Delhi District Court
M/S Bhartiya Global Infomedia Ltd vs M/S Metro Road Systems Pvt. Ltd on 2 March, 2010
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IN THE COURT OF SHRI SURINDER S. RATHI:ADJ:
ROOM NO.32:TIS HAZARI COURTS :DELHI
CS NO: 113/07
M/s Bhartiya Global Infomedia Ltd.
A company incorporated under the Companies Act
Having its Regd. Office at
601623, Dewika Towers,
Nehru Place,
New Delhi. ... Plaintiff
Vs.
1. M/s Metro Road Systems Pvt. Ltd
Through Its Director
Mr. Sachin Bhatia
Having its Regd. Office at
B82, Maya Puri Industrial Area
PhaseI,
New Delhi64.
2. M/s J.K. Technosoft Ltd.
F3, Sector 3,
Noida (UP) ....... Defendants
DATE OF INSTITUTION : 22.05.2007
DATE OF FINAL HEARING : 02.03.2010
DATE OF FINAL JUDGMENT : 02.03.2010
SUIT FOR RECOVERY OF Rs. 6,50,000/ ALONGWITH
FUTURE AND PENDELITE INTEREST @ 18% p/a TILL
THE REALISATION OF THE AMOUNT AND FOR
PERMANENT INJUNCTION
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JUDGMENT
1. This suit has been filed by the plaintiff company against the two defendant company is for recovery of Rs.6.50 lacs with cost and interest @ 18% apart from seeking relief of permanent injunction.
2. Case of the plaintiff is that it is a duly incorporated public limited company engaged in the business of software developing. It entered into an agreement with defendant no.1 company for developing software for parking management system. The remuneration was agreed at Rs.6.50, lacs after a letter of intent dated 14.8.06 was received from defendant no.1. As agreed defendant no.1 paid Rs.1,62,500/ vide a cheque towards 25% advance payment. In lieu of this payment plaintiff issued a cheque of same amount to the defendant no.1 as a security which under the contract was not supposed to be presented unless there is an inordinate delay or failure on the part of plaintiff to deliver the software as per agreement.
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3. On 5.9.06 defendant no.1 placed another order for developing software for similar parking management system at a cost of Rs.2.10 lacs. Rs.52,500/ was paid by defendant no.1 and in lieu thereof plaintiff gave another security cheque for the even amount to them. Plaintiff started working on both the projects as per instructions of defendant no.1. In the process defendant no.1 introduced defendant no. 2 to the plaintiff instructing them to include him as a consultant with them alleging that he was expert in the field. This was resisted by the plaintiff since defendant no.2 was himself in the same business as that of the plaintiff but ultimately they had to join him on the insistence of defendant no.1. Both the assigned jobs were completed by the plaintiff to the satisfaction of defendant no.2 and demonstration of the same was arranged at the project site of defendant no.1. While plaintiff was awaiting the defendant no.1's nod for final implementation followed by payment of their dues, defendant no,.1 served them with a legal notice dated 27.11.2006 alleging that plaintiff has failed to fulfill the terms of the agreement. This notice was replied . Later on plaintiff came to know that both the defendants have @contd/...
Page numbers connived to sell the software without clearing the outstanding dues of the plaintiff. As such plaintiff was constrained to file this suit.
4. Upon service of summons the suit was contested by both the defendants. In their written statement , defendant no.1 alleged that after they issued the letter of intent dated 14.8.06 to the plaintiff , they paid an advance of Rs.1,62,500/ , and signing of a detailed contract was to be followed. But plaintiff showed no interest in the same as a result defendant had to present the security cheque for encashment but the same was dishonoured. As regard the second order as well , it is pleaded that only a letter of intent was issued coupled with advance payment of Rs.52,500/ on 6.9.06 but no detailed order was signed between them. Even the security cheque qua this payment got dishonoured on presentation . This defendant contends that it did not place any formal order for developing of software and there was no commercial contract between the parties. However, it admitted that it had introduced defendant no.2 as a consultant for monitoring the development of software and this @contd/...
Page numbers software was supposed to be exclusive property of defendant no.1 as per the letter of intent.
5. It is alleged that plaintiff failed to complete the assigned work and gave an incomplete demonstration which is evident from the fact that no signed report of successful completion was prepared. It is pleaded that plaintiff failed to honour the time bound commitment as per letter of intent and as such there is no strength in plaintiff's claim that it developed software to the satisfaction of defendant no.1. It is pleaded that plaintiff is not entitled to payment of balance money not only because no formal contract was signed but also because no successful demonstration of completion of the project was made by the plaintiff. It is said that plaintiff failed to deliver the project as desired and did not rectify the errors on their part. Defendant no.1 also alleged against the plaintiff that even though as agreed this software was supposed to be 100% property of defendant no.1 but plaintiff started claiming the same to be its intellectual property with an intent to blackmail them. As such defendant no.1 has prayed for dismissal to this suit.
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6. Separate replication to this WS was filed by plaintiff wherein it reiterated its pleaded case and denied the contentions of the defendant. Plaintiff reiterated that it successfully developed and demonstrated the software at the site of defendant no.1 but it is the defendant alone who never intended to get the development completed by the plaintiff.
7. In its separate WS defendant no. 2 company prayed for dismissal of this suit against it on the ground that it is bad for misjoinder as no cause of action ever arose in favour of plaintiff and against it. It is admitted that defendant no.1 appointed defendant no.2 as a consultant with them on 24.08.06 but it was never a party to the communication between plaintiff and defendant no.1. It is specific case of defendant no.2 that plaintiff failed to develop and devlier the software for parking management system to defendant no.1 on time and as a result defendant no.1 had to place an order for development of the software with defendant no.2 as per contract dated 20.11.2006.
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8. Separate replication to this written statement was filed wherein plaintiff reiterated their pleaded case.
9. Upon completion of pleadings following issues were framed by LD. Predecessor on 22.2.2008.
Issues
10.
1. Whether the plaintiff is entitled to the recovery of amount of Rs.6,50,000/ as claimed in the suit qua defendant no.1 along with interest @18% p.a with future and pendentelite interest? (OPP)
2. Whether the plaintiff is entitled to the relief of injunction against both the defendants in the suit that they be restrained form selling, alienating, transferring the technical know how of the software developed by the plaintiff? (OPP)
3. Whether there was any lapse on the part of the plaintiff in the performance of the contract? If so its effect. (OPD1)
4. Whether the suit is bad on account of misjoinder of joining of defendant no.2 in the suit, if so its effect? (OPD2)
5. Whether there is no cause of action in the present suit against defendant no.2 ? (OPD2) @contd/...
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6. Relief
11.To prove its case plaintiff company was given an opportunity to lead evidence on 27.5.08. On that day no witness was produced by the plaintiff. However, an adjournment was granted subject to imposition of cost of Rs.1000/ . On the deferred day PW1 was partly examined. On the subsequent date i.e. 17.12.08, no witness was produced by the plaintiff . Yet another opportunity was granted on 26.5.09 but still no witness was produced . Last and final opportunity was granted to the plaintiff subject to cost of Rs.800/ for 27.10.09. On this date also no witness was produced , but yet another last and final opportunity was granted. Still on the adjourned date i.e 22.02.2010, no witness was produced when finally the evidence of the plaintiff was closed.
12.I have heard Ld. Counsel Sh. Dalip Mishra advocate for plaintiff and LD. Counsel Sh. Nitin Kakkar advocate for defendant no.1 and LD. Counsel Sh. D.K.Singhal advocate for defendant no.2 . I have also carefully gone @contd/...
Page numbers through the entire case file.
13.To prove its case plaintiff placed affidavit of PW1 Rajiv Aggarwal and PW2 Sumit Jain on record. However, they were not tendered for complete cross examination and in the absence thereof it can not be said that their depositions were complete so as to rely the same in favour of plaintiff company. Until and unless a witness offers himself for the purpose of cross examination, his examination in chief in the absence of complete cross examination can not be relied in favour of the party for which the witness is appearing. However, pleadings of the parties and admitted documents available on record, are sufficient to decide this case on merits.
14.Now I shall dispose off individual issues. Issue NO.4 &5
15.
4. Whether the suit is bad on account of misjoinder for joining of defendant no.2 in the suit, if so its effect? (OPD2)
5. Whether there is no cause of action in the present suit @contd/...
Page numbers against defendant no.2 ? (OPD2)
16.As far as role of defendant no.2 is concerned, it is admitted case of plaintiff company that it had no privity of agreement / contract with defendant no.2 in so far as, per the two letters of intent issued by defendant no.1 company in favour of the plaintiff, plaintiff was supposed to develop and deliver software only to defendant no.1 . Admittedly both these letters do not contain any mention of defendant no.2. Once this suit is based on both these letters of intent and name of defendant no.2 find no mention in the same , it can not be said that plaintiff company has a cause of action against defendant no.2 company as well. Admittedly defendant no.1 appointed defendant no.2 as a consultant in the job work sought to be got done by defendant no.1 from the plaintiff . An endeavour has been made by the plaintiff to rope in defendant no,.2 in the name of seeking injunction against it as well as defendant no.1 company by alleging that both the defendants have connived and intend to sell the software developed by the plaintiff. This plea is taken by the plaintiff company on a premise that the software which defendant no.1 was desirous @contd/...
Page numbers of development is intellectual property of the plaintiff. This plea is factually contradictory to the two letters of intent Ex.PW1/3 and the second one dated 5.9.06. Relevant portion of the two letters of intent are produced hereunder for ready reference:
" IPR and Source Code of software will be 100% property of Metro Road Systems."
This document has been placed on record admittedly by the plaintiff himself and is purported to be the basis of this suit. The above term of letter of intent squarely belies the claim of the plaintiff company that upon its development and delivery to the defendant no.1, the software would have remained intellectual property of the plaintiff. Once this is concluded that upon its delivery, the software would have become intellectual property of defendant no.1, even the relief of injunction as sought by the plaintiff against the defendant no.2 is not made out.
Hence both these issues are decided against the plaintiff and in favour of defendant no.2 @contd/...
Page numbers Issue No.2
17.
2. Whether the plaintiff is entitled to the relief of injunction against both the defendants in the suit that they be restrained form selling, alienating, transferring the technical know how of the software developed by the plaintiff? (OPP)
18.As concluded in the above two issues , the software sought to be got developed by defendant no.1 from the plaintiff would have become 100% property of defendant no.1 , there is no question of grant of relief of injunction to the plaintiff .
As such this issue is decided against the plaintiff and in favour of the defendants.
19.Issue No.3
3. Whether there was any lapse on the part of the plaintiff in the performance of the contract? If so its effect. (OPD1)
20.It is admitted case of the plaintiff as well as defendant no.1 that defendant @contd/...
Page numbers no.1 company had issued two letters of intent of the plaintiff for development of software for Parking Management System & Toll Collection Software. As per the first letter of intent Ex. PW1/3 dated 14.8.06 , this software was to be developed and delivered within three months. Plaintiff has admittedly not placed any document of delivery of the allegedly developed software on record to show that the job work was completed within time to the satisfaction of the defendant no.1 and was finally delivered to it as per schedule. The sheer fact that plaintiff company claims the allegedly developed software to be its intellectual property, itself signify and shows that primary software continued to remain in the possession of the plaintiff company through out. All that the plaint mentions is that plaintiff expressed desire to give a demonstration of the allegedly prepared software but neither any specific date of the alleged demonstration nor any document qua the alleged demonstration has been referred to show on record.
21.It has been case of the defendant no.1 company that plaintiff never developed the desired software as per letter of intent. It is also their case that @contd/...
Page numbers as per last para of letter of intent Ex. PW1/3, upon its acceptance it was supposed to be followed by detailed order duly signed by both the parties which was admittedly never signed between them. The relevant line is reproduced herein under for ready reference:
" this LOI (letter of intent) will be valid only on signing of detailed Order by both parties and will be treated as a part of our detailed Order."
22.This term shows that this LOI was just a proposal or an offer for an offer and was supposed to be followed by execution of a valid contract between the parties. According to defendant, no valid agreement could be executed because from the very inception plaintiff was miserably lacking and lagging behind in delivering the desired product . It is also evident from the email written by the plaintiff company to the defendant on 20.10.2006. Once the plaintiff failed to deliver the desired software to the defendant no.1, defendant no.1 who is in the business of toll collection and parking management system, had to place a fresh order for development of software with defendant no.2 as per letter dated 20.11.2006. It is also pointed out by LD. Counsel for @contd/...
Page numbers defendant no.1 that the fact of non completion of project assigned to the plaintiff is also evident from the fact that as per clause 12 of Ex. PW1/3, no final testing of the intended software was ever done by the plaintiff on UAT document which was to be provided by defendant no.1.
23.As such in view of the above discussion , I am of the considered view that plaintiff company did not ever develop and provide the desired software to the defendant no.1 company as per LOI Ex. PW1/3 and another LOI dated 5.9.06. Hence this issue is decided against the plaintiff and in favour of defendants.
Issue No.1
24.
1. Whether the plaintiff is entitled to the recovery of amount of Rs.6,50,000/ as claimed in the suit qua defendant no.1 along with interest @18% p.a with future and pendentelite interest? (OPP)
25.In view of the decision of issue no.3, once it is concluded that plaintiff has not developed and delivered the desired software to the defendant no.1, there is @contd/...
Page numbers no question of passing of decree of recovery of the plaint amount in favour of the plaintiff . As such this issue is decided against the plaintiff and in favour of defendant.
RELIEF
26. In view of the decision on above , suit of the plaintiff stands dismissed. Parties are however, left to bear their own cost. Decree sheet be prepared accordingly and file be consigned to record room. ANNOUNCED AND DICTATED IN OPEN COURT ON : 2.3.2010 ( SURINDER S. RATHI ) ADDL. DISTRICT JUDGE DELHI @contd/...
Page numbers CS NO: 113/07 M/s Bhartiya Global Infomedia Ltd.
Vs. M/s Metro Road Systems Pvt. Ltd 2.3.2010 Pr: LD. Counsel Sh. Dalip Mishra advocate for plaintiff LD. Counsel Sh. Nitin Kakkar advocate for defendant no.1 LD. Counsel Sh. D.K.Singhal advocate for defendant no.2 . Memo of appearance filed on behalf of plaintiff company by LD. Counsel.FA heard at length from both the sides and file perused. Vide a separate judgment of the day , suit of the plaintiff stands dismissed. Parties are however, left to bear their own cost. Decree sheet be prepared accordingly and file be consigned to record room.
( SURINDER S. RATHI ) ADDL. DISTRICT JUDGE DELHI: 2.3.2010 @contd/...
Page numbers MONEY DECREE SECTION 34 OF THE CODE OF CIVIL PROCEDURE IN THE COURT OF SHRI SURINDER S. RATHI, ADJ-07/CENTRAL/ DELHI. CS NO: 113/07 M/s Bhartiya Global Infomedia Ltd.
A company incorporated under the Companies Act Having its Regd. Office at 601-623, Dewika Towers, Nehru Place, New Delhi. ... Plaintiff Vs.
1. M/s Metro Road Systems Pvt. Ltd Through Its Director Mr. Sachin Bhatia Having its Regd. Office at B-82, Maya Puri Industrial Area Phase-I, New Delhi-64.
2. M/s J.K. Technosoft Ltd.
F-3, Sector 3, Noida (UP) ....... Defendants DATE OF INSTITUTION : 22.05.2007 DATE OF FINAL HEARING : 02.03.2010 DATE OF FINAL JUDGMENT : 02.03.2010
SUIT FOR RECOVERY OF Rs. 6,50,000/- ALONGWITH FUTURE AND PENDELITE INTEREST @ 18% p/a TILL THE REALISATION OF THE AMOUNT AND FOR PERMANENT INJUNCTION The Suit coming for final disposal before me in the presence of Shri Dalip Mishra Advocate for the plaintiff and Shri Nitin Makkar Advocate for defendant No.1 and Sh.D.K.Singhal Advocate . It is ordered that the suit of the Plaintiff is dismissed. Parties are however , left to bear their own cost.
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Costs of the suits
Plaintiff Defendant
Stamp for plaint NIL Stamp for power NIL
Stamp for power NIL Stamp for exhibits NIL
Stamp for exhibits NIL Stamp for petition NIL
Pleader's fee NIL Pleader's fee NIL
Subsistence for witness NIL Subsistence for witness NIL
Commissioner's fee NIL Commissioner's fee NIL
Service of process NIL Miscellaneous NIL
Miscellaneous NIL
Total NIL Total NIL
Given under my hand and the seal of this court, dated 2/3/2010.
SEAL ADJ-07/CENTRAL
DELHI.
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