Delhi District Court
M/S. Sav Engineers Pvt. Ltd vs Easun Reyrolle Ltd on 15 December, 2018
SAV Engineers V. Easun Reyrolle Ltd.
IN THE COURT OF SH. ARUN SUKHIJA,
ADDITIONAL DISTRICT JUDGE - 07, (CENTRAL DISTRICT)
TIS HAZARI COURTS, DELHI.
SUIT NO.: 97/2011
UNIQUE CASE ID NO.: 612180/2016
IN THE MATTER OF
M/s. SAV Engineers Pvt. Ltd.
(Through its Managing Director)
A71/2, 1st Floor, Hari Nagar,
Ashram, Mathura Road,
New Delhi14. ...Plaintiff
Versus
Easun Reyrolle Ltd.
Through its Managing Director,
29/12, Ground Floor,
East Patel Nagar, New Delhi8.
Also at:
389, Rasukumaki,
Benerghatta Road, Bangalore, 560076
Also at:
6th Floor, Temple Tower,
672, Anna Salai, Nandanam,
Chennai - 600035. ...Defendant
Suit No. 97/2011 Page 1 of 39
SAV Engineers V. Easun Reyrolle Ltd.
SUIT FOR RECOVERY FOR A SUM OF RS.16,64,795/
WITH PENDENTE LITE AND FUTURE INTEREST @
18% P.A.
Date of institution of the suit : 21.11.2011
Date on which Judgment was reserved : 22.11.2018
Date of Judgment : 15.12.2018
JUDGMENT
By way of present judgment, this court shall adjudicate suit for recovery of Rs.16,64,795/ with pendente lite and future in terest @ 18% p.a. filed by the plaintiff against the defendant.
CASE OF THE PLAINTIFF AS PER PLAINT Succinctly, the necessary facts for just adjudication of the present suit, as stated in the plaint, are as under:
(i) The plaintiff is running the business of trading of Elec trical equipments and articles and turnkey job work of Installation and Commissioning of electrical items/ goods etc.
(ii) The defendant is engaged and running the business of manufacturing PrePaid/ PostPaid Automatic Meter Reading Systems (AMRs). The AMR System interalia in cludes single phase/ three phases Dual Source Energy Meter with inbuilt Power Line Carrier Communication (PLCC) Modem, Data Concentrator Unit (DCU) with in Suit No. 97/2011 Page 2 of 39 SAV Engineers V. Easun Reyrolle Ltd.
built disconnector & PSTN Model and AMR software Prepaid/ Postpaid.
(iii) Upon the demand of its customers for supply of PrePaid AMR Systems, the plaintiff approached the defendant and inquired about the detailed specifications of the Pre Paid AMR Systems from it. The Defendant provided the following major specifications in the PrePaid AMR Sys tems apart from others:
(a) Power Line Carrier Communication (PLCC), Technology to download the reading of energy meter located or over the complex from a cen tralized location in place of lying of control ca bles.
(b) The Energy Meter to record Consumption of en ergy from dual sources i.e. EB & DG with PLCC and with automatic disconnection and connec tion facility.
(c) ISI marked Energy Meters, Dual Register Single Phase/ Three Phases, direct reading up to 60 amps with inbuilt 60 amps. DisConnector.
(d) The software to automatically calculate all types of tariffs and to generate monthly bills based on actual energy consumption from both energy sources, to integrate monthly charges, common Suit No. 97/2011 Page 3 of 39 SAV Engineers V. Easun Reyrolle Ltd.
area monthly charges, automatically read en ergy meters, consumer indexing, records of pay ments made and automatic connection and dis connection of energy supply, programmable load restriction for DG and utility supply with automatic overload cut off at predefined limits and time to use etc.
(e) Dual concentrator Unit (DCU) to store Data of all the meters and to record disconnection and connection signals, Remote Display Unit.
(iv) The plaintiff was informed by the representative of de fendant that complete commissioning of the AMR Sys tems at the site of the actual energy consumers shall also be done by Easun Reyrolle Ltd. alone in strict ad herence of the abovesaid specifications. The plaintiff was satisfied with the specifications in AMR systems pro vided by defendant, as the customers of plaintiff had de manded the prepaid AMRs with the same specifica tions. The plaintiff was also convinced with the price of the meters, as quoted by the defendant.
(v) Relying upon the specifications provided by Defendant and believing the assurances extended by defendant company, the plaintiff approached its customers and convinced his customers about the quality and accuracy etc. of defendant's prepaid AMR Systems and quoted Suit No. 97/2011 Page 4 of 39 SAV Engineers V. Easun Reyrolle Ltd.
them price of the meters. The customers of the plaintiff placed several purchase orders of the meters and other equipments to the plaintiff. Acting on the assurances and specifications of defendant company and in order to supply the material to its customers, the plaintiff placed three purchase orders bearing nos. PO001, PO002 and PO003 all dated 07.10.2008 to defendant for supply of ISI marked three phase, dual source energy meters, DCU (PSTN) and PrePaid AMR Software with SMS alert. The details of the said purchase orders are given below: PO001: 25 Units of ISI Marked Three Phase, Dual Source Energy Meter (PLCC) at the rate of Rs. 4700/ per unit DCU (PSTN) 1 unit, at the rate of Rs. 27,050/; PrePaid AMR Software with SMS Alert for Low Credit 1 number, at the rate of Rs.1,00,000/.
PO002: 150 Units of ISI Marked Three Phase, Dual Source Energy Meter (PLCC) at the rate of Rs.4700/ per unit.
DCU (PSTN) 1 unit, at the rate of Rs.27,050/ PrePaid AMR Software with SMS Alert for Low Credit 1 number, at the rate of Rs.2,00,000/.
PO003: 50 Units of ISI Marked Three Phase, Dual Source Energy Meter (PLCC) at the rate of Rs.4700/ per unit.
Suit No. 97/2011 Page 5 of 39SAV Engineers V. Easun Reyrolle Ltd.
DCU (PSTN) 1 unit, at the rate of Rs.27,050/ PrePaid AMR Software with SMS Alert for Low Credit 1 number, at the rate of Rs.1,00,000/.
(vi) In pursuance of the aforesaid purchase orders, defen dant delivered 175 Dual Source Energy Meters and 2 numbers of DCU to plaintiff at Delhi and raised invoices for the same. Plaintiff had placed purchase orders for 225 Dual Source Energy Meters, 3 numbers of DCU and prepaid AMR Software for all the systems. However, defendant failed to supply the items, as ordered by plaintiff and supplied less in numbers and incomplete systems to plaintiff. Though defendant delivered meters and DCU to plaintiff but failed to provide the prepaid software with SMS Alert and promised that it will be provided and commissioned later on.
(vii) The Prepaid AMR systems were purchased by Plaintiff to be installed and commissioned at different locations/ sites of M/s. Vatika Ltd., M/s. Rishab Platinum and M/s. Reliant Infratech i.e. customers of Plaintiff. After taking delivery of sealed/ packed goods from the Defen dant, the plaintiff supplied the meters & DCU's in the same condition to his respective customers as per their requirements.
(viii) Soon after the delivery of goods to M/s. Vatika Ltd., it discovered that some of the meters supplied to it were Suit No. 97/2011 Page 6 of 39 SAV Engineers V. Easun Reyrolle Ltd.
defective and were not displaying electricity consump tion reading. Plaintiff intimated the defendant about the said fault and requested defendant to replace the defec tive meters but to no avail.
(ix) The defendant's engineers visited the site of M/s.
Rishabh Platinum and revealed that the meters in ques tion were not having automatic inbuilt disconnection and reconnection feature. Upon this, M/s. Rishabh Platinum returned all 100 meters supplied to it for being below specifications claimed and assured by defendant at the time of purchase of the meters. Immediately plaintiff informed the defendant that there is no auto matic inbuilt disconnection and reconnection feature in the said meters and the same has been returned to plaintiff on account of this fault. With great pursuance, plaintiff managed to send M/s. Rishabh's consignment of 100 prepaid AMR Systems to defendant for incorpo rating the inbuilt disconnector/ reconnector therein but to the shock and surprise of the plaintiff, defendant again sent the meters after incorporating a relay therein and defendant engineers informed the plaintiff that au tomatic inbuilt disconnector and reconnector is noth ing but a relay which will give command to an external device (MCCB) with the help of operator. Plaintiff felt completely cheated by the defendant company. When Suit No. 97/2011 Page 7 of 39 SAV Engineers V. Easun Reyrolle Ltd.
M/s. Vatika Ltd., which was already dissatisfied due to faulty meters, came to know that the meters supplied to it are not equipped with automatic inbuilt disconnec tion and reconnection feature, it cancelled its purchase order vide letter dated 27.07.2009, rejected and re turned the material supplied to it. The plaintiff was compelled by its customer to take back the consign ment. The defendant not only failed to rectify/ replace the faulty meters with automatic inbuilt disconnector and reconnector but also failed to install prepaid AMR software with SMS alert in any of the meters supplied to aforesaid customers of plaintiff. All telephonic as well as electronic requests of plaintiff to provide prepaid AMR Software went in vain and defendant kept on making false promises that defendant will meet its commitments as soon as possible.
(x) After great persuasion, defendant installed the prepaid software at M/s. Rishab Platinum's site in November 2009, however, again the installation of the software was defective and incomplete as defendant did not install most important and inevitable feature of automatic dis connection, reconnection, when DG set supply starts & preset limits exceeds the load. Even the prepaid soft ware did not work at Rishab's site and also did not gen erate electricity bills. Plaintiff made several requests to Suit No. 97/2011 Page 8 of 39 SAV Engineers V. Easun Reyrolle Ltd.
the defendant to rectify the defects, to make the prepaid software workable and enable the automatic disconnec tion and reconnection feature and complete the installa tion and commissioning but defendant did not pay any heed to the requests made by plaintiff. Due to the defec tive meters, deficiency in service and breach of contract on defendant part M/s. Rishab Platinum also returned 100 meters and 2 DCU to plaintiff. As the defendant failed to supply complete AMR system including Prepaid AMR software, plaintiff vide emails dated 04.01.2010, 13.01.2010 and 16.01.2010 requested the defendant to take back all its material and to make the arrangement for refund of the amount paid by the plaintiff to the de fendant but the defendant did not refund the amount to plaintiff.
(xi) The plaintiff has made payment of Rs.6,65,911.00 to wards the cost of 125 meters @ Rs.5189.00 which in cluded the basic price i.e. Rs.4700/ per unit of the goods as well as applicable taxes thereupon. The plain tiff has further made payment of Rs.61,880.00 to the de fendant towards the cost and taxes upon 2 DCUs. Since the 175 meters and 2 DCUs supplied by defendant are defective and worthless without the prepaid AMR soft ware and because of other reasons, therefore, said mate rial was returned by the customers of plaintiff to the Suit No. 97/2011 Page 9 of 39 SAV Engineers V. Easun Reyrolle Ltd.
plaintiff and the said returned material is still lying with the plaintiff. The defendant is liable to refund the amount of Rs.7,27,791/ along with interest, it has re ceived in lieu of the cost of 125 Meters and 2 DCU and it is further liable to take aware the aforesaid meters & DCU from the office of plaintiff after clearing its entire li ability towards the plaintiff.
(xii) The payment was made by the plaintiff to the defendant under a commercial transaction and despite making payment, the plaintiff was compelled to pay again for new meters from a different company, therefore, the plaintiff becomes entitled for interest @ 18% p.a. on the said sum of Rs.7,27,791/ from 06.05.2009 i.e. the date of making last payment to the defendant of the value of the material in question till 06.10.2011, which comes to Rs.10,44,379/. The plaintiff is further entitled for pen dente lite and future interest @ 18% p.a. from the defen dant.
(xiii) The plaintiff purchased complete prepaid AMR system along with its software as well as automatic inbuilt con nection and disconnection feature in meter from M/s. Superior Products Industries @ Rs.6834/ per unit. The plaintiff had paid a sum of Rs.6,65,911/ to the defen dant as the consideration amount of 125 units. The plaintiff was compelled to purchase meters from third Suit No. 97/2011 Page 10 of 39 SAV Engineers V. Easun Reyrolle Ltd.
party at the risk and costs of the defendant and paid a sum of Rs.8,54,250/ towards the cost of 125 units. Therefore, apart from the nonrefund of the hard earned money of the plaintiff by the defendant paid to it as con sideration amount of 125 units, the plaintiff had to bear extra burden for a sum of Rs.1,88,339/ for those 125 units for which he had already made the complete pay ment.
(xiv) The plaintiff believed that the goods supplied by the de fendant are good and as per the specifications and therefore, the plaintiff further supplied the same to its customers. The customers of the plaintiff also relied upon the assurance extended by the defendant and after incurring huge costs, got the said meters installed at their respective premises. However, subsequent to the installation of the said meters at the premises of the customers of the plaintiff, the engineers of the defendant visited the premises and tried its level best to make the meters in question operative but to no results. There fore, the customers of the plaintiff uninstalled the said defective meters and demanded fresh meters of the good quality and standard equipped with aforesaid specifica tions. Consequently, the plaintiff was compelled to pur chase the fresh meters at higher price and also bore the expenses of their installation at the premises of his cus Suit No. 97/2011 Page 11 of 39 SAV Engineers V. Easun Reyrolle Ltd.
tomers. The plaintiff incurred expenses to the tune of Rs.2,32,077/ towards the installation charges of the fresh meters at the premises of his customers. The plaintiff has suffered mental agony, harassment, loss of business, loss of good will and business relations on ac count of supply of defective goods by the defendant. The plaintiff is entitled for damages of Rs. 2,00,000/ from the defendant on account of mental agony, harassment, loss of business, loss of good will and business relations. The plaintiff is entitled for recovery, details of which is given below: Details Amount in Rupees Refund of cost of 125 Meters and 2 DCUs 1044379/ i.e. Rs.7,27,791/ along with an interest @ 18% p.a. on the said sum from 06.05.2009 i.e. the date of making last payment to the defendant of the value of the material in question till 06.10.2011.
Damages caused in the form of difference of 188339/ price born by plaintiff in purchasing fresh 125 units of meters for which defendant had already received the complete payment. Expenses incurred by plaintiff towards the 232077/ installation charges of the fresh meters at the premises of his customers.
Damages of on account of mental agony, ha 200000/ rassment, loss of business, loss of good will and business relations.
Total 1664795/ Suit No. 97/2011 Page 12 of 39 SAV Engineers V. Easun Reyrolle Ltd.
CASE OF THE DEFENDANT AS PER WRITTEN STATEMENT Summons for settlement of issues were issued to the de fendant and the defendant has filed the written statement. Suc cinctly, the case of the defendant is as under:
(a) The plaintiff has not come with clean hands and has sup pressed the material facts from this Court. The present suit is against the rules and objectives of the contract entered by the parties in terms of the Indian Contract Act, 1872, as amended up to date. The present suit is false and frivolous and has been filed with malafide intention to cheat the defendant by il legal means and with motto to harass the defendant. The suit has not been properly verified and drafted, as per rules of Hon'ble High Court of Delhi. This Court has no territorial ju risdiction to entertain and decide the present suit.
(b) The defendants are in the trade of manufacture, supply and providing the technical solutions for Automatic Meter Reading (AMR) Systems, however, in the Power Line Carrier Communi cation (PLCC) based AMR, the defendant provides facility only upto the capacity of 40 Amps and the mail of the plaintiff dated 23022009 had specifically required the internal dis connectors up to 40 Amp inbuilt in PLCC meters. The defen dant is not responsible and related with the parties/ clients/ customers of the plaintiff. The basic rule of privities of con tract does not attract any obligation of the defendant to any contract which is done by the plaintiff with the third parties/ Suit No. 97/2011 Page 13 of 39 SAV Engineers V. Easun Reyrolle Ltd.
clients/ customers and its associations. The defendant is legally obliged for the performance of the contracts and honor the commitments made with the plaintiff only.
(c) Two purchase orders placed by the plaintiff having both dated 07/10/2008 and the offer of the defendant dated 19/02/2009 thereupon; are the only contracts between the plaintiff and the defendant and were absolutely performed by the defen dant. The orders placed by the plaintiff vide order no. PO 001, PO002 and PO003, all dated 07/10/2008 were prop erly and completely executed by the defendant simultane ously, however, the plaintiff had the payment of the bills of or der of 1 and 2 orders and intentionally has not made the pay ment of order PO003 to the defendant.
(d) The reply cum demand notice of the defendant dated 08/01/2011 in reply to the notice of the plaintiff dated 16/12/2010 had clearly mentioned the demand of balance sum of Rs.2,59,451/ plus penal interest from the plaintiff. Vide para 3 of the reply cum demand notice dated 08/01/2011 of the defendant, it was very well informed to the plaintiff that the defendant was not at all party to the con tract/ subcontracts what the plaintiff had entered upon with their agents/ customers. The privities of contract do not per mit the plaintiff to interfere or to be legally obliged for the per formance of such contracts. Whatever supply and at which ever site either owned by the plaintiff or its clients/ customers was made only to honour the contract of the plaintiff and the Suit No. 97/2011 Page 14 of 39 SAV Engineers V. Easun Reyrolle Ltd.
defendant inter se and directions of the plaintiff from time to time.
(e) Some meters got damaged due to mishandling by the plaintiff and defendant has not directly related with M/s. Vatika Ltd. and the plaintiff was also not interested to pay the balance amount of the defendant.
(f) The allegations have been accepted to the extent that the technical fault may occur in any mechanical product and or part of it, that's why there was always provision in the agree ment for onsite service and repair of the products if anything so reported but having no content in the contract to replace the already delivered products at the site after due inspection and satisfaction of the quality and efficiency of the same by the plaintiff in advance.
(g) The Contract by way of purchase order and the supply / ser vice contract entered into with the plaintiff were in the nature of supplies between principal to principal basis. The contract did not mention that the plaintiff is procuring products and systems as agents and supply to other party. The installation of the meters is the duty of the plaintiff and not of the defen dant. If the plaintiff needed training and demanded the same with the defendant, then the defendant gave the same to the plaintiff and his staff. The plaintiff has not deputed any tech nical staff for the installation. Instead of deputing any staff for installation and providing services to his clients/ cus tomers, the plaintiff stopped the payment of defendant of Suit No. 97/2011 Page 15 of 39 SAV Engineers V. Easun Reyrolle Ltd.
Rs.2,59,451/ and also sent a legal notice to the defendant dated 16/12/2010 which was replied by the defendant on 08/01/2011. In this reply, the defendant cleared all the terms and demanded his balance payment with interest which comes to Rs.3,41,907/ on 08/01/2011.
(h) Till 01/04/2012, the defendant is entitled for counter claim of Rs.4,30,803/ with future interest @ 20% p.a. and Rs.3,00,000/ towards the cost of damages on account of mental agony, harassment, loss of goodwill and business rela tions suffered by the defendant due to the conduct of the plaintiff. The plaintiff wants to take illegal advantage of his own wrongs and actually, he has no technical staff of his own and wants that the manufacturer will do all the things for it without charging any amount for his services. REPLICATION AND ISSUES Plaintiff has filed the replication controverting the allega tions/ contentions in the written statement of the defendant and contents of the plaint have been reiterated and reaffirmed.
From the pleadings of the parties, following issues were framed vide order dated 01/10/2012: ISSUES (1) Whether this court has no territorial jurisdiction to entertain the present suit? OPD (2) Whether the plaintiff is entitled to a decree for a sum of Rs.10,44,379/ towards the cost of 125 Meters and 2 DCU Suit No. 97/2011 Page 16 of 39 SAV Engineers V. Easun Reyrolle Ltd.
inclusive pre suit interest @ 18% p.a. from the defendant? OPP (3) Whether the plaintiff is entitled to a decree for a sum of Rs.4,20,416/ towards the damages for extra cost born on purchase and installation of new meters from the defendant? OPP (4) Whether the plaintiff is entitled to a decree for a sum of Rs.2,00,000/ towards damages on account of mental agony, loss of business, loss of goodwill and business rela tions from the defendant? OPP (5) Whether the plaintiff is entitled for pendentelite and future interest? If yes, at what rate? OPP (6) Relief.
EVIDENCE OF THE PLAINTIFF AND DEFENDANT AND DOCU MENTS RELIED UPON BY THEM:
Plaintiff, in order to prove its case, led plaintiff evidence and got examined Mr. Gagan Deep Ahluwalia, Proprietor of the plaintiff company as PW1. PW1 has filed his evidence by way of af fidavit wherein he reiterated and reaffirmed the contents of the plaint. PW1 was crossexamined by counsel for the defendant. PW 1 in his testimony has relied upon the documents:
1. The extract of Board Resolution dated 08.01.2015 as Ex.PW1/1.
2. The Incorporation Certificate and Memorandum of Association of plaintiff company as Ex.PW1/2 and Ex.PW1/3 respec tively.Suit No. 97/2011 Page 17 of 39
SAV Engineers V. Easun Reyrolle Ltd.
3. Technical proposal for prepaid AMR system as Ex.PW1/4.
4. Certificate issued by the defendant company certifying that the plaintiff is authorized supplier of the defendant as Ex.PW 1/5.
5. Purchase Orders no. PO001, PO002 and PO003 as Ex.PW 1/6, Ex.PW1/7 and Ex.PW1/8 respectively.
6. Letter dated 27/07/2009 as Ex.PW1/9.
7. The electronic correspondences of the plaintiff with defendant as Ex.PW1/10 to Ex.PW1/48.
8. Letter dated 01.12.2012 of M/s. Rishabh as Ex.PW1/49.
9. The emails dated 04.01.2010, 16.01.2010, 15.03.2010 and 08.04.2010 as Ex.PW1/50 to Ex.PW1/53.
10. Invoices, challans and Form VAT D3 as Ex.PW1/54 to Ex.PW1/61 respectively.
11. Tax invoice dated 24.01.2011 issued by Nav Prabhat Electri cals as Ex.PW1/63.
12. Office copy of the legal notice dated 16.12.2010, postal re ceipts as Ex.PW1/65 to Ex.PW1/69 respectively.
13. Reply dated 08.01.2011 as Ex.PW1/70 and
14. Certificate under Section 65B by way of affidavit in this re gard as Ex.PW1/71.
15. Documents Ex.PW1/62 and Ex.PW1/64 were deexhibited being the photocopies and the same were marked as MarkA and MarkB. Suit No. 97/2011 Page 18 of 39 SAV Engineers V. Easun Reyrolle Ltd.
Plaintiff also got examined the summoned witness Mr. Dinesh Kumar Sharma, Manager Accounts of M/s. Prominent Buildcon Pvt. Ltd. as PW2.
The defendant has led defendant evidence and got exam ined Sh. Manjit Singh Juneja as DW1.
The DW1 has filed his evidence by way of affidavit wherein he reiterated and reaffirmed the contents of the written statement. DW1 was crossexamined by counsel for the plaintiff. DW1 in his testimony has relied upon Copy of Special Power of At torney as Ex. DW1/1. The invoices exhibited in the affidavit of DW 1 as Ex.DW1/2 are marked as MarkD1 (Colly.).
This court heard the final arguments as advanced by Ld. counsel for the plaintiff and defendant and perused the material available on record.
ISSUE WISE FINDINGS ISSUE NO.1
1. Whether this court has no territorial jurisdiction to entertain the present suit? OPD Vide order dated 15/02/2016, issue no.1 was decided by the Ld. Predecessor of this Court and for this reason, this requires no adjudication.
ISSUES NO.2 TO 5(2) Whether the plaintiff is entitled to a decree for a sum of Rs.10,44,379/ towards the cost of 125 Meters and 2 DCU inclusive pre suit interest @ 18% p.a. from the defendant? OPP Suit No. 97/2011 Page 19 of 39 SAV Engineers V. Easun Reyrolle Ltd.
(3) Whether the plaintiff is entitled to a decree for a sum of Rs.4,20,416/ towards the damages for extra cost born on purchase and installation of new meters from the defendant? OPP (4) Whether the plaintiff is entitled to a decree for a sum of Rs.2,00,000/ towards damages on account of mental agony, loss of business, loss of goodwill and business rela tions from the defendant? OPP (5) Whether the plaintiff is entitled for pendentelite and future interest? If yes, at what rate? OPP The aforesaid issue Nos.2 to 5 are interrelated and inter connected to each other and accordingly they are decided together. ADMITTED CASE OF PARTIES Plaintiff had placed purchase orders for 225 Dual Source Energy Meters, 3 numbers of DCU and prepaid AMR Software for all the systems and 3 number of AMR Software with SMS alert for low credit. The defendant delivered 175 Dual Source Energy Meters and 2 numbers of DCU to plaintiff at Delhi and raised invoices for the same. The defendant raised the invoice to the tune of Rs.10,31,450/ for supply of aforesaid material as well as 1 number of AMR Software with SMS alert for low credit. During the course of evidence of the Plaintiff and defendant it comes on the record that the Plaintiff paid the defendant a sum of Rs.7,72,000/ approximately. Vide statement dated 01.10.2012 given by the Ld. Counsel for the defendant, the defendant has withdrawn counter claim of Rs.4,30,803/ and Rs.3,00,000/ as prayed in the written Suit No. 97/2011 Page 20 of 39 SAV Engineers V. Easun Reyrolle Ltd.
statement. Thus, the only claims which are left in the present are of the Plaintiff.
FINDINGS AND CONCLUSION OF THE COURT The moot question which arises for consideration is whether the transaction between the plaintiff and defendant was on the principal to principal and further whether goods supplied the defendant were incomplete and defective goods and prepaid AMR software with SMS alert for low credit was essential part for goods which were already supplied by the defendant. The Pleadings of the same are mentioned by the Plaintiff in paras no.9 to 15 of the Plaint and the relevant portion of same are as follows: "9. That Soon after the delivery of goods to M/s. Vatika Ltd., it discovered that some of the meters supplied to it were defective and were not display ing electricity consumption reading. Plaintiff inti mated the defendant about the said fault and re quested defendant to replace the defective meters but to no avail."
"10. That defendant's engineers visited the site of M/s. Rishabh Platinum and revealed that the me ters in question were not having automatic inbuilt disconnection and reconnection feature. Upon this, M/s. Rishabh Platinum returned all 100 meters supplied to it for being below specifications claimed and assured by defendant at the time of purchase of the meters. Immediately plaintiff informed the defendant that there is no automatic inbuilt discon nection and reconnection feature in the said meters and the same has been returned to plaintiff on ac count of this fault. With great pursuance, plaintiff managed to send M/s. Rishabh's consignment of Suit No. 97/2011 Page 21 of 39 SAV Engineers V. Easun Reyrolle Ltd.
100 prepaid AMR Systems to defendant for incor porating the inbuilt disconnector/ reconnector therein but to the shock and surprise of the plaintiff, defendant again sent the meters after incorporating a relay therein and defendant engineers informed the plaintiff that automatic inbuilt disconnector and reconnector is nothing but a relay which will give command to an external device (MCCB) with the help of operator. Plaintiff felt completely cheated by the defendant company."
"11. When M/s. Vatika Ltd., which was already dissatisfied due to faulty meters, came to know that the meters supplied to it are not equipped with au tomatic inbuilt disconnection and reconnection fea ture, it cancelled its purchase order vide letter dated 27.07.2009, rejected and returned the mate rial supplied to it. The plaintiff was compelled by its customer to take back the consignment." "12. That defendant not only failed to rectify/ re place the faulty meters with automatic inbuilt dis connector and reconnector but also failed to install prepaid AMR software with SMS alert in any of the meters supplied to aforesaid customers of plaintiff. All telephonic as well as electronic requests of plain tiff to provide prepaid AMR Software went in vain and defendant kept on making false promises that defendant will meet its commitments as soon as possible."
"13. After great persuasion, defendant installed the prepaid software at M/s. Rishab Platinum's site in November 2009, however, again the installa tion of the software was defective and incomplete as defendant did not install most important and in evitable feature of automatic disconnection, recon nection, when DG set supply starts & preset limits exceeds the load. Even the prepaid software did Suit No. 97/2011 Page 22 of 39 SAV Engineers V. Easun Reyrolle Ltd.
not work at Rishab's site and also did not generate electricity bills. Plaintiff made several requests to the defendant to rectify the defects, to make the prepaid software workable and enable the auto matic disconnection and reconnection feature and complete the installation and commissioning but de fendant did not pay any heed to the requests made by plaintiff."
"14. That due to the defective meters, deficiency in service and breach of contract on defendant part M/s. Rishab Platinum also returned 100 meters and 2 DCU to plaintiff. As the defendant failed to supply complete AMR system including Prepaid AMR software, plaintiff vide emails dated 04.01.2010, 13.01.2010 and 16.01.2010 requested the defendant to take back all its material and to make the arrangement for refund of the amount paid by the plaintiff to the defendant but the defen dant did not refund the amount to plaintiff."
"15. That as per defendant's own specifications, its prepaid AMR Systems cannot become operative and rather useless, if required software is not in stalled therein. Similarly, without inbuilt automatic disconnector and reconnector feature, the defen dant systems became even less effective than ordi nary meters. The defendant failed to supply the requisite software to the plaintiff and to rectify/ re place the faulty meters, which rendered the entire consignment received by plaintiff as inoperative and useless. Apart from this, the defendant sup plied only 2 DCU (PSTN) instead of 3 DCU, as or dered."
The basic pleas of the defendant in the written state ment are: Suit No. 97/2011 Page 23 of 39 SAV Engineers V. Easun Reyrolle Ltd.
(a) The Contract by way of purchase order and the supply / ser vice contract entered into with the plaintiff were in the nature of supplies between principal to principal basis.
(b) The Defendant was not at all party to the contract/ subcon tracts what the plaintiff had entered upon with their agents/customers. The privities of contract do not permit the Plaintiff to interfere or to be legally obliged for the perfor mance of such contract.
(c) In reference to para No. 9 of the Plaint. The defendant had vaguely and evasively denied the said para by stating that the same is wrong, incorrect and denied. However, it is submitted that some meters got damaged due to mishandling by the plaintiff and defendant was not directly related with M/s. Vakita Ltd.
(d) In reference to para No. 10 of the Plaint. The defendant had vaguely and evasively denied the said para by stating that the same is wrong, incorrect and denied. However, it is submitted that the allegation accepted to the extent that the technical fault may occur in any mechanical product and or part of it, that's why there was always provision in the agreement for onsite service and repair of the products if anything so re ported but having no contract to replace the already delivered products at the site after due inspection and satisfaction of the quality and efficiency of the same by the Plaintiff in ad vance.
Suit No. 97/2011 Page 24 of 39SAV Engineers V. Easun Reyrolle Ltd.
(e) In reference to para no.11 to 17, it is mentioned that the same are mere repetition and elaboration of the allegation made in preceding paras and further that paras which themselves are aimed at placing wrong and manipulated, fabulous, frivolous claims before the court of achieving gains by misguiding."
The first submission of the defendant to the effect that the dealings between the Plaintiff and defendant were purely on the basis of PrincipaltoPrincipal is demolished from the cross exami nation of DW1. The DW1 had categorically admitted that Plaintiff was appointed as authorized agent for the North Region. The said witness has also admitted Exhibit PW1/5 and the said admitted document further fortifies the aforesaid fact that the plaintiff was authorized agent. The perusal of the written statement clearly re veals that the defendant had vaguely and evasively denied the con tentions raised by the Plaintiff. It was not the duty of the Plaintiff alone but also of the defendant to ensure that the customers of the Plaintiff would get the goods as per the specifications given by the Defendant to the Plaintiff. The contentions raised by the Plaintiff in the plaint specifically in paras no. 9 to 15 are not baseless but also on the basis of various email exchange between the parties. The Plaintiff has also placed on record the requisite Certificate under Section 65B of the Indian Evidence Act. It is an admitted case of the Plaintiff and defendant that the Plaintiff and defendant used to exchange the communication through emails. The defendant had not disputed even the single email either in the pleadings or in the Suit No. 97/2011 Page 25 of 39 SAV Engineers V. Easun Reyrolle Ltd.
cross examination of PW1. The internal communication exchanged between Defendant to Mr. Manjit on 19.03.2009 and the copy of the same was also sent to the plaintiff totally demolished the case of the defendant. The said email is reproduced as under: "Dear Manjit, Please look into the request made by Mr. Gagan. The following explains the reason behind our re quest.
"Initially, ERL had decided to provide the discon nection relay (in addition to control relay) within the meter as an in built comp component. Accord ingly, this was also communicated to M/s. SAV and other customer too.
"In the course of time, ERL got news from the global markets that with internal disconnection re lay, at times due to automatic reconnection under load conditions they have faced the problem of arching in the meter. Even though, this generally happens in higher current rating (60A & above) and will not have impact upto 40A range, ERL de cided not to provide internal disconnection relay in any of their 3 phase meters to avoid any possible field disasters. Accordingly, ERL started manufac turing the PLCC meters with only internal control relay without inbuilt disconnection relay. "By oversight, this information in change of design was not communicated to M/s SAV in time. Based on our earlier confirmation SAV procured the order from their end customers presuming that upto 40A current range meters will come with internal dis connection relay.Suit No. 97/2011 Page 26 of 39
SAV Engineers V. Easun Reyrolle Ltd.
"Since, the disconnection/ re connection feature re quirement for this project was not explicitly men tioned, ERL supplied 1040A meters without inbuilt disconnection relay. The later communication be tween SAV and ERL brought out the requirement of this relay and ERL has decided to provide this re lay in the supplied meter.
The mechanism of incorporating this relay in volves
1. Opening of the meter.
2. Removal of Internal CTs
3. Fixing the relay & CTs with the required mechanical assembly
4. Re calibration of the meter
5. Closing the meter cover.
6. Final testing & sealing The process requires factory set up & cannot be done at site. Initially, it was agreed to carry out this modification at site based on the request of SAV to minimize the inconve nience it may cause to SAV and its end cus tomer. But, due to the technicality involved and the need of re calibration has forced us to request the return of the meters to our factory where this task can be accomplished.
We sincerely apologize for all the inconve nience this has caused to SAV and its end cus tomer but this will help us to accomplish this task to perfection at our factory which will in turn arrest any later field issues in this re spect."Suit No. 97/2011 Page 27 of 39
SAV Engineers V. Easun Reyrolle Ltd.
(The portion bolded in order to highlight) The perusal of Email dated 13.4.2009 (part of Exhibit PW1/32) reveals that the meters were sent to the factory through XPS vide their Docket No.433828065 alongwith necessary docu ments. The perusal of Email dated 02.05.2009 (part of Exhibit PW 1/32) reveals that Plaintiff requested the defendant to sent back meters with incorporation of inbuilt disconnector for Rishab Plat inum.
In one of the communications regarding AMR prepaid software, as per Exhibit PW1/33, the Plaintiff had written to the defendant as follows: Dear Manjit, "As confirmed by you that the the Prepaid Software for Rishab Platinum will be ready by May end, pl. ask your Bangalore office to send somebody along with software as early as pos sible, since the client is asking for immediate installation.
Pl. confirm the date by return mail, need to in form the customer."
As per Email dated 22.07.2009, Exhibit PW1/36, the Plaintiff had written to the defendant as follows: Dear Manjit, Suit No. 97/2011 Page 28 of 39 SAV Engineers V. Easun Reyrolle Ltd.
"Pl. confirm the date for Rishab visit for in stalling Prepaid Software. It has been quite long since we have been following up with you. "Pl. appreciate we cannot hold the customer for too long he has been pressurising us to in stall the software immediately and we can't even confirm the date.
"Also, pl. send somebody to Vatika Jaipur site, there is no display in 34 running meters, the meters are not displaying anything on the LCD screen.
The perusal of pleadings which were totally vaguely and evasively denied by the defendant and which amounts to admis sion, evidence of the parties and documents placed on the record vividly depicts that due to the defective meters and deficiency in service M/s. Rishab Platinum had returned 100 meters and 2 DCU to plaintiff. It is also proved that the defendant failed to supply complete AMR system including Prepaid AMR software and the said material was essential part of the goods already supplied. It is also proved that the defendant installed the prepaid software at M/s. Rishab Platinum's site in November 2009, and the said installation of the software was defective and incomplete.
The Plaintiff vide emails dated 04.01.2010, 13.01.2010 and 16.01.2010 requested the defendant to take back all its mate rial and to make the arrangement for refund of the amount paid by the plaintiff to the defendant but the defendant did not refund the Suit No. 97/2011 Page 29 of 39 SAV Engineers V. Easun Reyrolle Ltd.
amount to plaintiff. Moreover, the defendant has not even replied to the said emails. The DW1 in his cross examination has stated: "It is correct that we had received the mail from the Plaintiff for return of the goods. Vol. it was never re turned by the plaintiff. It is correct that we did not refund the amount to the plaintiff. Vol. material was not returned to us so the question of refund does not arises."
The Plaintiff has also placed on record the details re garding exchange of following emails: Ex. No. Email/ Issued By Reference/ Page Nos.
Doc. Dated Particulars
PW1/20 03.03.2009 Plaintiff Email Regarding 349
software and
internal dis
connectors
PW1/22 05.03.2009 Defendant Email Regarding 355 100 Numbers of disconnectors for Rishabh Platinum PW1/32 02.05.2009 Plaintiff Email Requesting 381 the defendant for sending back 100 meters after incorporating of inbuilt dis connectors for Rishab Platinum PW1/16 23.02.2009 Plaintiff Email Requesting 341 Suit No. 97/2011 Page 30 of 39 SAV Engineers V. Easun Reyrolle Ltd.
the Defendant to
supply &
commission the
software and
provide the internal
automatic
connection/
disconnection
feature
PW1/17 24.02.2009 Defendant Reply to mail dated 343 23.02.2009 regarding the supply of software and internal contactors PW1/18 24.02.2009 Plaintiff Email Requesting 345,347,349 20 19.03.2009 the Defendant to 03.03.2009 install prepaid software and incorporating automatic disconnection features therein.
PW1/21 04.03.2009 Defendant Reply with regard 351 to install prepaid software and incorporating automatic disconnection features therein.
PW1/24 23.03.2009 Plaintiff Email Regarding 363 Suit No. 97/2011 Page 31 of 39 SAV Engineers V. Easun Reyrolle Ltd.
and inbuilt
Defendant connection/dis
connection features
and reply by the
Defendant
PW1/26 07.04.2009 Plaintiff Email for 367, 369,
28 09.04.2009 installation of 371
11.04.2009 software and
commissioning the
same
PW1/30 16.04.2009 Plaintiff Email for 375
replacement of
DCU
PW1/29 16.04.2009 Defendant Email Reply to the 373 mail for replacement of DCU PW1/31 22.04.2009 Plaintiff Email Regarding 379, PW1/33 12.05.2009 supply and 383, 37, 15.06.2009 commissioning of 385, PW1/40 16.06.2009 software at the 387, PW1/42 22.07.2009 different sites of 389, PW1/43 03.08.2009 customers 391393, PW1/44 26.08.2009 401, 417 PW1/45 09.09.2009 421, PW1/46 11.09.2009 423, 13.10.2009 425,427, 14.10.2009 429 26.10.2009 PW1/9 27.07.2009 Vatika Email Rejecting 229 infotech meters be not as per the specification PW1/49 01.12.2010 Rishab Email Regarding 465 Suit No. 97/2011 Page 32 of 39 SAV Engineers V. Easun Reyrolle Ltd.
Platinum nonfunctional of meters requesting to solve the problem or to take back the metering systems. Rishab Platinum subsequently return 100 meters PW1/50 04.01.2010 Plaintiff Email Regarding 449, PW1/51 16.01.2010 Return of the 453, PW1/52 15.03.2010 material and for 455 refund of the 459 amount received by the defendant PW1/53 08.04.2010 Plaintiff Email 461 Complaining the defective material and requesting for return of the material The Plaintiff had apparently made out the case of return of 175 meters and 2 DCUs. The Plaintiff during the course of the pleadings and evidence has evaluated the value of 125 meters and 2 DCU's as Rs.7,27,791/. However, the evidence of the plaintiff and defendant clearly reveals that the amount paid by the plaintiff to defendant was about Rs.7,72,000/. Accordingly, the Plaintiff is entitled to refund of Rs.7,72,000/. The Plaintiff in its plaint has claimed that last payment was made on 06.05.2009 and for this reason, claimed the interest from 06.05.2009. The amount of re fund was claimed back by the Plaintiff from the defendant for the Suit No. 97/2011 Page 33 of 39 SAV Engineers V. Easun Reyrolle Ltd.
first time vide email dated 04.1.2010. Accordingly, the interest on the said amount can be granted only on or after the date of 04.1.2010. The rate of interest has been decided at later stage of this decision.
QUESTION OF DIFFERENTIAL RATES OF 125 METERS The Plaintiff has claimed the differential amount of Rs 188339/ on account of purchase of meters from Superior Products Industries (SPI). The PW1 had categorically admitted to the follow ing effect: ".......Q. Can you please state as to of what de scriptions, SPI had supplied the items to you and the numbers thereof?
Ans. 1060 AMP ISI Mark, three phase dual source energy electric meters with inbuilt dis connector about two hundred in numbers, Data Transfer and Receiving Hub (DTRH)47 in numbers, prepaid metering software for 200 meters......."
"........it is correct that the purchase orders placed by and the electric meters was of 40 AMP and purchase orders placed and Electric Meter supplied by SPI were of 60 AMP. Vol. The every manufacturer has there on design and specifications manufacture the goods as per ISI standards. SPI has supplied 60 AMP meter which superior than 40 AMP meter..."
"............On our request the defendant had in stalled AMR prepaid software at M/s Rishab Platinum site in November,2009. The defen Suit No. 97/2011 Page 34 of 39 SAV Engineers V. Easun Reyrolle Ltd.
dant did not raise the invoice against the said software that is why no payment was made to the defendant against the said AMR prepaid software....."
(Portions bolded in order to highlight) The perusal of the record clearly reveals that the specifi cations as far as the order of SPI and defendant were different and it also admitted by the Plaintiff that SPI had given the products of superior specification and quality. The Plaintiff had first time sought refund of the amount on 04.1.2010 and asked the defendant to take back the entire materials. Therefore, prior to that period the plaintiff was not having the material in their custody and thus they cannot seek the refund thereof. The perusal of the SPI Invoices re veals that the same were dated 18.08.2009 (against the purchase order dated 21.07.2009), 10.08.2010 and 04.1.2011. Thus, the in voices are either about four months prior to 04.1.2010 or after 8 months to 1 year from the said date. Thus the said invoices do not appear to relate to replaced materials. Moreover, the Plaintiff has himself claimed that none of the customer has filed any claim against the Plaintiff. The perusal of the legal Notice dated 16.12.2010 reveals that the Plaintiff has not claimed such amount from the defendant and only the refund of the amount and that too sum of Rs.7,87,791/ alongwith interest @ 18% per annum. The Plaintiff has failed to show any oral or documentary evidence that they have not charged the amount from their customers for supply of the superior quality to them. The evidence in this respect is to Suit No. 97/2011 Page 35 of 39 SAV Engineers V. Easun Reyrolle Ltd.
tally silent and in my considered view, the plaintiff has not been able to prove the claim of this amount.
QUESTION OF PAYMENT OF EXPENSES TOWARDS INSTALLA TION CHARGES OF THE FRESH METERS The Plaintiff has claimed 2,32,077/ towards expenses incurred by plaintiff towards the installation charges of the fresh meters at the premises of his customers. The invoice Exhibit PW 1/63 was of dated 24.01.2011 for sum of Rs.1,92,000/ and the said document has been relied upon by the Plaintiff in order to claim installation charges of fresh meters. The Plaintiff had for the first time sought refund of the amount on 04.1.2010 and asked the defendant to take back the entire materials. It cannot be presumed that the customers would wait for about one year for replacement of goods. The perusal of the legal Notice dated 16.12.2010 also reveals that the Plaintiff has not claimed such amount from the defendant. The Plaintiff has also failed to place on record any cogent and con vincing either oral or documentary evidence to show that they have incurred such installation expenses for affixing fresh meters. The Plaintiff has failed to show any oral or documentary evidence that the Plaintiff has not charged their customer for installation of the meters. The evidence in this respect is totally silent and in my con sidered view, the plaintiff has not been able to prove the claim of this amount.
QUESTION OF DAMAGES ON ACCOUNT OF MENTAL AGONY, HARRASMENT, LOSS OF BUSINESS, LOSS OF GOOD WILL AND BUSINESS RELATIONS Suit No. 97/2011 Page 36 of 39 SAV Engineers V. Easun Reyrolle Ltd.
The Plaintiff has also claimed the amount of Rs.2,00,000/ towards damages on account of mental agony, ha rassment, loss of business, loss of good will and business relations etc. This Court has already held that that due to the defective me ters and deficiency in service M/s. Rishab Platinum had returned 100 meters and 2 DCU to plaintiff. It is also proved that the defen dant failed to supply complete AMR system including Prepaid AMR software. It is also proved that the defendant installed the prepaid software at M/s. Rishab Platinum's site in November 2009, and the said installation of the software was defective and incomplete. Al though the Plaintiff has not claimed this amount in the legal Notice dated legal Notice dated 16.12.2010, the perusal of the email ex change between the parties, it clearly reveals that the Plaintiff must have suffered mental agony, harassment, loss of business, loss of good will and business relations etc. The Plaintiff has failed to place on record actual loss of business, however, the interest of justice is met if the Plaintiff is awarded Rs.1,00,000/ on this account. On this amount, no prior or pendentelite interest is granted to the plaintiff.
QUESTION OF INTEREST:
Although, there was no contract between the parties as far as the interest is concerned but it was commercial transaction and in my considered view interest of justice is met if simple inter est @ 12% p.a. on the principal amount of Rs.7,72,000/. from 04/01/2010 till filing of the suit is granted in favour of the plaintiff.Suit No. 97/2011 Page 37 of 39
SAV Engineers V. Easun Reyrolle Ltd.
Section 34 CPC postulates and envisages the pendent elite interest at any rate not exceeding 6% and future interest at any rate not exceeding the rate at which nationalized banks ad vanced loan. Keeping in mind the mandate of the said proposition, interest of justice would be served if plaintiff is granted pendent elite simple rate of interest @ 6% per annum and future rate of in terest @ 9% per annum till its realization on the principal amount.
In view of discussions made hereinabove, issue No.2 to 5 are decided in the aforesaid terms.
RELIEF Accordingly, in view of the discussions, as adumbrated above, I hereby pass the following FINAL ORDER
(i) The suit of the plaintiff is decreed in favour of the plaintiff and against the defendant for a sum of Rs.7,72,000/ along with simple rate of interest @ 12% p.a. from 04.01.2010 till filing of the suit. The plaintiff is also entitled to pendentelite simple rate of interest @ 6% per annum and future rate of interest @ 9% per annum till its realization on the said sum of Rs.7,72,000/.
(ii) The Plaintiff is also entitled to Rs.1,00,000/ from the defendant towards mental agony, harassment, loss of business, loss of good will and business relations etc. In case, the defendant fails to pay the said amount within one month from today then the Plaintiff shall be liable to pay the Suit No. 97/2011 Page 38 of 39 SAV Engineers V. Easun Reyrolle Ltd.
said amount with simple rate of interest @ 9% per annum till its realization.
(iii) The cost of suit of the Plaintiff is also awarded in favour of the plaintiff and against defendant.
(iv) The Plaintiff shall deliver back, at the cost of the defendant, 175 Dual Source Energy Meters and 2 numbers of DCU which was supplied by the Defendant to the Plaintiff. It is made clear that defendant shall lift back the said material/ articles from the place of the Plaintiff after giving them reasonable Notice of 15 days.
Decreesheet be prepared accordingly in terms of this decision.
File of the suit be consigned to Record Room after due compliance.
Announced in the open court on (ARUN SUKHIJA) this 15 Day of December, 2018. ADJ07 (Central) th Tis Hazari Courts, Delhi Suit No. 97/2011 Page 39 of 39