Delhi District Court
M/S Bmk Hospitality Services Private ... vs . M/S Su Zhou Schindler Elevator on 25 November, 2022
M/s BMK Hospitality Services Private Ltd. Vs. M/s Su Zhou Schindler Elevator
Company Ltd. and Anr.
IN THE COURT OF ADDITIONAL DISTRICT JUDGE02,
SOUTH DISTRICT, SAKET COURTS COMPLEX,
NEW DELHI.
Presiding Judge: Sh. Dinesh Kumar
CS DJ No. 8513/2016
Filing No. 33770/2009
CNR No. DLST010001842009
In the matter of
M/s BMK Hospitality Services
Private Limited
B3, Greater KailashI
New Delhi110048 ................Plaintiff
Versus
1. M/s Su Zhou Schindler Elevator Co. Ltd.
No.818, Jinmen Road, 215004
Suzhou, China.
2. M/s Schindler India Pvt. Ltd.
B401, Delphi, Hinandani Business Park
Powai, Mumbai400076
Branch Office at
B.K. Roy Court, 4th Floor
CS DJ No. 8513/16
CNR No. DLST01-000184-2009
Page 1 of 39
Dinesh Kumar/ADJ-02/South/Saket/25.11.2022
M/s BMK Hospitality Services Private Ltd. Vs. M/s Su Zhou Schindler Elevator
Company Ltd. and Anr.
67, Asaf Ali Road
New Delhi110002 .............Defendants
Date of Institution : 24.10.2009
Date of reserving the judgment : 07.10.2022
Date of pronouncement : 25.11.2022
Decision : Suit Dismissed
SUIT FOR PERMANENT AND MANDATORY
INJUNCTION AND RECOVERY OF RS. 10,00,000/
(RUPEES TEN LAKHS ONLY) FOR THE DAMAGES
AND COMPENSATION FOR LOSS OF REVENUE
GOODWILL AND BUSINESS OWING TO THE
NEGLIGENCE OF THE DEFENDANTS
JUDGMENT
1. Vide this judgment, I shall dispose of the Civil Suit filed by the plaintiff for Permanent and Mandatory Injunction and Recovery of Rs.10,00,000/ for the damages and Compensation, for Loss of Revenue, Goodwill and Business, owing to the negligence of the defendants. The brief facts of the case, as per the plaint, are as under: 1.1. The plaintiff is a company duly incorporated and registered under the Companies Act, 1956 and engaged in CS DJ No. 8513/16 CNR No. DLST01-000184-2009 Page 2 of 39 Dinesh Kumar/ADJ-02/South/Saket/25.11.2022 M/s BMK Hospitality Services Private Ltd. Vs. M/s Su Zhou Schindler Elevator Company Ltd. and Anr.
the business of running and operating hotels and restaurants. The plaintiff had newly set up a hotel unit in Gurgaon under the name and style "Ramada Gurgaon Hotel", which is a unit of M/s BMK Hospitality Services Private Limited, formerly known as M/s Bigway Hotels Private Limited, which has business association with "Ramada Hotels & International UK" under brand franchise agreement. Ramada has presence all over the world and is a well known name in Hospitality Industry around the globe.
1.2. Defendant No.1 is a company incorporated under the laws of China and engaged in the business of manufacturing and sales of lifts and elevators. The defendant No.2 is the Indian subsidiary of defendant No.1, incorporated under the Companies Act, 1956 and is authorized agent of the defendant No.1 to take care of the business of the defendant No.1 in India.
1.3. The plaintiff, in its Hotel known as Ramada Gurgaon hotel, h a d m a d e p r o v i s i o n o f installation of four lifts in the hotel premises. The two lifts were to be CS DJ No. 8513/16 CNR No. DLST01-000184-2009 Page 3 of 39 Dinesh Kumar/ADJ-02/South/Saket/25.11.2022 M/s BMK Hospitality Services Private Ltd. Vs. M/s Su Zhou Schindler Elevator Company Ltd. and Anr.
used by the guests of the plaintiff and other two lifts were to be used by the employees of the plaintiff. 1.4. The defendants No.1 & 2 impressed upon the plaintiff about their expertise and goodwill in the manufacturing and installation of lifts and requested the plaintiff to place order upon them for the supply of lifts. They promised to deliver and install the lifts within time. They also assured that they were aware about the legal regulations in relation to installation of the lifts and undertook to comply with all of them.
1.5. On the assurances and representations, the plaintiff placed the order of the purchase of two guest lifts upon the defendant No.1 and order for purchase of two service lifts and installation of all four lifts upon defendant No.2. The order was placed on 09.01.2007 and the date of completion of order was 30.04.2007. The plaintiff provided specifications, time frame and other terms and conditions, which were accepted and agreed by the defendants. The defendant No.1 undertook to import the guests lifts from China and the defendant No.2 undertook to receive them in India and perform the functions of installation. Service lifts CS DJ No. 8513/16 CNR No. DLST01-000184-2009 Page 4 of 39 Dinesh Kumar/ADJ-02/South/Saket/25.11.2022 M/s BMK Hospitality Services Private Ltd. Vs. M/s Su Zhou Schindler Elevator Company Ltd. and Anr.
were to be supplied by the defendant No.2 from its domestic manufacturing.
1.6. A salient feature of the order was that the defendants were to provide free maintenance for the lifts for a period of 12 months from the date of completion and final installation of the lifts. Installation would be said to be complete when all the terms of purchase order were complied within letter and spirit. The defendants also were to provide warranty for a period of 18 months from the date of shipments, which covered component defects in the lifts.
1.7. The Automatic Rescue Device (ARD) were agreed to be installed in the lifts, in compliance of statutory requirement of law in the State of Haryana. ARD is meant for meeting the difficulties in the event of electricity failure, from preventing the passenger getting entrapped in the lift, as ARD, in the event of power failure, would land the lift in the nearest floor and its doors would open, thereby ensuring the safety of its occupants. 1.8. Though three, out of the four, lifts were installed by the defendants, the installation, besides being delayed, CS DJ No. 8513/16 CNR No. DLST01-000184-2009 Page 5 of 39 Dinesh Kumar/ADJ-02/South/Saket/25.11.2022 M/s BMK Hospitality Services Private Ltd. Vs. M/s Su Zhou Schindler Elevator Company Ltd. and Anr.
was not complete in all spheres. None of the three lifts had ARD installed. Repeated requests for installing ARD yielded no result. After much persuasion the ARD were installed around 29.01.2009. As three lifts out of four lifts were completely installed on 29.01.2009, thus it was incumbent upon the defendant to maintain the lifts free of cost for the period commencing from 29.01.2009 till 28.01.2010. However they unilaterally stopped maintaining the lifts after completion of installation on 29.01.2009, demanding that lifts would be maintained only if the plaintiff would take Annual Maintenance Contract (hereinafter called "AMC") at the rate of Rs.1,47,000/ per elevator from August, 2008 onwards. They threatened to stop providing the maintenance in case of non payment which was in violation of terms and conditions of agreement between the parties. The defendants also refused to install fourth lift in the premises of the plaintiff. The plaintiff had to take fresh AMC under protest. 1.9. ARD installed in the guest lifts was defective, which came in the knowledge of plaintiff firstly on 26.06.2009, when a few important guests, who were using CS DJ No. 8513/16 CNR No. DLST01-000184-2009 Page 6 of 39 Dinesh Kumar/ADJ-02/South/Saket/25.11.2022 M/s BMK Hospitality Services Private Ltd. Vs. M/s Su Zhou Schindler Elevator Company Ltd. and Anr.
the lift on that day, were stuck in the lift as the ARD did not function. The guests remained stuck in the lift for a period of 40 minutes. They lodged an FIR against the plaintiff for the aforesaid incident. The defendants did not respond to the frantic calls of the plaintiff to repair the lift and help the lift in landing to nearest floor. The guests could be evacuated from the lift with the efforts of Police and fire Department officials.
1.10. The said incident caused great loss of goodwill and lowered the reputation of plaintiff in the business. The plaintiff had informed the defendants regarding the incident and the defects. However, the defendants had not taken effective measures to rectify the defects. 1.11. The unfair trade practice of the defendants has caused immense loss to the plaintiff. The defendants are liable to pay damages and compensation for the loss of reputation and goodwill. The negligence of the defendants resulted in irreparable loss to the plaintiff, which cannot be compensated in money. The prosecution and legal actions initiated by the Government and Legal Authorities for incident dated 26.06.2009 were direct and sole CS DJ No. 8513/16 CNR No. DLST01-000184-2009 Page 7 of 39 Dinesh Kumar/ADJ-02/South/Saket/25.11.2022 M/s BMK Hospitality Services Private Ltd. Vs. M/s Su Zhou Schindler Elevator Company Ltd. and Anr.
consequences of negligence exercised by the defendants, which resulted into downfall of business of the plaintiff, as the customers have become unwilling to come to the plaintiff.
1.12. The plaintiff issued a legal notice dated 10.07.2009 calling upon the defendants to fulfill their obligations towards the plaintiff and to take appropriate steps by removing the defects of the lift and to compensate the plaintiff for the loss and harassment. Defendant No.2 sent a vague reply to the legal notice. Hence, the plaintiff has filed the present suit with the following prayers:
1) Pass an order awarding compensation of an amount of Rs.10,00,000/ (Rupees Ten Lakhs only) to the plaintiff and against the defendants for the loss of reputation, goodwill, business and revenue by the negligence of the defendants;
2) Pass a decree of permanent and mandatory injunction in favour of the plaintiff and against the defendants, restraining the defendants from imposing and/or recovering unreasonable, illegal, wrongful and excessive and/or exorbitant CS DJ No. 8513/16 CNR No. DLST01-000184-2009 Page 8 of 39 Dinesh Kumar/ADJ-02/South/Saket/25.11.2022 M/s BMK Hospitality Services Private Ltd. Vs. M/s Su Zhou Schindler Elevator Company Ltd. and Anr.
maintenance charges from the plaintiff in respect of lifts supplied and installed by the defendant, situated in the hotel building of the plaintiff;
3) Pass a decree of mandatory injunction in favour of the plaintiff and against the defendants to provide maintenance free of charge/cost till 28.01.2010 to the lifts supplied and installed by the defendant, situated in the hotel building of the plaintiff at Gurgaon, as per the agreement between the parties;
4) Award cost of the proceedings in favour of the plaintiffs and against the defendants.
5) Any further orders or directions which this Hon'ble Commission (sic) may deem just and proper may be passed in favour of the complainants under the facts and circumstances of the present case.
2. Summons were issued to the defendants No. 1 & 2. Defendants No. 1 & 2 appeared and filed their separate Written Statements. The defendant No.1 in its Written Statement has stated as under: 2.1. There is no cause of action in favour of the plaintiff. The suit has not been properly signed and verified CS DJ No. 8513/16 CNR No. DLST01-000184-2009 Page 9 of 39 Dinesh Kumar/ADJ-02/South/Saket/25.11.2022 M/s BMK Hospitality Services Private Ltd. Vs. M/s Su Zhou Schindler Elevator Company Ltd. and Anr.
by the plaintiff. No cause of action has accrued against defendant No.1 and it is not a necessary party. 2.2. The defendant No.1 had received supply order dated 09.01.2007 for two elevators in CKD conditions of 9 passenger capacity serving 11 stops at Ramada Hotel at Gurgaon from Bigway Hotel Pvt. Ltd. The warranty was for a period of 18 months from the date of shipment. The defendant No.1 had raised invoice on 08.08.2007 and shipment was sent on 29.08.2007. The Claim period of 18 months elapsed in the month of February 2009. As per terms and conditions admitted by the plaintiff, it cannot claim for any defects after lapse of period of warranty. 2.3. False allegations have been made in the plaint. The defendant did not induce the plaintiff as claimed by it. The defendant No.1 had to supply two elevators as per the specifications in the supply order dated 09.01.2007. The installation of the lifts were not undertaken by the defendant No.1. The defendant No.1 never breached the agreement between the parties. The defendant No.1 has supplied the equipment as per the supply order, that is why CS DJ No. 8513/16 CNR No. DLST01-000184-2009 Page 10 of 39 Dinesh Kumar/ADJ-02/South/Saket/25.11.2022 M/s BMK Hospitality Services Private Ltd. Vs. M/s Su Zhou Schindler Elevator Company Ltd. and Anr.
the plaintiff duly accepted the equipment. Hence it is prayed that the suit may be dismissed with heavy cost.
3. The defendant No.2 filed its written statement. It has also contested the suit stating as under: 3.1. There is no cause of action in favour of the plaintiff. The plaintiff has not approached the Court with clean hands. The plaintiff has no locus standi to file the present suit. The plaintiff had not placed any supply order to the defendant No.2. The defendant No.2 had received the supply order from Bigway Hotels Pvt. Ltd. The plaintiff had not executed any agreement with the defendant No.2. Therefore the present suit is not maintainable.
3.2. The defendant No.2 had received the supply order and installation service elevators at Ramada Hotel at Gurgoan dated 09.01.2007. As per the agreement all the Civil, Electrical preparatory work was in the scope of the said company. The said company was responsible to provide a finished dry and lit hoiset way and machine room as laid out in the Indian Standards 14665:2000, single and three phases power supply as per Indian Standard 14655 CS DJ No. 8513/16 CNR No. DLST01-000184-2009 Page 11 of 39 Dinesh Kumar/ADJ-02/South/Saket/25.11.2022 M/s BMK Hospitality Services Private Ltd. Vs. M/s Su Zhou Schindler Elevator Company Ltd. and Anr.
(part 2/Sec. 1) 2000, Adequate Lockable Storage Space in the proximity of the hoist way, provision of scaffolding, hoisting beam and pit ladder. The installation was to be completed in 16 weeks from the date of acceptance of the order and subject to compliance of contractual terms of payment and site readiness. The plaintiff did not hand over the site ready for installation. The delay was caused as the RCC Walls were found to be out of plum and the plaintiff had taken time to rectify the shaft. The size of the shaft which was prepared by the contractor of the plaintiff was not in exact accordance with the requirements. Therefore there was delay on behalf of the plaintiff and not on behalf of the defendant No.2. The defendant No.2 had to suffer loss of Rs.8,31,099/ due to lose of the material from the site, which was exclusively within the domain of the plaintiff as per the supply order.
3.3. The free maintenance was for a period of 12 months which had to commence from the date of physical completion of installation. The date of commencement free maintenance would remain unchanged irrespective of any delay in building completion, availability of power of CS DJ No. 8513/16 CNR No. DLST01-000184-2009 Page 12 of 39 Dinesh Kumar/ADJ-02/South/Saket/25.11.2022 M/s BMK Hospitality Services Private Ltd. Vs. M/s Su Zhou Schindler Elevator Company Ltd. and Anr.
water supply, inspection, taking over or commencing use of the elevator. The defendant No.2 had handed over the physical possession of the said elevators to the plaintiff after their full satisfaction. Therefore, the plaintiff can not claim free maintenance perpetually.
3.4. The ARD is a separate component which was not part of the elevators. The ARD was installed with the full consent of the plaintiff.
3.5. The incident dated 26.06.2009 was because of faulty and frequent interrupted electric supply which was conveyed to the plaintiff. Such slackness on the part of the plaintiff by not providing stable electricity power supply itself amount to mishandling of the machine for which the defendant No.2 does not take any responsibility. 3.6. The Engineers of the defendant No.2 had acted promptly to rescue the passengers within time. The incident was not due to defective ARD. The lift was struck between the floors in such a way that trapped persons could not be rescued by the normal process. Hence, technical assistance was required to rescue trapped persons by the Engineers of defendant No.2 which was done within time.
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False allegations have been made against the defendant No.2. Hence, it is prayed that the suit may be dismissed with cost.
4. On the basis of the pleadings, vide order dated 09.11.2012, the following issues were framed: "1. Whether the suit filed has not been valued properly by the plaintiff for the purpose of court fees and jurisdiction? OPD "2. Whether the plaintiff is entitled to compensation of Rs. Ten Lakhs on account of loss of reputation, goodwill, business etc. because of not functioning of the lifts properly in the hotel of the plaintiff known as "Ramada Gurgaon Hotel'? OPP "3. Whether the plaintiff is entitled to the mandatory and permanent injunction as prayed for, in that suit filed? OPP "4. Relief.
5. The Plaintiff examined its AR Sh. Jagat Pal as PW1. He has tendered his evidence by way of affidavit Ex.PW1/A. He relied upon the following documents :
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1) Board Resolution: Ex.PW1/1.
2) Original Memorandum and articles of association of plaintiff company: Ex.PW1/2.
3) Legal notice dated 10.07.2009: Ex.PW1/14.
4) The copy of the purchase order dated 09.01.2007: Mark A and Mark B (colly)
5) copies of invoices dated 08.08.2007, 29.08.2007, 27.08.2007, 29.08.2007, 29.09.2008, 28.07.2008 and 28.07.2008: Mark C to Mark I.
6) The copy of FIR dated 26.06.2009: Mark J (colly).
7) The copy of letter dated 27.06.2009: Mark K.
8) Original postal receipts of legal notices Mark L (colly).
9) Reply to the legal notice: Mark M.
6. The witness was duly cross examined by Ld. Counsel for the defendants. The plaintiff did not examine any other witness, therefore PE was closed.
7. The defendant No.2 examined its AR Sh. Vinod Kumar Solanki as DW1. He has tendered his affidavit in evidence as Ex.DW1/A. He relied upon the document i.e. Power of Attorney as Ex.DW1/1.
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8. The witness was duly cross examined by the Ld. Counsel for the plaintiff. The defendants did not examine any other witness. In the meantime the defendant no.1 stopped appearing. The DE was closed and the matter was fixed for final arguments.
9. Ld. Counsel for the plaintiff would argue that the plaintiff has proved its case against the the defendants. The suit has been valued properly and appropriate Court Fee had been paid by the plaintiff. The plaintiff had set up a new Hotel in Gurgaon under the name and style "Ramada Gurgaon Hotel". The plaintiff had placed an order for the purchase of two lifts from the defendant No.1 and two lifts from defendant No.2 vide purchase order dated 09.01.2007. As per the purchase order and work order, the installation and maintenance of all the four lifts was to be done by defendant No.2. Timely completion was essence of the contract. As per the purchase orders, the lifts were to be installed completely by 30.04.2007. However the installation was not done within time. The ARD were required to be installed in the lifts as per Section 5 of the Haryana Lifts and Escalation Act, 2008. The ARD installed by the defendants were faulty. Due to those faulty ARD some guest of the hotel CS DJ No. 8513/16 CNR No. DLST01-000184-2009 Page 16 of 39 Dinesh Kumar/ADJ-02/South/Saket/25.11.2022 M/s BMK Hospitality Services Private Ltd. Vs. M/s Su Zhou Schindler Elevator Company Ltd. and Anr.
had trapped in one of the lift. They remained trapped for a period of 40 minutes. They also got registered one FIR against the Hotel. Due to the said incident, the plaintiff suffered a loss of goodwill and reputation. As per law the plaintiff is not required to prove actual loss or damages suffered by it as it is aggrieved by the breach committed by the defendants. The Court can award reasonable compensation in case of breach even if no actual damage is proved to have been suffered in consequence of the breach of the contract. The DW1 in his cross examination dated 17.09.2018 has admitted that the installation was to be completed within 16 weeks i.e. by 30.04.2007. He had also admitted that ARD was to be installed in every lift as per the contract. The ARD was installed only on 29.01.2009. Free maintenance period was from 04.08.2009 to 03.08.2010. The defendant No.2 had made illegal demand of AMC. On 26.06.2009 one of the lift in the Ramada Hotel got stuck due to faulty ARD. The RCC walls were not plum as claimed by the DW1. The plaintiff suffered loss of goodwill and reputation and business because of faulty ARD installed by the defendant No.2. Hence it is prayed that the suit may be decreed. During Course of arguments Ld. Counsel for the plaintiff would CS DJ No. 8513/16 CNR No. DLST01-000184-2009 Page 17 of 39 Dinesh Kumar/ADJ-02/South/Saket/25.11.2022 M/s BMK Hospitality Services Private Ltd. Vs. M/s Su Zhou Schindler Elevator Company Ltd. and Anr.
submit that the plaintiff was not pressing the reliefs of the injunction.
10. Ld. Counsel for the defendant No.2, on the other hand, would argue that there are no merits in the claim of the plaintiff. As per Clause 3 of supply order dated 09.01.2007 free maintenance period was to commence from physical period of installation of lifts and date of commencement of free maintenance was to remain unchanged irrespective of any delay in building completion, availability of power supply, inspection etc. The ARD is a separate component and can be installed at any time and has nothing to do with the installation of the lift. The incident dated 26.06.2009 has occurred due to faulty and frequent interrupted electric supply to the sophisticated and delicate component running the lift on account of non installation of regulator / stabilizer for electric power supply by the plaintiff. PW1 is not a reliable witness. The plaintiff had not produced any franchise agreement or authority derived from Ramada International to claim any goodwill or brand value due to such business association. There is nothing on record to show that the defendant No.2 company is a subsidiary of defendant No.1 company and it is authorized agent of defendant No.1. The CS DJ No. 8513/16 CNR No. DLST01-000184-2009 Page 18 of 39 Dinesh Kumar/ADJ-02/South/Saket/25.11.2022 M/s BMK Hospitality Services Private Ltd. Vs. M/s Su Zhou Schindler Elevator Company Ltd. and Anr.
plaintiff has not brought on record any evidence to show that it had made payment of all the four lifts to the defendant. As the plaintiff had not made the entire payment of the lifts, it cannot bring a suit for recovery as the products purchased have not been fully paid. As per the supply order the warranty period for the goods supplied was 18 months from the date of intimation that the goods supplied are at the warehouse or 12 months from the physical completion of the installation of lifts whichever is earlier. Clause 16 of supply order dated 09.01.2007 Mark A and B shows that it does not intend to cover any defect or damage due to absence of stable and permanent power supply according to India Standards 14655:2000. It was for the plaintiff to prove that the electricity supplied to the lifts was controlled and stabled being supplied through voltage stabilizers. However no such evidence has been brought on record. Further, the delay in installation was due to the faults attributable to the plaintiff. The PW1 in his cross examination had admitted that rectification were made at the site of lift installation by the plaintiff company. The lifts in the premises were functioning since the year 2008 after the physical installation of 3 lifts at the start of business operations of hotel. The free maintenance was being CS DJ No. 8513/16 CNR No. DLST01-000184-2009 Page 19 of 39 Dinesh Kumar/ADJ-02/South/Saket/25.11.2022 M/s BMK Hospitality Services Private Ltd. Vs. M/s Su Zhou Schindler Elevator Company Ltd. and Anr.
provided throughout the agreed period. The installation of ARD had become statutory requirement in the State of Haryana from the year 2009. It was not so in the year 2007 when the contract between the parties were entered into. It was an accessory to be installed separately on the full payment of the lift. However, the plaintiff failed to make the payment. PW1 has also admitted in his cross examination that the AMC from outside agency was at an exorbitant rate and therefore the allegation of the plaintiff that the AMC was executed between the parties at a huge cost is false. False allegations regarding the incident of 26.06.2009 have been made. There is nothing on record to show that the said incident had taken place on account of malfunction of the ARD in the lifts installed by the defendant No.2. In the FIR filed by the plaintiff in its evidence, the reason for lift malfunction is mentioned 'due to electrical fault'. The plaintiff has not filed any evidence of any expert or any inspection report from any specialized agency to prove that the said ARD was defective. The plaintiff has filed the present suit just to pressurize the defendant company. The plaintiff has not filed any evidence to show any loss of reputation, goodwill, business or revenue. There is no evidence to show loss of reputation, CS DJ No. 8513/16 CNR No. DLST01-000184-2009 Page 20 of 39 Dinesh Kumar/ADJ-02/South/Saket/25.11.2022 M/s BMK Hospitality Services Private Ltd. Vs. M/s Su Zhou Schindler Elevator Company Ltd. and Anr.
goodwill, business and revenue in respect of number of room occupancy, charges of rent/fees, ITR of income, turnover of the Hotel, Balance Sheet of the Hotel by an accredited agency, or as submitted before ROC etc. for the period immediately previous to incident and subsequent periods to show comparably that any loss and damages as claims had been actually suffered by the plaintiff company. The above glaring deficiency thus leaves the claim in the prayer clause of suit filed by the plaintiff company miserably unproved and therefore no relief can be granted to plaintiff company on bald allegations and hypothetical figures. Therefore the plaintiff company is not entitled for any of the prayer for reliefs and the suit of the plaintiff company may be dismissed with costs.
11. None had appeared on behalf of the defendant No.1 for final arguments.
12. I have heard the submissions of the Ld. Counsel for the plaintiff, Ld. Counsel for the defendant No. 2 and perused the material on record. My issue wise findings are as follows.
13. Issue no. 3 This issue reads as under:
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"3. Whether the plaintiff is entitled to the mandatory and permanent injunction as prayed for, in the suit filed? OPP"
14. The plaintiff has prayed for a decree of permanent injunction thereby restraining the defendants from imposing and/or recovering unreasonable or excessive or exorbitant maintenance charges in respect of the lifts. It has also prayed for a decree of mandatory injunction thereby directing the defendant to provide maintenance free of cost/charge till 28.01.2010 to the lifts supplied and installed by the defendants in the hotel building.
15. During course of arguments, Ld. Counsel for the plaintiff would state that the plaintiff was not pressing the issue no. 3. Hence, issue no. 3 is decided as not pressed.
16. Issue No. 1 - This issue reads as under:
"1. Whether the suit filed has not been valued properly by the plaintiff for the purpose of court fees and jurisdiction? OPD"
17. The onus to prove this issue was on the defendant. However, no evidence has been led nor any arguments have been advanced on this issue. Perusal of the record would show that the plaintiff has prayed for a decree of compensation of Rs.
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10 Lakhs, a decree of permanent and mandatory injunction. He has valued the suit for the compensation at Rs. 10 Lakhs, for permanent and mandatory injunction at Rs. 130 each. The plaintiff has paid advolerum court fee of Rs. 10,200/. Thus, the record shows that the suit has been properly valued for the purpose of jurisdiction and court fee. The issue is therefore, decided against the defendants.
18. Issue No. 2 : The issue reads as under :
"2. Whether the plaintiff is entitled to compensation of Rs. Ten Lakhs on account of loss of reputation, goodwill, business etc. because of not functioning of the lifts properly in the hotel of the plaintiff known as "Ramada Gurgaon Hotel'? OPP"
19. The onus to prove this issue was on the plaintiff. The plaintiff has examined only one witness in support of his case. The plaintiff has alleged that due to the fault attributable to the defendants and due to their negligence in maintaining the lifts during the free maintenance period, some guests had stuck inside a lift which has caused damage to the reputation and goodwill of the plaintiff. It is the case of the plaintiff that the lift was within the free maintenance period at the relevant time. However, the defendant no. 2 did not provide the free maintenance and the ARD system installed by the defendant no.
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2 did not function properly and therefore, the lift had stuck between the floors. It is also allegation of the plaintiff that due to the said incident the plaintiff had suffered loss of reputation and goodwill. Hence the plaintiff has claimed compensation from the defendants.
20. The defendants have denied these allegations. The defence of the defendant no. 1 is that it had only supplied two lifts to the plaintiff. It was not required to maintain those lifts as per the agreement. Defendant no. 2 has taken a defence that it had provided free maintenance during the period as per agreement and that at the time of the alleged incident, there was no free maintenance to be done by the defendant no. 2. It has also taken a defence that the lift had stuck between the floors due to fault of the plaintiff as it had not installed stabilizers for electricity supply.
21. The defendant no. 2 has also taken a defence in the WS that there was no contract of privity of contract between the plaintiff and the defendant no. 2. It is stated in the WS that the defendant no. 2 had supplied lifts on a supply order received from Bigway Hotels Pvt. Ltd. Hence, there is no agreement between the plaintiff and the defendant no.2.
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22. Perusal of the record would show that the plaintiff has filed the Memorandum and Articles of Association of BMK Hospitality Services Pvt. Ltd. i.e. the plaintiff company which is Ex. PW1/2 (Colly). It contains the Certificate of Incorporation issued by the Assistant Registrar of Companies and fresh Certificate of Incorporation consequent upon change of name. This document proves that the name of the company Bigway Hotels Pvt. Ltd. was changed to BMK Hospitality Services Pvt. Ltd. on 11.06.2008. Thus, it is shown that there was an agreement between the plaintiff and the defendant no. 2.
23. In the present case, it is an admitted fact that the plaintiff had purchased two lifts from the defendant no. 1 which were guests lift and two lifts from the defendant no. 2 which were service lifts. It is also an admitted fact that the defendant no.1 had to supply two lifts and that all the four lifts were to be installed by the defendant no. 2. Therefore, there was no liability of the defendant no.1 to maintain the lifts. Hence, no claim against the defendant no.1 is made out.
24. It is also an admitted fact that the order of purchase and installation of lifts was placed on 09.01.2007 and the date of completion of the order was 30.04.2007.
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25. In the plaint, the plaintiff has not mentioned as to when the lifts were physically installed at its premises. It has only vaguely mentioned that the installation of the lifts was delayed. It has also mentioned that only 3 lifts were installed by the defendant no. 2 and that none of the 3 lifts had ARD installed therein and therefore, the lifts could not be said to be installed. It is stated that the ARD were installed only around 29.01.2009 and therefore, the lifts could be said to have been installed around 29.01.2009. It is the case of the plaintiff that the defendant no. 2 was under duty to maintain the lifts free of cost for the period commencing from 29.01.2009 till 28.01.2010. It has been argued that Section 5 of the Haryana Lifts & Escalators Act, 2008 was applicable and it was duty of the defendant no. 2 to install the ARD in the lifts.
26. The defendant no. 2 has denied the said allegation. The defendant no. 2 has taken the defence that ARD is a separate component which was not part of the elevator and it could have been installed at any time. The lifts were installed as per agreement. At the time of the agreement and at the time of installation, the above mentioned Haryana Lifts & Escalators Act, 2008 was not in force and therefore, the ARD was an CS DJ No. 8513/16 CNR No. DLST01-000184-2009 Page 26 of 39 Dinesh Kumar/ADJ-02/South/Saket/25.11.2022 M/s BMK Hospitality Services Private Ltd. Vs. M/s Su Zhou Schindler Elevator Company Ltd. and Anr.
optional item. Therefore, it is argued that there are no merits in the claim of the plaintiff in this regard.
27. I have considered the submissions. Perusal of the record would show that the plaintiff has not mentioned on record as to when the lifts were physically installed at its premises. The defendant no.2 also has not provided any date as to when the lifts were physically installed. The supply order issued by the plaintiff to the defendant no. 2 is Ex. PW1/D1 and the supply order issued by the plaintiff to defendant no. 1 is Ex. PW1/D2. These documents are not in dispute. As per Ex. PW1/D2, the warranty provided by defendant no. 1 was for a period of 18 months from the date of shipment. As per Ex. PW1/D2, the plaintiff had placed only supply order for 2 elevators.
28. Ex. PW1/D1 is an order of supply and installation of service elevators placed by the plaintiff to the defendant no. 2. As per clause 3 of the said order, the free maintenance was for a period of up to 12 months and it had to commence from the date of intimation of the physical completion of the installation. The order was placed on 09.01.2007 and it had to be completed in 16 weeks from the date of acceptance of the work order. As per CS DJ No. 8513/16 CNR No. DLST01-000184-2009 Page 27 of 39 Dinesh Kumar/ADJ-02/South/Saket/25.11.2022 M/s BMK Hospitality Services Private Ltd. Vs. M/s Su Zhou Schindler Elevator Company Ltd. and Anr.
the Annexure A of the Ex. PW1/D1, there is no mention of the ARD in the order placed by the plaintiff. Admittedly, the Haryana Lifts & Escalators Act, 2008 had been published in the Gazette on 30.04.2008. Thus, it was not in force in the year 2007 when the order was placed and when the lifts were to be installed. Section 5 of the Act makes the installation of the ARD in a lift mandatory. It is the duty of the owner to make arrangement for the same. However, there is nothing on record to show that installation of the ARD in a lift was mandatory even prior to coming of the said Act in effect. In the absence of any material to that effect, I am of the considered opinion that the plaintiff has failed to prove, on the preponderance of probabilities that the ARD was an integrated component of installation of the lifts at its premises by the defendant no. 2. Therefore, it can also not be said that the installation of the lifts was not completed till the ARD was installed in the lifts of the plaintiff.
29. The entire claim of the plaintiff for compensation is based on the incident dated 26.06.2009. The claim of the plaintiff is that on the said date, some guests who were using the lift were stuck in the lift as the ARD did not function. The CS DJ No. 8513/16 CNR No. DLST01-000184-2009 Page 28 of 39 Dinesh Kumar/ADJ-02/South/Saket/25.11.2022 M/s BMK Hospitality Services Private Ltd. Vs. M/s Su Zhou Schindler Elevator Company Ltd. and Anr.
guests remained stuck in the lift for a period of 40 minutes. It is averred that the said incident had taken place due to faulty ARD which did not function on that day.
30. I have perused the record. Except the oral statement made by PW1, there is nothing on record to show that the lift was stuck on the relevant date because of the faulty ARD. There is no report of any expert to show that the ARD was faulty. In the absence of any material on record, I am of the considered opinion that the plaintiff has failed to prove that the lift had stuck because of the faulty ARD
31. The plaintiff has relied upon copy of an FIR stated to be registered against the plaintiff in relation to the said incident. The FIR is bearing no. 277/2009 at PS Civil Lines, Gurgaon. Perusal of the FIR would show that the said FIR has been registered on a complaint made against the hotel management staff of the Hotel Ramada Inn. It is mentioned in the FIR that when the complainant boarded the lift it was not functioning properly. The fact was brought to the notice of the hotel staff and it was assured by the staff that the lift was functioning properly and there was no trouble. As soon as the lift started it got stuck in between. When the hotel staff was contacted, it was CS DJ No. 8513/16 CNR No. DLST01-000184-2009 Page 29 of 39 Dinesh Kumar/ADJ-02/South/Saket/25.11.2022 M/s BMK Hospitality Services Private Ltd. Vs. M/s Su Zhou Schindler Elevator Company Ltd. and Anr.
told that the lift had stuck due to electrical fault. It is also mentioned in the FIR that there was no lift operator inside the lift when the incident had happened.
32. Perusal of this FIR would show that the complainant had informed the staff of the hotel before boarding the lift that the lift was not functioning properly. However, the hotel staff ignored the said complaint and told the guests that the lift was functioning properly. It was the duty of the hotel staff to stop the functioning of the said lift immediately after receiving a complaint and to get the defect rectified before using it for further operation. Therefore, it was the negligence on the part of the hotel staff who did not stop the functioning of the said lift for maintenance / rectification. Further, as per the FIR itself, there was no lift operator present inside the lift. It was the duty of the plaintiff to have a lift operator inside the lift as it was installed at a commercial establishment where it was to be used frequently.
33. In the present case, there is nothing on record to show that any contract has been broken by the defendants. It was the duty of the hotel staff of the plaintiff to inform about any fault in the lift which could have been repaired or removed by the CS DJ No. 8513/16 CNR No. DLST01-000184-2009 Page 30 of 39 Dinesh Kumar/ADJ-02/South/Saket/25.11.2022 M/s BMK Hospitality Services Private Ltd. Vs. M/s Su Zhou Schindler Elevator Company Ltd. and Anr.
defendant no. 2. The defendant no. 2 was not under a duty to keep one Engineer / maintenance staff posted at the hotel of the plaintiff 24 hours X 7 days only because it had to maintain the lifts installed in the premises of the plaintiff. As per general practice, whenever a fault is reported to the service provider/maintenance agency, a technician or engineer as the case may be is deputed who reaches at the spot to solve the problem. A machine can generate fault at any time. There is nothing on record to show that the plaintiff was facing the similar problems regularly which was not removed or rectified by the defendant no. 2. Even the plaintiff in its plaint has stated that it had come to know about the fault in ARD on the day of the alleged incident. It was for the first time when such a fault was noticed by the plaintiff itself. Therefore, it cannot be said that the defendant no. 2 was negligent in providing its services to the plaintiff. It was duty of the hotel staff to stop the operation of the lift in question immediately after receiving a complaint from its guests, as mentioned in the FIR, and to call a technician/engineer for service. PW1 in his cross examination has also stated that in the past whenever there was a fault in any lift, a call was made to the technician of the defendant no.2.
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However, on the day of the alleged incident dated 26.06.2009, the hotel staff acted negligently and it resulted in the alleged incident. Therefore, defendant no.2 can not be held liable for the said incident.
34. There is one more aspect. The plaintiff has claimed that because of the faulty ARD the lift had stuck and the guest made an FIR against the hotel which has caused damage to the goodwill and reputation of the plaintiff company. Ld. Counsel for the plaintiff would argue that after the said FIR, there was a fall in the guests arriving at the hotel of the plaintiff which caused monetary loss to the plaintiff.
35. I have considered the submissions. However, there is no material on record to substantiate the claim of the plaintiff that it had suffered loss of goodwill and reputation because of the said incident. The plaintiff has not examined any individual to show that due to the said incident, the plaintiff had suffered any loss of reputation and goodwill. The plaintiff has not filed any statement of account, ledger account or any other material on record to prove that there was a fall in the business of the plaintiff after the alleged incident.
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36. Ld. Counsel for the plaintiff would argue that in case of breach of an agreement, the Court can award compensation for breach of contract to the aggrieved party under Section 73 and 74, the Indian Contract Act, even if the actual damages are not shown by the plaintiff. Ld. Counsel for the plaintiff has relied upon the judgments titled Maula Bux Vs. Union of India AIR 1970 SC 1955 and Oil & Natural Gas Corporation Ltd. Vs. Saw Pipes Ltd. AIR 2003 SC 2629.
37. I have considered the submissions. However, I do not find any merits in the same. Section 73 of the Indian Contract Act provides for compensation for loss or damage caused by breach of contract. Section 74 of the Act provides for compensation for breach of contract where penalty stipulated for. In the present case, as discussed hereinabove, the plaintiff has failed to prove breach of any agreement by the defendants. Further, Section 73 of the Indian Contract Act reads as under:
"73. Compensation for loss or damage caused by breach of contract.--When a contract has been broken, the party who suffers by such breach is entitled to receive, from the party who has broken the contract, compensation for any loss or damage caused to him thereby, which naturally arose in the usual course of things from such breach, or which the parties knew, when they made the contract, to be likely to result from the breach of it.CS DJ No. 8513/16
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"Such compensation is not to be given for any remote and indirect loss or damage sustained by reason of the breach..."
38. As per Section 73 of the Act, a party can claim damages / compensation for any loss caused to it because of breach of contract. However, it is entitled to compensation for any such loss or damage which naturally arose in the ordinary course of things from such breach or which the parties knew when they made the contract, to be likely to result from the breach of it. As per law, compensation is not to be given for any remote or indirect loss or damage sustained by the breach. In the present case, even if it is presumed, for the sake of arguments, that there was a breach of contract of maintenance by the defendant no. 2, there is nothing on record to show that the loss of reputation or goodwill was directly related to the negligence / breach of contract by the defendant no. 2. No prudent person would think that a hotel would suffer loss of goodwill and reputation if a lift is stuck in between the floors while the guests are inside it. This may be called a remote and indirect cause of the said incident and therefore, even if the case of the plaintiff is presumed to be rightly based on the breach of an agreement, the plaintiff cannot claim the damages for the same from the defendants.
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39. I have studied the judgments relied upon by the plaintiff. The judgments relied upon by the plaintiff are distinguishable on facts. In Oil & Natural Gas Corporation Ltd. Vs. Saw Pipes Ltd. AIR 2003 SC 2629, the concept of assessment of damages in case of breach of contract has been explained. It is held that the terms of the contract are required to be taken into consideration before arriving at the conclusion whether the party claiming damages is entitled to the same. It has also been held if the terms are clear and unambiguous stipulating the liquidated damages in case of the breach of the contract, unless it is held that such estimate of damages/compensation is unreasonable or is by way of penalty, party who has committed the breach is required to pay such compensation.
40. The facts of the case titled Maula Bux Vs. Union of India AIR 1970 SC 1955 are sufficient to show that the plaintiff in the present case is not entitled to claim damages or compensation even if its case is considered to be true. In the said case, the appellant/plaintiff had entered into a contract with the Government of India to supply potatoes and deposited a sum of Rs.10,000/ as security for due performance of the contract.
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He entered another contract with the Government of India to supply poultry, eggs and fish and deposited Rs.8,500/ for due performance of the contract. The Government of India rescinded the contracts and forfeited the deposits on the ground that the appellant made persistent default in making regular and full supplies of the commodities agreed to be supplied. The appellant/plaintiff filed a suit for recovery of Rs.20,000/ being the amounts deposited. The Trial Court had held that the respondent was justified in rescinding the contract but it could not forfeit the amount of deposit for it had not suffered any loss in consequence of the default and decreed the suit. On appeal by the respondent/Government of India, the High Court held that under the terms of the agreement the deposit was to stand forfeited in case the plaintiff neglected to perform his part of the contract, for forfeiture of a sum deposited by way of security for due performance of a contract, where the amount forfeited is not unreasonable. Hon'ble Supreme Court allowed the appeal and held that the plaintiff was entitled to recover the entire security amount. It has held that where loss in terms of money can be determined, the party claiming compensation must prove the loss suffered by him. It was held that the Government could CS DJ No. 8513/16 CNR No. DLST01-000184-2009 Page 36 of 39 Dinesh Kumar/ADJ-02/South/Saket/25.11.2022 M/s BMK Hospitality Services Private Ltd. Vs. M/s Su Zhou Schindler Elevator Company Ltd. and Anr.
have proved the rates at which they had to be purchased and also other incidental charge incurred by them in procuring the goods contracted for. But, no such attempt was made. Hence the appeal was allowed.
41. In the present case, there is no such agreement on record which had been breached. The entire claim of the plaintiff is based on the loss of reputation and goodwill after the alleged incident. However, there is not even an iota of evidence to show that the plaintiff had suffered any actual loss due to the said incident. There is also no piece of evidence to show that the plaintiff had suffered any loss of reputation and goodwill due to the said incident. Hon'ble High Court of Delhi in Union of India vs Tribhuwan Das Lalji Patel: AIR 1971 Delhi 120, has held that the Courts will give damages for breach of contract only by way of compensation or loss suffered and not by way of punishment. It has held as under: "From the above quoted observations it is sought to be argued that the question of market price was immaterial and no repurchase is required to be proved. In my view, the observations of the Privy Council were made only in the context of fixing the quantum of damages and does not lay down the proposition that irrespective of whether there was any loss or not damages must still be paid. In fact, a reading of Section 73 of the Contract Act makes this obvious.
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Illustration (a) to Section 73, Contract Act, has to be construed in the light of the statutory provision so as to harmonise with the principles laid down in the section and not to enlarge the scope of the section by imputing to the statute something what is not stated therein. It is specifically provided in the second clause of Section 73 that that compensation is not to be given for any remote or indirect loss or damage. If even indirect loss or damage is excluded it cannot be conceived how compensation can be awarded when there has been no loss or damage. The decision in Ismail Sait and Sons v. Wilson and Co. Air 1919 Mad 1053, also, in my opinion, suffers from the same fallacy. I am in respectful disagreement with the rule laid down in the Madhya Bharat and the Madras decisions.
"7. To my mind the principle is well settled that the measure of damages, normally, in case of breach of contact for sale of goods, is a difference between the contract price and the market price on the date of the breach. It is, however, open to the parties to the contract, to create for themselves any special rights and obligations that they may please, such as providing therein measure of damages in case of breach of contract and specifically exclude the conditions which law generally attaches to contract of sale of goods. In fact Section 62 of the Sale of Goods Act is a statutory recognition of this right in the parties. As was observed by Bench of the Andhra Pradesh High Court in Dhulipudi Namayya v. Union of India Air 1958 Andh Pra 533: "It is well settled that courts will give damages for breach of contract only by way of compensation or loss suffered and not by way of punishment"
"The same rule was laid down by a Bench of Bombay High Court in Sitaram Bindraban v. Chiranjilal Brijlal, and by a Bench of the Patna High Court in Jado Prasad v. Jamuna Prasad Air 1946 Pat 263. In the last noted case it was observed that "under the terms of Section 73 the compensation is not to be given for any remote or indirect loss or damage sustained by reason of the breach of CS DJ No. 8513/16 CNR No. DLST01-000184-2009 Page 38 of 39 Dinesh Kumar/ADJ-02/South/Saket/25.11.2022 M/s BMK Hospitality Services Private Ltd. Vs. M/s Su Zhou Schindler Elevator Company Ltd. and Anr.
contract. The section does not give any cause of action unless and until the damage is actually suffered"
42. In the present case, as discussed hereinabove, the plaintiff has not brought any evidence to show that it had suffered loss of reputation and goodwill due to the alleged incident. The plaintiff has not brought any evidence to show that it was in any way related to the Ramada Hotels and International UK. Therefore, I am of the considered opinion that the plaintiff is not entitled for any compensation. The issue is accordingly decided against the plaintiff.
43. Issue no. 4: Relief: In the light of the discussion herein above, the plaintiff is not entitled to any relief. The suit of the plaintiff is dismissed. The parties shall bear their own cost.
44. Decree sheet be prepared accordingly.
Pronounced in the open Court on this 25th Day of November, 2022. Digitally signed by DINESH DINESH KUMAR KUMAR Date:
2022.11.25 17:04:03 +0530 (DINESH KUMAR) ADDL. DISTRICT JUDGE02, SOUTH, SAKET COURTS, NEW DELHI.CS DJ No. 8513/16
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