Delhi District Court
Ruloans Distribution Services Private ... vs Oxyzo Financial Services Private ... on 28 March, 2023
IN THE COURT OF DISTRICT JUDGE (COMM-02),
SOUTH DISTRICT, SAKET COURT, NEW DELHI
CS (COMM) 366/2021
Ruloans Distribution Services Private Ltd.
Through its Authorized Representative
Shri Kaushik Ashok Mehta, Director
Having its registered office at 601, Ashok Heights,
Next to Saraswati Tower Cross Parsi Panchayat,
Andheri East, Mumbai-400069, Maharashtra
Email : [email protected]
Phone No. 9967696924 ..... PLAINTIFF
Versus
Oxyzo Financial Services Private Limited
Through its Director
Having its registered office
Shop No. G-22 C (UGF) D-1 (K-84),
Green Park Main, New Delhi-110016
Email : [email protected], [email protected],
[email protected], [email protected]
Phone No. 9987098793 and 8826785109
Also at : E-6, First Floor,
Green Park Extension, New Delhi-110016 .. DEFENDANT
Date of institution : 01.11.2021
Conclusion of arguments : 13.02.2023
Date of decision : 28.03.2023
JUDGEMENT
1. This is a suit originally filed u/O XXXVII of The Code of Civil Procedure, 1908, for recovery of Rs.7,09,925/-. BACKGROUND FACTS
2. In brief, background facts of the case as pleaded by the plaintiff in the plaint are that, it is a company engaged in providing the services of Direct Sales Agents (DSA), who work as a referral associate agent for Banks, Non-Banking Financial Companies (NBFC's) or other Financial Institutions, being Ruloans Distribution Services Private Ltd. Vs. Oxyzo Financial Services Private Limited - CS (Comm) 366/21 Page 1 of 22 represented with by its director/authorized representative Shri Kaushik Ashok Mehta. Defendant company is stated to be one of the largest independent full-service retail and institutional broking house alongwith being a leading investment advisory firm in India providing diversified financial services and products to Corporates, institutional investors, foreign portfolio investors, mutual funds, insurance companies, high net worth individuals and retail clients.
3. It is averred that parties entered into an agreement dated 15.07.2019, wherein vide Clause 2 it was agreed that both parties shall execute certain roles, while defendant being a financial services company was to provide various financial products for small and medium enterprises and plaintiff amongst other responsibilities was to identify and convert potential clients for the defendant's financing products and commerce facilitation platform and in lieu of the services provided by the plaintiff, defendant was to provide the plaintiff a pay out of 3% + GST. It is stated that by virtue of the terms, the parties established a business relationship, during which plaintiff was instrumental in procuring customers and huge amount of business to defendant company, however, defendant since the month of December, 2019, began to default on the pay-out obligations due to the plaintiff as agreed upon between the parties vide Partnership Agreement dated 15.07.2019.
4. It is stated that plaintiff orally and by way of various emails time and again requested for the pending payments and through mail dated 19.05.2020 sent a detailed list of payments pending to the tune of almost Rs.9,30,000/- at that time. Defendant through its email dated 22.05.2020 conveniently Ruloans Distribution Services Private Ltd. Vs. Oxyzo Financial Services Private Limited - CS (Comm) 366/21 Page 2 of 22 started to use terms like force majeure clause and reference to a 'revised policy' as an excuse for non-payments of the pay-outs and other pending dues, despite there being no such clauses or amendments accepted by the plaintiff. It is stated that pursuant to the same, various emails were issued by the plaintiff for release of the payments and non-addresssal of it's claim, but plaintiff did not receive any satisfactory response from the defendant. It is stated that plaintiff being left with no choice was constrained to involve Reserve Bank of India, the regulatory authority for Non- Banking Financial Companies, so that it could intervene in the matter on plaintiff's behalf to recover the said amounts.
5. It is stated that on 15.07.2020, defendant, without any legal basis informed the RBI vide its email dated 15.07.2020 that it was not contractually obligated to make the said payments. Subsequently, plaintiff vide a detailed email dated 18.07.2020 wrote to RBI explaining the issue, and giving the details of the pending payments, non-addressal of the calls by the defendant, use of triggers by the defendant to somehow create a dispute, so that RBI does not intervene in the issue as it being an internal dispute between the parties. It is stated that plaintiff also rejected the force majeure argument as that had no bearing on the issue at hand and clearly gave reference to the relevant clauses entitling the plaintiff to the payments and negating the contractual dispute stance by the defendant.
6. It is stated that defendant through what seemed to be an automated email dated 29.07.2020 sent to all its channel partners, unilaterally and arbitrarily modified the pay-out policy giving the excuse of the ongoing COVID pandemic lockdown as the reason for the change in the policy and a strategy to withhold Ruloans Distribution Services Private Ltd. Vs. Oxyzo Financial Services Private Limited - CS (Comm) 366/21 Page 3 of 22 the payments due to the plaintiff even before the lockdown and in response to defendant's mail, plaintiff also by way of email dated 29.07.2020, while acknowledging the said mail, offered to help the defendant to recover some of the pending EMI's but also requested for pending statutory GST payments. In the said email, plaintiff, categorically stated that as far as the terms of the payments is concerned, plaintiff's legal team will revert on it separately and thus, there was no express consent to the change in policy or payment terms by the plaintiff. It is stated that on 06.08.2020, plaintiff's legal team, issued an email rejecting the payment policy changes by the defendant, stating that plaintiff's responsibility towards the defendant was merely that of sourcing of clients and helping the defendant in recovery of amounts on moral grounds, moreover, plaintiff's team once again requested for the pending payments at that time.
7. It is stated that plaintiff kept on following up on the payments and sent multiple reminders to the defendant, to which the defendant vide its email dated 12.08.2020 being well aware of the pending dues to the plaintiff, devised a strategy to wriggle out of its obligations by using the complaint by the plaintiff to the RBI ombudsman to its advantage stating that the pending amounts apart from the statutory payments (GST) are in dispute. It is stated that plaintiff vide an email dated 19.08.2020 requested the defendant to provide details of the so called disputed amount, or as to how the pending amounts were disputed and provide any details in relation thereto, failing which it will have no option but to initiate appropriate legal action for recovery of the dues. It is further stated that plaintiff vide emails dated 07.10.2020 and 23.10.2020 kept on following up on the payments and to which Ruloans Distribution Services Private Ltd. Vs. Oxyzo Financial Services Private Limited - CS (Comm) 366/21 Page 4 of 22 defendant via an email dated 23.10.2020 also agreed to release 20% of the pay-out in the first week of every month henceforth, however, yet no such payments were made by the defendant.
8. It is stated that plaintiff being left with no choice issued a legal notice dated 15.12.2020, for the payment of Rs.6,62,701/- pending at that time, failing which the plaintiff would be constrained to take legal action against the defendant. Defendant vide its email dated 28.12.2020, replied to the said legal notice maintaining its malicious stance of revised policy, without producing an iota of evidence of the plaintiff ever agreeing to the said revised policy. It is stated that defendant has been a defaulter and is unable to pay the dues to the plaintiff and is thus, creating excuses that have no legal or contractual basis. It is further stated that the change in policy by the defendant is unilateral, arbitrary and in non-compliance with the terms of the agreement dated 15.07.2019 and plaintiff has never agreed to the said change and thus, is not liable to be paid in accordance with the said policy. It is stated that agreement dated 29.07.2020 has never been amended, between the parties and in the absence of a force majeure clause, contents of the said email/change in policy etc irrelevant.
9. It is averred that the premise of the said email/change of policy is the non-payment of installments of the loans taken by customers identified by the plaintiff for the defendants, however, nowhere in the agreement is it mentioned that the payment obligations of the defendant towards the plaintiff are contingent on the payment of installments from the customers and thus, plaintiff cannot be made to suffer and not paid its dues due to the non-payment of EMIs by the customers.
Ruloans Distribution Services Private Ltd. Vs. Oxyzo Financial Services Private Limited - CS (Comm) 366/21 Page 5 of 2210. It is pleaded that the Ministry of Home Affairs vide Order No. 40-3/2020-DM-I(A) dated 30.05.2020, titled "Guidelines for Phased Re-Opening (Unlock 1)" ("Unlock Notification") ended the period of Lockdown and initiated partial reinstatement of services alongwith extension of Lockdown in containment zones. Thereafter, office spaces and the like were allowed to re-open by the Government of India. It is stated that further the Ministry of Home Affairs vide Order No. 40-3/2020- DM-I(A) dated 25.11.2020 titled "Guidelines for Surveillance, Containment and Caution: ("Latest Notification") extended the tenets of the Unlock - 5 Notification till December 30, 2020. No clause or tenet as stipulated in the Latest Notification bars the functioning of offices pan-India. The excuse of non-payment of dues as correlated with the logistics of the Covid-19 pandemic does not hold weight and thus, the moratorium period or lockdown are insignificant when it comes to defendant's payment obligations towards the plaintiff.
11. It is stated that for the sake of argument, even if the contents of the email dated 29.07.2020 is considered by the plaintiff as a valid ground for non-payment, the said email still stands no validity as it is evident that the invoices raised by the plaintiff pre-dated the lockdown period and thus, the contents of the said email have no practical or legal basis. It is stated that the obligation of the plaintiff towards the defendant is largely to engage with the defendant in the act of identifying and converting potential clients, thus, as soon as the plaintiff brings a customer on board with the defendant company, plaintiff is entitled to a pay-out from the defendant @ 3% + GST.
12. It is averred that plaintiff issued various payment Ruloans Distribution Services Private Ltd. Vs. Oxyzo Financial Services Private Limited - CS (Comm) 366/21 Page 6 of 22 reminders and despite legal notice dated 15.12.2020, defendant refused to comply with terms of the Agreement dated 15.07.2019 and owes the plaintiff a sum of Rs.5,71,009/- as pay-outs and defendant is also liable to pay the plaintiff a sum of Rs.21,692/- as pending GST. It is stated that defendant is also liable to pay a sum of Rs.1,17,224/- as delayed payment interest calculated @ 18% per annum. Thus, defendant owes the plaintiff a collective sum of Rs.7,09,925/- including the pay-out, GST due and delayed payment interest and other arrears between May, 2020 to March, 2021.
13. It was pleaded that the claim made in the present suit fully falls within the ambit of Order XXXVII CPC and no amount which does not fall within this provision has been claimed in the present suit. Plaintiff prayed for passing a decree in the sum of Rs.7,09,925/- including pay-outs and pending GST in favour of the plaintiff and against the defendant alongwith pendent-lite and future interest. Apart from this, interest @ 18% per annum from the date of filing of this suit till adjudication was also prayed.
14. On receipt of summons of the suit u/O XXXVII Rule 2(2) CPC, on 23.12.2021 defendant filed application for entering appearance and vide Order dated 06.04.2022, application u/O XXXVII Rule 3(5) CPC seeking leave to defend, was allowed and defendant was granted leave to defend. Thereafter, in order to explore the possibility of settlement, parties were referred to Mediation however, no settlement could take place between the parties.
15. In its written statement, defendant denied that an amount of Rs.7,09,925/- was payable as per agreement. It is Ruloans Distribution Services Private Ltd. Vs. Oxyzo Financial Services Private Limited - CS (Comm) 366/21 Page 7 of 22 stated that although plaintiff did bring a few customers, however, most of the customers brought in by the plaintiff defaulted and it caused great loss to the defendant. Defendant denied that it kept on giving flimsy and baseless responses to delay and confuse the matter. It is submitted that defendant informed the RBI that it was contractual dispute between the parties and the same ought to be decided by a court of law and not the regulator. It is stated that on the basis the reply of the defendant, RBI did not intervene in the matter. It is not disputed that the defendant sent an email dated 29.07.2020 with the revised pay-out policy to all its channel partners, however, it is denied that the same was arbitrary. Defendant denied that it was a strategy to withhold payments due to the plaintiff even before the lockdown. It is stated that the said pay-out policy was sent to all channel partners without any discrimination whatsoever.
16. Defendant denied that it is a defaulter and is unable to pay the dues to the plaintiff and is creating excuses that have no legal or contractual basis. It is stated that plaintiff agreed to the change in policy as it had acknowledged the same and also sought payments in terms of the new policy, specified in the email dated 29.07.2020, wherein the new pay-out policy was shared and relationship between the parties is to be governed by the new pay-out policy dated 29.07.2020. It is stated that plaintiff is unnecessarily trying to make out a case that the policy change was because of the alleged dues not paid to the plaintiff, which is baseless.
17. It is denied that plaintiff is entitled to a money decree of Rs.7,09,925/- including pay-outs and GST in favour of the plaintiff and against the defendant. It is denied that plaintiff Ruloans Distribution Services Private Ltd. Vs. Oxyzo Financial Services Private Limited - CS (Comm) 366/21 Page 8 of 22 is entitled to any interest, leave aside 18% per annum from the date of filing till adjudication or costs of the present suit.
18. Rejoinder to the written statement was filed controverting the allegations leveled in the written statement. ISSUES
19. Case management hearing was held on 11.10.2022. From the pleadings of the parties, following issues were framed:-
1. Whether plaintiff is entitled to the recovery of an amount of Rs.5,71,009/- from the defendant? OPP
2. Whether defendant is liable to pay GST in the sum of Rs.21,692/-? OPP
3. Whether plaintiff is entitled to recover interest @ 18% as claimed from the date of invoices till realization? OPP
4. Whether plaintiff had acknowledged the revised pay-out policy dated 29.07.2020 of the defendant and thereby consented to be governed by the revised policy and thus, defendant is not liable to pay the pay-outs as claimed? OPD
5. Relief including costs.
Witnesses produced and documents exhibited
20. Plaintiff produced PW-1, Shri Sunil Kumar Dabral, Director and authorized representative of plaintiff company. He placed on record Board resolution dated 08.08.2022 executed by Shri Kaushik Mehta authorizing him as Authorized Representative (Ex.PW-1/2); Partnership Agreement dated 15.07.2019 executed between plaintiff and defendant (Ex.PW- 1/3); email dated 19.05.2020 sent by plaintiff to defendant (Ex.PW-1/4); emails dated 22.05.2020; 19.05.2020 and 19.05.2022 sent by plaintiff to defendant (Ex.PW-1/5 to Ex.PW- 1/7); emails dated 23.05.2020 and 28.05.2020 sent by plaintiff to defendant (Ex.PW-1/8 and Ex.PW-1/9); mail dated 15.07.2020 12:12 pm sent by plaintiff to Reserved Bank of India and CCed Ruloans Distribution Services Private Ltd. Vs. Oxyzo Financial Services Private Limited - CS (Comm) 366/21 Page 9 of 22 to defendant (Ex.PW-1/10); email dated 15.07.2020 sent by defendant to plaintiff and CCed to RBI (Ex.PW-1/11); email dated 15.07.2020 at 01:49 pm by plaintiff to defendant (Ex.PW- 1/11A) and at 02:00 pm sent by plaintiff to defendant (Ex.PW- 1/11B); email dated 18.07.2020 sent by plaintiff to Reserve Bank of India (Ex.PW-1/12); email dated 20.07.2020 sent by plaintiff to RBI and CCed to defendant (Ex.PW-1/13); email dated 29.07.2020 sent by defendant to plaintiff (Ex.PW-1/14); reply dated 29.07.2020 sent by plaintiff to defendant (Ex.PW-1/15); email dated 06.08.2020 sent by plaintiff to defendant (Ex.PW- 1/16); email dated 12.08.2020 sent by defendant to plaintiff (Ex.PW-1/17); email dated 19.08.2020 sent by plaintiff to defendant (Ex.PW-1/18); emails dated 07.10.2020; 23.10.2020 at 10:02 am; 23.10.2020 at 11:14 am; 23.10.2020 at 10:32 am; 28.10.2020 at 09:06 am; 28.10.2020 at 10:39 am; 29.10.2020; 30.10.2020; 04.11.2020 at 09:46 am; 04.11.2020 12:53 pm; 04.11.2020 at 02:59 pm; 17.11.2020 at 04:46 pm and 17.11.2020 at 05;53 pm, shared between plaintiff to defendant (Ex.PW-1/19 to Ex.PW-1/31 respectively); Legal notice dated 15.12.2020 (Ex.PW-1/32); defendant's reply dated 28.12.2020 to legal notice (Ex.PW-1/33); Calculation table of outstanding amount due from the defendant (Ex.PW-1/34); Invoices dated 05.02.2020; 12.02.2020; 03.03.2020; 02.11.2020; 24.01.2020 (Ex.PW-1/35 to Ex.PW-1/39) and consolidated account of pending dues (Ex.PW- 1/40).
21. On the other hand, defendant examined DW-1 Shri Daksh Tyagi, who placed on record certified true copy of board resolution passed in the meeting of Operational committee of defendant held at 11.00 am on 17.01.2022 (Ex.D-1).
Ruloans Distribution Services Private Ltd. Vs. Oxyzo Financial Services Private Limited - CS (Comm) 366/21 Page 10 of 2222. This court has heard the submissions advanced by Shri Shalaj Mridul, Ld. Counsel appearing for the plaintiff and Shri Prateek Jain, Ld. Counsel appearing for the defendant and considered material on record. Issue-wise findings of this court are as under :-
ISSUE NO. 4"Whether plaintiff had acknowledged the revised pay-out policy dated 29.07.2020 of the defendant and thereby consented to be governed by the revised policy and thus, defendant is not liable to pay the pay-outs as claimed? OPD"
23. This issue is taken first as it is connected with and has a bearing upon entitlement of plaintiff to recover the claimed amount. Onus to prove this issue no. 4 was upon defendant. The defendant's version is that as per new pay out policy defendant is not liable to pay any amount as majority of those customers for which trade out had been processed earlier had crawled back and as such after adjustment the same no amount to payable. The new pay-out policy of defendant, stated to have been sent to the channel partner including plaintiffs, is contained in Ex.PW1/14 e- mail dated 29.07.2020 is as under :-
"Dear Valued Channel Partner Firstly we hope you are well and safe during these unprecedented times. Secondly, as you are well aware, the pandemic has spoiled the basisc foundation of doing business and our lives in general, in lieu of the lockdowns, slowdowns, labour unavailability and several other related and unrelated reasons, credit quality has been affected for the entire industry as the financing industry grapples with its longest winter in the pastfew decades. Thirdly, we as an organization, want to balance the above, with the relationship that we have enjoyed with you and hence we have drafted out a policy for pending payments that in our judgment best balances credit Ruloans Distribution Services Private Ltd. Vs. Oxyzo Financial Services Private Limited - CS (Comm) 366/21 Page 11 of 22 quality and fair practice principles.
Payout Policy:
1. The partner is requested to write to [email protected]. The GST will be refunded as per old policy once the input has been credited in our account. Kindly note that fresh requests have to be made for all GST refunds as it is possible that some cases may get missed out due to oversight and lesser staff in lockdowns.
2. Unpaid payouts will be made for all cases which have shown regularity in repayment for 3 consecutive month (beginning April' 2020).
3. Unpaid payouts for cases in moratorium are being withhel, they will be done once the accounts have been regualr for 3 months in a row. Partners have to be in touch with us for the same.
4. Unpaid payouts for cases in overdue are being withdheld. The payments will be made when the account is in regular status for 3 consecutive months. Partners have to be in touch with us for the same. 5 The payout for cases that have gone NPA that were paid for before will be clawed back (only those particulaar cases that have gone bad).
As the abvoe computation will take time, and we plan to initiate the payments within the first week of August'20, we will currently process 50% of the pending dues to you. Post that,the above computation will be done, case by case, and shared with you.
Further release of payments/clawback for excess payment done will be adjusted subsequently.
We appreciate allyour efforts and look forward to a long & fruitful relationship.
Warm regards Team Oxyzo"
24. Plaintiff vide mail datd 29.07.2020 (Ex.PW-1/5) acknowledged the mail but had not accepted the policy. Reply reads as under :-
"Dear Putta Acknowledging your mail As you mentioned above bad loan - is it, if any - try Ruloans Distribution Services Private Ltd. Vs. Oxyzo Financial Services Private Limited - CS (Comm) 366/21 Page 12 of 22 share that data asap. If possible, will try to push customer to pay the emi, (if at all they are irregular). About GST - Abhay will share you the date of GSO credit which is already given to you but not received by us, apart from pending payment aginst invoice raised.
About the terms of payment you have mentioned - our legal team will revert to you, on the same shortly. Regards, Vishal Phule - COO 9920262474
25. Defendant's version appears to be based on piece meal reading of the 'acknowledgement' in the plaintiff's mail dated 29.07.2020 which they claim was enough to be considered as an 'acceptance' of the said revised policy thereby denying the Plaintiffs a sum of Rs.7,09,925 as pending dues. This court finds no merits in the defence. PW-1 denied the suggestion that as per the revised policy, all clients referred by the plaintiff to the defendant who were having over due payment in respect of the same were to be withheld. PW-1 denied that he has acknowledged the revised pay out policy vide email dated 29.07.2020 (Ex.PW-1/15). Admittedly, by virtue of e-mail Ex.PW1/14 defendant had merely informed the plaintiff and other channel partners about drafting a policy for pending payments and seeking further added that since computation will take time, defendantm informed the plaintiff about initiating payments within first week of August 2020 and currently processing 50% of the pending due to plaintiff.
26. This court is in agreement with the contention of the plaintiff that plaintiff vide its email dated 29.07.2020 merely acknowledged the mail and not the terms of the revised policy, stated that as far as the terms of payments are concerned the Ruloans Distribution Services Private Ltd. Vs. Oxyzo Financial Services Private Limited - CS (Comm) 366/21 Page 13 of 22 same shall be responded to by the 'legal' team. It was submitted that the rationale behind the said reply obviously being that the said terms of the revised policy are illegal. In this context, it is also pertinent to read the mail dated 06.08.2020 (Ex.PW-1/6) sent by the plaintiff to the defendant, wherein the plaintiff have categorically denied to accept the terms of the revised policy during the subsistence of the Agreement dated 15.07.2020.
27. The e-mail containing pay out policy was only a draft and it cannot be held that plaintiff had given its consent to accept it or agreed to be goverened by revised policy drafted unilaterally by the defendant. There has to be consensus ad-idem i.e. meeting of mind to accept and enforce it as an agreement. This court finds no merits in the contention of the defendant that by acknowledging mail of defendant, plaintiff acknowledged to the terms and payment policy. By e-mail dated 06.08.2020 Ex.PW-1/16, plaintiff again wrote to the defendant. Accordingly, this issue no. 4 is decided in favour of the plaintiff and against the defendant.
ISSUE NO. 1"Whether plaintiff is entitled to the recovery of an amount of Rs.5,71,009/- from the defendant? OPP"
28. Onus to prove this issue was upon the plaintiff. Ld. counsel for the plaintiff submitted that there is no dispute about the agreement dated 15.07.2019 vide which plaintiff had to charge a pay out of 3% plus GST. No force maejure clause exists and unilateral policy dated 29.07.2020 is not an agreement between the parties as plaintiff had not accepted the revised policy, who stated that the same would be responded by the legal team as far as terms of payment are concerned and that plaintiff Ruloans Distribution Services Private Ltd. Vs. Oxyzo Financial Services Private Limited - CS (Comm) 366/21 Page 14 of 22 had fulfilled its obligation, issued invoices to the defendant over email and the defendant had not disputed the claimed amount.
29. Ld. counsel for the defendant submitted that PW-1 had signed the evidence affidavit at his home, in the absence of Ld. counsel for the plaintiff and PW-1 admitted that he had not come to the court to get the evidence affidavit attested. It is submitted that as per Order XIX Rule 5 CPC, a Court may, in its discretion, redact or order the redaction of such portions of the affidavit of examination in chief as do not, in its view, constitute evidence or return or reject an affidavit of examination in chief as not constituting admissible evidence. In support, he referred 'KBT Plastic Pvt. Ltd. Vs. Rajender Singh, MANU/DE/2791/2021. It is submitted that evidence affidavit of the plaintiff witness ought to be rejected and since the entire case of the plaintiff is rests on the evidence of the plaintiff witness, the suit deserves to be dismissed and plaintiff has failed to make out any case for payment of interest either through agreements, invoices or any other documents and has not put a single question on interest to the defendant's witness.
30. In the present case, the affidavit in evidence verified and attested on 09.11.2022 (Ex.PW-1/1) is on record shows that Shri Salaj Mridul having Enrol. No. D-2264/12 had identified the deponent Shri Sunil Kumar Dabral (PW-1). There is nothing on record to show that deponent has not signed in the presence of his advocate on the affidavit. No such suggestion has been given by the defendant to PW-1. The Enrol. number and Mobile number of counsel is mentioned below his signature. Having regard to the directions, referred in KBT Plastic's case (supra) referred by the Ld. counsel for the defendant, the Oath Ruloans Distribution Services Private Ltd. Vs. Oxyzo Financial Services Private Limited - CS (Comm) 366/21 Page 15 of 22 Commissioner could attest the affidavit on the basis of identification of the counsel. Moreover, there is no dispute that u/O XIX Rule 5 CPC as amended by the Commercial Court, court can redact, return or reject an affidavit if it does not constitute the admissible evidence. There is nothing on record to indicate if counsel for defendant had pointed out any defect in the affidavit or in any portion thereof which was not admissible. In view of this, court finds no merits in the submissions advanced by the the Ld. counsel for the defendant in this regard, which are rejected.
31. Now, in the present case, parties had entered into an agreement and the plaintiff being a DSA signed a partnership agreement dated 15.07.2019 with the defendants a NBFC for essentially bringing to the defendants potential borrowers on board and facilitating smooth documentation, financial history, credit evaluation etc. (Clause 2) to the satisfaction of the Defendants/NBFC's in return the Plaintiff was to charge a payout of 3% + GST off each referral (customer) brought on board with the Defendant Company (Clause 3), without any financial obligation in case the borrowers failed to fulfill their payment obligations towards the Defendant company. However, the defendants from December 2019 i.e. 6 months prior to the lockdown due to the COVID pandemic, began to default in making payments towards the payouts to the Plaintiffs.
32. Plaintiffs kept following up for the repayment of the dues, through various emails and other modes of communication, but to no avail. In the month of May 2020, defendant company being well aware that they were to comply and compensate the plaintiff's dues in terms of the agreement dated 15.07.2019 began Ruloans Distribution Services Private Ltd. Vs. Oxyzo Financial Services Private Limited - CS (Comm) 366/21 Page 16 of 22 to find umbrage under Moratorium due to Covid for dues which pre-dates the Covid Lockdown or even covered under the government's moratorium; a non-existent force majeure clause; and later also under an arbitrary revised policy dated 29.07.2020 which was of no value during the subsistence of the Agreement dated 15.07.2019 and has no bearing considering there being no acceptance of the said terms of the said revised policy by the Plaintiff.
33. Admittedly, parties had a written agreement dated 15.07.2019, which was valid till date as neither parties have rescinded from the said Agreement. Defendant has not disputed about signing of the said Agreement. They had acted upon the terms of the said Agreement and the defendant prior to the defaults and were regularly making payments in terms of the said agreement. Case of plaintiff is that defendant has been defaulting in making payments before the Global Pandemic due to COVID and even otherwise there was no moratorium or relief provided to NBFC's for payment of its dues and compliance with agreements signed between the instant parties. As per the terms in the agreement, defendant had to make payment within 50 days of loan disbursement but bills of outstanding for more than six months.
34. Indisputably, defendant had mentioned for release 50% in the first week of August 2020 but defendant had not even paid 50% of the payment or any of the amount out of amount claimed by plaintiff in the claim. Plaintiff not only did not give its consent to the revised draft pay-out policy of defendant but very clearly objected to the said proposed change in policy in Ruloans Distribution Services Private Ltd. Vs. Oxyzo Financial Services Private Limited - CS (Comm) 366/21 Page 17 of 22 detail vide email dated 06.08.2020. Plaintiff issued invoices and sent the same vide email to the defendant with all the details. It was submitted that Hon'ble High Court of Delhi in CM(M) No. 1185/2021 titled as "Flick Studios Pvt. Ltd. vs Gravity Entertainment Pvt. Ltd.", decided on 20.12.2021 that :-
"In the modern-day businesses, where all communications are through emails, invoices are routinely sent through email and such invoices are not signed by the parties. Therefore, there is no such thing as the original of the invoice. Invoice in the present case has been raised by the petitioner on the respondent and details of services as well as the purchaser have been duly mentioned in the invoice and receipt of the said invoice has also been acknowledged by the respondent.
35. In para No. 16 of the plaint, the plailntiff has asserted that the defendant owned the plaintiff a sum of Rs.5,71,009/-. In para No. 19, it is pleaded that defendant owes to the plaintiff a collectively sum of Rs.7,09,929/- including pay out and arrears between May 2020 till March 2021 and the calculatation total is P-18 Ex.PW-1/34. In the written statement the defendant has merely stated that the contents of para No. 6 are wrong and denied and contents of preliminary objections are reiterated, true and correct. There is no specific denial of the averments.
36. Defendant has not disputed the claimed amount. His version that the amount is not payable in terms of the revised policy dated 29.07.2020. In view of findings on issue no. 4, defendant cannot deny the payment to plaintiff on the basis of revised draft pay-out policy which was not having the effect of a binding contract to override the agreement dated 15.07.2019. There is also no merits in the contention of defendants that they would not pay the due amounts to the plaintiff only because the Ruloans Distribution Services Private Ltd. Vs. Oxyzo Financial Services Private Limited - CS (Comm) 366/21 Page 18 of 22 customers brought on board by the plaintiff had defaulted in making the payments to the defendants. Plaintiff in terms of the Agreement dated 15.07.2019 is not liable to suffer for the defaults by the customers. During arguments, on asking as to why no payment was paid, Ld. Counsel for the defendant submitted that no amount was payable to the plaintiff as per Clause 3, 4 and 5 of the new pay out policy. Undisputedly, the defendant has failed to rebut the amount due to the plaintiff or to show as per the invoice that the case of the plaintiff had fallen in NPA category and which case of moritorium etc.
37. In view of aforenoted discussion, this court holds that plaintiff has established that it is entitled to recovery of principal amount of Rs.5,71,009/- from the defendant. Accordingly, issue no. 1 is decided in favour of the plaintiff and against the defendant.
ISSUE NO. 2"Whether defendant is liable to pay GST in the sum of Rs.21,692/-?"
38. Onus to prove this issue was upon the plaintiff. Ld. counsel for the defendant submitted that plaintiff has failed to show that GST is payable, as claimed by the plaintiff. In para No. 17 it is averred that defendsant is liable to pay sum of Rs.21,619/- is pending GST as pay out. In para 40 of his evidence affidavit, PW-1 Shri Sunil Kumar Dabral has deposed that defendant is liable to pay a sum of Rs.21,692/- as pending GST. There is nothing in the cross-examination of PW-1 Shri Sunil Kumar Dabral to show that the claimed amount of Rs.21,692/- is not payable by the defendant. From the ledger/calculation table of the outstanding amount (Ex.PW-1/34), it is clear that an amount of Rs.17,192/- as regard the bill dated Ruloans Distribution Services Private Ltd. Vs. Oxyzo Financial Services Private Limited - CS (Comm) 366/21 Page 19 of 22 12.02.2020 and an amount of Rs.4,500/- as regard the bill dated 02.11.2020 has not been paid by the defendant, totaling Rs.21,692/-. During cross-examination suggestion has been put to PW-1 that GST pertaining to Shivani Creation and the Tech Master was the only amount payable in respect of GST pending as on 23.10.2020. Witness was confronted with Ex.PW-1/21. In view of this, this court finds that plaintiff has established that defendant is liable to pay Rs.21,692/- to the plaintiff towards GST. Accordingly, this issue no. 2 is decided in favour of the plaintiff and against the defendant.
ISSUE NO. 3"Whether plaintiff is entitled to recover interest @ 18% as claimed from the date of invoices till realization? OPP"
39. Onus to prove this issue was upon the plaintiff. Ld. counsel for the plaintiff submitted that the relationship between the plaintiff and defendant company was of commercial in nature and transactions being commercial, plaintiff is entitled to the interest @ 18% per annum. In response, Ld. counsel for the defendant submitted that plaintiff is not entitled to any interest as there is no affirmative averment in the plaint to justify grant of interest to the plaintiff. It is submitted that in Central Bank of India v. Ravindra and Others (2002) 1 SCC 367, it was held that award of interest pendente lite and post decree is discretionary with the courts as it is essentially governed by Section 34 of the CPC dehors the contract between the parties.
40. Now, the point to be addressed is whether plaintiff is entitled to interest and if so, what would it be the appropriate rate. As per Section 34 CPC, wherein and in so far as a decree is for payment of money, the court may, in the decree, order interest Ruloans Distribution Services Private Ltd. Vs. Oxyzo Financial Services Private Limited - CS (Comm) 366/21 Page 20 of 22 at such rate as the court deems reasonable to be paid on the principal sum adjudged, from the date of suit to the date of decree, in addition to any interest adjudged on such principal sum for any period prior to the institution of the suit with further interest at such rate not exceeding 6% per annum at court deems reasonable on such principal sum from the date of decree to the date of payment or to such earlier date as the court deems thinks. As per proviso to Sec 34 CPC, where the liability in relation to the sum so adjudged had arisen out of a commercial transaction, the rate of such further interest may exceed six per cent, per annum, but shall not exceed the contractual rate of interest or where there is no contractual rate, the rate at which moneys are lent or advanced by nationalized banks in relation to commercial transactions. Explanation I. - In this sub-section, "nationalized bank" means a corresponding new bank as defined in the Banking Companies (Acquisition and Transfer of Undertakings) Act 1970. Explanation II.- For the purposes of this section, a transaction is a commercial transaction, if it is connected with the industry, trade or business of the party incurring the liability.
41. Having regard to the lending rate of the bank for the commercial transactions, this Court is of the view that interest @ 9% per annum is reasonable and would serve the ends of restitutive justice. In the circumstances, plaintiff is held entitled to interest @ 9% per annum from the date of filing the suit till the realization of the entire amount.
42. The present suit was filed on 01.11.2021. In the factual matrix noted above, pleader's fee and litigation expenses are assessed as Rs.20,000/- and Court fee deposited by the plaintiff was Rs.9,500/-. This Court finds that plaintiff is entitled Ruloans Distribution Services Private Ltd. Vs. Oxyzo Financial Services Private Limited - CS (Comm) 366/21 Page 21 of 22 to costs of Rs.29,500/- (inclusive of Court fees). This issue no. 2 is answered accordingly.
RELIEF
43. In the result, a decree is hereby passed in favour of plaintiff and against defendant in the sum of Rs.5,71,009/- towards Principal amount; a sum of Rs.21,692/- towards GST alongwith interest @ 9% per annum w.e.f. the date of filing of the suit till its realization and costs of Rs.29,500/-. Decree sheet be prepared accordingly. Suit stands disposed of. File be consigned to record room.
(Dictated and announced today i.e. on 28.03.2023) (VINAY KUMAR KHANNA) District Judge (Commercial Court-02) South Distt., Saket, New Delhi Ruloans Distribution Services Private Ltd. Vs. Oxyzo Financial Services Private Limited - CS (Comm) 366/21 Page 22 of 22