Delhi District Court
M/S Millennium Automation & Systems ... vs Electronic Corporation Of India ... on 5 March, 2020
IN THE COURT OF MS. RAVINDER BEDI
ADDL DISTRICT JUDGE04, PATIALA HOUSE COURTS
NEW DELHI
CS NO. 59060 of 2016
M/s Millennium Automation & Systems Limited.
A Company Registered under the Companies Act, 1956
Having its Registered Office at:
E-48/09, Okhla Industrial Area,
Phase-2, New Delhi - 110020
Through its Finance Manager/Secretary
Mr. Sanjeev Singh
.....Plaintiff
VERSUS
Electronic Corporation of India Limited.
I.T. & T Group Purchase Department
ECIL, P.O. Hyderabad - 500062
Through its Principal Officer/Secretary
Also at:
B2, DDA LSC.
ABlock, Ring Road,
Naraina, New Delhi110028
...Defendant
Date of Institution of suit : 01.02.2013
Date of Final Arguments : 05.03.2020
Date of Judgment : 05.03.2020
CS NO. 59060 Of 2016
M/s Millennium Automation & Systems Limited vs.
Electronic Corporation of India Limited. Page no. 1 of 12
1.This is a suit for recovery instituted by Plaintiff against the Defendant alongwith interest pendentelite and future.
2. Plaintiff is a Company (registered under the Companies Act, 1956) and is engaged in the business of System Integration and sale and purchase of computers, computer peripherals and information technology hardwares. Present suit is filed through its Finance Manager/Secretary Mr. Sanjeev Singh.
3. The Defendant is a Govt. of India Enterprise. Through a Purchase Order bearing No. M4250(06)/R4995 dated 3 rd October, 2008, the Defendant had placed upon the Plaintiff an order for supply of various materials as mentioned therein and the said order was in the sum of Rs. 12,20,33,448.46 paise [Rupees Twelve Crores twenty Lakhs thirty three thousand four hundred forty eight and paise forty six only] plus tax. The said supplies were required by the Defendant for the SSB Wide Area Network. It is stated that as per AnnexureA to the aforesaid Purchase Order, one of the conditions was that the delivery had to be made by the Plaintiff in 1012 weeks from the date of the said Order whereas Sector Level BOM quantities were to be delivered by 25.10.2008. The supplies of the material was to be made by the Plaintiff at Defendant's premises at B22, DDA, LSC, A Block, Ring Road, Naraina, New Delhi. Through an Order of Amendment dated 09.01.2009 issued by the Defendant, the delivery date was changed/extended to 26.01.2009 and supply against the said Purchase Order was completed before 26.01.2009. However, CS NO. 59060 Of 2016 M/s Millennium Automation & Systems Limited vs. Electronic Corporation of India Limited. Page no. 2 of 12 Defendant wrongly deducted a sum of Rs.6,71,862/ as LD Charges inspite of timely completion of the Purchase Order. The Plaintiff reminded the Defendant through a Letter dated 19.09.2012 requesting for release of the aforesaid amount, however, the Defendant in response through a Letter dated 25.10.2012 did not give any concrete reason for the deduction and postponed the release of above sum of Rs. 6,71,862/ by stating that the request for release was "under consideration on its merits". Plaintiff has thus prayed for recovery of the aforesaid sum of money of Rs.6,71,862/ from the Defendant.
4. Another Purchase Order bearing No. M4250(06)/R4996 dated 07.10.2008, in the sum of Rs.1,40,72,604.99 paise [Rupees One Crore Forty Lakhs Seventy Two Thousand Six Hundred Four and Paise Ninety Nine only] was placed by the Defendant upon the Plaintiff, which specifically related to the installation, commissioning and integration of the SSB Wide Area Network Project. Under the said Purchase Order, the work was to be carried out by the Plaintiff at 69 sites. SSB was the End User under the above said Purchase Order. The Plaintiff claims that a duty was cast upon the Defendant to make available the MPLS Link from BSNL at the various sites subsequent to which integration would become possible. It is stated that in October 2009, the Plaintiff completed installation, commissioning and integration work at 46 sites and therefore, became entitled to payment on prorata basis for the work completed. The said payments, though they had become due on 16.10.2009, were made belatedly by the Defendant in January, 2011 CS NO. 59060 Of 2016 M/s Millennium Automation & Systems Limited vs. Electronic Corporation of India Limited. Page no. 3 of 12 under P.O. No. M4250(06)/R4996 dated 07.10.2008. As such, in January 2011 payment was received by the Plaintiff for the aforesaid work at 45 sites.
5. The Plaintiff had completed Installation, Commissioning and Integration work at 56 sites by December 2011 and Installation and Commissioning work had also been completed at 66 sites by then, but Integration work was being delayed due to lack of provisioning of MPLS link from BSNL by the Defendant. As the payments for such work were being delayed due to this, the Plaintiff was constrained to have issued to the Defendant a Legal Notice dated 28.05.2012 via registered A.D. Post calling upon the latter to make the prorata payment for 21 sites which amounted to Rs. 47,24,112.38. Plaintiff also intimated that in case such payment was not made, the Plaintiff would claim 15% interest per annum on the aforesaid amount w.e.f. 29.05.2012. Plaintiff received a reply dated 25/28.06.2012 from Defendant stating that the latter was not obliged to arrange the availability of MPLS links from BSNL. To this, Plaintiff issued a letter dated 31.07.2012 refuting the contention of the Defendant referring to emails dated 08.10.2010, 03.05.2011 and 18.05.2011, contending that it was the duty of SSB to ensure availability of MPLS link from BSNL and coordination with SSB and BSNL was to be carried out for the said purpose by the Defendant. The Defendant through another communication dated 09.08.2012 denied the claims made by the Plaintiff for payment of money.
CS NO. 59060 Of 2016 M/s Millennium Automation & Systems Limited vs. Electronic Corporation of India Limited. Page no. 4 of 12
6. Plaintiff states that by December 2012, it had completed the installation and commissioning work on 66 sites out of which on 60 sites the integration work was also completed. However, the balance integration work for six sites remained incomplete on account of failure of the Defendant to provide the MPLS Link from BSNL. Plaintiff states that considerable finances were put in for the aforesaid Installation and Commissioning work at the 46th to the 66th site and the Integration work as well at the 46th to 60th site. The two sites out of the total 69 sites had been abolished being the sites at (i) SSB ACTCJamnagar, Gujrat and (ii) SSB ATC - Doimukh, Arunachal Pradesh and by December 2012, Installation, Commissioning and Integration work remained to be done only at one site at Tawang, Arunachal Pradesh and besides that, Integration work remained to be done at only 6 other sites.
7. It is stated that since the payments due to the Plaintiff for the above work were being delayed and denied by the Defendant, plaintiff was constrained to file the present suit for recovery of its dues under the second Purchase Order No. M4250(06)/R4996 dated 07.10.2008 as claimed through its Legal Notice dated 28.05.2012 along with interest, pendentlite and future interest @15% per annum.
CS NO. 59060 Of 2016 M/s Millennium Automation & Systems Limited vs. Electronic Corporation of India Limited. Page no. 5 of 12
8. The Plaintiff by present suit has prayed for recovery of the amounts payable to it under the two purchase orders viz:
(i) Purchase Order No. M4250(06)/R4995 dated 3rd October, 2008 - Amount claimed Rs. 6,71,862/
(ii) Purchase Order No. M4250(06)/R4996 dated 07.10.2008 - Amount claimed Rs. 48,65,835.38p
9. The Defendant filed its written statement and took preliminary objections interalia stating that the LD for Rs. 6,71,862/ was rightly deducted against Purchase Order No. M4250(06)/R4995 dated 3rd October, 2008 as even though the time for delivery had been extended through the Order Amendment dated 09.01.2009, all other terms of the original Purchase Order remained unaltered. With regard to the Purchase Order No. M4250(06)/R4996 dated 07.10.2008, the Defendant stated in para 6 of reply on merits that "as per the terms of PO, the payments can be released only on raising invoice for minimum 15 sites with the I&C Certificates". The Defendant in para 8 of the written statement contended that the Plaintiff did not produce I&C Certificate to support its claim that by Defendant 2012, the installation, commissioning and integration had been fully completed at the 46th to the 60th site. The Defendant refuted that the responsibility of providing the MPLS link from BSNL was not the sole responsibility of ECIL. The Defendant thus denied the claim of the Plaintiff for payment against the 46 th to 60th site for lack of I&C Certificates and also the payment for installation and CS NO. 59060 Of 2016 M/s Millennium Automation & Systems Limited vs. Electronic Corporation of India Limited. Page no. 6 of 12 commissioning work done at the 61st to 66th site stating that the payment against the same can be done only after the integration is completed.
10. Plaintiff had filed its replication to the written statement of the Defendant reiterating its contentions in the plaint. Plaintiff averred that the installation, commissioning and integration work had been fully completed on 64 out of the 69 sites and the I&C Certificate for 64 sites had been submitted to the Defendant and hence, Defendant was illegally withholding the payment due to the Plaintiff under purchase Order No. M4250(06)/R4996 dated 07.10.2008.
11. It is pertinent to state that by Notification no. 27187/DHC dated 24.11.2015, the suit was transferred to District Courts, PHC, New Delhi and was assigned to this court on 22.04.2016.
12. During proceedings, Defendant stopped appearing since 26.10.2016 and finally by Order dated 23.11.2017 was proceeded ex parte and the Plaintiff was directed to lead its evidence. The Plaintiff in evidence has filed an affidavit [Ex.PW1/A] of Mr. Sanjeev Singh [PW1] who has exhibited documents in support of the case. The evidence was concluded on 28.03.2019.
13. I have heard Ld. Counsel for plaintiff and have perused the entire record coupled with testimony of witnesses. In order to substantiate its case, the Plaintiff has exhibited the Purchase Order No. CS NO. 59060 Of 2016 M/s Millennium Automation & Systems Limited vs. Electronic Corporation of India Limited. Page no. 7 of 12 M4250(06)/R4995 dated 3rd October, 2008 as Ex.PW1/3, whereunder it was stipulated that the delivery under the said Purchase Order was to be made within 1012 weeks from the date of the said order, whereas sector level BOM quantities were to be delivered by 25.10.2008. The Plaintiff has exhibited as Ex.PW1/4 the Order Amendment dated 09.01.2009 whereby the date of delivery was changed by the Defendant and extended to 26.01.2009. From perusal of the written statement and in para 3 thereof on merits, the Defendant has admitted that supplies had been completed by the Plaintiff before 26.01.2009. The defense taken in the written statement is that the payment to the Plaintiff was through Letter of Credit and the terms and conditions of the LC pertaining to the delivery were binding and that "though the delivery date was revised to 26.01.2009 in the LC the consequent LD clause remained unaltered". Defendant did not come up to lead evidence and chose to remain ex parte. Even otherwise, the supplies had been made in time which was so made even as per the admission of the Defendant. The Plaintiff has led evidence in support of its aforesaid claim, the same has gone uncontroverted and unrebutted. Plaintiff has proved that Defendant wrongly deducted the amount of Rs. 6,71,862/ from the payment made to the Plaintiff under the Purchase Order No. M4250(06)/R4995 dated 3rd October, 2008.
14. In support of its another claim, Plaintiff proved the Purchase Order No. M4250(06)/R4996 dated 07.10.2008 as Ex.PW1/7, in sum of Rs.1,40,72,604/ to carry out Installation, Commissioning and Integration CS NO. 59060 Of 2016 M/s Millennium Automation & Systems Limited vs. Electronic Corporation of India Limited. Page no. 8 of 12 work on 69 Sites as per the said PO. The Plaintiff proved Ex.PW1/8, a letter dated 09.10.2010 addressed by it to the Defendant in para 6 whereof, it stated as under: "6) Out of 69 SSB sites, Installation, Commissioning & Integration at 46 sites has been successfully completed but due to nonavailability of MPLS link from BSNL, integration at remaining 23 sites can't be possible. There is also no clarity from ENDUser for making the MPLS link available. Reason of nonavailability of MPLS link is beyond our control as the same was to be provided by ECIL/SSB".
15. The Defendant in para 6 of Written Statement i.e. the reply on merits, stated that "the responsibility of getting the MPLS link from EndUser is not the sole responsibility of ECIL and it is the arrangement that should be available for accomplishing the assignment". Perusal of attachment to email dated 03.05.2011 [Ex.PW1/12] issued from the Defendant's side shows that SSB was to insure availability of MPLS link and BSNL officials. Having observed so, it is clear that the Plaintiff could not be burdened in case, the MPLS link was not provided to it for completing the Integration work after the Installation and Commissioning work had been completed by it.
16. The Plaintiff has been able to prove that it had carried out the work as per Purchase Order No. M4250(06)/R4996 dated CS NO. 59060 Of 2016 M/s Millennium Automation & Systems Limited vs. Electronic Corporation of India Limited. Page no. 9 of 12 07.10.2008 Ex.PW1/7. The same shows that payments were to be made on prorata basis upon completion of work at 15 sites, upon submission of filing of Installation and Commissioning [I&C] Certificates by the Plaintiff to the Defendant. Admittedly payment for 45 sites had been made by the Defendant to the Plaintiff prior to filing of the suit. PW1 Mr. Sanjeev Singh in his evidentiary Affidavit has deposed that "I further say that the Plaintiff had by December, 2012 completed the installation and commissioning work on 66 sites out of which on 60 sites the integration work was also completed. As before, the balance integration work remained incomplete till then on account of failure of the Defendant to provide the MPLS link from BSNL. It is also stated that out of the initial 69 sites, the following two sites had been abolished by the Defendant:
(i) SSB ATC - Jamnagar, Gujrat
(ii) SSB ACT - Doimukh, Arunachal Pradesh Therefore, by December 2012, installation and commissioning work remained to be done only at one site at Tawang, Arunachal Pradesh and besides that integration work remained to be done at only six other sites. I further say that huge amount of finances had been put in by the Plaintiff by December, 2012 and all supplies under the Purchase Order dated 7th October, 2008 [Exhibit PW1/7] had been completed. I further say that by December, 2012, the installation and commissioning work at all the sites barring the one at Arunachal Pradesh had been completed and the integration work also had been completed at 60 sites as the MPLS link from BSNL had been made available by the Defendant at such sites".
CS NO. 59060 Of 2016 M/s Millennium Automation & Systems Limited vs. Electronic Corporation of India Limited. Page no. 10 of 12
17. The Plaintiff's case is that release had to be on prorata basis for 21 sites being the 46th to 66th sites. The Installation, Commissioning and Integration work was completed at 46 th to 60th sites, whereas the Installation and Commissioning work had also been completed at the 61 st to 66th site. The Plaintiff claims for payment in the sum of Rs.47,24,112.38. The Invoices with regard to the work done are proved as Ex.PW1/16 and Ex.PW1/17. It is proved through evidence that Plaintiff continued working on the Project inspite of pendency of the present suit and Integration and Completion Certificates for 64 sites had been duly submitted to the Defendant as is clear from Ex.PW1/15. It is proved that the Installation, Commissioning and Integration work was completed for the 46th to 64th site. The Installation and Commissioning work had been completed on the 65th and 66th site is not disputed by the Defendant which in its written statement contended that payment could be released only upon completion of Integration work and also on the bald plea that if the EndCustomer SSB released payment to it on prorata basis, then it would also release such payment to the Plaintiff.
18. It is proved that the installation and commissioning work stood completed at 66 sites at the time of filing of the suit. The testimony of PW1 has gone uncontroverted and unrebutted. Thus, this Court holds that the plaintiff has been able to prove its case. The plaintiff is entitled to the payment due under Purchase Order No. M4250(06)/R 4995 dated 3rd October, 2008 i.e. Rs. 6,71,862/ and Purchase Order No. M4250(06)/R4996 dated 07.10.2008 I.e. Rs. 47,24,112.38. The CS NO. 59060 Of 2016 M/s Millennium Automation & Systems Limited vs. Electronic Corporation of India Limited. Page no. 11 of 12 claims of the Plaintiff stand proved and suit of Plaintiff deserves to be decreed.
19. The Plaintiff has claimed pendentelite and future interest @ 15% per annum on the amounts claimed by it in prayer clauses (a) & (b) thereunder. However, it would be appropriate and justifiable to grant an interest of 10 % on the amounts so prayed.
20. In view of my findings, the suit of the Plaintiff succeeds. The suit stands decreed in favour of Plaintiff. The Plaintiff is entitled to recover the following amounts from defendant:
a) Rs.6,71,862/ along with interest @ 10% per annum from the date of filing of suit till its actual realization.
b) Rs.47,24,112.38. along with interest @ 10% per annum from the date of filing of suit till its actual realization.
c) Plaintiff is also entitled for costs.
21. Decree sheet be prepared and the file be consigned to record room after due compliance, as per law.
(Announced in the open court.) (RAVINDER BEDI )
Additional District Judge04
Judge code : DL0253
PHC, New Delhi/05.03.2020
CS NO. 59060 Of 2016
M/s Millennium Automation & Systems Limited vs.
Electronic Corporation of India Limited. Page no. 12 of 12