No.7555/2015 21064/12 filed by the Plaintiff against the Defendant has held that there shall be a joint inspection of the work done by the Plaintiff and Defendant No.2 2 and only in case the work is found satisfactory, the defendants have to pay the plaintiff. Till date there is no joint inspection. Therefore the plaintiff has no cause of action to file the this suit. It is the law of land that if a particular thing is required to be done in a particular way it has to be done only in that way. In the present case the hon'ble high court of Karnataka has specifically held in Writ petition number 21064/12 that the Plaintiff is shall be paid only if it is found in joint inspection that the work is satisfactory. There is no joint inspection till date . Therefore the plaintiff cannot claim any money from the defendant without their being a joint inspection. The plaintiff claims that the work has been completed in the year 2011. The plaintiff also alleges that the defendants became liable to pay the amount in the year 2011. The above case has been filed in the year 2015. Therefore the above suit is hopelessly barred by the by limitation and is liable to be dismissed. The plaintiff has not come before this court with clean hands and is guilty of suppressing the material facts of the case.
The Defendant further contented that managing committee of defendant No. 2 held a meeting on 11/8/2009 and 14 Com.O.S.No.7555/2015 decided for office automisation. In accordance with order passed by the president of different No. 2 a tender for office automisation was called. The Plaintiff participated in the said tender and succeeded in the same. Accordingly the tender was awarded to the plaintiff along with all specifications. A work order dated 20.05.2010 was issued to the Plaintiff by Defendant No.2 for an amount of Rs. 70,18,000 /- plus taxes in respect of office automisation. Defendant No.2 also permitted the Plaintiff to automise the office in accordance with contract and paid and an amount of Rs. 35,00,000/- to the plaintiff. As per clause 7 of general terms of the contract specifies that the Plaintiff shall be paid 50% advance along with work order. Further 25% of the amount shall be paid after delivering all hardware and networking components and balance 25% shall be paid after successful implementation of project. Further contract for providing services dated 21.5.2010 along with the technical and other requirements and non-disclosure agreement dated 21.5.2010 were also executed between the plaintiff and Defendant No.2. As stated earlier an amount of Rs.35 lakh was paid to the Plaintiff along with the work order in accordance with the terms. The plaintiff started its work during the same time. The plaintiff during the year 2011 communicated to the Defendant No.2 that the work has been completed. The plaintiff also addressed a letter 7.7.2011 claiming that the work has 15 Com.O.S.No.7555/2015 been completed and claimed money from defendant No.2. The plaintiff also addressed the letter dated 12.7.2011 and informed defendant No.2 to and annual maintenance contract will end on 1.8.2011 and request it defendant No.2 to extent the same. The Plaintiff in the said letter also demanded Rs.3000/- per day for administrative and data entry support services in case the said annual maintenance contract is not extended. The plaintiff made the said demand even though he had specifically agreed to remedy defects in confirmity of the contract at contract for providing service dated 21.5.2010 the defendant no.2 paid an amount of Rs.17,50,000 being 25% of the amount as stipulated in the contract to the Plaintiff on 6.08.2011. When things stood does, it was noticed by the Defendant No.2 to that the hardware software and components supplied by the plaintiff was not working properly and where defective. Defendant No.2 also could not utilize hardware, software and components supplied by the Defendant No.2 and thus started incurring losses. Therefore Defendant No.2 withheld the remaining 25% of the balance amount which was supposed to be paid to the Plaintiff after successful implementation of project. Defendant No.2 also informed the Plaintiff that the project was not successfully implemented. Defendant No.2 at this point also paid back the earnest money to the plaintiff. The senior programmer,Directorate of health and family welfare service 16 Com.O.S.No.7555/2015 addressed letter dated 20.8.2011 that the hardware software and other components are working satisfactory as on 20.8.2011. However it was it was a once again found that the hardware, software and other components supplied by the Plaintiff were not working properly. Therefore, the Defendant No.1 issued a communication dated 18.05.2012 requiring inspection of work undertaken by the Plaintiff by a third party to be appointed for the said purpose. Communication dated 18.05.2012 issued by the Defendant No.1 require inspection of the work undertaken by the plaintiff by third party to be appointed for the said purpose was challenged by the Plaintiff before the hon'ble high court of Karnataka in WP No. 21064/2012. High court of Karnataka by order dated quashed the communication issued by Defendant No.1 dated 18.05.2012 and held that there must be joint inspection of the Plaintiff's work by the plaintiff and Defendant No.2. Hon'ble high court of Karnataka further observed that the plaintiff would be entitled to receive money from Defendant No.2 in case its work is found satisfactory during the said inspection. Therefore the plaintiff does not have any cause of action to file the suit. The suit is also hopelessly barred by limitation since the plaintiff alleges that the Defendant No.2 became due to it during the year 2011. The project has not been successfully implemented. Therefore 17 Com.O.S.No.7555/2015 Plaintiff is not entitled to any reliefs from this court. Hence the suit is liable to be dismissed.
4. Heard arguments and perused the records.
5. Based on the above pleadings, the following Issues are framed:
1. Whether the plaintiff proves that defendant have accepted the Plaintiff's tender for Rs. 70,18,000 on 15.05.2010 and issued the work order on 20.05.2010, as alleged in para 2 of the plaint ?
2. Whether the Plaintiff further proves that he had supplied goods to the Defendants in terms of tender and reported compliance to the Defendants on 26.04.2011, as alleged in para 4 of the plaint ?
3. Whether the Plaintiff further proves that he has deposited earnest money of Rs.
2,00,000/- to the Defendant at the time of participating in the bid ?
4. Whether Plaintiff further proves that defendants have paid only Rs. 52,50,000/-
and they have not paid Rs. 22,33,763/-
despite several reminders as alleged in para 8 of the plaint ?
5. Whether Plaintiff further proves that as on 19.10.2013, defendant were in due of Rs.
22,33,763/- as alleged in para 10 of the plaint ?
18 Com.O.S.No.7555/20156. Whether Plaintiff further proves that he is entitle to recover a sum of Rs. 38,47,073/-
from the Defendant with interest @ 18% per annum from the Date of suit till the date of realization.
7. What order or decree?
6. My findings on the above Issues 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 Affirmative.
Issue No.5: In the Affirmative.
Issue No.6: In the Partly Affirmative.
Issue No.7: As per the final Order for the following reasons.
REASONS
7. Issue Nos.1 to 4: The plaintiff to substantiate its case, the Power of Attorney Holder of plaintiff is examined as Pw1. Pw1 in her evidence reiterated the averments of the plaint and got marked Ex.P1 to P59. The Advocate for Defendant cross- examined PW.1 in detail. The facts elicited during cross-
19 Com.O.S.No.7555/2015examination is to be considered herein after at appropriate stage.
8. On the other hand, the defendant to substantiate his case, the Authorized Signatory of the defendant is examined as Dw1. Dw1 in his evidence reiterated the averments of the written statement and got marked Ex.D1 to D8. The Advocate for Plaintiff cross-examined DW.1 in detail. The facts elicited during cross-examination is to be considered herein after at appropriate stage.
9. Before going to the contrary facts of the case, it is necessary to mention the admitted facts. Admitted facts are the Plaintiff has taken part in the tender process for the supply of various modules of software and also hardware required for the implementation of the project by depositing the earnest money of Rs.2,00,000/- and that the Plaintiff made a bid in the tender for Rs. 70,18,000/- for the various modules of the software and hardware required for the implementation of the project and that the tender was opened on 28.04.2010 and that the technical committee meeting has taken place on 11.05.2010 and the Plaintiffs tender was accepted on 15.05.2010 and that the Defendant has communicated the work order by issuing the order to the Plaintiff on 20.05.2010.
20 Com.O.S.No.7555/201510. It is the case of the Plaintiff that the Plaintiff have implemented the project by first undertaking supply of Hardware like servers, computers, smart cards, Biometric Sensors, Bar Code Readers etc., as per the work orders. Along with these supplies, the warrant certificates to the individual products as offered by the manufacturer of these products were also handed over the defendant with a covering letter dated 26.04.2011 by plaintiff which was duly acknowledged by the Defendant. After the commencement of the work, they have supplied all the required hardware and implemented each and every module of the software as per the tender and at every stage, the concerned persons from the defendant have inspected and provided work completion certificate. As per clause 7 the Defendant shall pay 50% of the payment along with the work order, 25% shall be paid after receiving the delivery of all hardware and networking components and the balance 25% shall be paid after the successful implementation of the project. The total tender amount is Rs. 74,83,763/- which includes the VAT and Services Tax. The Defendant has paid a sum of Rs. 35,00,000/- as advance. The Defendant failed to release the 2nd payment of 25%. Hence after the completion of the work, they have raised a perform invoice for the total amount due and made a formal demand as per the letter dated 07.07.2011 and sought for the full and final settlement of the 21 Com.O.S.No.7555/2015 dues and reminder dated 27.07.2011. In response to this reminder, the Defendant released a sum of Rs. 17,50,000/- on 06.08.2011 being the 25% of the tender amount. The Defendant has sent a letter dated 06.08.2011 to the Plaintiff that the project implementation was completed, the full and final settlement would be made only after the 3rd party inspection. Once the project was implemented the Defendant shall have to refund the earnest money deposit of Rs. 2,00 000/- to them. They have demand by personal visit and letter dated 22.08.2011 and 06.09.2011 for the Defendant to refund the earnest money deposit of Rs. 2,00,000/- to them on 23.09.2011. The Defendant failed to clear due amount of Rs. 22,33,763/-.
11. On the other hand the Defendant contention that they were defects in software and hardware supplied by the Plaintiff and the said project was not successfully implemented. Therefore the Plaintiff is not entitled to claim any money for the alleged work done. The Plaintiff has failed to provide services and remedy the defects in hardware and software supplied by it. Therefore the Plaintiff cannot seek any payment for the task which it has not performed.
12. From the pleadings and evidence placed before this court it clearly proved that the Defendant has accepted the Plaintiff 22 Com.O.S.No.7555/2015 tender for Rs. 70,18,000/- on 15.05.2010 and issued work on 21.05.2010 and further it also proved that the Plaintiff has supplied goods to the Defendant in terms of tender and reported compliance to the Defendant on 26.04.2011. Further, it is also indisputed fact that the Plaintiff has deposited the earnest money from 2,00,000/- at the time of participating the bid. As per the tender clause 5.1 of Ex.P.6 the Defendant has refunded the EMD amount to the Plaintiff. From the cross- examination of DW.1 it is proved that the Defendants have paid 52,50,000/- i.e., 75% of the tender amount and balance amount is 22,33,763/- i.e., 25% of the work order. Hence, I answer Issue No. 1 to 4 are in the Affirmative.
13. Issue No. 5 and 6: Now I am are coming to the point whether the Defendant is liable to pay due amount of 25% work order i.e., 22,33,763/- to the Plaintiff. The Defendant contention that there were defects in software and hardware supplied by the Plaintiff and said project was not successfully implemented. Therefore the Plaintiff is not entitled to claim any money for the alleged work done. The Plaintiff has failed to provide service and remedy the defects in hardware and software supplied by the Plaintiff. Therefore, the Plaintiff cannot seek any payment for the task which it has not performed.
23 Com.O.S.No.7555/201514. On the contrary during cross-examination DW.1 has clearly admitted that the Director of Health and family Welfare Department has submitted Joint Inspection report at Ex.P.4 and they have certified that project has been successfully implemented as per tender. So, it is clearly proved that the Plaintiff has successfully implemented work as per the tender.
15. Admittedly, 26, 27 and 28 certificates issued by the Defendant clearly indicates that the Plaintiff has satisfactorily implemented work. Ex.P.29 issued by the Nodal Officer after successful training on Hospital Module to the staff of Defendant No.2. Ex.P.30 issued by Nodal Officer after successful completion of work, Ex.P.31 issued by Dean cum Direction of Defendant No.2 after successful completion of training and complete Data entries on Paycare Module to the staff of the Defendant No.2. Ex.P.32 issued by the Nodal Officer of defendant no.2 after successful completion of Data entries and Fee Module training to the staff, Ex.P.33 issued by Nodal Officer after successful implementation and training to the staff regard registration on staff and establishment module, Ex.P.34 issued by Dean cum Director of defendant no.2 after successful implementation and training to the staff with regards to the data entry on inventory module, Ex.P.35 issued by Dean cum Director of defendant no.2 after implementation and providing 24 Com.O.S.No.7555/2015 training to the staff with regard to the data entries and Financial Account Module, Ex.P.36 issued by Dean cum Director of defendant no.2 for successful implementation and training to the staff with regard to the data entries on Administrator Module, Ex.P.37 issued by Dean cum Director of defendant no.2 with regard to the after successful implementation and training to the staff with regard to the data entries on Library Module, Ex.P.38 issued by Dean cum Director of defendant no.2 with regard to the after successful implementation and training to the staff with regard to the data entries on Calendar of Event Module and Ex.P.39 issued by Dean cum Director of defendant no.2 with regard to the after successful implementation and training to the staff with regard to the data entries on Exam Module. Ex.P.44 to Ex.P.49 are certified by the Nodal Officer and Ex.P.50 (50 in numbers) training effective reports and our staff has signed on these reports is aware of the contents of Ex.P.5.
16. Further, the DW.1 categorically admitted that the Director of the Health and Family Welfare Department has given a recommendation for take the AMC from the Plaintiff before expiring the warranty period. Despite of recommendation, they have not taken AMC from the Plaintiff and also admitted fact that the Plaintiff company wrote a letter 25 Com.O.S.No.7555/2015 to Defendant No.2 by stating that, warranty period is going to be expired and take the AMC for better usage of software. The Director of Health and Family Welfare Department had certified that the project had been successfully implemented as per the tender and also the warranty period is one year as per Ex.P.6. So, under these circumstances the contention of the Defendant that there were defects in software and hardware supplied by the Plaintiff and the said project was not successfully completed is not accepted.
17. The Defendant contention that since the joint inspection was not conducted so they have not liable to pay suit claim amount.
18. The Plaintiff has produced the certified copy of the order of Hon'ble High Court of Karnataka in WP No. 21064/2012 it reveals that "The Plaintiff approached the Hon'ble High Court of Karnataka in WP No. 21064/2012 for relief to quash the order No. A.KU.KA/58/MSF 2012 dated 18.05.2012 and for a direction to pay the amount due to the Plaintiff. The Hon'ble High Court of Karnataka by its order dated 03.07.2013 quashed the said order and suggested Joint Inspection to be carried out by both the Plaintiff and the Defendant to find out if there were any defects. The Hon'ble High Court of Karnataka also directed the Plaintiff to furnish the copy of the order to the Defendant within 26 Com.O.S.No.7555/2015 2 weeks from the date of the receipt of the copy of the order and also stated that if the Defendant desire for Joint Inspection, the Defendant shall fix the date of Joint Inspection within 3 weeks from the date of the intimation of the order to the Defendant. Accordingly, the Plaintiff sent a notice on 31.07.2013 along with the copy of the order passed by the Hon'ble High Court of Karnataka seeking for fixing a date for the Joint Inspection."
19. The DW.1 has admitted that Hon'ble High court of Karnataka has given a direction for joint inspection by the Plaintiff and competent officers of the Defendant No.2. The whole responsibility of conducting the Joint inspection on Defendant No.2. They have not intimated the Plaintiff after fixing the date for joint inspection. Except the case before the Hon'ble High court of Karnataka, till today they have not filed any suit against the Plaintiff before any court or any tribunal for non-completion work.
20. As per the direction of the Hon'ble High court they have to make a list of incomplete the work and defects of the work, which has to be handed over to the Plaintiff. But the Defendants not prepared the list and not handed over to the Plaintiff. It is also evident on the record the Plaintiff issued a letter at Ex.P.56 to 58 to the Defendant No.2 as per the 27 Com.O.S.No.7555/2015 direction of Hon'ble High court of Karnataka, along with order of Hon'ble High court of Karnataka for fixing the date of Joint inspection.
21. In view of the above discussion, there is no dispute that the Plaintiff has carried out the works in terms of the Ex.P.4. It is the contention of the Plaintiff that the Defendants are due to the extent of Rs. 22,33,763/- as claimed in this suit.
22. In view of the above mentioned Ex.P.26 to 39 and Ex.P.44 to 49 and Ex.P.4 report all the works were carried out by the Plaintiff satisfactorily. When such being the case, the Defendants cannot contended that all the works were not satisfactorily completed by the Plaintiff. Even various documents and as admitted by Dw.1 the defendant has not taken any Annual Maintenance Contract as per terms of Ex.P.6 and as recommended Ex.P.4 report. When such being the case, said contention of the Defendant cannot be accepted at all.
23. It is evident on the record that inspite of receipt of notice and order of Hon'ble High Court of Karnataka 21064/2012 and the Defendant has not fixed the date for joint inspection and 28 Com.O.S.No.7555/2015 joint inspection was not conducted. Further it is also clear that they have conducted the meeting on 07.10.2014 During the meeting, it is settled that, the plaintiff has to furnish the report with regard to the implementation of work done as per the Tender within 31.12.2014. As per the direction in meeting dtd.07.10.2014, plaintiff inspected the work in the presence of Defendant and prepared the report and they have submitted the report at Ex.P.60. In Ex.D.6 the Defendants have stated that after joint inspection and by confirming work done, they pay the due amount. But after Ex.D6 Defendants have not taken any steps for joint inspection. As per Ex.P.60 some of the machine are not working in conditions due to not taking AMC and because of non maintenance.
24. It is evident that inspite of direction from the Hon'ble High court of Katakana in WP 2064/2012 the Defendant has not taken any steps for joint inspection and also not prepared any list of defects in the works done by the Plaintiff. Further, the Defendant has not produced any document to shows that they have reported any mistake or non working conditions of any installations made by the Plaintiff within one year from the date of installation and they have intimated any such problems till filing writ petition. Further, the Defendant has not entered into Annual Maintenance charges with the Plaintiff. As above 29 Com.O.S.No.7555/2015 discussed Ex.P.26 to Ex.P.28 certificate issued by the Defendant and Ex.P.30 to 39 and Ex.P.44 to 49 and Ex.P.4 are clearly shows that the work done by the Plaintiff is satisfactory and successfully completed the work. For the joint Inspection the Defendant has not acted in terms of the order passed by the Hon'ble High court. Hence, the Plaintiff is legally and morally not liable to effect any repairs that may be required to the installation made by the Plaintiff without any charges, since the Defendant has not entered into Annual Maintenance Contract with the Plaintiff.
25. It is established on record that, the Defendant has not taken any steps for joint inspection as per the order of Hon'ble High court of Katakana in WP No. 21064/2012. So, the Defendant cannot escape from the liability. Moreover, there is no clause in the tender either 3rd party inspection or joint inspection. It is clearly shows that the Defendnat No.2 has with intention to harras the Plaintiff withhold the 25% of the amount i.e., 22,33,736/-. If really any defects in the work done by the plaintiff, definitely defendant could have been make the list of the defects and handed over to the plaintiff, but the defendant not done so. So it is clear that only for the purpose of harass the plaintiff, the defendant withhold the amount. Furthermore, defendant himself not made any arrangements for joint 30 Com.O.S.No.7555/2015 inspection. Under these circumstances, in the absence of the documents the contention of the defendant that there were defects in the work done by the plaintiff and the work has not completed satisfactorily is not acceptable. Hence, it is proved that the Defendant is liable to pay outstanding balance of Rs. 22,33,763/-.
26. The Plaintiff claimed interest at the rate of 18% per annum on 22,33,763/- from 20.08.2011 when it was certified that the project was implemented successfully in terms of tender till filing of the suit it comes 16,98,310/-.
27. The learned counsel for the Defendant argued there isno contractual obligation to claim the interest at the rate of 18%. During cross-examination PW.1 admitted that in WP they have sought for direction for payment of balance amount with interest at the rate of 12%. The Plaintiff stated that, since the parties have not complied the order of the Hon'ble High Court of Karnataka. So, they have claimed the interest at the rate of 18%. Admittedly, this is commercial transaction, the Defendants have failed to pay the tender amount, even after the successfully and satisfactorily completion of the work by the Plaintiff. Hence, the Plaintiff is entitle to claim the interest at 18% per annum amounting to Rs. 16,92,310/- on outstanding amount of Rs, 22,33,763/-. The total balance 31 Com.O.S.No.7555/2015 amount is due and payable by the Defendant is 38,47,073/-. Hence, the Defendant is liable to pay 38,47,073/-.
28. The Plaintiff claimed future interest at 18% per annum on suit claim of Rs. 37,47,073/-.
29. Section 34 of CPC provides that the court may, in a decree for payment of money, order interest on the principal sum adjudged for any period prior to institution of the suit and from the date of institution of the suit to the date of decree. As the court deems reasonable. Further, Section 34 of CPC provides that the court may order future interest at such rate not exceeding 6% p.a. and for liability arising out of a commercial transaction, court may order future interest exceeding 6% p.a. But not exceeding contractual rate of interest and if there is no contractual rate of interest, at the rate on which nationalized bank advance loans.
30. Considering the aforesaid proposition of law, in my considered opinion that it could be in the interest of justice, if the interest at the rate of 10% p.a. on suit claim from the date of the suit till the realization.
31. From the above discussion, I hold that the Plaintiff has proved that the Plaintiff is entitled to recover the amount of 32 Com.O.S.No.7555/2015 Rs.37,47,073/- with interest at 10% per annum from the date of suit till the date of realization. Hence, i answer Issue No. 5 in the Affirmative and Issue No.6 in Partly Affirmative.
32. Issue No.7 : Therefore, I proceed to pass the following Order.
ORDER Suit of the Plaintiff is decreed in part with cost.
The Defendant is hereby directed to pay a sum of Rs.37,47,073/- with interest at 10% p.a. from the date of suit till date of realization.
Draw Decree accordingly.
The Office is directed to send copy of this Judgment to Plaintiff and Defendants to their email ID as required under Order XX Rule 1 of the Civil Procedure Code as amended under Section 16 of the Commercial Courts Act.
(Dictated to the Stenographer, typed by her directly on computer, verified and then pronounced by me in open Court on this the 21st day of March, 2024).
(SUMANGALA S BASAVANNOUR), LXXXII Addl.City Civil & Sessions Judge, Bengaluru.
33 Com.O.S.No.7555/2015ANNEXURE LIST OF WITNESSES EXAMINED ON BEHALF OF THE PLAINTIFF P.W.1 Govindaiah LIST OF DOCUMENTS EXHIBITED ON BEHALF OF THE PLAINTIFF Ex.P.1 Letter dated 20.05.2010.
Ex.P.2 Agreement dated 14.05.2010.
Ex.P.3 Statement of work.
Ex.P.4 Letter dated 20.08.2011
Ex.P.5 C/c of WP No. 21064/2012.
Ex.P.6 Tender document.
Ex.P.7 Copy of letter issued to Defendant No. 2 dated
21.05.2010.
Ex.P.8 letter dated 04.08.2010
Ex.P.9 letter dated 28.10.2010.
Ex.P.10 letter dated 28.08.2010.
Ex.P11 to Delivery challans.
22
Ex.P23 Official memorandum dated 04.06.2010.
Ex.P.24 work completion certificates.
to 39
Ex.P.40 warranty certificates.
to 43
Ex.P.44 Hardware service report.
to 49
Ex.P50 Training effectiveness report
34 Com.O.S.No.7555/2015
Ex.P.51 letter dated 10.08.2011.
Ex.P.52 letter of Defendant No.1 dated 18.05.2012.
Ex.P.53 Copy of Letter dated 22.08.2011.
Ex.P.54 Copy of Letter dated 06.09.2011
Ex.P.55 Copy of Letter dated 23.08.2011.
Ex.P.56 Copy of legal notice dated 31.07.2013.
Ex.P.57 Postal receipts and postal acknowledgment.
and 58
Ex.P.59 Authorization letter.
Ex.P.60 Report.
LIST OF WITNESSES EXAMINED ON BEHALF OF THE DEFENDANT D.W.1 Mariswamy K LIST OF DOCUMENTS EXHIBITED ON BEHALF OF THE DEFENDANT Ex.D1 Role of authority given to testify.
Ex.D2 Official memorandum to appoint Dr. Namitha
Shan Bhog as a Nodal Officer dated
04.06.2010
Ex.D3 Official memorandum to appoint as a
Committee member dated 04.06.2010.
Ex.D4 Copy of advance payment letter dated
09.06.2010
Ex.D5 letter dated 01.40.2014.
Ex.D6 letter dated 30.10.2014.
Ex.D7 and 8 Postal receipts.
(SUMANGALA S. BASAVANNOUR),
LXXXII Addl. City Civil & Sessions Judge,
Bengaluru.