Bangalore District Court
M/S. Methods (India) Pvt Ltd vs M/S.Greensol Power Systems Pvt. Ltd on 26 June, 2019
IN THE COURT OF THE LXXIII ADDL. CITY CIVIL&
SESSIONS JUDGE,MAYOHALL UNIT, BENGALURU
(CCH-74)
Present: Sri.YAMANAPPA BAMMANAGI,
B.A., LL.B., (SPl.,)
LXXIII ADDL.CITY CIVIL & SESSIONS JUDGE
Dated this the 26th day of June, 2019.
OS NO. 25025/ 2015
Plaintiff: M/s. Methods (India) PVT LTD.
No.5A, Hoskote Industrial Area
Bengaluru - 562114.
Represented by its Chairman &
Managing Director Mr.E.J.Jose
(By Sebastian & Co. - Adv.)
Vs.
Defendants: 1.M/s.Greensol power systems Pvt. Ltd.,
No.995, Service Road,
RPC Layout, Vijayanagar,
Bengaluru- 560040.
Represented by its Director & CEO.
Mr.Shridhar Nambi
2.Shri.J.S.R. Prasad
Chairman & Managing Director.
M/s. Greenesol Power Systems Pvt.Ltd.
No.8-2-148, Meenakshi House, 1st Floor,
Road No.7, Banjara Hills,
Hyderabad -500034.
3.Shri.Shridhar Nambi
2
Director & CEO
M/s Greensol power Systems Pvt.Ltd.
No.995, Service Road,
RPC Layout, Vijayanagar,
Bengaluru- 560040.
[For D1 & D2 By Sri.M.R.Ravindra - Adv.)
Date of Institution of the suit 07.01.2015
Nature of the (Suit or pro-note, suit
for declaration and possession, suit Money Suit
for injunction, etc.)
Date of the commencement of
24.07.2017
recording of the Evidence.
Date on which the Judgment was
26.06.2019
pronounced.
Year/s Month/s Day/s
Total duration 04 05 19
(Yamanappa Bammanagi)
73rd Addl. CC & SJ, M.H.Unit,
Bengaluru. (CCH-74)
JUDGMENT
The plaintiff has filed this suit for recovery of sum of Rs.45,09,107/- with the interest at the rate of 18% per annum from the date of suit till realization.
2. Brief facts of the plaintiff's case:
3
It is contended in the plaint that, the Plaintiff Company is an ISO 9001:2008, multi-product rapidly expanding private sector Company supplying equipment and providing trunkey solution to the bulk material handling industries. Such being the fact the Defendants have approached Plaintiff Company through their project consultant M/s Avanth grade Engineers and consultant Private Ltd., Chennai for an a enquiry of fuel handling system for 2X70 MW cool based power plant for BMM ISPAT Ltd., Hosapete, Karnataka.
3. The Plaintiff Company has responded with offer on 27- 11-2010 and the techno commercial clarification and discussion completed and letter of intent vide GPSL/MIFL/3001P-01/CPD/LO-01-006/1011, dated 03-02- 2011, placed by Defendant on Plaintiff Company. Accordingly Defendant No.1 had purchased orders and one work order total value of Rs.4,91,40,000/.
4. The purchase order stipulates the terms of payment as 10% advance against bank guarantee, 10% against drawing of submission and approvals, 70% within 10 days from the date of receipt of material at site and 10% against commissioning 4 and submission of bank guarantee for warranty period plus 3 months as per the terms of purchase order. The Plaintiffs have completed material supply work by February 2012 and completed erection and commissioning by April 2012 and Defendants have never complained about any delay in executing the work entrusted to the Plaintiff delivering the material at the site. All pending work had been completed by June 2012. After each supply, erection and commissioning, the bills had to be followed up for payment as payments were always delayed from the Defendants. The unpaid amount is Rs.45,09,107/- which includes retained money. The said unpaid money is the balance of the final payment. The Plaintiff had made several request to the Defendant for the said balance, the Plaintiff had send3 letter to the Defendants. As per the terms and conditions of the agreement. The Plaintiff has carried out entire works to the satisfaction of the Defendant and they running the machineries/equipments erected productively and no defect due to inferior quality of work have notified till date and Defendants are liable to pay 5 the entire outstanding bill and to release the entire amount due to the Plaintiff.
5. On the other hand, the Defendant has filed Written Statement contending that, the Defendants have issued purchase order as contended by the Plaintiff in the plaint and mode of payment is also admitted in the written statement, but it is denied that the Plaintiff Company had completed entire work within stipulated time and Plaintiff Company has not supplied and erected fuel in time in terms of work order, due to which the Defendant is entitle for 10% of total value of work order as liquidated damage. Further the Defendant has filed counter claim in the Written Statement and claimed set- off contending that the Defendants admits the transaction, taken place between the Plaintiff and Defendant in terms of work order for erection and commission of fuel handling system. It is also not indispute that the total value of the purchase order is Rs.4,45,50,000/-. But Plaintiff has claimed Rs.45,09,107/-. Further the Defendants have contended that, Defendants are entitle for 10% of total value of work order due to delay in supply and in execution of work. The 6 Plaintiff has agreed to supply the materials on 30-04-2011 and the supply of the material was started on 31-03-2011 and completed by 04-05-2012. So there was delay of one year in supplying the materials. Further as per the work order, period for completion of work is 4 months, Plaintiff has taken 6 month time for completion of work. As per the purchase order dated 14-06-2011, the Plaintiff is bound to supply materials by 15-07-2011, but the Plaintiff supplied the same on 07-08- 2011 and completed the work by September 2012. So, the Plaintiff is bound to pay liquidated damage of 10% of the total value of Rs.4,45,50,000/-, which comes to Rs.45,55,000/-. Further the Defendant had issued another PO No.GPSZ/MFL/3001P-10/CPD/WO-019/1112/ dated 04-06- 2011, total value of work is Rs.12,60,000/-. The Plaintiff is bound to pay liquidated damage of 10% on the said value i.e. Rs.4,59,000/-.
6. Further Defendant contended that, for the supplied materials, lifting and placing of erection of the same, the Plaintiff is bound to arrange the crane service. As Plaintiff was unable to arrange the crane services, at the request of 7 Plaintiff, the Defendant arranged the crane services, born charges of crane services of Rs.7,60,805/-. So the Plaintiff is bound to pay crane service charges of Rs.7,60,805/-.
So in all 10% liquidated charges On to the value Rs.4,45,50,000/- :Rs.4,45,5000/- 10% of liquidated damages of the Total value two other bills Rs.33,30,000/- + 12,60,000/- :Rs.4,59,000/-
Charges of crane services born
By the Defendants :Rs.7,60,805/-
Total :Rs.56,74,805/-
So, claim by Plaintiff Rs.45,09,107/- set-off.
Plaintiff liable to pay the Liquidated damages and crane Service charges :Rs.56,75,805/-
After deduction claim by the Plaintiff:
Rs.4509107/-set-off The Defendant is entitle Rs.11,66,698/- counter claim
7. On the other hand, Plaintiff had filed re-joinder to the counter claim made by the Defendant in his Written Statement and Plaintiff denied the counter claim of the Defendant contending that, Defendant did not made any compliant 8 about the delay in supply of materials till filing of the suit. Further Defendant did not expressed his dis-satisfaction about the work of installation and commissioning and execution till filing of this suit. instead, the Defendant had issued satisfaction certificate after paying final bills expressing the satisfaction for timely completion of work and quality of work. The Defendant never objected any of the invoice raised, Defendant fully aware that delay in supply is due to non payment of invoice amount in time and non readiness of site for installation. So, claim of liquidated damage is after thought, the Defendant is not entitle for set-off, counter claim as stated in the counter claim. Further the Defendant had paid last payment on 25-06-2013, even at that time also the Defendant did not denied or disputed balance amount. With this Plaintiff prayed for dismissal of the counter claim and set- off.
8. On basis of pleadings of the parties, my learned predecessor, has framed following:
ISSUES 9
1. Whether the Plaintiff proves that, it is entitled to recover suit claim amount of Rs.45,09,107/- from the Defendants with interest?
2. Whether the Plaintiff proves that it is entitled to the relief's of as sought for in the Plaint?
3. What order or decree?
Additional Issues
1. Whether the Defendants proves that the Plaintiff is due and liable to pay a sum of Rs.56,74,805/- and after set off against claim of Plaintiff of Rs.45,09,107/- the Plaintiff is still due and liable to pay a sum of Rs.11,66,698/-
to the Defendants with future interest at 18% pa. as claimed by way of counter claim?
9. The representative of the Plaintiff Company is examined as PW.1 and got marked Ex.P.1 to Ex.P.24, and closed his side evidence and Defendant examined as DW.1 and got marked Ex.D1 to D14, heard argument on both side. The learned counsel for Plaintiff has submitted synopsis of argument and the learned counsel for the Defendant addressed his argument and both counsel for the parties are relied on citation in support of their case. 10
10. My answer to above Issues are as follows:
Issue No.1 : Partly in the Affirmative. Issue No.2 : In the Affirmative. Issue No.3 : In the Affirmative. Additional Issue No.1: In the Negative. Issue No.4 : As per the final order, for the following:
REASONS
11. Issue No.1: I have carefully perused the evidence of PW.1. It is the case of the Plaintiff that, Plaintiff Company had received work order from the Defendant for erection of fuel and supply of materials and delivering the same at the site and for installation. Further it is the case of the Plaintiff that work has to be completed within stipulated period in terms of work order. The Plaintiff Company had completed its work order and Defendant had paid agreed amount to the Plaintiff Company. The Defendant had issued certificate stating that, the Plaintiff Company had supplied, erected and commissioned the system in time and to our entire satisfaction, the conveyor system designed and supplied by 11 working smoothly. But Plaintiff has deposed that Defendant had retained 10% of total amount, on account of which the Plaintiff had demanded the Defendant for payment of balance 10% amount. But Defendant did not paid even after several request hence, the Plaintiff Company had issued legal notice calling upon the Defendant to pay the remaining balance amount. But Defendant had refused to pay the 10% of total value, contending that, the Plaintiff Company did not done its work in terms of work order. There was delay in supplying of the materials and installation and Plaintiff Company failed to erect fuel and failed to complete the work in time, hence, Defendant is entitle for 10% of total work value for the delay caused in completion of work. Hence, the Plaintiff had filed this suit for recovery of 10% work value with interest. On perusal of the entire pleadings of the parties it is clear that, the Plaintiff Company had executed work and Defendant had paid amount for the work done by the Plaintiff Company.
12. On perusal of the plaint and Written Statement it is clear that there is no dispute regarding agreement between the Plaintiff and Defendant and Defendant has paid an invoice 12 amount in terms of work order after completion of work by the Plaintiff Company. On perusal of the material placed before the court, only dispute between the Plaintiff and Defendant is as to whether Defendant is entitle to retain 10% of total value, on account of delay caused in supply of materials, after issuing satisfactory certificate by the Defendant. Further it is disputed fact that whether Defendant has complied with the terms of purchase order to claimed the 10% of total value as a liquidated damage. And another dispute is whether Defendant is entitle for counter claim and set- off as pleaded in the Written Statement. Before coming to the disputed fact it is pertinent to note here the undisputed fact, undisputed fact is completion of work under taken by the Plaintiff and payment of invoices except the 10% of total value of work order as liquidated damage on account of alleged delay in supplying materials for erection and commissioned the system in time.
13. Now the question is as to whether the Defendant is entitle for 10% of the total value of work order as a liquidated damage. To answer this question the appreciation of oral evidence of PW.1 and DW.1 and Ex.P2 to P5 and P6 is 13 necessary. Ex.P1 is authorization letter and Ex.P2 is letter of intend for supply and erection of fuel handling system which provides the terms of work order. As per the Ex.P2, Para 8.0 which reads thus:
Terms of payment: 10% Advance against P.O. Acceptance and submission of ABG valid till the delivery period plus one month claim period & proforma invoice.
10% Advance against drawing
approval& Submission of
proforma invoice.
70% with 100% Taxes & Duties
with in 10 days from the date of
receipt of materials at site and
against receipt of Original
Dispatch documents. On Pro-
Rata Basis.
Balance 10% against
commissioning & submission of
PBG valid till warranty period + 3
months claim period.
14. Further it is relevant to note here the terms of Ex.P2 letter of intend, Para13.0 Which reads thus;
Liquidated Damages(LD) for Late Despatch By 30-APR-2011:
For delay in completion of supply from Delivery period, for every one week or Part thereof delays in supply, 14 penalty shall be levied @ 1.00% per every week of the delay beyond the schedule delivery period. Maximum penalty payable shall be limited to 10.0% of he total order value. If any delay not attributable to the supplier, then accordingly the supplier shall seek delivery extension by giving valid reason for the delay. However the supplier shall make all efforts to meet the PO/ Project delivery schedule.
15. Ex.P3 is the purchase order for the supply of fuel handling system for the value of Rs.4,45,50,000/-, which provides the terms of payment at its Para 8.0 which reads thus:
Terms of payment: 10% Advance against P.O. Acceptance and submission of ABG valid till the delivery period plus one month claim period & proforma invoice.
10% Advance against drawing
approval& Submission of
proforma invoice.
70% with 100% Taxes & Duties
with in 10 days from the date of
receipt of materials at site and
against receipt of Original
Dispatch documents. On Pro-
Rata Basis.
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Balance 10% against
commissioning & submission of
PBG valid till warranty period + 3
months claim period.
16. Further it is relevant to note here the terms of Ex.P3, which is purchase order for the supply of Fuel Handling System. Para13.0 Which reads thus:
Liquidated Damages(LD) for Late Despatch By 30-APR-2011:
For delay in completion of supply from Delivery period, for every one week or Part thereof delays in supply, penalty shall be levied @ 1.00% per every week of the delay beyond the schedule delivery period. Maximum penalty payable shall be limited to 10.0% of he total order value. If any delay not attributable to the supplier, then accordingly the supplier shall seek delivery extension by giving valid reason for the delay. However the supplier shall make all efforts to meet the PO/ Project delivery schedule
17. Ex.P4 is the work order for the erection and commission of fuel handling system for the value of 16 Rs.33,30,000/- which provides the terms of payment at Para7.0 which reads thus:
Terms of payment: 10% Advance against W.O. Acceptance and submission of ABG valid till the complete the work plus one month claim period & proforma invoice.
10% Advance payment against mobilization of Manpower, Tools & Tackles and submission of proforma invoice along with above list and Manpower mobilised & certified by site engineer.
70% with 100% Taxes & Duties with in 10 days from the date of commissioning & against submission of original invoice certified by our site engineer & submission PBG for 10% of the order value valid till warranty period + 3 months claim period.
18. Further it is relevant to note here the terms of Ex.P4 letter of intend, Para12.0 Which reads thus:
Liquidated Damages(LD) for Late Despatch By 30-june-2011:
For delay in completion of supply from Delivery period, for every one week or Part thereof delays in supply, penalty shall be levied @ 1.00% per every week of the delay beyond the schedule 17 delivery period. Maximum penalty payable shall be limited to 10.0% of he total order value. If any delay not attributable to the supplier, then accordingly the supplier shall seek delivery extension by giving valid reason for the delay. However the supplier shall make all efforts to meet the PO/ Project delivery schedule
19. Further it is relevant to note here the terms of Ex.P5 which is purchase order for the supply of dust extraction system and dust suppression. Para13.0 Which reads thus:
Liquidated Damages(LD) for Late Despatch By 15-july-2011:
For delay in completion of supply from Delivery period, for every one week or Part thereof delays in supply, penalty shall be levied @ 1.00% per every week of the delay beyond the schedule delivery period. Maximum penalty payable shall be limited to 10.0% of he total order value. If any delay not attributable to the supplier, then accordingly the supplier shall seek delivery extension by giving valid reason for the delay. However the supplier 18 shall make all efforts to meet the PO/ Project delivery schedule
20. It is also relevant to answer the issue, Ex.P6 which reads thus:
CERTIFICATE This is to certify that M/s. Methods (India) Private Limited, Bengaluru have executed the order (through M/s Greenesol Power Systems Private Limited, Bengaluru) for Fuel Handling System on Turnkey basis for our 2 x 70 MW Coal Based Power Plant at Danapur Village, Hospet Taluk, Bellary District, Karnataka. They have supplied, erected and commissioned the system in time and to our entire satisfaction. The conveyor system designed and supplied by them is working smoothly.
We wish them success in all their endeavours.
21. Now it is relevant to appreciate the evidence of DW.1.
DW.1 as categorically admitted in the Cross-examination which reads thus:
It is true that within 10 days we have to make payment after receipt of material at 19 site and receipt of original dispatched documents on pro-rata basis. 31-03-2011 is the first invoice listed in the statement of account which is marked at Ex.P9 is paid on 11-05-2011. witness voluntaries that the condition of payment was receipt of material at site and receipt of original documents from the Plaintiff Company.
Once both conditions are complied, the payment ought to be released and Defendant Company has released the cheque No.196195 dated 06-05-2011. Said payment was after 10 days. Conditions are same in respect of all invoices and no payment was made within 10 days as per the conditions. First invoice payment was made after 35 days as it appears in Ex.P9.
22. So, the entitlement of 10% liquidated damage is not an absolute right of the Defendant, it is subject to condition that if any delay not attributable to the supplier. So, now it 20 is relevant to note here that the case of the Plaintiff is that the delay caused due to non-payment of invoice amount and non-readily availability of site for installation. So, the Defendant has claimed a 10% liquidated damage due to delay caused in supply. On clear cut admission of DW.1 as stated above that no payment was made by the Defendant in time in terms of work order. Defendant failed to make payment in time, so, delay caused in supply is due o non-payment in time.
So delay in supply is not attribute to supplier. That itself to sufficient to hold that the Defendant is not entitle for liquidated damage in terms of the work order. It is also clear from the oral and documentary evidence that till date of the filing of the suit Defendant did not called for retaining the 10% of total value as liquidated damage. It is only after filing of this suit the Defendant has come with a defence that there was a delay in completion of work and supply of materials, on account of which as per the terms of work order, the Defendant is entitle to retain 10% of total value as liquidated damage.
21
23. When Defendant did not raised any objection about the alleged delay in supply and permitted the Plaintiff Company till completion of project, even there was a delay in supply of materials it is deemed to be consented to continue the work. Plaintiff has continued his work in terms of work order even there was a delay in payment. So, such being the fact, though there is a delay in payment on part of Defendant but Plaintiff did not stop his work on delay in payment, on the other hand there was a delay in supply of material but Defendant did not objected and stop the work of the pf, for the reason that delay in supply is due to delay in payment. At this stage the case of the Plaintiff is that, delay in supplying the materials is on account of delay in payment, is holds good. Because the Plaintiff has to supply material only after payment made by the Defendant. so, admittedly there was a delay in payment. So, delay is not attributable to supplier i.e. Plaintiff Company. hence, in terms of work order, Defendant is not entitle for 10% liquidated damage as Defendant failed to prove that delay is not on account of delay in payment.
Further I have perused Ex.P6 which reads thus: 22
CERTIFICATE This is to certify that M/s. Methods (India) Private Limited, Bengaluru have executed the order (through M/s Greenesol Power Systems Private Limited, Bengaluru) for Fuel Handling System on Turnkey basis for our 2 x 70 MW Coal Based Power Plant at Danapur Village, Hospet Taluk, Bellary District, Karnataka. They have supplied, erected and commissioned the system in time and to our entire satisfaction. The conveyor system designed and supplied by them is working smoothly.
We wish them success in all their endeavours.
24. On careful appreciation of Ex.P6, I am of the opinion that, no prudent man could say that Plaintiff Company has committed a breach of contract, after issuing Ex.P6. After careful going through Ex.P6, It can be safely held that the defence taken by the Defendant is only after thought. If that is the case then what prevent the Defendant to bring the notice of the Plaintiff at the time of payment of final bill. On careful perusal of the material placed before the court, no documents have been produced by the Defendant to show that, he suffered loss due to delay in supply of materials. 23 The Defendant use to make payment after certifying the bills at the time of payment of invoice. Further it is clear that, no legal injury has been cause to the Defendant. The learned counsel for the Plaintiff argued that Defendant has to pay invoice amount within 10 days after receipt of materials at site, but admittedly no payment was made within 10 days. Further Defendant did not raised any objection for the delay till filing of this suit for the reason well known to him that delay was due to delay in payment. In support of his case the learned counsel for the Plaintiff is relied on the decision reported in AIR 1971 Rajasthan 229 in case of State of Rajasthan Vs.Chandra Mohan Chopra.
In the above decision The lordship have held thus:
(A) Contract Act (1872). S.74-If on account of breach of contract, the complaining party has not suffered any loss, he is not entitle to any compensation whatsoever even if a sum is named in the contract and is to be paid in the even of breach.
24(B) Contract Act (1872) S.74- where the Plaintiff contractor had not finished the work by the date fixed in the agreement and the Defendant-State allowed him to continue and complete it and final bill was prepared. Withour imposing any penalty in terms of contract soon after Plaintiff's failure to complete by fixed date or rescinding the contract or getting work completed by other contractor.
The Defendant was not entitle to compensation as it must be deemed to have waived its right to fix it and recover the same from the Plaintiff.
25. The law laid down by the lordship in the decision is aptly applicable to the case on hand, for the reason that in the case on hand also there is a some little bit delay in supplying the materials but Defendant did not objected it and continue to pay invoices and permitted the Plaintiff Company to continue 25 the work in terms of work order, ofcourse, the delay caused in supply of materials and installation was due to delay in payment on part of Defendant, but no party have objected delay caused on both side. But continue to work in terms of agreement and finally the Defendant has issued Ex.P6 and Defendant has paid final bill also without any objection about liquidated damage, even Defendant did not raise his voice about liquidated damage till filing of this suit. This clearly show that there is no loss or injury cause to Defendant due to delay in supply of material because delay is due to delay in payment.
26. On perusal of the oral and documentary evidence and relying on the on the decision referred above I hold that the Plaintiff is entitle for claimed amount of Rs.45,09,107/- in terms of work order. On perusal of the material placed before the court and I have perused work order and purchase order and Ex.P1 letter of intent, there is no written contract between the parties in respect of interest. In the absence of written contract in the agreement with regard to interest, reasonable interest is to be awarded. What is reasonable interest is depends upon facts of each case. The fact involved in the suit 26 is only with regard to entitlement of 10% of total value as a liquidated damage. Though both parties claimed that the delay caused in their part in performing their part of contract as per the work order but no party has objected during the subsistence of contract till completion of work and till filing of this suit. It is not dispute between the parties that the work has completed and payment has been made in terms of the work order but only dispute is in respect of liquidated damage as discussed above. Under such circumstances, I am of the opinion that, 9% interest will be the reasonable interest as the contract between the party is commercial contract. In support of my opinion I relied on the decision reported in 2010 (5) KCCR 3465 (DB) Karnataka High Court, in case of N.Subhramanyam Vs. Corporation Bank, Bengaluru. The lordship have held thus:
"In the absence of any written agreement between the parties, in so far as award of interest is concerned, interest @ 12% would be reasonable, and charging of current and future interest thereto, will 27 governed by order 34, Rule 11 of the Civil Procedure Code, 1908".
With these reasons, I am of the opinion that, Plaintiff is not entitle for 9% interest. Hence, I answer this issue Partly in the Affirmative.
27. Issue No.2: On perusal of the oral and documentary evidence the Plaintiff has proved that the Plaintiff Company has performed his work of erection and installation and supply of material in terms of purchase order Ex.P2 to Ex.P5. The plaintiff has supplied the material and erection and commissioning of fuel handling system and Defendant being satisfied with the work of Plaintiff Company, had issued satisfaction certificate at Ex.P6 and paid invoices amount to the Plaintiff. Further it proved that delays caused in supply is due to non-payment in time and non available of site for erection and installation of fuel. Further it is proved that there is no legal damage caused to the Defendant due to delay in supplying of material. When Defendant failed to prove the legal damages, under such circumstances, I am of the opinion 28 that, the Defendant is not entitle for any liquidated damages in terms of contract. At this stage it is relevant to refer the decision relied on by the Plaintiff. The learned counsel for the Plaintiff relied on Decision reported in AIR 1982 Kerala 281 in case of State of Kerala and Others Vs. United Shippers and dredgers Ltd., The lordship have held thus:
28. While determining the damages or compensation due to breach of contract, the complaining party must show the damage or loss caused due to breach of contract further held that while deciding the issue relating to damage or loss due to breach of contract mere provision of sec.74 of Indian contract Act is not sufficient to come to correct conclusion, court must read Sec.73,74 and 75 of the Indian contract Act, together. Unless legal injury or loss or damage is proved complaining party is not entitle for the relief of damages. Considering the oral and documentary evidence and material placed before the court, I am of the opinion that, Plaintiff has proved his case and entitle for the relief sought in the plaint. With this reason, I answer this issue in the Affirmative.
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29. Additional Issue No.1: The Defendant had made counter claim alleging that Plaintiff has to deliver the material by 30-04-2011 as per the purchase order dated 03-02-2011, where as the Plaintiff has started supply of material from 31- 02-2011 and completed by 4th of May 2012. So, there was a delay of one year in supply of material and as per the purchase order dated 11-06-2011, the period of completion of work is within 4 months but Plaintiff has completed work in 6 months. So, the Plaintiff is bound to supply the material by 15-07-2011 to the spot but material supplied by the Plaintiff by 07-8-2011. So, the Defendant claimed in view of the delay in supply of materials and completion of work. The Plaintiff is bound to pay a sum of Rs.49,14,000/- as a liquidated damage to the Defendant.
30. I have perused entire material placed before the court, it is seen that except oral evidence no documents have been produce by the Defendant to prove the counter claim. It is the counter claim made by the Defendant i.e. he had paid crane services charge of Rs.7,60,805/-, at the request of the 30 Plaintiff. But Defendant has not produced any documents to show that the Plaintiff has made a request to pay the crane service charges. Further Defendant has not produced any receipt for having paid the crane service charges. On the other hand the Plaintiff himself produced the original receipt for having paid crane charges used by him as per the terms of work order and Plaintiff got marked Ex.P15 to P23 on confrontation while Cross-examination of DW.1. Ex.P15 is the original receipt dated 31-03-2012, issued by the Maha Ganesh Transport, Crane Service and Transport contractor, for having received sum of Rs.60,665/- from Plaintiff Company as a charges towards the use of crane. Ex.P16 is a original receipt dated 05-08-2012, issued by the Maha Ganesh Transport, Crane Service and Transport contractor, for having received sum of Rs.60,665/- from Plaintiff Company as a charges towards the use of crane. Ex.P17 is a original receipt dated 06- 07-2012, issued by the Maha Ganesh Transport, Crane Service and Transport contractor, for having received sum of Rs.61,798/- from Plaintiff Company as a charges towards the use of crane. Ex.P18 is a original receipt dated 06-06-2012, 31 issued by the Maha Ganesh Transport, Crane Service and Transport contractor, for having received sum of Rs.64,180/- from Plaintiff Company as a charges towards the use of crane. Ex.P19 is a original receipt dated 06-05-2012, issued by the Maha Ganesh Transport, Crane Service and Transport contractor, for having received sum of Rs.61,798/- from Plaintiff Company as a charges towards the use of crane. Ex.P20 is a original receipt dated 07-04-2012, issued by the York Cranes for having received sum of Rs.2,59,295/- from Plaintiff Company as a charges towards the use of crane. Ex.P21 is a original receipt dated 06-06-2012, issued by the Maha Ganesh Transport, Crane Service and Transport contractor, for having received sum of Rs.10,000/- from Plaintiff Company as a charges towards the use of crane. Ex.P22 is a original receipt dated 06-06-2012, issued by the Maha Ganesh Transport, Crane Service and Transport contractor, for having received sum of Rs.60,680/- from Plaintiff Company as a charges towards the use of crane. Ex.P23 is a original receipt dated 06-02-2012, issued by the Maha Ganesh Transport, Crane Service and Transport 32 contractor, for having received sum of Rs.27,770/- from Plaintiff Company as a charges towards the use of crane.
31. On careful scrutiny of Ex.P15 to P.23, it is clearly seen that Plaintiff had paid crane charges in terms of work order, Ex.P15 reflects the name of Plaintiff Company who had paid the amount mentioned in Ex.P15 for hiring charges of crane for shifting work at BMM Hospete site. Further Ex.P16 to P.23 reflects the name of the Plaintiff Company and period in which crane service was used and purpose for which the Plaintiff Company has used the crane services and date and amount paid by the Plaintiff Company for crane service charges. Under such circumstances, the counter claim made by the Defendant for having paid crane charges Rs.7,60,805/- does not take place of proof and argument of the learned counsel for the Defendant that the Defendant has paid crane charges of Rs.7,60,805/- holds no good as there is no documentary evidence to prove the counter claim. Instead the Plaintiff had produce the Ex.P15 to P.23, as discussed above and proved that the crane charges has been paid by the Plaintiff's Company in terms of Ex.P2 to P.5. Under such 33 circumstances, the Defendant failed to prove the counter claim and he is not entitle for the counter claim. Further the Defendant has made set-off stating that in terms of agreement the Defendant is entitle for 10% of total value of work and purchase orders as liquidated damage. As already discussed that liquidated damage is not an absolute right of the Defendant in terms of agreement but it is subject to condition that if any delay not attributable to the supplier, then accordingly supplier shall seek delivery extension by giving a valid reason for the delay. At this stage it is relevant to appreciate Ex.P.6, Ex.P.6 is a certificate issued by the Defendant appreciating the work of the Plaintiff Company and for having satisfied with Plaintiff Company work, then the question of delay in supplying the material, installation and erection work does not arise. Though both Plaintiff and Defendant have alleged each other about the little bit delay in supplying material and on the other hand delay in payment by the Defendant but they did not considered and raised any objection at the time when the delay was occurred on the side of Plaintiff and Defendant. Further it is relevant to note hear 34 that Defendant had admitted that there was a delay in payment. The Plaintiff contended that the delay in supply is only due to delay in payment. As per the terms of work and purchase order the Defendant has to made payment within 10 days from the date of receipt of material at site. But it is admitted by the Defendant that no payment was made within 10 days from the date of receipt of material at site. Under such circumstances, the delay not attributable to the supplier i.e. Plaintiff Company. Further whenever there was delay in supply of materials, erection and installation fuel, the Defendant did not raised any objection for the delay and did not asked to the Plaintiff stop the project work but Defendant permitted Plaintiff to the work in terms of work and purchase order, for the reason well known to Defendant that there was a delay on Defendant part in payment. On appreciation of Ex.P6, it is clear that the Defendant has satisfied with the Plaintiff Company work of supplied, erection and commissioned system in time. Considering this fact it is clear that, even there was a little bit delay in supply of materials and erection of fuel, it is clear from the facts and 35 circumstances discussed above that Defendant deemed to be extended the time for the reason well known to him that the delay in supply was due to delay in payment. In order to express his satisfaction about the work done by the Plaintiff Company the Defendant had issued Ex.P6. Hence, there is no legal loss or injury cause to the Defendant due to delay in supply as the delay was due to delay in payment and said delay not attributable to the Plaintiff Company. Under such circumstances, the Defendant is not entitle for 10% of total value of the work and purchase order as a liquidated damage. When Plaintiff Company had completed his work in terms of the work and purchase order then the Defendant is not entitle to retain the 10% of total value of the work order as liquidated damage. The learned counsel for the Defendant relied on the decision reported in AIR 1959 1357 in case of Shivajute Bailing Ltd., Vs. Hindley & Company Ltd., in this decision the lordship have decided the fact of liquidated damage, on account of breach of contract with a reference to Sec.73 and 74 of Indian contract Act, the fact decided in the decision is entirely different from the fact involved in the case on hand. 36 For the reason that the terms of work order at Para 13 which reads thus: Liquidated Damages(LD) for Late Despatch By 30-APR-2011:
For delay in completion of supply from Delivery period, for every one week or Part thereof delays in supply, penalty shall be levied @ 1.00% per every week of the delay beyond the schedule delivery period. Maximum penalty payable shall be limited to 10.0% of he total order value. If any delay not attributable to the supplier, then accordingly the supplier shall seek delivery extension by giving valid reason for the delay. However the supplier shall make all efforts to meet the PO/ Project delivery schedule.37
32. According to this condition if the Defendants wants to retain the 10% of total value of the work as liquidated damage he must prove that delay in supply of material and erection and installation is not due to delay in payment. But in the case on hand Defendant had categorically admitted that there was a delay in payment. And it is the case of the pf, delay caused in supply of materials is due to payment in delay. Hence, the Defendant did not raised any objection during the work for delay and continued to provide work to the Plaintiff Company after delayed payment. It is also admitted fact that Defendant has to make a payment within 10 days form the date of receipt of material at site. And further the Defendant has admitted in the Cross-examination that Defendant has not paid any payment within 10 days in terms of work order. Under such circumstances, Defendant is not entitle to have a shelter under the decision relied on by him.
33. Hence, Defendant is not entitle for set-off as claimed by him in his Written Statement and the Defendant failed to prove the counter claim made by him in the Written 38 Statement. With this reasons, I answer this issue in the Negative.
34. Issue No.3: In-view of the discussion made on Issue Nos.1 and 2 and Additional issue No.1, I proceed to pass the following:
ORDER The suit of the plaintiff is hereby partly decreed with cost.
It is ordered that plaintiff is entitle for the claimed amount of Rs.45,09,107/-, with 9% interest per annum, from the date of filing of the suit, till realization. Defendant is hereby directed to pay the above said decreetal amount with 9% interest per annum to the plaintiff.
The set-off and Counter claim made by the Defendant in his Written Statement is hereby dismissed.39
Draw decree accordingly.
(Dictated to the Stenographer, directly on computer system, Computerized by her, after online correction by me, printout taken by her and then pronounced by me in the open court on this the 26th day of June, 2019).
(Yamanappa Bammanagi) LXXIII Addl. CC & SJ, M.H. Unit, (CCH-74), Bengaluru.
ANNEXURE List of witnesses examined for the plaintiff's side:
PW1: Jacob Jose List of documents exhibited for the plaintiff's side:
Ex.P.1 :Resolution passed in the meeting of BOD of the Plaintiff Pvt. Ltd., authorizing me to prosecute the case Ex.P.2 :Letter of intent for the supply and erection of fuel handling system Ex.P.3 :Purchase order.
Ex.P.4 :Work order.
Ex.P.5 :Purchase order.
Ex.P.6 :Certificate issued by BMM Co., Ex.P.7 :Copy of legal notice. Ex.P.8 :Reply notice.40
Ex.P.9 :Statement of accounts. Ex.P.10 to 12 :Copies of letters dt.07.07.2014, 11.08.2014, 08.09.2014.
Ex.P.13:Copy of E-mail.
Ex.P.14:Certificate u/s 65 of evidence Act Ex.P.15 to 19 :Bills Ex.P.20: Credit Memo Ex.P.21 to 23 :Bills List of witness examined for the defendant side :
DW.1: Manjunath M.N. List of documents exhibited for the defendant's side:
Ex.D.1 :Authorization Letter Ex.D.2 :Computerized copy of work order and Commission issue Dt.14.06.2011 Ex.D.3 :Computerized copy of Purchase order dt.11.06.2011 Ex.D.4 :Computerized copy of Purchase order dt.03.02.2011 Ex.D.5 :Computerized copy of Ledger account extract from 01.04.2010 to 07.03.2015.
Ex.D.6 :Computerized copy of reply notice dt.26.11.2014.
Ex.D.7 :Computerized copy of mail correspondence dt.02.02.2012 41 Ex.D.8 :Computerized copy of mail correspondence dt.15.11.2011 Ex.D.9 :Computerized copy of mail correspondence dt.07.12.2012 Ex.D.10:Computerized copy of mail correspondence dt.14.07.2012 Ex.D.11:Computerized copy of mail correspondence dt.14.07.2012 Ex.D.12:Computerized copy of mail correspondence dt.13.06.2012 Ex.D.13:Computerized copy of mail correspondence dt.28.03.2012 Ex.D.14:Debit notice with back of Papers (Yamanappa Bammanagi) LXXIII Addl. CC & SJ, M.H. Unit, Bengaluru.(CCH-74)