Delhi District Court
One97 Communications Ltd vs Mentey Uma Maheswara Rao on 28 February, 2025
IN THE COURT OF DR. NEERA BHARIHOKE
DISTRICT JUDGE (COMMERCIAL COURT)-06
SOUTH EAST, SAKET COURTS,
NEW DELHI
CNR No. DLSE01-001832-2024
CS (Comm) 118/2024
One97 Communications Ltd.,
A company incorporated
under the provisions of Companies
Act, 1956, having its registered
office at:
First Floor, Devika Tower
Nehru place,
New Delhi-110019
Corporate office at:
B-121, Sector-5,
Noida-201301
E-mail : [email protected]
(M) 9871147263
... Plaintiff
Versus
Mentey Uma Maheswara Rao
Prop. of Sri Annapurna Theatre
18-9-50, Near Bhimeswaralayam,
Bhimavaram, West Godavari,
Andhra Pradesh-534201
Email:[email protected]
Mobile:9394133999
....Defendant
NEERA
BHARIHOKE
Digitally signed
by NEERA
BHARIHOKE
Date: 2025.02.28
15:28:28 +0530
CS (Comm) 118/24 One97 Communications Ltd. Vs. Mentey Uma Maheswara Rao Page 1 of 16
Date of institution of the suit : 23.02.2024
Date on which judgment was reserved : 24.02.2025
Date of pronouncement of Judgment : 28.02.2025
JUDGMENT
SUIT FOR RECOVERY
1. By way of this judgment, I shall decide the suit of the Plaintiff filed for recovery of Rs.6,54,568/- alongwith interest.
CASE OF THE PLAINTIFF AS SET UP IN THE PLAINT
2. Brief facts of the case as stated by the Plaintiff in the plaint are that:
a. The Plaintiff company is engaged in the business of providing telecom based value added services to its clients and is one of the well-known online platform in India for providing services related to utility bill payments, recharges, ticketing including various types of travel and movie ticketing, hotel booking, and various other financial services to consumers. The Plaintiff company is owner of the website www.paytm.com, Paytm mobile application, PaytmIVR and Paytm WAP site.
b. Present suit has been filed through Shri Jitender Kumar. Being completely aware about the facts of the present matter, he has been NEERA BHARIHOKE CS (Comm) 118/24 One97 Communications Ltd. Vs. Mentey Uma Maheswara Rao Page 2 of 16 Digitally signed by NEERA BHARIHOKE Date: 2025.02.28 15:28:36 +0530 authorized by the Plaintiff Company to represent it in the present matter vide Board Resolution dated 05.05.2023.
c. The Defendant approached the Plaintiff company for the promotions, marketing, listing and booking of movie tickets of his cinema theater namely Sri Annapurna Cinema through Plaintiff company's Platform. On the basis of the said representation/warranties made by the Defendant, the Plaintiff company agreed to enter into a Ticketing Agreement dated 09.09.2019 with the Defendant to upload the ticket inventory of Defendant's theater and provide related products and services alongwith digital contents and such other information for listing the same on the Paytm Platform. It was further agreed that Defendant would offer the movies tickets booking through Paytm Platform as per the terms and conditions stipulated in the said Agreement entered into between the Defendant and Plaintiff Company. It was further agreed that Defendant would offer the movies ticket booking through Paytm Platform as per the terms and conditions of Schedule A & B of the said Agreement.
d. The Principal Agreement was effective from 09.09.2019 for the above said objective by Defendant through Paytm Platform.
e. Clause 4.1 of the said Agreement specifically provided the scope of
work which reads as under: Digitally
signed by
NEERA
NEERA BHARIHOKE
BHARIHOKE Date:
2025.02.28
15:28:43
+0530
CS (Comm) 118/24 One97 Communications Ltd. Vs. Mentey Uma Maheswara Rao Page 3 of 16
"4.1 Merchant shall offer the Movies Ticket Booking through the Paytm Platform and shall upload continually "on-an-as-on basis, the comprehensive and up to date information, including images, facility and service description and such other details including any terms and conditions for availing the Ticket Bookings, if any, in this connection more specifically provided in Schedule A."
f. The Plaintiff company in view of the services rendered to Defendant was entitled to charge convenience fee from the customers on every ticket booked through paytm platform over and above the selling price of the tickets booked through the paytm platform. Clause 1.1 of Schedule B annexed to the said Agreement reads as under:
"1.1 Convenience Fee: Merchant agrees that One97 shall be entitled to charge a Convenience Fee from the Customers on every Ticket Booked through Paytm Platforms over and above the selling price of the Tickets Booked through the Paytm Platform and One97 agrees to share the said Net Convenience Fee @ Rs.6/- per ticket with the Merchant. Payment gateway charges will be applicable on the total transaction value @ 2% (excluding applicable taxes). Taxes will be applicable as extra"
g. The Plaintiff company as per the said agreement with a view to integrate platform of Defendant with his own platform had to install hardware at Defendant's theater. The Plaintiff Company installed CPU, keyboard, mouse, monitor, UPS and printer at the movie theater of Defendant.
h. By virtue of Clause 1.2 of Shcedule B of the Agreement, the NEERA BHARIHOKE CS (Comm) 118/24 One97 Communications Ltd. Vs. Mentey Uma Maheswara Rao Page 4 of 16 Digitally signed by NEERA BHARIHOKE Date: 2025.02.28 15:28:51 +0530 Plaintiff Company paid the Defendant an amount of Rs.2,00,000/- at the time of execution towards Advance Convenience Fees share of the merchant. Clause 1.2 of Schedule B is reproduced as under:-
"Advance payment against Convenience Fee share of Merchant:
One97 hereby agrees to provide an interest free advance amount of Rs.2,00,000/- (Rupees Two Lakhs only) against the Convenience Fee share of the Merchant. At the end of every month from the Effective Date of this Agreement, Convenience Fee share of the Merchant at the rate of Rs.6/- shall be calculated and the same shall be deduction from the amount paid in advance by On97. In case of termination of the Agreement, Merchant agrees to refund the balance unused amount against Rs.2,00,000/- (Rupees Two Lakhs only) to One97. Taxes will be applicable as extra."
i. In accordance with Clause 1.3 of Schedule B of the Agreement, the the Plaintiff Company paid the Defendant an amount of Rs.5,00,000/- as interest free refundable security deposit at the time of execution of the Agreement. Clause 1.3 of Schedule B is reproduced as under:-
"One97 shall pay an interest free refundable security deposit to the Merchant of an amount of INR.5,00,000/- (Rupees Five Lakhs only) under this Agreement. Merchant agrees and acknowledges that under no circumstances the security deposit shall be deducted / withhold/set off during the term of the Agreement. The said security deposit will be refunded by the Merchant to Paytm within 7 days of the termination or expirty of this Agreement."
Digitally signed by NEERA NEERA BHARIHOKE BHARIHOKE Date:
2025.02.28 15:28:57 +0530 CS (Comm) 118/24 One97 Communications Ltd. Vs. Mentey Uma Maheswara Rao Page 5 of 16 j. As per Clause 4 of the said agreement, the Defendant was contractually obligated to provide/update and upload the ticket inventory and fix rates of ticket booking in respect of its theater alongwith any and all additional services ought to be availed by customers at the theater of Defendant.
k. The Cinema Theater of the Defendant was operational before Covid-
19 but with the onset of Covid-19 restrictions were imposed on Cinema theaters qua operation. However, Defendant did not resume operations even after lifing of the restrictions by the Government without ascribing any reason to Plaintiff Company. When the representatives of Plaintiff Company approached the Defendant on 15.12.2022 requesting resumption of theater operations, the Defendant assured the Plaintiff Company that the same shall be resumed, however, the same has not been resumed. Despite multiple requests to resume operations, the Defendant failed to resume the same and cinema theater had not been made operational by the Defendant.
l. As per Clause 4 of the said Agreement, the Defendant was contractually obligated to provide/update and upload the ticket inventory and fix rates of ticket booking in respect of its theatre alongwith all additional services ought to be availed by customers at the theater of Defendant. Digitally signed by NEERA NEERA BHARIHOKE BHARIHOKE Date:
2025.02.28 15:29:03 +0530 CS (Comm) 118/24 One97 Communications Ltd. Vs. Mentey Uma Maheswara Rao Page 6 of 16 m. The Defendant through Application Programming Interface (API) was contractually bound to offer movie tickets through platform of the Plaintiff company and to upload movie tickets regularly and further control rates and inventory of the booking.
n. The objective and reason in gaining exclusivity for selling movie tickets through online platform was that huge expenses were incurred in creating the infrastructure for booking and offering movie tickets through online platform which also encompassed within itself other expenses which were incurred at the backend of the platform of the online aggregator for connecting platform of the merchant with that of the online aggregator.
o. It was clear from the acts of the Defendant that he had no intention to honour the agreement since inception, instead, had the intention of misappropriating not only security deposit amount of Rs.5,00,000/- towards itself and further undues convenience fee towards itself, thereby causing wrongful gain to the Defendant while causing wrongful loss to the Plaintiff company. Such acts of the Defendant had shaken the trust, faith and confidence the Plaintiff company had reposed in Defendant at the time of executing the agreement believing his representation to be true.
p. The entire purpose and aim of execution of said agreement was to sell tickets of cinema theater of Defendant exclusively through NEERA BHARIHOKE CS (Comm) 118/24 One97 Communications Ltd. Vs. Mentey Uma Maheswara Rao Page 7 of 16 Digitally signed by NEERA BHARIHOKE Date: 2025.02.28 15:29:10 +0530 online platform of Plaintiff company, however, in the absence of such intent on the Defendant's part, the Plaintiff company was constrained to terminate the said principal agreement dated 09.09.2019 vide termination notice dated 15.02.2023.
q. The Defendant had committed fraud with the Plaintiff company by alluring and inducing the Plaintiff company by offering exclusive rights for selling online movie tickets of his theater through the platform of the Plaintiff company, which it never intended to grant and confer to the Plaintiff company as a result the Defendant extracted huge amount of money from the Plaintiff company thereby causing huge financial loss to the Plaintiff company besides loss of image before e-commerce industry.
r. The Defendant was liable to return amount of Rs.6,54,568/- to Plaintiff company as details mentioned below:
Sr.no. Particulars Amount
1. Outstanding Security Deposit Rs.5,00,000/-
2. Balance unused convenience fee Rs.1,54,568/-
--------------------
Total Rs.6,54,568/-
--------------------
s. The Defendant was also liable to pay pendent lite and future interest
@12% per annum to the Plaintiff on the overdue amount. Digitally
signed by
NEERA
NEERA BHARIHOKE
BHARIHOKE Date:
2025.02.28
15:29:17
+0530
CS (Comm) 118/24 One97 Communications Ltd. Vs. Mentey Uma Maheswara Rao Page 8 of 16
t. It was the duty of the Defendant to return the amount of
Rs.6,54,568/- to Plaintiff company as the Defendant was unable to run the cinema theater.
u. The Plaintiff company was suffering huge financial loss due to the acts and misconduct of the Defendant in retaining the amount of Rs.6,54,568/- to the prejudice of the Plaintiff Company.
v. The Defendant was retaining the amount of Rs.6,54,568/- so as to cause wrongful gain to himself and wrongful loss to Plaintiff Company.
w. The Plaintiff preferred a Pre-litigation/Pre-Institution Mediation before the Competent Authority, i.e. SEDLSA, on 18.03.2023, however Defendant did not appear before the Competent Authority. Furthermore, the Non-Starter Report for the Pre-Institution Mediation was issued by the Competent Authority, SEDLSA, dated 19.04.2023.
3. Hence, the present suit has been filed.
CASE OF THE DEFENDANT
4. Defendant was served through e-mail sent on 15.03.2024. Defendant appeared through Counsel on 27.05.2024 and was directed to file the Address Form. Defendant filed Written Statement and application NEERA BHARIHOKE CS (Comm) 118/24 One97 Communications Ltd. Vs. Mentey Uma Maheswara Rao Page 9 of 16 Digitally signed by NEERA BHARIHOKE Date: 2025.02.28 15:29:24 +0530 for condonation of delay on 20.07.2024. Vide order dated 26.09.2024, the application under Order VIII Rule 1 CPC of the Defendant for condonation of delay in filing the Written Statement was dismissed and Written Statement of the Defendant was not taken on record.
5. Defendant had filed Address Form in September, 2024. Affidavit of Evidence was filed by Plaintiff with copy to learned Counsel for Defendant in October, 2024. Fresh Vakalatnama filed on behalf of Defendant on 17.12.2024. Thereafter, none appeared for the Defendant and he was proceeded ex parte vide order dated 10.01.2025.
PLAINTIFF'S EVIDENCE
6. On 10.01.2025, Plaintiff examined PW-1 Shri Jitendra Kumar. He presented his evidence by way of affidavit vide Ex. PW-1/A. He reiterated the contents of the plaint and relied upon the following documents: -
i. Copy of Certificate of Incorporation is Ex. PW-1/1. ii. Original Board Resolution dated 05.05.2023 is Ex. PW-1/2. iii. Copy of Ticketing Agreement dated 09.09.2019 is Ex. PW-1/3. iv. Copy of Certificate of ICICI Bank Ltd. is Ex. PW-1/4. v. Statement of Account is Ex. PW-1/5. NEERA vi. Termination Notice dated 15.02.2023 is Ex. PW-1/6. BHARIHOKE Digitally signed by NEERA BHARIHOKE Date: 2025.02.28 15:29:30 +0530 CS (Comm) 118/24 One97 Communications Ltd. Vs. Mentey Uma Maheswara Rao Page 10 of 16 vii. Copy of Airway Bill No.X8396601 of DTDC Express Ltd. is Ex.
PW-1/7 viii. Copy of courier return information document is Ex.PW-1/8. ix. Certificate u/s 65-B of Indian Evidence Act is Ex. PW-1/9.
7. PW-1 was discharged on 10.01.2025 as Defendant was proceeded ex parte. On the same date, applicaation of the Plaintiff for filing list of witnesses was allowed and matter was adjourned for remaining PE for 30.01.2025.
8. On 30.01.2025, the summoned witness appeared, but due to non- intimation about the record to be produced, he was bound down for 01.02.2025. On the same day, an application of the Defendant under Order IX Rule 7 CPC was allowed for setting aside ex parte order dated 10.01.2025 with direction to the Defendant to cross examine PW-1 to the limited extent available with Defendant.
9. On 01.02.2025, the summoned witness brought the summoned record and was discharged after taking the summoned record. On the same day, PW-1 was cross examined by learned Counsel for the Defendant and he was discharged and Plaintiff's Evidence was closed.
DEFENDANT'S EVIDENCE
10. As right of the Defendant to lead defence evidence was closed in view of closing the right of the Defendant to file Written Statement, the NEERA BHARIHOKE CS (Comm) 118/24 One97 Communications Ltd. Vs. Mentey Uma Maheswara Rao Page 11 of 16 Digitally signed by NEERA BHARIHOKE Date:
2025.02.28 15:29:36 +0530 matter was not adjourned for Defendant's Evidence and the matter was listed for final arguments.
FINAL ARGUMENTS
11. At the stage of final arguments, learned Counsel for Defendant submitted that the Board Resolution relied upon by the Plaintiff is general and not specific for this case. He also submitted that the loan was advanced in 2019 but the witness PW-1 had joined in 2020 and therefore, had no knowledge about the transaction in question. However, PW-1 has deposed and tendered his evidence on the basis of official record and during his cross-examination, he specifically answered that the Agreement executed between the Plaintiff and Defendant was drafted by the leagal team of PW-1. No suggestion was put to him that he had no personal knowledge about the present case. He denied the suggestion that he was not authorised to give evidence on behalf of Plaintiff in the present case. PW-1 was working as Manager (Litigation) in the Plaintiff Company and the Board Resolution specifically authorizes him on behalf of Plaintiff Company to commence and to defend, compound and abandon actions, suits, claims, demands and legal proceedings in an court of law. It also authorizes him to sign, verify and present pleadings, plaints etc. Further, during his examination in chief, PW-1 specifically deposed that he could identify signature of Shri Abhishek Bagga, AVP (Finance & Accounts) on the Ticketing Agreement dated 09.09.2019, Ex. PW-1/3 ad he had seen him writing and signing on numerous documents. No cross NEERA BHARIHOKE CS (Comm) 118/24 One97 Communications Ltd. Vs. Mentey Uma Maheswara Rao Page 12 of 16 Digitally signed by NEERA BHARIHOKE Date: 2025.02.28 15:29:43 +0530 examination was conducted in this regard. In view of these observations, the objection taken by learned Counsel for Defendant is not sustainable.
12. Learned Counsel for Defendant submitted that in the plaint as well as evidence by way of affidavit and legal notice of demand provide that the amount in question was given to the Defendant on the date of execution of the Agreement in question. He submitted that the document i.e. Principal Agreement was executed on 09.09.2019, whereas the amount was paid to Defendant on 22.10.2019. Therefore, the Plaintiff has misled this court. The submission of learned counsel for Defendant is correct about the date of advancing the amount and the date of signing the Agreement are different. However, the said difference in the date is not fatal to the case of the Defendant because the Plaintiff has filed not only the Agreement in question alongwith the Ledger Account of the Defendant maintained by the Plaintiff but also has summoned the original bank statement of the Plaintiff from ICICI Bank which produced the summary of the Bank Account of the Plaintiff supported by Certificate under Section 2A of the Banker's Books of Evidece, 1891 and Certificate under Section 65-B (4) of Indian Evidence Act. The CMS Settlement Report filed by the Bank clearly reflects the name of payee to be Menty Uma Maheswara Rao i.e. Defendant and the transfer of the amount in question was effected through NEFT on 22.10.2019. Therefore, the Plaintiff has proved the transfer of amount of Rs.5,00,000/- and Rs.1,80,000/- (after deduction of Rs.20,000/- on account of TDS) to the Defendant by the Plaintiff on 22.10.2019.
NEERA BHARIHOKE Digitally signed CS (Comm) 118/24 One97 Communications Ltd. Vs. Mentey Uma Maheswara Rao Page 13 of 16 by NEERA BHARIHOKE Date: 2025.02.28 15:29:49 +0530
13. It was also argued that the suit has been filed beyond limitation since the last adjustment against the convenience fees was in 2019 and the suit has been filed on 22.02.2024. The Ticketing Agreement Ex. PW-1/3 has been perused. Clause 10 of the Agreement provides that the Agreement shall remain in effect for a period of 5 years till 08.09.2024. The parties may terminate the Agreement in accordance with terminiation Clause 11 of this Agreement, the first five years being lock-in period subject to fulfillment of the terms of the Agreement. Therefore, the cause of action in the present matter would arise not from the date of last adjustment as argued by learned Counsel for Defendant, but from the date of termination of the Ticketing Agreement. The termination-cum- recovery notice given by the Plaintiff to the Defendant is of 15.02.2023 and the pre-institution mediation was pending from 18.03.2023 to 19.04.2023 and the present suit has been filed on 22.02.2024. and is therefore within limitation.
14. The suit of the Plaintiff is based upon the documents placed on record as Ex. PW-1/1 to Ex.PW-1/9. The testimony of PW-1 has been duly corroborated by the other documents placed on record. There is no occasion to doubt the veracity of the said witness and for that matter, the authenticity of testimony led by him. The testimony of PW-1 has gone unrebutted and unchallenged despite being cross examined. This court finds no reason to disbelieve the on-oath testimony of the Plaintiff NEERA BHARIHOKE Digitally signed CS (Comm) 118/24 One97 Communications Ltd. Vs. Mentey Uma Maheswara Rao Page 14 of 16 by NEERA BHARIHOKE Date: 2025.02.28 15:29:55 +0530 coupled with the relevant documents. Hence, the Plaintiff has successfully proved its case by preponderance of probability.
RELIEF
15. Accordingly, the present case is decreed in favour of Plaintiff and against the Defendant for the sum of Rs.6,54,568/-. Plaintiff has prayed for pendente lite and future interest @ 12% per annum. The same is allowed. The Defendant is directed to pay to Plaintiff a sum of Rs.6,54,568/- alongwith pendente lite and future interest 12% per annum till realization.
16. Defendant is also directed to pay to Plaintiff the cost of the suit which shall include pleader's fee and the other costs on the scale provided under section 35 of the Code of Civil Procedure as substituted by Commercial Courts Act. If the payment is not made within thirty days, the cost shall carry simple interest @ 6% per annum.
17. Decree sheet be prepared accordingly.
File be consigned to record room after necessary compliance.
Digitally signed by NEERA BHARIHOKENEERA BHARIHOKE Date:
Announced in the open 2025.02.28
15:30:04
+0530
Court on 28.02.2025
(Dr. Neera Bharihoke)
District Judge (Commercial Court)-06
South East, Saket, New Delhi
28.02.2025
CS (Comm) 118/24 One97 Communications Ltd. Vs. Mentey Uma Maheswara Rao Page 15 of 16
Certified that this judgment contains 16 pages and each page bears my signatures. NEERA BHARIHOKE Digitally signed (Dr. Neera Bharihoke) by NEERA BHARIHOKE District Judge (Commercial Court)-06 Date:
2025.02.28 15:30:30 South East, Saket, New Delhi +0530 28.02.2025 CS (Comm) 118/24 One97 Communications Ltd. Vs. Mentey Uma Maheswara Rao Page 16 of 16