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[Cites 5, Cited by 0]

Delhi High Court

Software One India Pvt. Ltd. vs C&S; Electric Ltd. on 7 May, 2019

Author: Rajiv Sahai Endlaw

Bench: Rajiv Sahai Endlaw

*     IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                           Date of decision: 7th May, 2019

+ CS(COMM) NO. 271/2016 & IA No. 12596/2016 (u/O VII R-11 CPC)

    SOFTWARE ONE INDIA PVT. LTD.         ..... PLsAINTIFF
                  Through: Mr. Manoj Kumar Sahu, Adv.
                         Versus
    C&S ELECTRIC LTD.                     ...DEFENDANT
                  Through: Mr. Chander M. Lall, Sr. Adv. with
                            Ms. Nancy Roy & Mr. Rupin Bahl,
                            Advs.
CORAM:
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW

1.    The plaintiff has sued the defendant for recovery of Rs.1,18,55,172/-
pleading that:

      (i)     the plaintiff is a software licensing company;

      (ii)    the defendant placed a purchase order dated 27th June, 2011 on
              the plaintiff seeking delivery of various software licenses of
              Microsoft from the plaintiff, for a period of three years, on
              year 1, year 2 and year 3 basis;

      (iii)   under the said purchase order, the defendant was liable to pay
              license fee of Rs.52,75,531/- for each of the three years and the
              plaintiff was to deliver to the defendant software licenses of
              Microsoft on yearly basis for a consecutive period of three
              years;

      (iv)    an Enterprise Enrollment Agreement dated 28th June, 2011 was
              entered between the plaintiff, Microsoft and the defendant, for
CS(COMM) No.271/2016                                            Page 1 of 20
              a term of 36 months, on year 1, year 2 and year 3 basis; as per
             the said agreement all the products were to be imported
             directly from the principal publisher Microsoft to the
             defendant and the plaintiff was appointed as the re-seller to
             meet the terms of pricing and delivery of licenses and payment
             of billing etc. to the defendant;

      (v)    the aforesaid Enterprise Enrollment Agreement could only be
             terminated or renewed as per the termination clause thereof; in
             view of the termination clause, it was clear that the defendant
             had no right to terminate the already existing enrollment under
             the agreement and the defendant had a right only to terminate
             the ability to enter into new enrollments under the agreement,
             by giving 60 days notice;

      (vi)   in compliance with the agreed terms of the purchase order, the
             software licenses were duly delivered to the defendant for year
             1 and the defendant in turn had also paid outstanding dues for
             the year 1 invoice as raised by the plaintiff on the defendant;
             Microsoft in turn raised an invoice on the plaintiff for year 1
             and the plaintiff duly made payment against the said invoice as
             raised by Microsoft;

      (vii) the plaintiff, for due compliance of year 2 of the purchase
             order had delivered the software licenses to the defendant and
             raised an invoice dated 7th July, 2012 on the defendant and the
             defendant was liable to pay Rs.59,27,586/- including taxes to
             the plaintiff within a month of the date of the invoice;
CS(COMM) No.271/2016                                         Page 2 of 20
              Microsoft raised a corresponding invoice dated 28th June, 2012
             for year 2 for a sum of Rs.52,72,532.79 on the plaintiff and the
             plaintiff made payment thereof to Microsoft;

      (viii) however, the defendant failed and refused to make the
             payment against the invoice dated 7th July, 2012 in spite of
             repeated requests and reminders of the plaintiff; the plaintiff
             got served a legal notice dated 8th April, 2013 on the
             defendant;

      (ix)   the defendant, in response dated 22nd April, 2013 to the legal
             notice of the plaintiff, took a stand that the defendant had
             consulted and communicated to Microsoft vide letter dated 27 th
             April, 2012 that the defendant did not wish to renew the
             Enterprise Agreement; however the said stand of the defendant
             was incorrect as the Enterprise Agreement was perpetual in
             nature for an agreed term of 36 months and could not be
             terminated mid-term;

      (x)    the plaintiff also received a letter dated 30th May, 2013 from
             Microsoft    informing   the   plaintiff   that   Microsoft       had
             communicated to the defendant that the Enterprise Agreement
             was perpetual and could not be terminated mid-term; and,

      (xi)   Microsoft raised an invoice dated 28th June, 2013 for year 3 on
             the plaintiff and the plaintiff has made payment thereof as
             well. The plaintiff raised a corresponding invoice dated 15th
             July, 2013 on the defendant for a sum of Rs.59,27,586/- but
             which also has not been paid by the defendant.
CS(COMM) No.271/2016                                            Page 3 of 20
       Hence, the suit for recovery of Rs.1,18,55,172/- with pendente lite
and future interest.

2.    The suit was filed as a summary suit under Order XXXVII of the
CPC and came up first before the Court on 2nd December, 2013 when
summons for appearance were issued and upon the defendant entering
appearance, summons for judgment were issued and the defendant filed
leave to defend.

3.    Vide order dated 21st March, 2016, the suit was ordered to be re-
numbered as a commercial suit.

4.    Vide order dated 12th July, 2016, unconditional leave to defend was
granted to the defendant reasoning that (a) it was not the case of the
plaintiff that the defendant had used the software in question after the
termination of the Enterprise Enrollment Agreement on 27 th April, 2013;
(b) the principal controversy that was thus required to be addressed was,
whether the defendant would be liable to pay the license fee for the period it
had not used the software; and, (c) it was also the plea of the defendant that
the defendant had purchase Microsoft Operating Software for which it had
paid separately.

5.    The defendant has filed a written statement pleading that, (i) the suit
based on a contract is bad for non-joinder of Microsoft Operations Pte Ltd.,
also a party thereto; (ii) the plaintiff is only a reseller of software of which
Microsoft holds copyright; (iii) the plaintiff is neither the rights holder of
the software nor a signatory to the Enterprise Enrollment Agreement of
which compliance is sought; (iv) the defendant neither has privity with the
plaintiff nor owes any money to the plaintiff; (v) prior to year 2 invoice
CS(COMM) No.271/2016                                            Page 4 of 20
 dated 7th July, 2012 raised by the plaintiff on the defendant, the defendant
on 27th April, 2012 informed Microsoft that the defendant did not find any
fruitful benefits of the Enterprise Agreement and was exiting therefrom;
(vi) the Enterprise Agreement was entered into by the defendant upon a
misrepresentation by Microsoft that the issues which the defendant was
earlier having qua Microsoft Operating System would be cured; however
the said issues remained even under the Enterprise Agreement, making the
defendant realize that there was no fruitful benefit of the Enterprise
Agreement; (vii) Microsoft, vide its letter dated 10th August, 2012 for the
first time took a stand that the Enterprise Agreement could not be
terminated and had to run its course of 36 months and which was
controverted by the defendant; and, (viii) no software, price whereof is
being demanded in this suit, was supplied under the Enterprise Agreement
to the defendant for year 2 and year 3.

6.    The plaintiff failed to file replication to the written statement
aforesaid inspite of opportunity therefor and vide order dated 19 th
December, 2016, the right of the plaintiff to file replication was closed.

7.    The defendant, besides filing the written statement has also filed IA
No.12596/2016 under Order VII Rule 11 of the CPC for rejection of plaint
on the ground of (A) there being no privity of contract between the plaintiff
and the defendant and the agreement on the basis of which suit is filed
being between defendant and Microsoft Operations Pte Ltd.; (B) the
agreement on the basis of which the suit has been filed having been
terminated by the defendant on 27th April, 2012; (C) the plea that Enterprise
Agreement could not be terminated is contrary to the terms thereof; and,

CS(COMM) No.271/2016                                            Page 5 of 20
 (D) though it was denied but even if it was assumed that the plaintiff had
made payment for year 2 and year 3 to Microsoft, the remedy of the
plaintiff was not to recover the same from the defendant but to seek refund
thereof from Microsoft.

8.    The plaintiff has filed a reply to the IA No.12596/2018 under Order
VII Rule 11 of the CPC but which contains nothing but denial of the
averments in the application and reiteration of the averments in the plaint.

9.    This Court on 11th July, 2017 prima facie found that the suit could
not be proceeded with without impleading Microsoft and on such
observation, the counsel for the plaintiff sought adjournment to take
instructions. On 2nd November, 2017, the counsel for the plaintiff stated
that he had instructions not to implead Microsoft.

10.   Vide order dated 17th August, 2018, the plaintiff was directed to
place on record its internal arrangement with Microsoft. The counsel for the
plaintiff on 22nd November, 2018 informed that the plaintiff had no other
internal arrangement with Microsoft than what was already on record.

11.   The counsel for the plaintiff and the senior counsel for the defendant
have been heard on IA No.12596/2016 under Order VII Rule 11 of the CPC
and / or vis-à-vis the maintainability of the suit.

12.   The senior counsel for the defendant has argued that, (i) the plaintiff
is suing the defendant for infringement of copyright without adding the
owner of the copyright in software; (ii) the plaintiff is suing the defendant
on the basis of a contract to which the plaintiff is not a party; (iii) the
agreement was to be renewed from year to year for a period of three years

CS(COMM) No.271/2016                                           Page 6 of 20
 and the defendant having not renewed the agreement for the second year is
not liable for license fee for year 2 or for year 3; (iv) on the contrary, the
defendant chose to purchase the software from the Microsoft; (v) the
plaintiff, under the Enterprise Agreement was only a collecting agent; (vi)
the orders aforesaid show this Court to have expressed doubts as to the
maintainability of the suit; (vii) the plaintiff in spite of directions has not
produced the internal arrangement with Microsoft; and, (viii) attention is
drawn to Section 61 of the Copyright Act, 1957 to contend that Microsoft
as owner of the copyright is a necessary party.

13.   The senior counsel for the defendant however agrees that for non-
joinder of necessary party, the plaint cannot be rejected and at best
Microsoft is to be impleaded as a defendant in the suit.

14.   The counsel for the plaintiff has only argued what is stated in the
plaint and which is recorded hereinabove and additionally only drawn
attention to a copy of the letter dated 7th August, 2012 of Microsoft
Corporation (India) Pvt. Ltd. to the defendant in response to the defendant‟s
letter dated 27th April, 2012 terminating the Enterprise Agreement and
stating that (a) Microsoft Operations Singapore is the contracting entity for
the plaintiff‟s Microsoft license; (b) the defendant appeared to have a
misunderstanding as to how enterprise agreements operate; (c) the
Enterprise Agreement is a perpetual agreement enabling customers to place
orders with Microsoft under specific volume licensing programmes; (d) the
„enrollment‟ under the Enrollment Agreement is the specific purchase
which the defendant made and Microsoft allows customers to pay for such
purchase over a three year period - it is not a year to year subscription

CS(COMM) No.271/2016                                            Page 7 of 20
 agreement that can be terminated mid-term; (e) thus the defendant‟s
enrollment obligations continued and Microsoft could not accept the
purported termination by the defendant; (f) the defendant‟s enrollment was
covering plaintiff‟s renewal for 475 Desktops Computers with 125
Desktops being added at signing and shall continue to run for the term of
enrollment which ended on 30th June, 2014; (g) the plaintiff will thus need
to fulfill all obligations as part of enrollment; (h) Microsoft had not
received any "True Up Orders" from the defendant; and, (i) advising the
defendant to work with its partner and Microsoft Account Manager in
relation to outstanding licence compliance.

15.   Before I proceed to deal with the respective arguments, it is deemed
expedient to discuss the documents filed by the plaintiff, though the
defendant in its affidavit of admission / denial of documents has denied all
the said documents on the ground of being photocopies. The order dated
19th December, 2016 also records that the plaintiff had not produced any
documents i.e. original documents for admission / denial. However, from
the pleadings, it emerges that there is no dispute about the form and content
of documents which I proceed to discuss herein for the purpose of the
present stage of the suit.

16.   The purchase order dated 24th June, 2011 placed by the defendant on
the plaintiff contains the product description, unit price, quantity and total
price for each of the years 1,2 and 3, though same for all the years, with the
plaintiff also providing (i) one day session on share point software; (ii) two
days training session on Microsoft Excel; (iii) support on VLSC site; (iv)
hand on access to "SA benefit under EA programme by specialized

CS(COMM) No.271/2016                                           Page 8 of 20
 software one EA Experts"; and, (v) training against SA vouchers by
specialized partner and providing "1st year payment along with purchase
order; 2nd year payment from the date of invoice. 3rd year payment also
from the date of invoice".

17.   The Enterprise Enrollment (Indirect):

      (i)     describes itself as between the entities identified in the
              signature form; the entities described in the signature form are
              the defendant under the column „Customer‟ and Microsoft
              Operations Pte Ltd. in the column "Microsoft Affiliate‟;

      (ii)    provides that the enrollment consists of the Enterprise
              Enrollment (Indirect) and the Enterprise Agreement

      (iii)   provides that the effective date thereof is the date the
              enrollment is accepted by Microsoft;

      (iv)    provides that the enrollment thereunder will expire 36 full
              calendar months from the effective date and that "it could be
              terminated earlier or renewed as provided in the Microsoft
              Enterprise Agreement. Microsoft will advise Customer of the
              renewal options before it expires";

      (v)     against the column "Product Order" provides, that the reseller
              will provide the customer with customer‟s Product pricing and
              order; pricing and billing terms for all products ordered will be
              determined by agreement between customer and the reseller
              and the reseller will provide Microsoft with the order
              separately from this enrollment;

CS(COMM) No.271/2016                                            Page 9 of 20
       (vi)   against the column "Reseller Information" mentions the name
             of the plaintiff as re-seller company and contains the signature
             on behalf of the plaintiff in confirmation of the information
             furnished of its address, telephone numbers, e-mail ID and
             contact person;

      (vii) against the column "Changing a Re-seller" provides that if
             Microsoft or the plaintiff as re-seller chooses to discontinue
             doing business with each other, the defendant as customer
             must choose a replacement; and, if the defendant as customer
             intends to change the re-seller, it must notify Microsoft and the
             plaintiff as former re-seller in writing at least 90 days prior to
             the date on which the change is to take effect;

      (viii) in the "Definitions" section of the Enterprise Agreement
             defines "Reseller" as a large account reseller authorized by
             Microsoft to re-sell licenses in an Enrolled Affiliate‟s Defined
             Region under the programme or, where applicable, an entity
             that purchases licenses from a distributor for resale in an
             Enrolled Affiliates Defined Region under this programme.
             (Therefrom it appears that reseller thereunder can either be an
             entity having authorization from Microsoft to resell licenses or
             an entity which purchases licenses from a distributor of
             Microsoft for resale in its defined region. The plaintiff
             nowhere in the plaint has pleaded in which category it falls i.e.
             whether it is only an authorized reseller or purchases licenses
             from distributor of Microsoft for resale. While in the case of

CS(COMM) No.271/2016                                            Page 10 of 20
              former, the relationship of the plaintiff with Microsoft would
             be as between agent and principal, in the case of latter it would
             be on a principal to principal basis);

      (ix)   In the "How the Enterprise program works" section of the
             Enrollment Agreement, under "When acquiring Licenses
             through a Reseller" provides that orders under an indirect
             enrollment will be made out to and submitted to the Enrolled
             Affiliate‟s reseller; Microsoft will invoice that reseller or that
             reseller‟s distributor, as applicable, according to the terms in
             the applicable enrollment; the reseller and the Enrolled
             Affiliate will determine the Enrolled Affiliate‟s actual price
             and payment terms (since the Enterprise Enrollment between
             the defendant and Microsoft has the words "indirect" in
             bracket, it appears that the arrangement which the defendant
             entered into with Microsoft falls in the category of "Indirect
             Enrollment" within the meaning of the said clause);

      (x)    In the "Licence grant" section of the Enterprise Agreement,
             under "Special rule for Enterprise Products" provides that so
             long as the Enrolled Affiliate places annual true-up orders, the
             Enrolled Affiliate may use the latest version (or any prior
             version) of each Enterprise Product on each of its Qualified
             Desktops as permitted in the Product Use Rights; in addition,
             for CALs, each Qualified Desktop (or, for CALs that are User-
             based Licenses, each Qualified User) covered by the
             Enrollment may access and use the associated server software;

CS(COMM) No.271/2016                                            Page 11 of 20
       (xi)   In the "Licence grant" section of the Enterprise Agreement
             under "When Licenses become perpetual" inter alia provides
             in the case of early termination of an enrollment as provided in
             the subsection entitled "Early Termination", if an Enrolled
             Affiliate chooses only to pay amounts due and payable as of
             the termination date, then the Enrolled Affiliate will instead
             have perpetual licenses for the number of licenses specified in
             the subsection entitled "Early termination";

      (xii) The "Term and termination" section of the Enterprise
             Agreement provides as under:

             "This agreement stays in place until terminated. The term of
             each Enrollment is stated in the Enrollment.          "Renewal"
             means the renewal of an Enrollment.            Either party can
             terminate the agreement on notice - that will not affect any
             existing Enrollments. Generally, existing Enrollments may be
             terminated if either party breaches the agreement and does not
             cure the breach in the time allotted.           Generally, upon
             termination or expiration, Enrolled Affiliate must order
             Licenses for copies of Products it has been using but has not
             yet placed orders for, and pay for all Licenses in full.

             a. Term. This agreement will remain in effect unless it is
                 terminated by either party as described below.            Each
                 Enrollment or order will have the term provided in that
                 Enrollment or order.


CS(COMM) No.271/2016                                            Page 12 of 20
              b. Termination without cause. Either party may terminate
                 this agreement, without cause, upon 60 days written notice.
                 Such termination will merely terminate either party's and
                 its Affiliates' ability to enter into new Enrollments under
                 this agreement.    Such termination will not affect any
                 Enrollment or order not otherwise terminated, and any
                 terms of this agreement applicable to any Enrollment or
                 order not otherwise terminated will continue in effect with
                 respect to that Enrollment or order.

             c. Termination for breach. Either party to an Enrollment may
                 terminate it if the other party materially breaches its
                 obligations under this agreement, including any obligation
                 to submit orders or pay amounts owed. Except where the
                 breach is by its nature not curable within 30 days, the
                 terminating party must give the other party 30 days notice
                 and opportunity to cure. It Microsoft gives such notice to
                 an Enrolled Affiliate, Microsoft will give Customer a copy
                 of that notice as well and Customer agrees to assist in
                 attempting to resolve the breach. If the breach also affects
                 other Enrollments and cannot be resolved between
                 Microsoft and Customer within a reasonable period of
                 time, Microsoft may also terminate this agreement and all
                 other Enrollments under it. If an Enrolled Affiliate ceases
                 to be Customer's Affiliate, Customer must promptly notify
                 Microsoft, and Microsoft may terminate its Enrollment.

CS(COMM) No.271/2016                                          Page 13 of 20
              d. Early termination. If an Enrolled Affiliate terminates its
                 Enrollment as a result of a breach by Microsoft, or if
                 Microsoft terminates an Enrollment because the Enrolled
                 Affiliate has ceased to be an Affiliate of Customer, then the
                 Enrolled Affiliate will have the following options:

                 (i) It may immediately pay the total remaining amount due,
                       including all installments, in which case, the Enrolled
                       Affiliate will have perpetual rights for all Licenses it has
                       ordered; or

                 (ii) It may pay only amounts due as of the termination date,
                       in which case the Enrolled Affiliate will have perpetual
                       Licenses for (1) all copies of Products for which
                       payment has been made in full, and (2) the number of
                       copies of Products it has ordered (including the latest
                       version of Products ordered under Software Assurance
                       coverage in an initial or renewal term) for which
                       payment has been made in installments that is
                       proportional to the total of payments made versus total
                       amounts due if the early termination had not occurred.

             e. Effect of termination or expiration. When an Enrollment
                 expires or is terminated,

                 (i) Enrolled Affiliate must order Licenses for all copies of
                       Products it has run for which it has not previously
                       submitted an order. Any and all unpaid payments or any
                       order of any kind, including subscription services,
CS(COMM) No.271/2016                                               Page 14 of 20
                        remain due and payable.      Except as provided in the
                       subsection titled "Early termination," all unpaid
                       payments for Licenses immediately become due and
                       payable.

                 (ii) Enrolled Affiliate's right to Software Assurance benefits
                       under this agreement ends if it does not renew Software
                       Assurance.

                       To the extent necessary to implement the termination
                       provisions of this agreement, each party waives any
                       right it has or obligation that the other party may have,
                       now or in the future under any applicable law or
                       regulation, to request or obtain the approval, order,
                       decision, or judgment of any court to terminate this
                       agreement."

18.   The defendant, vide its letter dated 27th April, 2012 to Microsoft
Operations Pte Ltd. intimated its decision not to renew the Enterprise
Agreement and to instead buy the licenses. The plaintiff, at page 47 of
Part-IIIA file has also filed a photocopy of an invoice raised by the plaintiff
on the defendant on 15th July, 2013 purporting to dispatch to the defendant
the licenses for that year and containing a declaration that the licenses
detailed to have been dispatched were genuine and imported by the plaintiff
from the principal publisher i.e. Microsoft Singapore.

19.    The plaintiff though has also filed at pages 49 and 50 the invoices
dated 28th June, 2012 and 28th June, 2013 raised by Microsoft on the

CS(COMM) No.271/2016                                             Page 15 of 20
 plaintiff but has not furnished any proof of payment thereof, though in the
plaint has pleaded to have paid the value thereof to Microsoft.

20.   A reading of all the documents filed by the plaintiff itself does not
show the arrangement to be of sale of licenses valid for three years with
only the price thereof having been agreed to be paid in three installments
and in which case the plaintiff was entitled in law, having completed the
sale by delivery of licenses valid for three years, to sue for the balance price
thereof. On the contrary, the purchase order placed by the defendant on the
plaintiff shows the amount type and price of the licenses separately for each
of the three years.    Had the licenses not been meant to be delivered
successively, the licenses to be delivered and sold would not have been
separately mentioned with price thereof. Similarly, the invoices show that
the plaintiff for each year was to supply the licenses to the defendant and
with respect to each of which licenses the plaintiff in terms of the purchase
order assured the defendant that the licenses were genuine and had been
sourced from Microsoft.

21.   Once the arrangement between the parties is found to be so, de hors
the contentions qua the interpretation of the termination clause, the
termination by the defendant of the arrangement, after the period of first
year only and / or refusal by the defendant to take delivery of and to pay for
licenses for the second and third years for which also the defendant had
placed an order on the plaintiff and agreed to pay to the plaintiff, would
only amount to breach of contract by the defendant and would entitle the
plaintiff in law only to the remedy of seeking compensation for breach of
contract. On the contrary what the plaintiff is seeking to do by filing this

CS(COMM) No.271/2016                                            Page 16 of 20
 suit for recovery of the agreed price for year 2 and year 3, is to seek specific
performance of the agreement of sale of licenses, without pleading the
necessary ingredients of the claim for specific performance.

22.   Supreme Court in Kisan Sahkari Chini Mills Ltd. Vs. Vardan
Linkers (2008) 12 SCC 500 held that ordinarily the remedy available for a
party complaining of breach of contract lies for seeking damages and the
entitlement to the relief of specific performance is available only if the
contract is capable of being specifically enforced in law. Similarly, in
Fortune Infrastructure Vs. Trevor D' Lima (2018) 5 SCC 442 it was noted
that in common law, claim for damages is the rule and specific performance
is an exception. In Noble Resources Ltd. Vs. State of Orissa (2006) 10
SCC 236, it was held that ordinarily specific performance of a contract
would not be enforced particularly when damages may be an adequate
remedy for breach of contract.

23.   Otherwise also, the agreement of sale of computer software licenses
is not specifically enforceable under the Specific Relief Act, 1963. It is
nowhere pleaded that the software licenses to be granted were specially
written / got written for the defendant or had no use to anyone else. The
plaintiff, while seeking the relief in the nature of specific performance has
not even pleaded what it did with the licenses for the year 2 and year 3
which the defendant refused to take and pay for and whether the plaintiff
sold the said license to anyone else and / or otherwise how the plaintiff
mitigated its damages on account of breach of agreement by the defendant.
So much so that the plaintiff failed to file replication even to the written
statement and forfeited its right therefor.

CS(COMM) No.271/2016                                            Page 17 of 20
 24.   Even otherwise, the agreement between the plaintiff and the
defendant is not specifically enforceable as a reading of the „Changing a
Reseller‟ clause of the Enterprise Enrollment (Indirect) between Microsoft
and the defendant shows that the defendant was, at any point of time during
the contract, entitled to change the Reseller by giving a notice to Microsoft
and the Reseller intended to be replaced, 90 days prior to the date on which
the change is to take place. A conjoint reading of Section 14(d) of the
Specific Relief Act which provides that contracts which are by nature
determinable are not specifically enforceable, along with Section 41(e)
which provides that injunctions cannot be granted to prevent the breach of a
contract performance of which cannot be specifically enforced, shows that
the Courts are not to grant specific performance of an agreement which is
terminable at will by either of the parties. Reference in this regard may be
made to Divyanshi Saxena Vs. Shri Ram School 2006 SCC OnLine Del
375, Jindal Steel and Power Ltd. Vs. SAP India Pvt. Ltd. (2015) 221 DLT
708 and Indian Oil Corporation Ltd. Vs. Amritsar Gas Service (1991) 1
SC 533.

25.   I may however note that the Specific Relief Act has been amended
through the Specific Relief (Amendment) Act, 2018 and which amendment
has been in force since 1st October, 2018. Though the said amendment has
removed "contract for the non-performance of which compensation in
money is an adequate relief" as one of the type of contracts which cannot be
specifically enforced under Section 14, as aforesaid, the contract as per the
amended Section 14 also is still unenforceable.

CS(COMM) No.271/2016                                          Page 18 of 20
 26.   Thus de hors the argument of the senior counsel for the defendant, of
their being no privity of contract between the plaintiff and the defendant,
the suit as instituted and in the form filed does not lie and is a deadwood
with no reasonable possibility of the plaintiff succeeding therein and should
not continue to waste the time of the Court.

27.   No merit is found in the contention of the senior counsel for the
defendant relying on Section 61 of the Copyright Act, of the plaintiff being
not entitled to institute the suit for infringement of copyright without
impleading the owner of the copyright and Microsoft being a necessary
party to the suit for the said reason, because the present suit is not a suit for
infringement of copyright.

28.   I must however state that the documents as described hereinabove do
not show the plaintiff to be having any rights whatsoever under an
Enrollment Agreement, to which it was not even a party. What appears to
have transpired is that pursuant to the defendant placing the purchase order
on the plaintiff for Microsoft Enterprise, the defendant was made to enter
into an Enrollment Agreement directly with Microsoft and though under
which Enrollment Agreement, the purchase order placed by the defendant
on the plaintiff was to be executed by the plaintiff but the fact remains that
the plaintiff being not a party to the Enrollment Agreement is not entitled to
exercise any rights thereunder. All that the plaintiff is entitled to is to
exercise its rights under the purchase order and which as aforesaid is of sale
of licenses and payment of price thereof separately for the three years and
on refusal of defendant to take delivery of and pay price for year 2 and year


CS(COMM) No.271/2016                                             Page 19 of 20
 3 whereof, the remedy of the plaintiff as aforesaid is only of suing the
defendant for breach of contract and not of recovery of price.

29.    Having held so, the need to interpret the clauses aforesaid of the
Enterprise Agreement does not arise.

30.    The suit is thus found to be not maintainable in law and is dismissed.

31.    The plaintiff to pay costs of the suit to the defendant, with
professional fee assessed at Rs.2.5 lacs.

       Decree sheet be drawn up.




                                              RAJIV SAHAI ENDLAW, J.

MAY 07, 2019 „gsr‟ (Corrected & released on 6th June, 2019) CS(COMM) No.271/2016 Page 20 of 20