Delhi District Court
F1 Infotech Private Limited vs Omnitel Technologies Private Limited on 26 May, 2025
IN THE COURT OF MS. ANU GROVER BALIGA,
DISTRICT JUDGE (COMMERCIAL COURT-04),
SOUTH-EAST DISTRICT, SAKET COURTS,
NEW DELHI
CS (COMM) No. 1293/2018
F1 INFOTECH PVT. LTD. VS. OMNITEL TECHNOLOGIES PVT. LTD.
In the matter of:
F1 INFOTECH PRIVATE LIMITED
(A Company registered under Companies Act)
Registered Office :-
ED 55C, Pitampura,
Delhi-110034. ....Plaintiff
Versus
1. OMNITEL TECHNOLOGIES PRIVATE LIMITED
(A Company registered under Companies Act)
Registered Office at:-
B-220, Florence Marvel
Sushant Lok-III, Sector-57,
Gurgaon, Haryana-122002.
OFFICE :-
Elegance Tower, Pocket A2,
Jasola, New Delhi-110025.
2. M/S CHECK POINT SOFTWARE TECHNOLOGIES LIMITED
Registered Office at:-
2nd Floor, Local Shopping Complex,
Phase-III, Capital Court
Olof Palme Marg, New Delhi-110067.
SALES OFFICE :-
4A, 4th Floor, Vandana Building,
Tolstoy Marg, New Delhi-110001.
3. MAYAN SETHI
Accounts Manager
CS (Comm.) No. 1293/18 F1 Infotech Pvt. Ltd. Vs. Omnitel Technologies Pvt. Ltd. & Ors Page 1 of 27
Digitally signed
by ANU
ANU GROVER
GROVER BALIGA
Date:
BALIGA 2025.05.29
15:36:31 +0530
M/s Check Points Software Technologies Ltd.
Registered Office
2nd Floor, Local Shopping Complex,
Phase-III, Capital Court, Olof Palme
Marg, New Delhi-110067.
Sales Office :-
4A 4th Floor, Vandana Building,
Tolstoy Marg, New Delhi-110001. ....Defendants
Date of institution : 29.08.2018
Date of reserving judgment : 07.05.2025
Date of pronouncement of Judgment : 26.05.2025
JUDGMENT
1. Vide the present order, I shall decide an application filed by the Defendant No. 2 under Order XIII-A CPC (as amended by the Schedule to the Commercial Courts Act) praying therein that the suit of the Plaintiff be dismissed at this stage itself, for in view of plaint and the documents filed therewith, the Plaintiff has no real prospects of succeeding in its claim.
2. As per record, the present suit seeking recovery of Rs. 1,06,75,707/- had been filed by the Plaintiff initially against three Defendants interalia on the assertions that on the asking and on the assurance of the Defendant No. 2 and 3, the Plaintiff had supplied certain software / computer related goods to the Defendant No. 1 and that the Defendant No. 1 had failed to clear its outstanding of Rs. 34 Lakhs approximately. It was also the assertion of the Plaintiff that the Defendant No. 2 and 3 were also jointly and severally liable to pay to the Plaintiff, the said amount and an additional amount of Rs. 66 Lakhs approximately, for the Plaintiff has suffered losses to this extent, due to the acts / omissions of these Defendants.
CS (Comm.) No. 1293/18 F1 Infotech Pvt. Ltd. Vs. Omnitel Technologies Pvt. Ltd. & Ors Page 2 of 27 Digitally signed by ANU ANU GROVER
GROVER BALIGA
Date:
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3. The record further reveals that though the suit was initially filed before the Court of Ld. ADJ, it was subsequently transferred to the Predecessor of this Court vide order dated 19.09.2022 of the Ld. Principal District & Sessions Judge, South-East, Saket Courts and before the Ld. Predecessor of this Court, there was a settlement reached between the Plaintiff and Defendant No. 1 vide which the Defendant No. 1 has paid Rs. 34 Lakhs to the Plaintiff. Pursuant to receiving the said payment the Plaintiff withdrew its claim against Defendant No. 1.
4. In view of the above, vide order dated 25.01.2024, the Ld. Predecessor of this Court had observed that the present suit stands disposed off as settled qua Defendant No. 1. Thereafter, as per record the Defendant No. 2 and 3 preferred applications under Order VII Rule 11 CPC praying therein that no cause of action arises against them and that therefore the plaint should be rejected.
5. The suit was transferred to this Court vide order dated 06.07.2024 of Ld. Principal District & Sessions Judge, South-East, Saket Courts. Before this Court, Ld. Counsel for Defendant No. 2 Sh. Arora did not press the application filed under Order VII Rule 11 CPC but instead filed an application under Order XIII-A CPC.
6. To appreciate the basis on which the present application under Order XIII-A CPC has been filed, it will be relevant herein to note the material averments on the basis of which the present suit has been filed by the Plaintiff and the same are as follows :-
(a) The Defendant No. 2, a limited company is inter alia engaged in the business of manufacturing and supply of Firewall and other IT Security CS (Comm.) No. 1293/18 F1 Infotech Pvt. Ltd. Vs. Omnitel Technologies Pvt. Ltd. & Ors Page 3 of 27 Digitally signed by ANU ANU GROVER GROVER BALIGA Date:
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Services. M/s Arrow Enterprise Computing
Solutions India Pvt. Ltd. (hereinafter referred to as M/s Arrow), M/s Texonic Instruments, and M/s ITecSys Pvt. Ltd. (hereinafter referred to as M/s ITecSys) are the distributors of the Defendant No. 2 for the India region. Defendant No. 3 is an Accounts Manager with the Defendant No. 2.
(b) The Plaintiff and Defendant No. 1 are amongst the resellers of the products manufactured by the Defendant No. 2 Company and Plaintiff has been shown as such on Defendant No. 2's Partner Portal.
(c) In the normal course of transaction, an end customer would place a purchase order upon the reseller of the Defendant No. 2, for the purchase of its Products. The reseller would then place a purchase order upon any of the distributors of Defendant No. 2 (in this case M/s Arrow, Texonic Instruments, and ITeSys). The Distributors would then procure the material (Hardware, Software) and also procure Software Licenses from Defendant No. 2 and then supply the products to resellers (in this case Plaintiff and/or Defendant No.1,) in terms of the orders placed upon it by the end customer.
(d) Contrary to the aforementioned practice, without National Informatics Centre Services Inc. CS (Comm.) No. 1293/18 F1 Infotech Pvt. Ltd. Vs. Omnitel Technologies Pvt. Ltd. & Ors Page 4 of 27 Digitally signed by ANU ANU GROVER GROVER BALIGA Date:
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(NICSI), placing any orders upon the Defendant No.1, who is only a reseller of Defendant No. 2, at the behest of Defendant No. 2 and 3 placed three Purchase Orders bearing No. OMNIPO-2014-
15/0038, OMNIPO-2014-15/0039 and OMNIPO-2014-15/0040, all dated 27.06.2014 on Computer Distributor Links Services India Pvt. Ltd. (now known as M/s Arrow), Distributor of Defendant No. 2 for the supply of products of the Defendant No. 2 i.e., Hardware, Software Licenses and Support (Service Contract). The total amount of the said purchase orders was Rs.1,05,27,188.57/- (Rupees One Crore Five Lakhs Twenty Seven Thousand One Hundred Eighty Eight and Paise Fifty Seven Only) and reflected that the end customer is NICSI.
(e) Since M/s. Arrow had some payment issues with Defendant No. 1, it therefore, refused to carry out the said transaction. The Defendant No. 3, on behalf of Defendant No.2 as its agent, approached the Plaintiff to carry out the aforementioned transaction along with other transactions.
Defendant No.3 assured the Plaintiff that the transactions shall be completed in the next 60 days and apart from the payment terms being back to back, the Plaintiff will be paid appropriate profit margin as well as finance cost. The Plaintiff CS (Comm.) No. 1293/18 F1 Infotech Pvt. Ltd. Vs. Omnitel Technologies Pvt. Ltd. & Ors Page 5 of 27 Digitally signed ANU by ANU GROVER GROVER BALIGA BALIGA Date: 2025.05.29 15:37:04 +0530 considering its business relations with Defendant No. 2 agreed to the same. On 20.03.2015, the Defendant No.3, acting on behalf of the Defendant No.2 sent an email to the Plaintiff attaching the purchase orders to be placed by the Plaintiff upon M/s. Arrow, and one M/s. Texonic Instruments (another Distributor of Defendant No.2) despite having not received any purchase order from NICSI.
(f) On 25.03.2015, the Plaintiff acting on the instructions issued by the Defendant No.3, placed 3 Purchase Orders bearing No.F-1/2014-15/126, No.F-1/2014-15/127 and No.F-1/2014-15/128 for a total amount of Rs.1,05,27,188.21/- (Rupees One Crore Five Lakhs Twenty Seven Thousand One Hundred Eighty Eight and Paise Twenty One Only) (Excluding Tax) with M/s. Arrow and 2 Purchase Orders bearing No.F-1/2014-15/129 and No.F-1/2014-15/130 for a total amount of Rs.98,91,679.52/-(Rupees Ninety Eight Lakhs Ninety One Thousand Six Hundred Seventy Nine and Paise Fifty Two Only) (Excluding Tax) with M/s. Texonic Instruments for the supply of the materials detailed in the aforementioned purchase orders. The Plaintiff also made an advance payment of Rs.15,79,078/-(Rupees Fifteen Lakhs Seventy Nine Thousand Seventy Eight Only) to CS (Comm.) No. 1293/18 F1 Infotech Pvt. Ltd. Vs. Omnitel Technologies Pvt. Ltd. & Ors Page 6 of 27 Digitally signed ANU by ANU GROVER GROVER BALIGA BALIGA Date: 2025.05.29 15:37:12 +0530 M/s. Arrow as per the terms of the Purchase Order.
(g) On demand of the aforementioned 02 distributors of Defendant No. 2, the Plaintiff made various payments to them and after receiving delivery of goods from them then forwarded the goods to the Defendant No. 1 and raised invoices against Defendant No. 1 for a total value of Rs.
1,28,78,856.21/-(Rupees One Crore Twenty Eight Lakhs Seventy Eight Thousand Eight Hundred Fifty Six And Paise Twenty One Only).
(h) The Defendant No.1 only made part payments towards its liability and failed to make the payment of Rs. 35,87,455.21 (Rupees Thirty Five Lakhs Eighty Seven Thousand Four Hundred Fifty five And Paise Twenty One Only) against the material supplied by the Plaintiff.
(i) Since the goods had been supplied by the Plaintiff to Defendant No. 1 only on the asking of Defendant No. 2 and 3, they should be jointly and severally held liable to pay to the Plaintiff the aforementioned amount. Further the Defendant No. 2 and 3 had failed to arrange for end customer purchase orders in relation to the goods / material worth Rs. 25,94,809.72 purchased by the Plaintiff, on their instructions from M/s. Arrow and material worth Rs. 4,36,234.32/- from M/s. ITeSys bearing CS (Comm.) No. 1293/18 F1 Infotech Pvt. Ltd. Vs. Omnitel Technologies Pvt. Ltd. & Ors Page 7 of 27 Digitally signed by ANU ANU GROVER GROVER BALIGA Date:
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No. F-1/2015-16/15 dated 01.06.2015 for an
amount of Rs.4,36,234.32/- (Rupees Four Lakh Thirty Six Thousand Two Hundred Thirty Four and Paise Thirty Two Only). Further the transactions entered between the Plaintiff and Defendant No. 1 and the distributors of Defendant No. 2 had caused to the Plaintiff, loss of reputation, finance costs and opportunity costs and therefore the suit must be decreed for an amount of Rs. 1,06,75,707.83/- in favour of the Plaintiff.
7. In the present application filed, the Defendant No. 2 has interalia asserted that there is no possibility of the Plaintiff succeeding in its claim against Defendant No. 2 and 3, for the Plaintiff himself has admitted, during the course of proceedings that it had no grievance against Defendant No. 2 and 3. It has been averred in the application that the averments of the plaint itself reflects that the Plaintiff's only grievance against Defendant No. 2 and 3 was that they did not get the disputes settled between the Plaintiff and Defendant No. 1 and did not ensure that Defendant No. 1 cleared its outstanding due to the Plaintiff. It has also been asserted in the application that the Plaintiff has not even explained as to how the suit has been filed within the period of limitation against the Defendant No. 2 and 3, and further that the Plaintiff has failed to file on record a single document reflecting that there was any oral or written agreement between the Plaintiff and Defendant No. 2 and 3, for it to demand any amount from these Defendants.
8. In its reply filed to the aforementioned application, the Plaintiff has sought to assert that the suit of the Plaintiff cannot at all be decided in the summary manner under the provisions of Order XIII-A CPC. According to the CS (Comm.) No. 1293/18 F1 Infotech Pvt. Ltd. Vs. Omnitel Technologies Pvt. Ltd. & Ors Page 8 of 27 ANU Digitally signed by ANU GROVER GROVER BALIGA Date: 2025.05.29 BALIGA 15:37:27 +0530 Plaintiff the following issues are required to be framed in the present case :-
(a) Whether the transactions in the suit were initiated on the assurance of Defendant No. 2 and 3.
(b) Whether the Defendant No. 2 and 3 assured the Plaintiff that they will arrange the buyers of the software which had been purchased by the Plaintiff on the persuasion of the Defendant No. 2 and 3.
(c) Whether the Plaintiff suffered losses because of the expiry of the licenses sold by the Defendant as they remained unsold / unused.
9. It has been further averred by the Plaintiff in its reply that the Plaintiff is to be granted the opportunity to adduce evidence for the purposes of establishing that the Defendant No. 2 and 3 had promised and assured the Plaintiff that if it places purchase orders on its distributors, it would be earning profits. It is the assertion of the Plaintiff that it is these promises / assurances which inspired the Plaintiff to enter into a contract with Defendant no. 1 and also led the Plaintiff to have legitimate expectations that it will receive further purchase orders from the end customers of Defendant No. 2 and 3.
Contentions of Ld. Counsels
10. It is relevant to mention that during the course of arguments on the present application, Ld. Counsel for Plaintiff Sh. Rajesh Gogna had submitted before this Court that the Plaintiff wishes to forgo a part of the claim, as made in the plaint and that it now only wishes to claim for a decree for a principal amount of Rs. 30,31,044.04/- against the Defendant No. 2 and 3. They had submitted before this Court that though as per the plaint, the Plaintiff has claimed that it is entitled to a total amount of Rs. 66 Lakhs approximately from Defendant no. 2 and 3, they fairly wish to inform this Court that the Plaintiff has CS (Comm.) No. 1293/18 F1 Infotech Pvt. Ltd. Vs. Omnitel Technologies Pvt. Ltd. & Ors Page 9 of 27 Digitally signed by ANU ANU GROVER GROVER BALIGA Date:
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no evidence to claim the said amount and that it be recorded that the Plaintiff limits its claim to Rs. 30,31,044.04/-. According to them, this is the amount of the goods that the Plaintiff had purchased, at the behest of Defendant No. 2 and 3, from their distributors and for which the Defendant No. 2 and 3 failed to arrange end customers for the Plaintiff. It is also relevant to note that though in the reply filed to the application under Order XIII-A CPC, the Plaintiff had asserted that it is entitled to the aforementioned amount on the principle of legitimate expectation, during the course of arguments Ld. Counsel Sh. Gogna has fairly conceded that since the said principle can be invoked, in India, only against the State, the Plaintiff will not be entitled to invoke this principle against the Defendant No. 2 and 3. He then has sought to argue that if this Court applies the provisions of Section 70 of the Indian Contract Act to the facts of the present case, the Plaintiff is entitled to seek a decree against Defendant No. 2 and 3. In support of this contention, Ld. Counsel for Plaintiff has relied upon the following judgment :-
• Mahanagar Telephone Nigam Limited v. TATA Communications Ltd. (2019) 5 Supreme Court Cases 341
11. In reply to the aforementioned contention, Ld. Counsel for Defendant No. 2 Sh. Vikas Arora, has made the following rebuttal contentions :-
(a) Section 70 of the Contract Act, 1872 cannot come to the aid of the Plaintiff. The bare reading of the Section 70 of Contract Act indicates that there are three necessary ingredients that must be satisfied to invoke this section. Firstly, the goods are to be delivered lawfully or anything has to be done for another person lawfully.
Second, the thing done or the goods delivered is so done or delivered "not intending to do so gratuitously". Third, CS (Comm.) No. 1293/18 F1 Infotech Pvt. Ltd. Vs. Omnitel Technologies Pvt. Ltd. & Ors Page 10 of 27 ANU Digitally signed by ANU GROVER GROVER BALIGA Date: 2025.05.29 BALIGA 15:37:44 +0530 the person to whom the goods are delivered "enjoys the benefit thereof.
(b) It is the admitted case of the Plaintiff that it did not render any service or supply goods to Defendant No. 2 and 3 and no goods. The best case of the Plaintiff is that it purchased material from the vendors which material was manufactured/ produced by Defendant No.2, on the assurance of Defendant No.3, that the product would be sold immediately, and the Plaintiff would be able to earn profits. In these facts, the provision of Section 70 Contract Act 1872, have no application whatsoever. The Plaintiff's reliance upon the Section 70 Contract Act, 1872 is absolutely misconceived.
(c) That without prejudice to the above, it is settled law that for availing the benefit of Section 70 Contract Act, 1872 the necessary ingredients are to be specifically pleaded. In the entire Plaint, as well as the Rejoinder filed by the Plaintiff, there are no pleadings which are mandatorily required to be pleaded. There are no pleadings to the effect that Plaintiff did some work on behalf of Defendant No. 2. There are no pleadings that the said work was done non- gratuitously. There are no pleadings that because of the said work, the Defendant No. 2 achieved some benefit. In the absence of necessary pleadings, benefit of Section 70 Contract Act 1872 cannot be availed, in view of the judicial dicta laid down by the Hon'ble Supreme Court reported and titled as Union of India v. Sita Ram Jaiswal, (1976) 4 SCC 505, CS (Comm.) No. 1293/18 F1 Infotech Pvt. Ltd. Vs. Omnitel Technologies Pvt. Ltd. & Ors Page 11 of 27 Digitally signed ANU by ANU GROVER GROVER BALIGA BALIGA Date: 2025.05.29 15:37:51 +0530
(d) That even otherwise the claims made by the Plaintiff are not supported by any documentary evidence whatsoever. The mails dated 20.03.2015 and 24.03.2015 allegedly sent by Defendant No. 3 to the Plaintiff contain no promise whatsoever that Defendant No. 2 or Defendant No. 3 will arrange end customers for the materials so purchased by the Plaintiff, on the instructions of the Defendant No. 3. Besides the said mails, there are no other documents or communications placed on record by the Plaintiff to suggest that the Defendant No. 2 ever promised or assured the Plaintiff to get the products, so purchased, sold. Further though the e-mail dated 20.03.2015, according to the Plaintiff contained attachments of the purchase orders sent by Defendant No. 3 to it, the said attachments have not been placed on record and the Plaintiff has merely placed on record, the purchase orders that it placed upon Defendant No. 1.
(e) Even otherwise there is no document on record to suggest that the alleged material so purchased remained unsold. As such mere bald assertions in the Plaint are inconsequential. It establishes that the Plaintiff does not have any real prospect of success in its claim. Despite several opportunities which were taken by the Plaintiff to file additional documents, on no occasion did the plaintiff place on record any document to show that the material so purchased, remained unsold.
(f) That there is no email or communication from the Plaintiff to the Defendants raising any grievance that CS (Comm.) No. 1293/18 F1 Infotech Pvt. Ltd. Vs. Omnitel Technologies Pvt. Ltd. & Ors Page 12 of 27 ANU Digitally signed by ANU GROVER GROVER BALIGA Date: 2025.05.29 BALIGA 15:37:58 +0530 the products are lying unsold or that it was the assurance or responsibility of the Defendants to get the products sold. There is no communication that the Plaintiff ever showed his inclination to return the products since the products were allegedly lying unsold.
Findings
12. This Court has carefully considered the submissions made by the Ld. Counsels and has perused the entire record as well as the judicial dicta relied upon by Ld. Counsels for the parties.
13. It will be relevant at this stage to reproduce relevant provisions of Order XIIIA CPC, which provide for the Court to pass a summary judgment in certain cases of commercial disputes. Rule 2 of the said Order lays down as under :-
"3. Grounds for summary judgment - The Court may give a summary judgment against a plaintiff or defendant on a claim if it considers that -
(a) the plaintiff has no real prospect of succeeding on the claim or the defendant has no real prospect of successfully defending the claim, as the case may be; and
(b) there is no other compelling reason why the claim should not be disposed of before recording of oral evidence."
In paras 49 and 52 of its recent judgment pronounced in the case titled Su-kam Power Systems Limited vs. Kunwer Sachdev & Anr. (2019) SCC Online, Delhi 10764, the Hon'ble Delhi High Court has dealt with the aforementioned provisions of Order XIII-A CPC and has observed as follows:-
"49. Consequently, this Court is of the view that when a summary judgment application allows the Court to find the necessary facts and resolve the dispute, proceeding to trial would generally not be proportionate, timely or cost effective. It bears reiteration that the standard for fairness is not whether the procedure is as exhaustive as a trial, but whether it gives the Court CS (Comm.) No. 1293/18 F1 Infotech Pvt. Ltd. Vs. Omnitel Technologies Pvt. Ltd. & Ors Page 13 of 27 Digitally signed ANU by ANU GROVER GROVER BALIGA Date:
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the confidence that it can find the necessary facts and apply the relevant legal principles so as to resolve the dispute as held in Robert Hryniak (supra)....
52. Consequently, this Court is of the opinion that there will be 'no real prospect of successfully defending the claim' when the Court is able to reach a fair and just determination on the merits of the application for summary judgment. This will be the case when the process allows the court to make the necessary finding of fact, apply the law to the facts, and the same is proportionate, more expeditious and less expensive means to achieve a fair and just result."
The aforementioned succinct enunciation of law by the Hon'ble Court makes it clear that in case this Court is able to determine the necessary facts in dispute between the parties and is able to apply the relevant legal principles to the said facts so as to resolve the disputes between the parties, this Court will be justified in exercising its powers under Order XIIIA CPC.
14. Now, in the present case, as noted herein above, the main grievance of the Plaintiff initially was against Defendant No. 1. It was inter alia the averment of the Plaintiff that at the behest of Defendant no. 2 and 3, it had purchased certain softwares etc. from the distributors of Defendant No. 2 and thereafter had supplied the same to Defendant No. 1 and had raised invoices amounting to Rs. 1,28,78,856.21/- in this respect and that the Defendant No. 1 had failed to make complete payment against the said invoices and that a sum of Rs. 35,87,455.21/- remained pending to be paid by Defendant No. 1 to the Plaintiff. It had also sought to make Defendant No. 2 and 3 liable for the said outstanding of Defendant No. 1 on the ground that it was upon the asking of Defendant No. 2 and 3 that the Plaintiff had entered into transactions with Defendant No. 1 and that therefore the Defendant No. 2 and 3 should make the payment of outstanding dues of Defendant No. 1, in case it fails to do. Alongwith this cause of action that the Plaintiff asserted to have against Defendant No. 1 with respect to amount of Rs. 35,87,455.21/-, the Plaintiff CS (Comm.) No. 1293/18 F1 Infotech Pvt. Ltd. Vs. Omnitel Technologies Pvt. Ltd. & Ors Page 14 of 27 ANU Digitally signed by ANU GROVER GROVER BALIGA Date: 2025.05.29 BALIGA 15:38:12 +0530 apparently joined another cause of action that it had only against Defendant No. 2 and 3. According to the averments made in the plaint, the Plaintiff due to the hurdles that it faced in completing the transactions with Defendant No. 1 and the distributors of Defendant No. 2, had suffered huge losses of finance costs and opportunity costs and had to suffer loss of reputation and incur litigation expenses due to the acts / omissions of Defendant No. 2 and 3. Though no amount in this respect has been specified in the plaint as such, Ld. Counsels for Plaintiff, during the course of arguments on the present application had first sought to submit that out of the total suit amount of Rs. 1,06,75,707.83/-, the Court may deduct the amount of Rs. 35,87,455.21/- that the Plaintiff was entitled and has already received from Defendant No. 1 for the supply of goods to it and arrive at the figure that the Plaintiff is claiming under the aforementioned heads from Defendant No. 2 and 3. Subsequently, on realising that no documentary evidence whatsoever, had been placed on record to seek the aforementioned damages to the extent of Rs. 66 Lakhs approximately, they have then sought to limit the claim of the Plaintiff to Rs. 30,31,044.04/-. According to them, purchase orders worth this amount had been placed by the Plaintiff, at the behest of Defendant No. 2 and 3 upon the distributors of Defendant No. 2 and that no end customer for the said purchase orders was provided by these Defendants and hence the Plaintiff would be entitled to this amount from Defendant No. 2 and 3. Ld. Counsels for Plaintiff are relying upon the provisions of Section 70 of the Indian Contract Act, to contend that the Plaintiff must be granted an opportunity to prove that it is because of the assurances of Defendant No. 2 and 3, that it purchased goods worth Rs. 30,31,044.04/- and subsequently suffered a loss to the tune of the said amount. At this stage, it is therefore relevant to note the provisions of Section 70 of the Indian Contract Act:-
Section 70:- Obligation of person enjoying benefit of non-CS (Comm.) No. 1293/18 F1 Infotech Pvt. Ltd. Vs. Omnitel Technologies Pvt. Ltd. & Ors Page 15 of 27 Digitally signed
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GROVER BALIGA
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gratuitous Where a person lawfully does anything for another person, or delivers anything to him, not intending to do so gratuitously, and such other person enjoys the benefit thereof, the latter is bound to make compensation to the former in respect of, or to restore, the thing so done or delivered.
Illustrations
(a) A, a tradesman, leaves goods at Bs house by mistake. B treats the goods as his own. He is bound to pay A for them.
(b) A saves Bs property from fire. A is not entitled to compensation from B, if the circumstances show that he intended to act gratuitously.
15. In Union of India's case (supra- the judgment relied upon by Ld. Counsel for Defendant), the Hon'ble Supreme Court while considering the aforementioned provisions of Section 70 of the Indian Contract Act has interalia observed as under :-
"The three ingredients to support the cause of action under Section 70 of the Indian Contract Act are these :
First, the goods are to be delivered lawfully or anything has to be done for another person lawfully. Second, the thing done or the goods delivered is so done or delivered "not intending to do so gratuitously". Third, the person to whom the goods are delivered "enjoys the benefit thereof". It is only when the three ingredients are pleaded in the plaint that a successful cause of action is constituted under Section 70. In the present case only the second ingredient was fulfilled. Hence the suit was not maintainable under Section 70 in the absence of proper pleadings." (emphasis applied)
16. Now clearly in the present case, the Plaintiff has not specifically pleaded any of the three ingredients required for the application of Section 70 of the Indian Contract Act. Ld. Counsel Sh. Gogna has, however sought to submit that though the plaint is not perfectly worded and leaves much to be desired, that in itself should not be sufficient for this Court to dismiss the suit of the Plaintiff in a summary manner. According to him, there is no requirement of the Plaintiff to amend its pleadings and it is his submission that if one carefully CS (Comm.) No. 1293/18 F1 Infotech Pvt. Ltd. Vs. Omnitel Technologies Pvt. Ltd. & Ors Page 16 of 27 Digitally signed by ANU ANU GROVER GROVER BALIGA Date:
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reads the pleadings in a holistic manner, the Plaintiff has infact pleaded all the requisite ingredients of Section 70 of the Indian Contract Act. He has pointed out that there are averments made by the Plaintiff that it is only on the instructions and assurance of Defendant No. 2 and 3 that it had purchased goods worth Rs. 30,31,044.04 from the distributors of Defendant No. 2. He has pointed out that the Plaintiff has also placed on record, the emails vide which the Defendant No. 3 had forwarded to the Plaintiff, the formats of the purchase order that the Plaintiff was required to place upon the distributors of Defendant No. 2. It is his submission that though the said e-mails do not contain any assurance from Defendant No. 3, the Plaintiff must be granted an opportunity to step into the witness box to corroborate the said documentary evidence by deposing that there was an oral assurance given by Defendant No. 3, on behalf of Defendant No. 2 that the Plaintiff will be compensated for the purchase orders being placed by it upon the distributor of Defendant No. 2. Thus according to him, on the basis of the said e-mails, the Plaintiff will prove during trial that it had not placed the purchase orders gratuitously. His further contention is that though there is no specific averment that Defendant No. 2 and 3 benefited from the placing of purchase orders by the Plaintiff, an inference must be drawn by this Court that Defendant no. 2 being the manufacturer of the goods in question, would have benefited from the purchase orders placed by the Plaintiff upon its distributors.
17. I am afraid that the aforementioned contentions of Ld. Counsel for Plaintiff cannot be accepted. In view of the judicial dicta laid down by the Hon'ble Supreme Court in Union of India (supra), it is to be held that the suit as it stands now is not maintainable under Section 70 of the Indian Contract Act, for there are no specific averments made by the Plaintiff in the suit to constitute a successful cause of action as envisaged by the provisions of the said Section.
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The averments being pointed out by the Ld. Counsel for Plaintiff cannot at all be interpreted to hold that the ingredients of Section 70 of the Contract Act are attracted to the facts of the present case. It will be relevant at this stage to note the material averments made by the Plaintiff in its suit. As narrated herein above, (reference be made to para no. 6 of this judgment), it is the own case of the Plaintiff that in the normal course of transaction, it being the reseller of Defendant No. 2 would have never placed a purchase order for any goods upon the distributor of Defendant No. 2, unless a customer had placed a purchase order for the said goods upon it. In other words lawfully, the Plaintiff firstly would have to have a customer of its own who would place a purchase order upon it and only thereafter the Plaintiff would have placed the corresponding order upon a distributor of Defendant No. 2. To explain why it chose not to follow this course of action in the present case, the Plaintiff has sought to plead that it did so at the behest of Defendant No. 2 and 3. According to the averments made in this respect, though NICSI had not placed any orders upon Defendant No. 1, the said Defendant who was also a reseller like the Plaintiff, at the instance of Defendant No. 2 and 3 had placed 03 purchase orders upon M/s Arrow, one of the distributors of Defendant No. 2 for a total amount of Rs. 1,05,27,188.57/- but that M/s Arrow was refusing to deal with Defendant no. 1 and that is when Defendant No. 3, on behalf of Defendant No. 2 asked the Plaintiff to step in. At this stage, it will be relevant herein to reproduce the necessary averments made by the Plaintiff in this respect in para 7 of the plaint.
7. Since M/s Arrow Enterprise Computing Solutions India Pvt. Ltd. had some payment issues with Defendant No. 1, it therefore, refused to carry out the said transaction. The Defendant No. 3, on behalf of Defendant No. 2 as its agent, therefore approached the Plaintiff to carry out the aforementioned transaction along with another transactions. Defendant No. 3 assured the Plaintiff that the transactions shall be completed in the next 60 days and apart from the payment terms being back to back, the Plaintiff will be paid appropriate profit margin as well as finance cost......... The Plaintiff CS (Comm.) No. 1293/18 F1 Infotech Pvt. Ltd. Vs. Omnitel Technologies Pvt. Ltd. & Ors Page 18 of 27 ANU Digitally signed by ANU GROVER GROVER BALIGA Date: 2025.05.29 BALIGA 15:38:43 +0530 considering the business relations between the parties agreed to the same. ........
Now though the aforementioned averments show that according to the Plaintiff it had acceded to the request of Defendant No. 3 only because it wanted to maintain its business relations with Defendant No. 2 (the same can be interpreted to hold that the Plaintiff did infact therefore act gratuitously vis a vis Defendant No 2 and 3), the question to be considered is that whether or not it did so lawfully. In this respect, it is to be noted that in the legal notice issued by the Plaintiff to the Defendants, (the same has been filed alongwith the plaint), it is the assertion of the Plaintiff that Defendant No. 2 and 3 had inside information of goods required by NIC / NICSI and therefore without waiting for the said Government Department to actually place orders, they made their resellers place orders upon their distributors for the said goods. At this stage, it will be relevant to reproduce para 4 of the legal notice issued by the Plaintiff to the Defendant No. 2 and 3:-
4. Acting on behalf of the Noticee No. 1, you the Noticee No. 6, agreed to take ownership of these transactions and assured our client that the transactions shall be completed in the next 60 days and apart from the payment terms being back to back, our Client will be paid appropriate profit margin as well as finance cost. Our Client considering the business relations between the parties agreed to the same despite wafer thin margins and thus on 20.03.2015, you the Noticee No. 6, acting on behalf of the Noticee No. 1, sent an email to our Client attaching the purchase orders to be placed by our Client upon M/s Arrow and M/s Texonic Instruments (another distributor of you the Noticee No. 1) despite having not received any purchase order from NICSI. This demonstrates the Advocates & Legal Consultants insider information of NIC/NICSI available with you the Noticees that while no purchase order had been placed, you continued to carry out the transaction in relation to Government of India orders (with exact quantity and part codes) and thus is sufficient proof in itself for initiation of investigation against you the Noticees under the Prevention of Corruption Act (POCA), 1988 as well as your parent company M/s. Check Point Software Technologies Inc. under the Foreign Corrupt CS (Comm.) No. 1293/18 F1 Infotech Pvt. Ltd. Vs. Omnitel Technologies Pvt. Ltd. & Ors Page 19 of 27 ANU Digitally signed by ANU GROVER GROVER BALIGA Date: 2025.05.29 BALIGA 15:38:50 +0530 Practices Act (FCPA), 1977 in as much as there are prima facie material to establish that at the behest of you the Noticees, material relating to Government orders (with exact quantity and part codes) were placed prior to the Government actually placing orders on any of your resellers and thus you the Noticees have indulged in unfair practices for procuring and retaining business for your parent company M/s. Check Point Software Technologies Inc. The aforementioned assertions of the Plaintiff show that the Plaintiff itself was of the opinion that what the Defendant No. 2 and 3 were allegedly requesting him to do, was not in accordance with law and yet it went ahead and carried out the transactions as requested by the Defendant No. 2 and 3, to earn profits from sale of goods to Defendant No. 1. At this stage, it would also be relevant to take note of the written statement filed on record on behalf of Defendant No. 1 and the replication filed by the Plaintiff thereto. The said pleadings make it clear that Defendant No 1 was an empaneled partner of NICSI and that NICSI used to purchase software / licenses only through Defendant No. 1 and the Plaintiff, not being on the panel of partners of NICSI, could have never received a direct purchase order from NICSI. Despite this, apart from placing orders upon M/s Arrow to sell the same to Defendant No. 1, it is the own case of the Plaintiff, it also placed two other purchase orders for a total amount of Rs. 98,91,679.52/- upon another distributor of the Defendant No. 2, namely M/s Texonic Instruments and a purchase order for Rs 4,36,234.32/-
upon a third distributor of Defendant No. 2, namely M/s ITecSys. Admittedly M/s Texonic Instruments and M/s ITecSys had no payment issues with Defendant No. 1 and yet the Plaintiff went ahead to place purchase orders upon them, for its anticipated end customer NICSI (the purchase orders placed on record by the Plaintiff itself reflects that according to the Plaintiff the end customer would be NICSI). It is thus apparently clear from such assertions of the Plaintiff itself that the reason for the Plaintiff to place all the aforementioned purchase orders was only and only to earn profit, even if the placing of the said CS (Comm.) No. 1293/18 F1 Infotech Pvt. Ltd. Vs. Omnitel Technologies Pvt. Ltd. & Ors Page 20 of 27 Digitally signed ANU by ANU GROVER GROVER BALIGA BALIGA Date: 2025.05.29 15:38:57 +0530 purchase orders was not entirely in accordance with law/business practices. Such kind of acts on behalf of the Plaintiff can only be stated to be speculative acts done to earn profit and therefore in the considered opinion of this Court, if the transactions entered by the Plaintiff did not materialize into profits for it, it cannot be allowed to turn around and demand from Defendant No. 2 and 3, the losses suffered by it by taking aid of the provisions of Section 70 of the Indian Contract Act. The judicial dicta relied upon by Ld. Counsels for Plaintiff does not at all come to the aid of the Plaintiffs. In Mahanagar Telephone Nigam's case (supra-the judgment cited by Ld. Counsels for Plaintiff), while explaining the provisions of Section 70 of the Indian Contract Act, the Hon'ble Supreme Court has made it clear that the juristic basis of the obligation, in cases where compensation is being sought under Section 70 of the Indian Contract Act, is founded on a quasi contract or restitution. In the very same judgment the Hon'ble Supreme Court has taken note of cases where a Government Agency, without following the mandate of Section 175 (3) of the Government of India Act, made contractors render their services to it and then refused to pay for the said services on the ground that there was no valid contract executed in favour of the contractors. It has been observed by the Hon'ble Supreme Court that it is in such cases that provisions of Section 70 of the Indian Contract Act can be invoked to give relief to the contractors, for though there was no valid contract executed in their favour, they were entitled to be compensated for their services rendered to the Government Agency. Clearly, in the present case there are no services that the Plaintiffs can stated to have rendered to Defendants No. 2 and
3. In the considered opinion of this Court, the mere fact that the Plaintiff at the behest of Defendant No. 2 and 3 placed purchase orders upon the distributor of Defendant No. 2, in anticipation of earning profits, cannot entitle them to seek any compensation from these Defendants, by invoking the provisions of Section 70 of the Contract Act.
CS (Comm.) No. 1293/18 F1 Infotech Pvt. Ltd. Vs. Omnitel Technologies Pvt. Ltd. & Ors Page 21 of 27 ANU Digitally signed
by ANU GROVER
GROVER BALIGA
Date: 2025.05.29
BALIGA 15:39:04 +0530
18. Further the contention of Ld. Counsel Sh. Gogna that even in the absence of any pleadings, this Court must grant an opportunity to the Plaintiff to step into the witness box to depose that the Defendant No. 2 and 3 had orally assured the Plaintiff that it would be duly compensated for the purchase orders placed by it and therefore had not acted gratuitously, cannot at all be accepted. It is well settled law that in a civil case no party can be allowed to lead evidence beyond pleadings. In the entire plaint, there is not a whisper that the Defendant No. 2 and 3 at any time assured the Plaintiff that if they were unable to arrange end customers for the aforementioned goods, it is they who will compensate the Plaintiff for placing the purchase orders. The next contention of Ld. Counsel Sh. Gogna, the fact that the Plaintiff has pleaded that Defendant No. 2 was a manufacturer of goods must be sufficient for this Court to assume that Defendants No. 2 and 3 benefited from the act of the Plaintiff in placing purchase orders upon their distributors and therefore compensate the Plaintiff, also cannot be upheld. He has submitted that it is an admitted case between the parties that Defendant No. 2 is the Original Equipment Manufacturer (OEM), who is doing business in India through its channel partners which included the Plaintiff and the Defendant No. 1 and that all the transactions were initiated by Defendant No. 2, with its partners only serving as conduits. He therefore submits that the said factual position should lead to an inference that it is only the Defendant No. 2 which would have benefited from the placing of purchase orders by the Plaintiff upon the distributors of Defendant No. 2. In the considered opinion of this Court, the said contention of Ld. Counsel cannot be accepted. There is no material placed on record by the Plaintiff for the Court to make such an assumption. In the absence of any pleadings or documents to the said effect, this Court cannot presume that the relationship between Defendant No. 2 and its distributors was such that the Defendant No. 2 would be earning profit only if its distributors could sell the goods manufactured by Defendant CS (Comm.) No. 1293/18 F1 Infotech Pvt. Ltd. Vs. Omnitel Technologies Pvt. Ltd. & Ors Page 22 of 27 ANU Digitally signed by ANU GROVER GROVER BALIGA Date: 2025.05.29 BALIGA 15:39:12 +0530 No. 2 and that the placing of purchase orders by the Plaintiff upon the distributors of Defendant No. 2 benefited Defendant No. 2. Admittedly the Plaintiff has also earned some profits from the sale of software / services to Defendant no. 1 and also with respect to the purchase orders that it placed upon M/s Texonic Instruments and it is only assertedly with respect to goods worth Rs. 30,31,044.04/-, that it could not earn any profits.
19. In view of the discussion hereinabove, this Court is of the considered opinion that in view of the judicial dicta laid down by the Hon'ble Supreme Court in Union of India's case (supra), the Plaintiff cannot be allowed to contend that it is entitled to compensation from Defendant no. 2 and 3 on the basis of the provisions of Section 70 of the Indian Contract Act.
20. At this stage, it would also be relevant to mention that at the fag end of final arguments, Ld. Counsel for Plaintiff Sh. Gogna had sought to alternatively argue that infact there was an oral contract between the parties and that in consideration of the Plaintiff placing purchase orders upon the distributors of Defendant No. 2 and 3, they had undertaken to arrange for end customers for the Plaintiff. He has submitted that there was no requirement that such a contract had to be in writing and that therefore on the basis of this oral contract between the parties, this Court must allow the Plaintiff to prove that the Defendant committed breach of this contract and is therefore liable to pay damages to the Plaintiff. He has sought to submit that the licenses given by the distributor of Defendant No. 2 to the Plaintiff, alongwith the software / computer related goods, had expired in the year 2015 itself, for their validity was only for a term of one year and that therefore the Plaintiff could not have resold the software / computer related goods to any third party and thus there is no merit in the contention of the Ld. Counsel for Defendant Sh. Arora that the Plaintiff should have taken steps to mitigate the losses suffered by it. He CS (Comm.) No. 1293/18 F1 Infotech Pvt. Ltd. Vs. Omnitel Technologies Pvt. Ltd. & Ors Page 23 of 27 Digitally signed ANU by ANU GROVER GROVER BALIGA BALIGA Date: 2025.05.29 15:39:19 +0530 therefore has contended that this Court must frame an issue regarding the losses suffered by the Plaintiff due to the breach of the oral contract by the Defendants 2 and 3 and allow the Plaintiff to lead evidence to prove that the licenses purchased by him had expired in the year 2015. In support of his contention that an oral contract is valid in the eyes of law, he has relied upon the judgment of the Hon'ble Supreme Court pronounced in the case titled and reported as Aloka Bose v. Parmatma Devi & Ors., (2009) 2 Supreme Court Cases 582.
21. In the considered opinion of this Court though there is no doubt that an oral contract is valid in the eyes of law, it is to be noted that in the entire plaint there are no averments regarding the existence of an oral contract between the parties. At the cost of repetition, it is to be noted that it is not even the averment of the Plaintiff that apart from assuring the Plaintiff that it would earn profits eventually, the Defendant No. 2 or 3 at any point of time had assured the Plaintiff that they would be arranging end customers for the goods that the Plaintiff had placed the purchase orders for. There are no averments whatsoever that in consideration of the Plaintiff placing purchase orders upon the distributors of Defendant No. 2, there existed any corresponding obligation to be performed by Defendant No. 2. The averments of the Plaintiff itself is that it would have earned profits eventually by selling the software / licences to the end customers to be provided by Defendant No. 2 and 3. Even in the various mails assertedly written by the Plaintiff to Defendant No. 2 and 3 and placed on record there is not a whisper that the Plaintiff informed these Defendants that the software / licenses purchased by the Plaintiff at their behest is lying unsold and that since the Defendant No. 2 and 3 have failed to provide end customers to the Plaintiff, they should compensate the Plaintiff for the asserted losses that it has suffered. All that the Plaintiff has averred in the said mails is that Defendant No. 2 and 3 must intervene to close the transactions of the Plaintiff CS (Comm.) No. 1293/18 F1 Infotech Pvt. Ltd. Vs. Omnitel Technologies Pvt. Ltd. & Ors Page 24 of 27 Digitally signed ANU by ANU GROVER GROVER BALIGA BALIGA Date: 2025.05.29 15:39:30 +0530 with Defendant No. 1. Similarly in the legal notice issued by the Plaintiff to the Defendant No. 2 and 3 all that has been asked from Defendant No. 2 and 3 is that they should intervene between Plaintiff and their distributors and close the transactions initiated by the Plaintiff with Defendant No. 1 and the distributors of Defendant No. 2. According to Ld. Counsels for Plaintiff, the wordings of the said mails and legal notices reflect that the Plaintiff was demanding the Defendant No. 2 and 3 to provide end customers to it and hence, close the transactions. They however fairly concede that there is no averment whatsoever made by the Plaintiff that the software / licenses purchased by it are getting expired and that therefore the Defendants must compensate the Plaintiff. In such view, on the basis of the material on record, the Plaintiff cannot be permitted to contend that this Court must frame an issue regarding the expired licenses of the softwares purchased by the Plaintiff at the behest of the Defendant no. 2 and 3. It is being rightly contended by Sh. Arora that in the absence of any pleadings whatsoever with respect to the expiration of the validity of the licenses of the software purchased by the Plaintiff, there is no question of this Court framing any issues as being contended by Ld. Counsel Sh. Gogna.
22. There is also another reason why the Plaintiff cannot be allowed to continue with this suit. It is to be noted that there are no documents whatsoever placed on record by the Plaintiff to show that it, on the basis of the purchase orders placed by it upon the distributors of Defendant No. 2, namely M/s Arrow and M/s ITecSys, did receive the goods so ordered and made payments thereon. It is not disputed by the Ld. Counsels for Plaintiff that pursuant to the purchase orders placed by the Plaintiff upon the aforementioned two distributors, the said two distributors would have raised invoices for the goods sold by them to the Plaintiff and thereafter, the Plaintiff would have made payment against the said invoices. Now, there is not a whisper in the entire plaint about such invoices CS (Comm.) No. 1293/18 F1 Infotech Pvt. Ltd. Vs. Omnitel Technologies Pvt. Ltd. & Ors Page 25 of 27 ANU Digitally signed by ANU GROVER GROVER BALIGA Date: 2025.05.29 BALIGA 15:39:50 +0530 being raised. Initially, the plaintiff had not even bothered to file documents reflecting as to how it had made payments against the purchase orders asserted by it and it is only during the course of arguments on the present application, that an application under Order XI Rule 12 CPC was filed seeking permission to place on record, a Statement of Bank Account of the Plaintiff in support of the contention that payments were infact made by the Plaintiff to the aforementioned two distributors of Defendant No. 2. Though, as per the Plaintiff, it had purchased goods worth Rs. 25,94,809.72 from M/s Arrow, against a purported invoice (copy of the same was not sought to be filed even alongwith the said application), the Statement of Bank Account filed on behalf of the Plaintiff nowhere reflects the payment of this exact amount to the said distributor. According to Ld. Counsel for Plaintiff, part payments were made by the Plaintiff in this respect and he has sought to contend that during trial the Plaintiff will explain the manner in which the said payments were made. It is also relevant to mention herein that in the entire plaint there is no explanation as to how the cause of action with respect to the aforementioned invoices and payments is within the period of limitation. Ld. Counsels for Plaintiff have again sought to contend that the issue of limitation may also be decided after the Plaintiff is allowed to lead evidence. It is unacceptable that in a suit filed under the Commercial Courts Act such an approach is sought to be adopted by the Plaintiff which is a Private Limited Company. Clearly the Plaintiff does not have in its possession invoices against which it made the payments of Rs. 25,94,809.72 and Rs. Rs. 4,36,234.32/- to M/s Arrow and M/s. ITeSys respectively; it does not have the proof of delivery of these goods and yet it wants this Court to go ahead with the trial of this case. In the considered opinion of this Court, the Plaintiff cannot be permitted to do so. In 'Su-Kam Power Systems Ltd. Vs. Kunwer Sachdev and Another, 2019 SCC Online Del 10764, the Hon'ble Delhi High Court has held that the intent behind incorporating the CS (Comm.) No. 1293/18 F1 Infotech Pvt. Ltd. Vs. Omnitel Technologies Pvt. Ltd. & Ors Page 26 of 27 ANU Digitally signed by ANU GROVER GROVER BALIGA Date: 2025.05.29 BALIGA 15:39:58 +0530 summary judgment procedure in the Commercial Court Act, 2015 is to ensure disposal of commercial disputes in a time-bound manner and that in fact, the applicability of Order XIIIA, CPC to commercial disputes, demonstrates that the trial is no longer the default procedure/norm. It has further observed that where the Court comes to the conclusion that the defendant has no real prospects of successfully defending the claim and there is no other compelling reason why the claim should not be disposed of before recording of oral evidence, the Court must pronounce judgment. It has been further held that the expression "real" directs the Court to examine whether there is a "realistic" as opposed to "fanciful" prospects of success. In the present case, in view of the detailed discussion hereinabove, this Court is of the considered opinion that there is no prospect of the Plaintiff succeeding in its claim against Defendant No. 2 and 3. This Court thus finds no reason whatsoever to put the present case on trial. As such, the application filed by Defendant No. 2 u/s XIII-A CPC stands allowed and the suit of the Plaintiff is hereby summarily dismissed. There are no orders as to costs.
This file be consigned to Record Room.
ANU Digitally signed
by ANU GROVER
GROVER BALIGA
Date: 2025.05.29
Announced in the open court BALIGA 15:40:07 +0530
on 26th May, 2025. (Anu Grover Baliga)
District Judge (Commercial Court-04)
South-East/Saket Court
New Delhi
CS (Comm.) No. 1293/18 F1 Infotech Pvt. Ltd. Vs. Omnitel Technologies Pvt. Ltd. & Ors Page 27 of 27