Delhi District Court
Shanti Mukund Hospital vs M/S Trio Tree Technologies P Ltd And Ors on 9 December, 2023
IN THE COURT OF SH. BRIJESH KUMAR GARG,
DISTRICT JUDGE (COMMERCIAL COURT)-01 :
SHAHDARA, KARKARDOOMA COURTS: DELHI
CS (Comm.) No.227/21
SHANTI MUKUND HOSPITAL
2 Institutional Area Vikas Marg Extension.
Karkardooma Delhi-110 092,
through its Medical Superintendent
......Plaintiff
Versus
1. M/S TRIO TREE TECHNOLOGIES LTD.
Through its Directors
2. Dr. Divye Chhabra (Director)
3. Mr. Surjeet Thakur (Director)
4. Ms. Akanksha Rajeev (Director)
5. Mr. Naresh Singh Rana (Director)
All at:
H-86, Ground And First Floor,
Sector-63, Noida-201301, U.P.
......Defendants
Date of institution : 19.04.2021
Date of final arguments : 16.11.2023
Date of Judgment : 09.12.2023
JUDGMENT
1. The present commercial suit for recovery of damages of Rs.13,11,842/-, alongwith future interest, has been filed on behalf of the plaintiff, on 15.04.2021, wherein, it is stated that the plaintiff is a charitable hospital and is represented through its Medical Superintendent Dr. Kulvinder Singh Kochhar, who has been duly authorized vide Resolution, dated 10.02.2021, by CS (Comm.) 227/21 page 1 of 33 D.J.(Commercial Court)-01/Shahdara/KKD/Delhi Mukandi Lal Memorial Foundation for Heart & Medical Care, who signed and filed the present suit.
2. It is further stated in the plaint that the plaintiff hospital is an integrated hospital/medical centre for East Delhi, for providing comprehensive diagnosis and treatment in almost all medical and surgical specialities, whereas, the defendant M/s Trio Tree Technologies P. Ltd., is claimed to an information technology based company engaged in providing customized software development health care solutions in India.
3. It is further stated in the plaint that in order to streamline the entire functioning of the plaintiff hospital, an urgent need of software was felt, that could cater the requirement of each department of the hospital, by connecting their services with each other.
4. It is further stated in the plaint that the defendant No.1, through one of its director Dr. Divye Chhabra, approached the plaintiff hospital for providing services for software, which integrates the entire services of the hospital. It is further stated that after having few detailed meetings and discussions with the defendant company, the plaintiff hospital placed work order dated 20.02.2018 with the defendant company, for implementation of Hospital Management System (HMS) at the hospital with duly agreed terms.
5. It is further stated in the plaint that as per the said work order, the total cost for complete and implementation of the CS (Comm.) 227/21 page 2 of 33 D.J.(Commercial Court)-01/Shahdara/KKD/Delhi HMS, including software, customization, new requirements and training of all users at hospital, was agreed at Rs.18 Lakhs, exclusive of taxes and the entire integrated software was assured to be completed by 23.03.2018, and the software was assured to be fully operational w.e.f. 01.04.2018, and accordingly, the plaintiff hospital, while complying the terms of the work order, made a payment of Rs.4,50,000/-, i.e., 25% of the agreed sum of Rs.18,00,000/-.
6. It is further stated in the plaint that soon after the receipt of the payment, in order to execute the work, the defendant company initiated its task towards implementation of software. But, the defendant could not complete the work within the agreed time frame. It is further stated that the defendants, with some unexplained and unsatisfactory reasons, kept on hold the entire system of the plaintiff hospital, till they could manage things. It is further stated that during this period, delay due to carelessness and negligence, on the part of the defendant, affected the functioning of the plaintiff hospital. But, the plaintiff hospital was left with no other option, but to bear the same, and to hope that new system would streamline the functioning of the hospital soon.
7. It is further stated in the plaint that due to incompetence, lack of expertise and various other reasons attributed to the defendant team and its management, engaged in the implementation of the software, the said integrated software could not be executed till 30.09.2018 and the software could 'Go Live' partially, only after a delay of six months, i.e. on CS (Comm.) 227/21 page 3 of 33 D.J.(Commercial Court)-01/Shahdara/KKD/Delhi 01.10.2018, and due to this inordinate delay of implementing the software, the entire functioning of the hospital was badly/adversely effected. It is further stated that since, the software had lots of glitches, it did not function properly, leave alone performing accordingly to the agreed terms of the work order or as of quality claimed by the defendants.
8. It is further stated in the plaint that although the system was claimed to have been made operational by the defendants, after the delay of six months, but 'Go Live' of software on the part of the defendants was found to be faulty and not completely installed in terms of the work order, due to which the plaintiff hospital suffered various operational issues and these issues were duly communicated to the defendants, from time to time.
9. It is further stated in the plaint that due to fault in the software, all the services of the plaintiff hospital came to stand still, and were started manually, without relying upon the systems installed by the defendants. It is further stated that on request of the plaintiff hospital, the defendants made an integration of the hospital software with max lab machines, for which, an additional payment of Rs.1,25,280/- was also made through RTGS, on 12.01.2019. But, the said amount has also gone waste, as this functioning was totally dependent upon the entire software to be integrated.
10. It is further stated in the plaint that despite follow-up and reminders, the defendants could not provide the satisfactory solution to the issues involved during the working of the software CS (Comm.) 227/21 page 4 of 33 D.J.(Commercial Court)-01/Shahdara/KKD/Delhi and they always remained unresolved. It is further stated in the plaint that with a view to resolve the issues amicably and also to streamline the functioning of the hospital, the plaintiff hospital preferred to convene a meeting on 30.04.2019, in which, the defendant No.2 participated on behalf of the defendants and minutes of the meeting were also reduced into writing and the said minutes were duly acknowledged by the defendant No.2, vide email dated 01.05.2019.
11. It is further stated in the plaint that despite crossing the deadlines for implementation of software, pendency of unresolved issues for a long time, the defendants again failed to execute the work order, but kept on demanding the payment, which were even not due . It is further stated that there were several issues in the implementation of the software which remained unresolved at the end of the defendants. But, the defendants did not leave any stone unturned to harass the plaintiff hospital, by sending an email dated 04.06.2019, stating that in the absence of release of funds, services would not be continued at the plaintiff hospital. It is further stated that the defendants were bent upon closure of the services as an arm-twisting tactics to get the amount released. However, on repeated requests of the plaintiff hospital, defendant No.2, vide email dated 05.06.2019, agreed to extend the licence for the close of 06.06.2019.
12. It is further stated in the plaint that the plaintiff hospital paid the amount in terms of the work order and the remaining amount was not released due to the pendency of many unresolved issues and non-implementation of the work order. It CS (Comm.) 227/21 page 5 of 33 D.J.(Commercial Court)-01/Shahdara/KKD/Delhi is further stated that the plaintiff hospital, under threat for not getting the services from the defendants and foreseeing the difficulty in case of closure of services, was left with no option but to opt for old HIS system.
13. It is further stated in the plaint that a sum of Rs.5,75,280/-, so paid by the plaintiff hospital to the defendants, had gone waste and the plaintiff hospital had asked the defendants several times, to refund the said amount, as the software could not run due to issues solely attributed to them. It is further stated that the defendants neither paid any heed to the request of the plaintiff hospital to rectify the issues, nor paid any amount so paid and hence, the present suit. The plaintiff has also claimed an amount of Rs.5 Lakhs as damages and mental agony, alongwith interest @12% , besides the aforesaid amount of Rs.5,75,280/-.
14. After filing of the present suit, summons of the suit for settlement of issues were duly served upon the defendants and on 17.01.2022, Ms. Ishu Chawla, Advocate, appeared on behalf of the defendants and thereafter, on 18.01.2022, written statement was filed, on behalf of the defendants No.1, 3, 4 & 5. However, no written statement was filed, on behalf of the defendant No.2.
15. In their written statement, it is stated that the defendant No.2 has resigned from the defendant company on 08.02.2021. It is further stated that the team of the plaintiff hospital had visited Akash Hospital, Dwarka, where the software of defendant No.1 was operational and after getting all the satisfactory reviews, the CEO of the plaintiff hospital, Sh.Sunil Saggar, requested the CS (Comm.) 227/21 page 6 of 33 D.J.(Commercial Court)-01/Shahdara/KKD/Delhi defendant No.2 to give the software and solution for the plaintiff hospital, for which, the defendant No.2 agreed and accordingly, a work order, dated 23.02.2018, was placed by plaintiff No.1 with the defendant No.2, for IT software for Hospital Management System of the plaintiff. It is further stated that the said work order also bears an enclosure dated 20.02.2020, as scope of work and terms and conditions, including installation, payment terms, warranty and AMC etc., as per requirements of the plaintiff. It has been admitted in the written statement that as per the work order dated 23.02.2018, the payment of Rs.18 Lakhs, excluding GST/Taxes was fixed between the plaintiff and the defendants, towards implementation of software of defendant No.1, and an amount of Rs.7 Lakhs, excluding GST, was fixed as AMC for four years. It is further admitted that the work order, dated 23.02.2018, was accepted by the defendant No.1 as per terms and conditions, and after confirmation, the defendant No.1 raised invoices every month for the remaining payment, for which, the defendant paid the GST also and a total amount of paid GST was Rs.4,50,000/-, which had gone totally waste and defendant No.1 was left empty handed, as the amount paid by the plaintiff has gone in making payment of GST.
16. It is further stated in the written statement that the defendant No.1, raised an invoice bearing No.T3-GST-18-043, dated 03.03.2018, for an amount of Rs.29,50,000/-, including GST, vide email dated 19.03.2018 and as per terms of the work order and the payment terms, the plaintiff was liable to pay Rs.7,37,500/-, as 25% of the value of the work order. But, the plaintiff paid only Rs.4,50,000/- and when the defendant raised CS (Comm.) 227/21 page 7 of 33 D.J.(Commercial Court)-01/Shahdara/KKD/Delhi this issue of payment, the plaintiff assured the defendant No.1, by making false statements, just to evade the payments.
17. It is further stated in the written statement that as per the terms of the work order, the defendant No.1 completed the functional workshop, installed the software in training environment on 05.03.2018, before commencement of training and thereafter, started training of various employees of the plaintiff. Accordingly, the defendant No.1 raised demand for payment of 20% as well as the remaining payment of first installment, i.e., Rs.2,87,500/-, which the plaintiff had again evaded by showing false and fabricated financial difficulty.
18. It is further stated in the written statement that the plaintiff has conspired to grab the legal dues of the defendants and therefore, whenever the payment became due, the plaintiff evaded the same on the pretext of financial difficulty. It is further stated in the written statement that on the assurances of the plaintiff, the defendants continued to complete the project in a time bound manner and about to complete 'Go Live', while plaintiff was not co-operating and delaying the project on one pretext or the other. It is further stated that on 28.03.2018, the defendant sent an email to the concerned person of the plaintiff, requesting him to give the requisite data to upload the same in Hospital Management System (HMS), But, on 29.03.2018, an email was received from the office of the plaintiff, informing the defendant that the plaintiff had decided to postpone TrioTree HIS roll out plan.
CS (Comm.) 227/21 page 8 of 33 D.J.(Commercial Court)-01/Shahdara/KKD/Delhi
19. It is further stated in the written statement that the defendant no.1 had already spent huge sum on the installation and training to the staff of the plaintiff and therefore, they did not have any other way, except to wait for the instructions of the plaintiff. It is further stated that on 31.03.2018, after discussions with the representative of the plaintiff, the defendant No.1 sent the revised HISTree project plan for 'Go Live' on 15.04.2018. But the said email was not responded by the plaintiff.
20. It is further stated in the written statement that another email dated 16.05.2018 was sent by the defendant No.1, requesting the plaintiff to give the updated schedule of charges (SOC) for preparation of another plan for 'Go Live', but no response was received from the plaintiff and therefore, another email dated 24.04.2018 was sent to the plaintiff and a request for giving SOC at least 15 days before so that the new plan may be made as per requirements of the plaintiff. But, no response was received to the said email also.
21. It is further stated in the written statement that no response was received from the plaintiff to the reminders of defendant No.1, dated 26.04.2018 and 30.04.2018. However, on 30.04.2018, the representative of the plaintiff sent an email to defendant No.1, thereby informing that the plaintiff was working with the management to finalize the SOC and they will inform the defendant No.1 accordingly.
22. It is further stated in the written statement that after lots of efforts and remainders, staff/representative of plaintiff shared a CS (Comm.) 227/21 page 9 of 33 D.J.(Commercial Court)-01/Shahdara/KKD/Delhi laboratory data, but still failed to give SOC for which the defendant No.1 has been requesting since April 2018, which has caused further more delay in 'Go Live'.
23. It is further stated in the written statement that the main issue regarding 'Go Live' and SOC was completely ignored by the plaintiff and the plaintiff was not acting as per the terms of the said work order, therefore, the defendant No.1 again sent email dated 21.05.2018 informing the plaintiff that the defendant No.1 has rescheduled the 'Go Live' for 31.05.2018.
24. It is further stated in the written statement that the plaintiff failed to give SOC and accordingly, on 22.05.2018, another email was sent by defendant No.1 to the plaintiff. It is further stated that during the term, the plaintiff took various additional works from the defendant, which were also not paid in entirety. It is further stated that the plaintiff has made deliberate delay in completion of the project, which has caused huge costs to the defendant No.1. It is further stated that after much persuasion and efforts of defendant No.1, the date for 'Go Live' was decided as 01.10.2018. But the defendant No.1 was still struggling for data and information, which the plaintiff was to provide.
25. It is further stated in the written statement that various previous employees of the plaintiff hospital, who were given training, had already left due to delay on the part of the plaintiff and therefore, the defendant No.1 had to give training to the new/additional staff again, for which the plaintiff is yet to pay. It is further stated that after much persuasion of defendant No.1, the CS (Comm.) 227/21 page 10 of 33 D.J.(Commercial Court)-01/Shahdara/KKD/Delhi software came into motion of 'Go Live' and started functioning on 01.10.2018. But even after 'Go Live', the plaintiff has not paid the previous dues. It is further stated that the defendant No.1 raised the demands for payment from the plaintiff and the said demands were also admitted by the plaintiff. But, they again sought some time to make the payments.
26. It is further stated in the written statement that the defendant No.1 made the software functional with integration as per the demand and requirement of the plaintiff, as per terms of the work order and various additional integration were also made by the defendant No.1, as per the request of the plaintiff. But, the plaintiff has failed to make the due payment and has illegally retained the same, despite various reminders. It is further stated that on 28.01.2019, the defendant No.1 received a mail from Ms.Vanita Yadav, who assured the defendants that the entire payment shall be released on 31.01.2019. However, even after 31.01.2019, the payments were not released by the plaintiff.
27. It is further stated in the written statement that the plaintiff has failed to fulfill the promises till 31.01.2019 and accordingly, vide email dated 04.06.2019, defendant No.1 was constrained to inform the plaintiff that they will not be able to provide services to the plaintiff, without payment by the plaintiff. It is further stated that defendants had completed its obligations after 'Go Live' also and have also covered one year warranty and have continued to give AMC, as per terms of the work order. But, the plaintiff failed to comply their obligations and failed to make payment to defendant No.1. It is further stated that the plaintiff CS (Comm.) 227/21 page 11 of 33 D.J.(Commercial Court)-01/Shahdara/KKD/Delhi had not co-operated and used to provide incomplete information. It is further stated that despite all services and support, the plaintiff is still retaining an amount of Rs.25,00,000/-, as per the work order, illegally. It is further stated that the defendant No.1 has failed to get payments from the plaintiff and accordingly, a legal notice dated 11.03.2021, was also sent to the plaintiff. But, no response to the legal notice has been received from the plaintiff. It has been prayed that the suit of the plaintiff may be dismissed with heavy exemplary costs.
28. Replication to the written statement of the defendants was also filed, on behalf of the plaintiff, wherein, the plaintiff has denied the contents of the written statement and has reiterated the contents of the plaint.
29. First case management hearing was conducted on 12.09.2022 and the following issues were framed by the court, as under:
1. Whether this court has no territorial jurisdiction to try and entertain the present suit ? OPD
2. Whether the present suit is bad for non-joinder and mis-
joinder of necessary parties ? OPD
3. Whether the plaintiff has not valued the present suit properly for the purposes of court fees ? OPD
4. Whether the plaintiff is entitled to recover the damages of Rs.10,75,280/- from the defendants, as claimed in the plaint ? OPP
5. Whether the plaintiff is entitled for recovery of an amount of Rs.2,36,562/-, as interest, till the month of March 2021, on the principle amount of Rs.10,75,280/-, as claimed in the plaint ? OPP CS (Comm.) 227/21 page 12 of 33 D.J.(Commercial Court)-01/Shahdara/KKD/Delhi
6. Whether the plaintiff is entitled to claim interest from the defendants, if so, at what rate and for which period ? OPP
7. Relief.
30. During the trial, the plaintiff has examined its Administrative Officer Sh. Ashim Sharma as PW-1 and Sh.Pankaj Pathak, its IT Manager, as PW-2. Whereas, the defendants have examined Sh. Chandan Kumar Mishra, its AR as DW-1; Sh.Pradeep Kumar, its Sr. Project Manager, as DW-2 and Sh.Naresh Rana, its Head: Product Implementation, as DW-3.
31. After completion of trial, final arguments were addressed by Sh. K.K. Makhija, Advocate, for the plaintiff and Sh.Shahrukh Inam, Advocate, for the defendants, on 16.11.2023. The Ld. counsels for the parties have also filed their written arguments. The Ld. counsel for the defendants has also relied upon the following judgments, in support of his contentions:
(i) 'Yassh Deep Builders LLP vs. Sushil Kumar Singh & Anr.' passed by the Hon'ble High Court of Delhi, in OMP (I) (Comm.) No.401/2022, on 14.03.2023;
(ii) 'Kanchan Ydyog Limited vs. United Spirits Limited', of the Hon'ble Supreme Court of India, passed in Civil Appeal No.1168 of 2007, on 19.06.2017;
(iii) 'C.S. Venkatesh vs. A.S.C. Murthy' of the Hon'ble Supreme Court of India, passed in Civil Appeal No.8425 of 2009, on 07.02.2020;
(iv) 'M/s KSS-KSSIIPL Consortium vs. M/s GAIL India Ltd.', passed by the Hon'ble Delhi High Court, in CS (Comm.) No. 198/2017, on 30.09.2019; and
(v) 'Mcdermott International Inc. vs. Burn Standard Co. Ltd.
& Ors.' passed by the Hon'ble Supreme Court of India, in Appeal (Civil) 4492 of 1998, on 12.05.2006.
32. I have carefully perused the case file and I have also given CS (Comm.) 227/21 page 13 of 33 D.J.(Commercial Court)-01/Shahdara/KKD/Delhi my considered thoughts to the arguments addressed by the Ld. Counsels for the parties. I have also perused the written arguments filed by the Ld. Counsels for the parties and also gone through the judgments cited by the Ld. counsel for the defendant. My findings on the various issues are as under:
Issue No.1, 2 & 31. Whether this court has no territorial jurisdiction to try and entertain the present suit ? OPD
2. Whether the present suit is bad for non-joinder and mis-
joinder of necessary parties ? OPD
3. Whether the plaintiff has not valued the present suit properly for the purposes of court fees ? OPD
33. The burden of proof of all these issues lies on the defendants. But, during the trial, the defendants have failed to lead any evidence on any of these issues. During the course of arguments, the Ld. counsel for the defendants has conceded that this court was having the territorial jurisdiction to try and entertain the present suit. He prayed that the defendants were not pressing the issue No.1.
34. During the course of arguments, the Ld. counsel for the defendants further submitted that he was not pressing for issues No.2 & 3 and also he conceded that there was no requirement for the court for giving any findings on issues No.1, 2 & 3.
35. During the course of arguments, the Ld. counsel for the plaintiff has stressed that this court has the territorial jurisdiction CS (Comm.) 227/21 page 14 of 33 D.J.(Commercial Court)-01/Shahdara/KKD/Delhi to try and entertain the present suit and the suit has been properly valued for the purposes of court fees and jurisdiction and the suit of the plaintiff was not bad for non-joinder/mis-joinder of the necessary parties. He has prayed that the aforesaid three issues may be treated as deleted.
36. In view of the submissions of the Ld. counsels for the parties and from the material on record, this court is also of the considered opinion that this court is having the territorial jurisdiction to try and entertain the present suit and the present suit is also not bad for non-joinder or mis-joinder of necessary parties and the same is also valued properly for the purposes of court fees.
Therefore, the issues No.1, 2 & 3 are treated as not pressed and are accordingly, decided in favour of the plaintiff and against the defendants.
Issue No.4 & 54. Whether the plaintiff is entitled to recover the damages of Rs.10,75,280/- from the defendants, as claimed in the plaint ? OPP
5. Whether the plaintiff is entitled for recovery of an amount of Rs.2,36,562/-, as interest, till the month of March 2021, on the principle amount of Rs.10,75,280/-, as claimed in the plaint ? OPP
37. The burden of proof of both these issues lies on the plaintiff. In support of its contentions, the plaintiff has examined its Administrative Officer Sh.Ashim Sharma, as PW-1, who has filed his affidavit Ex.PW1/A, and has proved the various documents on record. The work order, dated 20.02.20218, has CS (Comm.) 227/21 page 15 of 33 D.J.(Commercial Court)-01/Shahdara/KKD/Delhi been proved on record as Ex.PW1/1. This document is an admitted document of the parties and has not been denied by the defendants. This witness has also proved the payment receipt regarding payment of a sum of Rs.4,50,000 to the defendant on 28.02.2018 as Ex.PW1/2. This receipt is also not denied by the defendants and is an admitted document of the parties. The minutes of the meeting, dated 30.04.2019, have been proved on record, as Ex.PW1/4. This witness has also proved the email, dated 01.05.2019, as Ex.PW1/5. Both these documents have not been denied by the defendants and are the admitted documents of the parties. This witness has also proved the email dated 05.06.2019, regarding release of funds to the defendant, as Ex.PW1/6. This email is also not denied by the defendants as the same was sent by the director of defendant No.1, Dr. Divye Chhabra (defendant No.2). A copy of the legal notice dated, 12.02.2021, has been proved on record as Ex.PW1/7. This is also an admitted document, as the defendants have not denied the receipt of this legal notice.
38. PW1 Sh. Ashim Sharma, in his affidavit Ex.PW1/A, has reproduced the entire contents of the plaint, as briefly stated above. This witness was subjected to a lengthy cross- examination, on behalf of the defendants and during his cross- examination, this witness, who was looking after the general administration of the hospital, as well as its IT operations, has admitted that emails, dated 31.03.2018, 26.04.2018 and 30.04.2018, sent by the director of defendant No.1, marked as Ex.PW1/DX-1, Ex.PW1/DX-2 & Ex.PW1/DX-3, were received by the plaintiff, on the correct email address of Sh. Amit Sharma, CS (Comm.) 227/21 page 16 of 33 D.J.(Commercial Court)-01/Shahdara/KKD/Delhi who was senior manager (IT) of the plaintiff hospital, at the relevant time. This witness has also admitted that the emails dated 11.05.2018, 21.05.2018 and 22.05.2018, marked as Ex.PW1/DX-4, Ex.PW1/DX-5 and Ex.PW1/DX-6, respectively, were also received on the email of Sh.Amit Sharma.
39. During his cross-examination, PW-1 Ashim Sharma has further deposed that till 01.10.2018, the HIS (Hospital information system) of the hospital was running with 'Accurate Plus' software. This witness has admitted that after 01.10.2018, the hospital information system of the plaintiff started working on the software provided by the defendant. This witness has further deposed that the process for installation of the software, provided by the defendant, had started on 01.10.2018 and a few services of the hospital were stopped prior to 01.10.2018, whereas, the remaining services were running on the previous software system even prior to 01.10.2018. This witness has denied the suggestion that the software provided by the defendant was under installation and was not fully functional on 01.10.2018. This witness has further deposed that the store, purchase, accounting, food and beverages, were still continuing on 01.10.2018 and besides these services provided to the indoor patients till their discharge, were also continued on the previous software. He has further deposed that all the aforesaid services were continued on the previous software. This witness has further deposed that all the aforesaid services were to be conducted on the software provided by the defendant, as per the work order. He has volunteered that all the above mentioned services had started after about one month of 01.10.2018.
CS (Comm.) 227/21 page 17 of 33 D.J.(Commercial Court)-01/Shahdara/KKD/Delhi
40. In order to prove its case, the plaintiff has also examined Sh. Pankaj Pathak, the IT Manager of the plaintiff hospital, who has filed his affidavit Ex.PW2/A. This witness was also subjected to a lengthy cross-examination, on behalf of the defendant. During his cross-examination, he has admitted that he was the associate project manager of the defendant till 12.10.2019 and he joined the services of the plaintiff on 21.01.2019. This witness was working with the defendants, till 12.10.2019 and therefore, he has further deposed that he was having the personal knowledge about the work order dated 20.02.2018. This witness has admitted that the training was imparted by the defendants, to the officials of the plaintiff, regarding installation and operation of new software of the defendants for hospital information services of the plaintiff. But, he was not a part of the team which imparted training to the officials of the plaintiff.
41. During his cross-examination, this witness has further deposed that Sh. Amit Sharma, who was previously looking after the IT department of the plaintiff, had resigned and on request of the plaintiff, the defendant has relieved him to join the services with the plaintiff.
42. This witness has categorically denied the suggestion of the Ld. counsel for the defendant that SOC (Schedule of charges) was not provided by the plaintiff hospital to the defendant, due to which there were several glitches in the software installed by the defendant. This witness has further deposed that the hospital has informed the defendant about the glitches and purchase of the CS (Comm.) 227/21 page 18 of 33 D.J.(Commercial Court)-01/Shahdara/KKD/Delhi additional hardware by the hospital. But, no such email could be traced by him on the court record, during his cross-examination.
43. From the depositions of PW-1 and PW-2 and the documents on record, it is clear that vide work order dated 20.02.2018, Ex.PW1/1, the defendant was granted the work of implementing the hospital management system at the plaintiff hospital, including training of its users, for a total cost of Rs.18 Lakhs, excluding the taxes. As per the work order, the implementation of the hospital management system was to be started w.e.f. 01.02.2018 and was to be completed before 23.03.2018, so that the integrated online HMS was fully operational w.e.f. 01.04.2018.
44. Since the work order dated 20.02.2018, Ex.PW1/1, is the bone of contention between the parties and since both the parties have blamed each other for non-compliance of its terms & conditions, it would be appropriate that the relevant terms & conditions of the work order Ex.PW1/1 are reproduced for ready reference. The relevant terms & conditions are accordingly, reproduced below :
"Note by IT
1) The total cost of SMH for complete implementation of the HMS including software customizations, new requirements and training of all users will be Rs.18,00,000/- (Rupees Eighteen Lakh only) exclusive of all taxes. The total cost of AMC including all the taxes is Rs.7,00,000/- for 4 years after the expiry of the warranty period. Te details as mentioned below.
2) M/s TrioTree Technologies, shall start implementation of the Hospital Management System with effect from 1 st February, 2018 and complete the same before 23rd March, CS (Comm.) 227/21 page 19 of 33 D.J.(Commercial Court)-01/Shahdara/KKD/Delhi 2018, so that integrated online HMS is fully operational with effect from 1st April, 2018.
3) M/s TrioTree Technologies have assured us full and prompt after sales support not only during the warranty period but also during the AMC period.
4) All users of the HMS shall be adequately trained by M/s TrioTree Technologies, for proper usage and understanding of the applicable portions of the software.
5) The warranty of the HMS implemented at SMH shall be 12 months, i.e. "After Sale Service" and the Annual Maintenance of the software shall be provided free of charge for a period of 12 months to be reckoned from 1 st Apr 2018. The M/s TrioTree Technologies have assured that SMH can raise as many number of tickets for customization and new requirements during six months after go live.
6) After the expiry of the warranty period i.e. 31 st Mar 2019, the AMC shall be valid for next 4 years i.e. 1 stApr 2019 to 31st Mar 2023. The cost of Annual Maintenance Support (AMC) shall be fixed to Rs.1.75 lacs per annum for next 4 years i.e. 1stApr 2019 to 31st Mar 2023 with no extra charges, enhancements or hidden costs. The M/s TrioTree Technologies have assured that SMH can raise as many number of tickets for customization and new requirements during the AMC period.
7) M/s TrioTree Technologies have agreed that for new requests or requirements raised per point 4 & 6, if there is an extraordinary effort to develop and deploy, a mutually agreed effort estimate and costing may be done.
8) M/s TrioTree Technologies have also assured us the smooth transition in parallel from the present HIS to their new HIS. During the final phase of implementation i.e. before going live they shall provide us extra manpower for smooth transition and the extra support shall continue for few days further after the go live has been achieved.
9) M/s TrioTree Technologies have also agreed and assured that they would do our HMS integration with Family Health Care for both OP, IPD, Radiology or any other service using a reasonable process or technology based method for end to end outcome.
10) M/s TrioTree Technologies have agreed and assured that they would do our HMS Integration with Tally before go live i.e. 1st Apr 2018. they have also assured us of CS (Comm.) 227/21 page 20 of 33 D.J.(Commercial Court)-01/Shahdara/KKD/Delhi integrating new finance software if purchased in future during the period 1st Apr 2018 to 30th Sep 2019.
11) M/s TrioTree Technologies have also agreed and assured that they would do our HMS integration with Max Lab for both OP and IPD using a reasonable process or technology based method for end to end outcome.
12) M/s TrioTree Technologies have agreed to integrate three additional equipment over & above the current installed equipment's in the Lab from the date of go live i.e. 1st Apr 2018.
13) Payment terms and conditions :
(a) 25% on signing Contract
(b) 20% on completion of functional workshop
training commencement, software installed in training environment.
(c) 20% of go-live
(d) 25% two months after go-live
(e) 10% of completion of warranty period.
You are requested to collect the payment of advance for the project, in accordance with the above terms and conditions agreed upon.
Authorized Signatory Authorized Signatory
M/s TrioTree Technologies Shanti Mukund Hospital"
45. From the terms & conditions of this work order, as noted above, it is clear that the installation of Hospital Management System was to be completed before 28.03.2018, so that, the integrated online HMS was fully operational we.f. 01.04.2018.
From the above terms & conditions, it is also clear that the defendants had agreed to integrate three additional equipments over and above the current installed equipments in the lab from the date of "Go Live" i.e. 01.04.2018. It is also clear that an amount of 25% was to be paid by the plaintiff at the time of signing of the contract and thereafter, 20% of the contract amount was to be paid by the plaintiff on completion of functional work CS (Comm.) 227/21 page 21 of 33 D.J.(Commercial Court)-01/Shahdara/KKD/Delhi shop training commencement software intalled on training environment and thereafter further payment of 20% was to be made by the plaintiff at the time of 'Go Live'. The stage of Go Live was to be therefore, achieved by 01.04.2018. Perusal of the record further shows that vide receipt dated 28.02.2018, Ex.PW1/2, a payment of Rs.4,50,000/- i.e. 25% of the contract amount, excluding the taxes, was duly paid by the plaintiff to the defendant.
46. Perusal of the record further shows that the stage of 'Go Live' has been achieved by the defendant only on 01.10.2018, as communicated by Sh. Naresh Singh Rana, on behalf of the defendant, to Sh. Amit Sharma, Sr. Manager (IT) of the plaintiff, vide email Ex.PW1/3. This email is an admitted document of the parties and is not disputed.
47. Perusal of the record further shows that due to delay of implementation and completion of the work order, a meeting between the parties was also held on 30.04.2019. The minutes of the said meeting have been proved on record as Ex.PW1/4. Perusal of the minutes of the meeting Ex.PW1/4, shows that the stage of 'Go Live' was achieved only on 01.10.2018, but a large number of shortcomings and glitches were still persisting, due to which the entire implementation could not be completed.
48. In order to prove the delay and fault on the part of the officials of the plaintiff, the defendant has also examined its authorized representative Sh. Chandan Kumar Mishra as DW-1, who was also working as accounts administration manager of the CS (Comm.) 227/21 page 22 of 33 D.J.(Commercial Court)-01/Shahdara/KKD/Delhi defendant company. This witness has also filed his affidavit Ex.DW1/A and has reproduced the contents of the written- statement. This witness has also stated that the defendant No.2 was approached by the CEO of the plaintiff hospital, for a software package, for hospital information system. But, the defendant No.2 had already resigned from the defendant company on 08.02.2021.
49. It is very relevant to note that the defendant No.2 Dr.Divye Chhabra, who was also one of the directors of the defendant company, at the relevant time, was the person who had negotiated with the officials of the plaintiff at each and every stage, for completion of the work as per the work order Ex.PW1/1. It has come on record that defendant No.2 Dr. Divye Chhabra was the person, who was dealing with the officials of the plaintiff hospital at each and every stage of the work, regarding the implementation of HMS and for completion of the work as per the work order Ex.PW1/1. Dr. Divye Chhabra is the person who had even participated in the conciliatory meeting dated 30.04.2019, in respect of which minutes Ex.PW1/4 are also on record. During the trial, the defendant No.1 has failed to produce Dr. Divye Chhabra, as a witness, to make clarifications regarding the dispute between the parties. Dr. Divye Chhabra was a very material witness to throw light on the reasons of dispute between the parties. But, the defendant has deliberately and intentionally failed to examine him as a witness during the trial. The best possible evidence has been concealed by the defendants, from the court.
CS (Comm.) 227/21 page 23 of 33 D.J.(Commercial Court)-01/Shahdara/KKD/Delhi
50. DW-1 was also subjected to a lengthy cross-examination on behalf of the plaintiff and perusal of his cross-examination shows that there was no dispute regarding the exchange of communication between the parties, through emails. But, this witness has admitted that the emails on record were not complete. This witness has also admitted that Dr. Divye Chhabra (Defendant No.2) director of the defendant No.1, was the person directly involved in the project. This witness has also admitted that Dr. Divye Chhabra was also involved in all the day to day negotiations, meetings, communications related to the project, from the day one of the negotiations till the end of the project. He has categorically stated that the proposals, negotiations and finalization of the contract was done by him.
51. DW-1 has further deposed in his cross-examination that he had never accompanied Dr. Divye Chhabra in any meeting relating to the project and had never replied to any of the emails of the plaintiff relating to any installation, glitches, grievances, related to the project. He has further deposed that he replied to the emails related to the accounts only. He has admitted that he had never visited the site in respect of the project. He has further admitted that he was having no knowledge about the negotiations pertaining to the project. He has admitted that the work had started 2-3 months prior to the issuance of the work order dated 23.02.2018.
52. During his cross-examination, DW-1 has also admitted that there was no ambiguity in the terms & conditions of the work order dated 20.02.2018, Ex.PW1/1, and all the modules as CS (Comm.) 227/21 page 24 of 33 D.J.(Commercial Court)-01/Shahdara/KKD/Delhi mentioned in Ex.PW1/1 were to be installed under the project. This witness has also admitted that all the modules mentioned in the work order Ex.PW1/1 could not be installed in one go, i.e. at one point of time. However, he has admitted that the installation work was to be completed by 01.04.2018. Regarding the deficiencies in supplying the schedule of costs (SOC), this witness has shown his ignorance and has stated that he was having no information in this regard as he was not a technical person, related to the software. This witness has further deposed that he was not aware about the number of modules which were ready for installation by 01.04.2018. He has further deposed that either Dr. Divye Chhabra or Mr. Naresh Singh Rana or Mr. Pradeep Kumar or Mr. Pankaj Pathak, the ex-employees of the defendant, were the concerned persons to depose in this regard. This witness has further deposed that he was having no technical knowledge of the project. This witness has admitted that Dr.Divye Chhabra is still alive. But, he was no longer a director of the defendant as he had already resigned.
53. During his cross-examination, DW-1 has again admitted that the project was completed in all respect, from the side of the defendant, only in October 2018. He has further admitted that some of the modules were still pending for installation, as on 30.04.2019.
54. This witness has further admitted that 25% of the contract amount of Rs.18 Lakhs, i.e. an amount of Rs.4,50,000/- had already been received by the defendant in the month of February- March 2018. This witness has further admitted that the next CS (Comm.) 227/21 page 25 of 33 D.J.(Commercial Court)-01/Shahdara/KKD/Delhi payment of 20% was becoming due only when the workshop were functional, trainings were done, software installation was done and training for software was complete.
55. In support of its contentions and to prove the fault of the officials of the plaintiff, the defendants have also examined the senior project manager Sh. Pradeep Kumar, as DW-2, who has also filed his affidavit Ex.DW2/A. In his affidavit, this witness, who was working as sr. project manager of the defendant during the relevant period has also reproduced the contents of the written-statement. This witness was also subjected to a lengthy cross-examination, on behalf of the plaintiff, and in his cross- examination, this witness has deposed that in the year 2018, he was associated with the defendant as project manager and he was the senior project manager in the project of the plaintiff hospital. He has further deposed that Sh. Pankaj Pathak, was also associated with him as a project manager. He has further deposed that as a senior project manager, his duty was to install the software, to get the work done, to supervise the project team, to assist the team and to communicate the issues related with the project, to Sh. Naresh Singh Rana, Head of implementation. He has further stated that Sh. Naresh Singh Rana used to report to Dr. Divye Chhabra, director (defendant No.2). This witness has also admitted that Dr. Divye Chhabra was constantly in touch with the plaintiff hospital even prior to the issuance of the work order, till the time, the dispute had arisen between the parties. He has further admitted that Dr. Divye Chhabra was the authorized person to decide all the modalities and terms & conditions of the work order, as well as the completion and implementation of the CS (Comm.) 227/21 page 26 of 33 D.J.(Commercial Court)-01/Shahdara/KKD/Delhi project. He has further admitted that Dr. Divya Chhabra used to communicate directly with the plaintiff regarding the project. This witness has also admitted that prior to installation of the software of the defendant, the plaintiff hospital was running on a software called 'Accurate'. He has further deposed that the defendant was also involved with the installation and running of the said software with the plaintiff hospital.
56. During his cross-examination, this witness has given a curious turn to the defence of the defendants and has bifurcated the work order in two parts, i.e., phase-1 and phase-2. This witness has admitted that the software "HISTree" of the defendant company was to be installed by the defendant. He has also admitted that the work order dated 20.02.2018 contained all the work related modules. This witness has improvised the defence of the defendants and has stated that all the modules, as mentioned in the work order dated 20.02.2018, were not to be operationalized by 01.04.2018. He has further deposed that all the modules were to be operationalized in two phases, i.e. Phase- 1 and Phase-2. He has further deposed that out of total 23 modules, only 18 modules were required to be operationalized, prior to 01.10.2018 and the date of operationalizing the remaining modules was not given by the plaintiff. This deposition of the witness is in contradiction to the terms & conditions of the work order dated 20.02.2018, Ex.PW1/1. This witness has named several modules, which were to be operationalized till 01.10.2018. He has further deposed that remaining modules were to be operationalized in phase-2 and the terms & conditions for identifying phase-1 and phase-2 were CS (Comm.) 227/21 page 27 of 33 D.J.(Commercial Court)-01/Shahdara/KKD/Delhi reduced into writing. But, there is nothing on record to suggest that the work order, Ex.PW1/1, was to be implemented in two phases. There is nothing on record to suggest that a few of the modules were to be operationalized till 01.10.2018 and the remaining modules were to be operationalized, thereafter, in phase-2.
57. During his cross-examination, this witness was asked to go through the case file and to trace out any such written document, under which phase-1 and phase-2 of the work order were identified, but, this witness could not trace any such document on record. During his cross-examination, this witness has admitted that the implementation of the project was to be completed as per the work order Ex.PW1/1. He has further admitted that as per the work order the entire project was to be completed and software was to be operationalized by 23.03.2018, but, the defendant was ready for implementation of phase-1 only by September-October 2018. During his cross-examination, he has further stated that there were some glitches in uploading of schedule of charges (SOC) and SOC was required for operationalizing all the modules.
58. During his cross-examination, he has further stated that he was involved in the implementation of the project at all times and at all stages. He has admitted that some additional hardware was required, prior to installation of the software and accordingly, the configuration was sent to the plaintiff for additional hardware in the month of March-April 2018. This witness has admitted that the plaintiff has provided the hardware to the defendant. He has CS (Comm.) 227/21 page 28 of 33 D.J.(Commercial Court)-01/Shahdara/KKD/Delhi further admitted that the software provided by the defendant company could not be installed, in case, the required hardware was not provided by the plaintiff hospital.
59. During his cross-examination, this witness has again reiterated that as on 23.10.2018 only phase-1 was complete and phase-2 was still pending. He has again admitted that Dr. Divye Chhabra was the competent person to communicate with the plaintiff hospital regarding completion of the project or implementation or installation or any glitch in the software/ project.
60. During his cross-examination, this witness has admitted that AMC was to be due and payable when the installation of the modules had completed.
61. During the trial, the defendants have also examined Sh. Naresh Singh Rana, its Head : Product Implementation, as DW-3. This witness has also reproduced the contents of the written- statement in his affidavit Ex.DW3/A. This witness was also subjected to a lengthy cross-examination, on behalf of the plaintiff. During his cross-examination, this witness has again admitted that Mr. Divye Chhabra used to personally attend the meetings with the officers of the plaintiff, as and when the same were held. He has further deposed that till the time of issuance of the work order, Sh. Divye Chhabra was doing all the negotiations/meetings. This witness has stated that he was not involved in any meeting, prior to issuance of the work order by the plaintiff, in favour of the defendant. However, he attended CS (Comm.) 227/21 page 29 of 33 D.J.(Commercial Court)-01/Shahdara/KKD/Delhi about 50 meetings, regarding implementation of the project alongwith Mr. Divye Chhabra.
62. DW-3 has also deposed on the same lines as DW-2 and has also raised additional defence that the entire project work was to be completed in two phases. He has further deposed that the fact of completion of two phases were mentioned in various communications through email. But, he could not trace any such email on record.
63. During his cross-examination, DW-3 has further deposed that some of the modules of the phase-1 were to be completed by 31.03.2018 and 'Go Live' was to be effected w.e.f. 01.04.2018. He has further deposed that modules of phase-2 were to be operationalized within a period of three months thereafter i.e. till 30.06.2018. He has admitted that the entire project, as per the work order Ex.PW1/1, was to be completed by 23.03.2018. During his cross-examination, he has admitted that the defendant had completed the entire project in the month of January- February 2019.. He has also admitted that in the month of April 2019, a meeting was convened by Dr. Divye Chhabra with the officers of the plaintiff, wherein, time limit was fixed for completing the remaining work.
64. During his cross-examination, DW-3 has given an additional narration of the training of the staff of the plaintiff and has deposed that the training of the staff of the plaintiff was also to be conducted in two phases. But, he has shown his ignorance about the date of completion of training of officials/staff of the CS (Comm.) 227/21 page 30 of 33 D.J.(Commercial Court)-01/Shahdara/KKD/Delhi plaintiff in respect of the modules of phase-1.
65. From the testimonies of the witnesses of the parties and the documents on record, it is clear that as per the work order Ex.PW1/1, the entire work of implementation of Hospital Management System (HMS) was to be completed before 23.03.2018 and the integrated on-line HMS was to be fully operationalized w.e.f. 01.04.2018. But, the implementation of Hospital Management System could not be completed till 01.10.2018 and 'Go Live' could take place only in October 2018. It is also clear that even on 30.04.2019, when the meeting has taken place between the officials of the plaintiff and the defendant, vide minutes of the meeting Ex.PW1/4, the entire project could not be completed and a fresh time line was fixed for implementing the project completely by 15.07.2019.
66. In the considered opinion of this court, since time was the essence of completing the work order Ex.PW1/1, it was the duty of the defendants to complete the entire project work by 23.03.2018, so that the integrated online HMS system was fully operational w.e.f. 01.04.2018. It is very relevant to note here that there is nothing on record to suggest that various modules of the software, as per work order Ex.PW1/1, were to be completed in two phases. It is also relevant to note that prior to 23.03.2018, there was no communication by the defendants, either to pay the remaining contract amount or to provide necessary assistance, from the plaintiff, for implementation of the Hospital Management System.
CS (Comm.) 227/21 page 31 of 33 D.J.(Commercial Court)-01/Shahdara/KKD/Delhi
67. During the trial, the plaintiff has filed the payment receipt of Rs.4,50,000/- as Ex.PW1/2 and another payment receipt, regarding the subsequent payment of Rs.1,25,280/- on 12.01.2019. During the testimonies of the parties, it has come on record that the said amount of Rs.1,25,280/- was spent by the plaintiff hospital for installation of additional hardware, so that some of the modules, as per work order Ex.PW1/1, may be implemented by the defendant.
68. During the trial, the plaintiff has failed to lead any evidence to show that the plaintiff has also suffered losses or damages due to non-implementation of all the modules as mentioned in work order Ex.PW1/1, besides the above noted payments. No document has been filed by the plaintiff hospital to substantiate its claim of damages and mental agony or harassment etc. worth Rs.5 lakhs.
69. During the course of final arguments, the Ld. counsel for the plaintiff hospital has also conceded this fact that no documentary evidence could be filed on record by the plaintiff in respect of its claim of damages of Rs.5 lakhs.
In view of the above discussion, both these issues are decided in favour of the plaintiff and against the defendant, partly, to the effect that the plaintiff hospital is entitled to claim/recover the amount of Rs.5,75,280/- from the defendant company.
Issue No.6 Whether the plaintiff is entitled to claim interest from the defendants, if so, at what rate and for which period ? OPP CS (Comm.) 227/21 page 32 of 33 D.J.(Commercial Court)-01/Shahdara/KKD/Delhi
70. The burden of proof of this issue also lies on the plaintiff. But, none of the witnesses of the plaintiff have deposed anything about the claim of interest. However, keeping in view the prevailing bank rates of interest and keeping in view the nature of business transactions between the parties, this court is of the considered opinion that an interest @6% per annum, as per Section 34 of the CPC, shall suffice the claim of the plaintiff regarding its claim of interest, w.e.f. 15.07.2019.
This issue is accordingly decided in favour of the plaintiff against the defendants.
Relief
71. In view of my findings on the various issues, as discussed above, the suit of the plaintiff is hereby decreed, in favour of the plaintiff and against the defendants, for an amount of Rs.5,75,280/-, alongwith interest @6% per annum, w.e.f. 15.07.2019, till its realization.
Parties to bear their own costs.
Decree be drawn accordingly.
File be consigned to record room, after due compliance.
Digitally signedAnnounced in the open Court BRIJESH by BRIJESH
KUMAR GARG
on this 09th Day of December 2023 KUMAR Date:
GARG 2023.12.09
16:46:13 +0530
BRIJESH KUMAR GARG
District Judge (Commercial Court)-01
Shahdara Distt, KKD, Delhi
CS (Comm.) 227/21 page 33 of 33 D.J.(Commercial Court)-01/Shahdara/KKD/Delhi