Bangalore District Court
Rk Fabrics India Pvt.Ltd vs Atharvan Business Consulting on 2 November, 2019
IN THE COURT OF THE XIX ADDL. CITY CIVIL &
SESSIONS JUDGE AT BANGALORE CITY : (CCH.18)
Dated this 2nd day of November, 2019.
Present
SRI.DINESH HEGDE, B.A.,LL.B.,
XIX ADDL. CITY CIVIL & SESSIONS JUDGE,
BANGALORE CITY.
O.S.NO.395/2014
PLAINTIFF : RK Fabrics India Pvt.Ltd.,
(A private company limited by shares
and incorporated under the provisions of
the Companies Act, 1956)
Having its offices at:
No.1/1, 3rd floor
Vinayaka Towers,
1st Cross, Gandhinagar,
Bangalore-560 009.
Represented herein by its
Managing Director
Mr.Ramesh Kumar Shah,
aged about 54 years.
(By Keystone Partners,Advocates)
-VS-
DEFENDANTS : 1. Atharvan Business Consulting
Pvt.Ltd.,
(A private company limited by shares
and incorporated under the
provisions of the Companies Act,
1956)
Having its offices at:
No.2164, 3rd Floor, 27th Main,
Sector 1, HSR Layout,
Bangalore-560 102.
And also at:
2
O.S.No.395/2014
No.1060, 7th A Main,
3rd Block, Koramangala,
Bangalore-560 034,
Represented herein by its
Managing Director.
2. Microsoft Corporation India
Pvt.Ltd.,(A private company limited
by shares and incorporated under
the provisions of the Companies Act,
1956)
Having its offices at:
Ground and First Floor,
Signature Building,
Block-E, Embassy Golf Links
Business Park,
Off Intermediate Ring Road, Domlur,
Bangalore-560 071,
Represented by its Managing
Director.
(D.1 - By Sri.TSM, Advocate)
(D.2 - By Sri.SBM Advocate)
Date of Institution of the suit : 10/1/2014
Nature of the Suit : Recovery of money
Date of commencement of recording
of evidence[
: 13/8/2014
Date on which the Judgment was
pronounced : 02/11/2019
Year/s Month/s Day/s
Total Duration : 05 09 22
(Dinesh Hegde)
XIX Addl.City Civil & Sessions Judge,
Bangalore City.
3
O.S.No.395/2014
JUDGMENT
This suit is filed by the plaintiff against defendant for recovery of money.
2. The case of plaintiff in nutshell is that:-
The plaintiff is a private company limited by shares, belonging to the RK Group of Companies engaged primarily in the business of textile trading and it is a leading importer of fabric from reputed mills across the globe. The defendant No.1 is also a private company limited by shares with offices inter- alia in Bangalore. The defendant No.1 advertises its basic services as encompassing 5 service components viz., Solution Architecture, Project Management, Business Understanding, Implementation and Custom Development, Screen-shots collated from the website of the defendant No.1. The defendant No.2 is a private company limited by shares and appears to be a group company or affiliate of the USA-based Microsoft Corporation and it is engaged inter-alia in the business of software designs, production and 4 O.S.No.395/2014 marketing. The defendant No.1 acts as a product support partner ot the defendant No.2 for the latter's products including most pertinently, the latter's 'Microsoft Dynamics AX', 'Microsoft Dynamics NAV' and "Microsoft CRM" products. In and around May 2011, plaintiff made contact with the defendants who proposed the implementation of "Microsoft Dynamics NAV 2009" at the plaintiff's organization.
3. Defendants first approached the plaintiff around April-May 2011, they identified and proposed the "Microsoft Dynamics NAV 2009" ERP software system for the various business units belonging to the plaintiff and represented that this system would be the most feasible to execute, license and implement for the plaintiff's business purposes. The defendant No.2 in particular categorically recommended the "Microsoft Dynamics NAV 2009" software system for the plaintiff's business and stated that it would be ideal for the plaintiff's purposes. The defendant No.2 further represented to the plaintiff that since they did 5 O.S.No.395/2014 not undertake implementation assignments directly, they would have the same performed through their product support partner, viz., the defendant No.1. The plaintiff was also informed by the defendant No.2 that their ERP license would have to be purchased from the defendant No.1 for documentation purpose.
4. Based on the representations made by the defendants, the plaintiff agreed to purchase the software and utilize their services. On the basis of the mutual negotiations between the parties, the 1st defendant made a proposal for implementation to the plaintiff on the 29th of June 2011. The plaintiff issued a work order to the defendant No.1 on 29 th of June 2011. The contract also required a 100% advance payment to be made towards the product license fee and stipulated a phased milestone based payment schedule for the implementation fee. The plaintiff paid the entire license fee amount(inclusive of service tax, cess and VAT, but less TDS) to the 1 st defendant and also the entire 15% mobilization fee of the over all implementation service costs. However, the 6 O.S.No.395/2014 defendants have failed to perform their commitments under the contract. The 1 st defendant's team members remained absent frequently from the plaintiff's premises. The 1st defendant changed virtually the entire team deployed by it to the plaintiff's assignment, arbitrarily and without any prior notice to the plaintiff or the consent of the plaintiff. This was completely unacceptable to the plaintiff as the entire process of analysis was required to be started again, and the plaintiff was thus saddled with the requirement of investing its time, energy, manpower and cost once again and therefore, addressed an e-mail to the 1st defendant on the same day informing the 1st defendant of the fact that plaintiff was extremely surprised to see a new team at the discussions and to note its dissatisfaction. The promised ERP software system, for which the plaintiff had paid the licensee fee and also mobilization advance was not installed at all on the plaintiff's computed systems.
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O.S.No.395/2014
5. Despite its full co-operation and tolerant and indulgent handling of the totally unprofessional service levels of the 1st defendant which was only on account of the false assurances being given to it repeatedly by both the defendants - no results were delivered to it. Even after the lapse of several months from the date of the work order, the software system failed to be implemented effectively, and no ERP solution was made available to the plaintiff. The plaintiff addressed several e-mails to the defendants on 20th, 23rd and 26th of June 2012, asking for refund of the amounts paid by it, on the ground that there was an inherent mismatch in the plaintiff's business requirements. To the e-mails of the plaintiff, the 2 nd defendant replied viz an e-mail dtd:17 th July 2012, weakly proposing to resolve the issues faced by the plaintiff and also to make the implementation project a success. Hence, the plaintiff was constrained to issue a legal notice to the defendants canceling the work order dtd:29th June 2011, and inter-alia seeking refund of all the amounts paid by it towards the 8 O.S.No.395/2014 purchase of the license and also the mobilization fee paid by it to the 1st defendant towards implementation services.
6. The 1st defendant got issued through its legal counsel a wholly false and frivolous reply notice on 14th November 2012, but clearly and unequivocally admitting the role of the 2nd defendant in recommending the suitability of the "Microsoft Dynamics NAV 2009" ERP software system for the requirements of the plaintiff. The 1 st defendant further wrongly demanded that an amount of Rs.8,10,000/- be paid to it towards its alleged fee for "60% project completion". In fact the categorical admission of the 1st defendant, that they have not completed 100% of the contracted work, indicates that the ERP software system is not implemented on to the plaintiff's system, and therefore, dis-entitled the defendants from retaining any amounts received by them from the plaintiff. 1st defendant again issued a notice dtd:4th February 2013 unlawfully and without 9 O.S.No.395/2014 any basis whatsoever demanding a sum of Rs.8,10,000/- from the plaintiff by falsely claiming that these amounts were owed to it for its alleged "60% completion" of the project. The plaintiff also issued a demand notice dtd:4th April 2013 directly addressed to the 2nd defendant, reiterating its claims and afore mentioned demands, and noting that although its first demand notice was issued on the 15 th October 2012 and marked to the attention of the 2 nd defendant also, the 2nd defendant had failed altogether to respond to the plaintiff.
7. It is further stated in the plaint that the 1st defendant has caused tremendous losses to the plaintiff. Apart from the amount of Rs.19,60,100/- paid towards the purchase of product license for the Microsoft Dynamic NAV 2009 program of the 2 nd defendant, and a further amount of Rs.2,97,810/- paid by it towards the mobilization fee for implementation process, the plaintiff has also had to incur significant costs in deploying its senior management and staff members for engaging with the unstable and 10 O.S.No.395/2014 unprofessional team of the 1 st defendant for several weeks on end. Owing to the failure of the defendants to fulfill their contractual and legal obligations to the plaintiff, the plaintiff now unfortunately finds itself back at square one i.e., without any ERP software system at all, even though it has spent more than Rs.22,57,910/- to the defendants. The failure to implement the software system is solely attributable to the defendants. The defendants frequently misrepresented that the 1st defendant was competent and capable of successfully implementing the ERP software system. As the events show, the said assertion has turned out to be completely false and misleading, as the 1st defendant's team was highly unprofessional and wholly incompetent when it came to taking up execution of the implementation phase. The 1st defendant did not have the requisite skill and expertise for the tasks it contractually bound itself to do. It is submitted that had the plaintiff not been induced in to believing the misrepresentation of the defendants to be true, they would not have issued any 11 O.S.No.395/2014 work order to the defendants in the 1 st place. The defendants are liable jointly and severally to refund the entire amount of Rs.22,57,910/- along with interest thereon at the rate of 18%p.a. from the date of paying for the software system license, being 29 th of June 2011, until date of full repayment. The interest claim as on 10/1/2014 amounts to Rs.10,31,045.95/-. The plaintiff is also entitled for additional costs in a sum of Rs.1,00,000/-. Hence, prays to decree the suit as prayed for.
8. After service of suit summons, defendant No.1 & 2 appeared through their counsel and filed their separate written statement.
9. The defendant No.1 in his written statement has contended that that its role is very much limited to the supply of license being Product Partner of 2nd defendant and implementation of ERP by customizing the same to the requirements of the plaintiff. He has 12 O.S.No.395/2014 denied that the plaintiff approached the defendant No.1 & 2 directly for which strict proof and evidence is needed. He has admitted that the license shall be purchased through the Product Partner of 2 nd defendant and the implementation will be done by the same partner subject to fulfillment and providing for certain requirements and facilities as detailed in the 1st defendant's proposal dtd:29/6/2011. The contents of the entire documents with regard to the duties and responsibilities of both the parties i.e., the plaintiff as well as defendant No.1 are to be reviewed with the documentary evidence and not a particular or an isolated clause for the self centric illegal claim of the plaintiff ignoring several facts. The alleged expressions "Fundamental incompatibility", "the Defendants object failure in implementation of the ERP software system" etc., are redundant and in view of the fact that, the Decision to purchase the ERP Microsoft Dynamics NAV 2009 was only based on the advise, decision etc., of their own IT/ERP Project Consultant. The plaintiff is further put to strict proof 13 O.S.No.395/2014 and evidence for usage of the expressions "Misrepresentations", "inducing the plaintiff for entering in to contract", "skill set up of the 1 st defendant's team etc. It is evident from the so called emails that there was no attempt from plaintiff for getting the software implemented by proper co- operation and only a demand for refund was made on false allegations ignoring the lapses on the part of the plaintiff detailed in para 6 supra, and the fundamental breach is only attributable to the plaintiff and not to the defendants. Defendant No.1 has further contended that all the averments which are not specifically replied or rebutted, shall be considered as denied by the 1st defendant.
10. Defendant No.1 has further contended that the plaintiff will be held responsible for all the cost and consequences arising thereof, and plaintiff has to pay balance of Rs.8,10,000/- Project Completion at 60% towards the cost of resources other incidental expenses agreed in work order even while taking the 14 O.S.No.395/2014 doctrine of quantum Meerut. He is not liable for making any refund as claimed by the plaintiff for which separate recovery proceedings are being initiated for breach of the terms and conditions of the contract by the plaintiff. Hence, prays to dismiss the suit of plaintiff with exemplary costs for lack of legally acceptable and substantial evidence for establishing the blatant allegations of misrepresentations, inducement to purchase the ERP software, inefficiency in implementation, incompatibility of the software etc.
11. Defendant No.2 in his written statement has contended that the software product known as "Microsoft Dynamics ERP" is one of the business software products of Microsoft Corporation, USA and is being widely used by more than 10,000 customers across the world and has been installed in more than 200 business establishments in India. The software products developed by Microsoft Corporation, USA are not sold by defendant No.2 as such but are licensed 15 O.S.No.395/2014 by Microsoft Corporation or its subsidiaries for use by the end-user customers. This is the standard practice of all companies engaged in the business of software development.
12. Defendant No.2 has further contended that as per its business policy, till 2013, defendant No.2 did not license software directly to the end-user customer in India, such as the plaintiff. As per the standard business practice, defendant No.2's business associates (also called resellers) carry out all commercial transactions for Microsoft products with the customers directly and enter in to contracts independent of the defendant No.2. Based on their needs, products like Microsoft Windows and Office etc., are procured by business associates from Microsoft licensing entity. Defendant No.1 is such business associate who has approached by the plaintiff for implementation of software solutions for their business purposes and as per their requirements. The plaintiff raised its purchasing 16 O.S.No.395/2014 request directly with defendant No.1 and may have paid the defendant No.1, but at no point of time, did plaintiff and defendant No.2 enter in to any agreement whatsoever for license or implementation services of software as alleged by the plaintiff and the plaintiff is put to strict proof of the same.
13. The ultimate decision on the software solutions to be implemented and installed lies solely with distributors such as defendant No.1 and the customers. As per the standard policies of defendant No.2 the sales model of its software products is always through its partner network of agencies and hence, if a customer such as the plaintiff makes a query on defendant No.2 such customer is advised to procure the software or license through an agency such as defendant No.1 and have the same implemented/installed by defendant No.1 as per their system requirements and business needs. Thus, while defendant No.2 may have advertised a software product to the general public, the license of the said software is done solely through distributors such as 17 O.S.No.395/2014 defendant No.1 who would have studied the system requirements and business needs of the plaintiff and be in the best position to advise suitable products and solutions for the customers such as plaintiff's business operations. Defendant No.2 has no role in the sale of the license of the software product purchased by the plaintiff in the instant case and the implementation of the software solution suggested by defendant No.1 to the plaintiff for its business purposes and cannot be held liable or responsible for any of the alleged grievances of the plaintiff as detailed in the suit and defendant No.2 is not liable to pay any of the amounts claimed by the plaintiff in this suit and prays to dismiss the suit with exemplary costs.
14. Based on the above pleadings, the following issues were framed:-
ISSUES
1. Whether the plaintiff proves that he had entered in to an agreement with defendants for customized "Enterprise Resource Planning" i.e., ERO software solutions to purchase the same from defendant No.1 and 2 under "Microsoft Dynamics NAV 2009"?18
O.S.No.395/2014
2. Whether the plaintiff further proves that he issued work order to the defendant No.1 on 29/6/2011 and work was to be completed within 5 months from 1/8/2011 with three months of "post implementation support"?
3. Whether the plaintiff further proves that several meetings were held and has corresponded with defendants and defendants had not completed and implemented the programme?
4. Whether the plaintiff further proves that the defendants are liable to pay Rs.19,60,100/- for non delivery of ERP Software Solution and Rs.2,97,810/-
towards the amount spent for obtaining license of Microsoft Dynamic NAV 2009 totally to the tune of Rs.22,57,910/-?
5. Whether the plaintiff is entitled for interest at 18% totally to the tune of Rs.10,31,045.95 till the date of filing the suit and damages to the tune of Rs.One Lakh?
6. Whether defendant No.1 proves that the plaintiff had not provided the required hardware, dedicated project manager and did not sign the analyses documents as stated in para No.6 of the written statement?
7. Whether the defendant No.2 proves that he had no role in the sale of license of the software product purchased by the plaintiff and therefore, he is not liable to pay any amount to the plaintiff?
19
O.S.No.395/2014
8. Whether the plaintiff is entitle for the suit claim amount with future interest?
9. What order or decree?
15. The Managing Director of plaintiff company is examined as PW-1 and marked Ex.P.1 to Ex.P.27 and closed its side. On behalf of defendants, Managing Director of the defendant No.1 company and Company Executive of defendant No.2 company are examined as D.W.1 & 2 and marked Ex.D.1 to Ex.D.26.
16. Heard arguments and perused the records.
17. My findings on the above issues are as under :-
Issue No.1:- In the Affirmative; Issue No.2:- In the Affirmative; Issue No.3:- In the Negative; Issue No.4:- In the Negative; Issue No.5:- In the Negative; Issue No.6:- In the Affirmative; Issue No.7:- In the Affirmative; Issue No.8:- In the Negative; Issue No.9:- As per the final order for the following:-20
O.S.No.395/2014 REASONS ISSUE No.1 to 6
18. These issues are taken up together for discussion as they are inter-related to each other.
19. It is the specific case of the plaintiff company that for its requirements of customized Enterprise Resource Planning (ERP) to handle the business entered in to a contract with the 1 st defendant for ERP Solutions. It is the further case of the plaintiff that it was introduced to the 1st defendant by the 2nd defendant. On the recommendations of the 2 nd defendant, the plaintiff decided to purchase the license for Microsoft Dynamics NAV Software System and engaged the 1st defendant for its implementation. In furtherance of the contract, the plaintiff has paid the entire advance amount Rs.19,60,100/- to the 1 st defendant company. It is the further case of the plaintiff that the work done by the 1 st defendant is not to the satisfaction of the plaintiff company. Therefore, the plaintiff filed suit for recovery of money of Rs.19,60,100/- and Rs.2,97,810/- as mobilization fee 21 O.S.No.395/2014 and totally Rs.22,57,910/- with interest at the rate of 18% p.a. It is the case of the defendant No.1 that the plaintiff has not provided required hardware, dedicated project manager and did not sign the analysis documents. It is further case of the defendant No.1 that plaintiff company is liable to pay an amount of Rs.8,10,000/-. The case of the defendant No.2 is that he had no role in the sale of license of the software products purchased by the plaintiff and therefore, he is not liable to pay any amount to the plaintiff.
20. To prove the case of the plaintiff, the Managing Director of the plaintiff company i.e., R.K.Fabrics India Pvt.Ltd., represented by Sri. Rameshkumar P.Shaw has been examined as P.W.1. In his evidence by way of affidavit, he has reiterated the facts averred in the plaint and claimed that his company has lost the valuable time resulted in loss of business quantified at Rs.10 Lakhs.
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O.S.No.395/2014
21. He also relied upon the documents marked at Ex.P.1 to Ex.P.27. It is not in dispute that the plaintiff and the defendant No.1 companies entered in to an agreement for providing software solutions. Ex.P.1 is the copy of the Memorandum of Association of the 1 st defendant company reveal that the purpose of incorporation is carry on business of software development, date processing and procure software and to engage in purchase, sale, distribution, development etc. relating to software development and data processing. Ex.P.2 is computer generated sheet of services to be provided by 1 st defendant company reveal that it designs and architects the ERP Solutions depending on the customer's requirements. Ex.P.3 is the computer generated copy of Memorandum of Association of defendant No.3 company i.e., Microsoft Corporation (India) Pvt.Ltd., reveal that the object of the incorporation of the company for manufacture, assemble, erect, install, purchase, import, export etc. and carry out research in design, develop engineer, alter, exchange or 23 O.S.No.395/2014 process in any manner relating to data process etc. Ex.P.4 is the computer generated copy of the advertisement of the 1st defendant company in its Website shows its various business products. Ex.P.5 is the computer generated copy of proposal dtd:29/6/2011 prepared by the defendant company for the plaintiff company. The proposal is for implementation of the plaintiff's ERP Software Solution.
22. Therefore, it is clear that plaintiff had made a proposal to the 1st defendant company to enter in to a contract of ERP Software Solutions. Ex.P.6 is the computer generated work order dtd:29/1/2011 issued by the plaintiff to the defendant No.1 company in respect of implementation of Microsoft Dynamics reveal that the plaintiff has accepted the proposal and accordingly, the plaintiff company has placed the work order as per the terms and conditions mentioned in the proposal dtd:29/6/2011. Hence, it is clear that the proposal is coupled with consideration amount of 24 O.S.No.395/2014 Rs.19,60,100/- and Rs.2,97,810/- as mobilization fee as reflected in tax-invoice marked at Ex.P.7 & 8. Therefore, the plaintiff and the defendant No.1 company have entered in to a valid agreement enforceable by law and it become a contract as contemplated under Section 2(h) of the Indian Contract Act, 1872.
23. Ex.P.9 & 10 are the copy of two bank cheques dtd:29/6/2011 reveal that the plaintiff company has issued two cheques for a sum of RS.17,64,090/- and Rs.2,68,029/- in favour of the defendant No.1 company. However, the original cheques are not produced by the plaintiff or the documents to show that the said amount has been credited to the bank account of defendant No.1 company.
24. Ex.P.12 is the computer generated copy of letter dt:18/8/2011 reveal that the plaintiff sent an e-mail to the defendant No.1 stating that the plaintiff company is surprised to see a new Team for the meeting and none of the previous members were the part of the 25 O.S.No.395/2014 discussion and asked the 1st defendant to stick on to one team for the entire project. Ex.P.13 is the e-mail letter dtd:19/8/2011 issued by the defendant No.1 to the plaintiff company apologizing for any discomfort caused and reassured him that providing best resources and team for the implementation and support to the plaintiff company.
25. Ex.P.14 is the e-mail letter dtd:19/8/2011 reveal that plaintiff wrote a letter to the 1 st defendant by request to improve a CA in the team. Ex.P.15 is the e-mail letter dtd:30/8/2011 reveal that plaintiff intimated the defendant No.1 that plaintiff company is having serious issues with the project as seems to be a major gap between understanding in the working team. Ex.P.16 is the e-mail letter dtd:1/10/2011 issued by the defendant No.1 to the plaintiff. Ex.P.17 is the e-mail dtd:20/6/2012 issued by the plaintiff to defendant No.2 company regarding implementation of Microsoft Dynamics requesting to give immediate refund of the amount that they paid for the 26 O.S.No.395/2014 implementation of Microsoft ERP since there was inherent mismatch in the requirements. It also shows that payment done by the plaintiff company on behalf of the 1st defendant company and again in e- mail dtd:23/6/2012 plaintiff company requested the defendant No.2 for refund of the amount. Ex.P.19 is the e-mail dtd:17/5/2012 reveal that defendant No.2 company sent an e-mail to the plaintiff company stating that it is unfortunate that the plaintiff company has not been able to implement ERP to the satisfaction.
26. Ex.P.20 is the letter dt:15/10/2012 reveal that the plaintiff issued a letter to the defendant No.1 company for refund of the payment required to be made on account of misrepresentation and non- execution of the work order. Ex.P.21 is the reply dtd:14/10/2012 reveal that 1st defendant company sent a letter to the plaintiff company stating that the work order given for purchaser of software license from Microsoft was executed by the company and the project mobilization advance given to the 1 st 27 O.S.No.395/2014 defendant cannot be refunded since plaintiff has failed in compliance of the terms and conditions of the implementation of the pro gramme envisaged in the proposal in Para No.8.1 & 8.2. Further, the 1 st defendant company has claimed balance amount of Rs.8,10,000/- towards cost of resources and other incidental expenses agreed in work order.
27. Ex.P.22 is the notice dtd:24/12/2012 reveal that the plaintiff company has issued a letter to the 1 st defendant company calling upon them to pay a sum of Rs.22,57,810/- with interest at the rate of 18% p.a. Ex.P.23 is the reply notice dtd:4/2/2013 reveal that defendant No.1 company issued a reply notice to the plaintiff company again demanding the said balance amount of Rs.8,10,000/-. Ex.P.24 is the notice issued by the plaintiff to defendant No.2 calling upon them to pay an amount of Rs.19,60,000/- towards purchase of Microsoft Dynamics NAV 2009 Software System Licenses and an amount of Rs.2,97,810/- towards payment made as project mobilization fee with 28 O.S.No.395/2014 interest at the rate of 18% p.a. The P.W.1 has also filed a certificate under Section 65-B of the Indian Evidence Act by way of affidavit stating that those documents produced by him are computer generated documents. However, apart from the e-mails, none of the documents are computer generated documents. The plaintiff has produced only copies of the documents including two cheques.
28. To rebut the evidence adduced by the plaintiff, the Managing Director of the defendant No.1 company by name Razi Ahmed Mohammed has been examined as D.W.1. Head for Microsoft Business Applications of defendant No.2 company by name Samik Roy has been examined as D.W.2 They relied upon Ex.D.1 to D.26. Ex.D.1 is the e-mail dtd:17/8/2011 reveal that the defendant No.1 company has sent an e-mail to the plaintiff company intimating supply of license files received from the Microsoft company. Ex.D.1(a) is the attachment of license issued with plaintiff which was sent by 2nd defendant through 1st defendant reveal 29 O.S.No.395/2014 that what are the license files issued to the plaintiff by the 1st defendant company. Ex.D.1(b) is the permission to the plaintiff to install the license of micro software. Ex.D.2 is the e-mail dtd:16/9/2011 sent by the defendant No.1 to the plaintiff reveal that it has submitted the particulars of review meeting held on 15/9/2011 in the Head Office of the plaintiff company. Ex.D.2(a) is the minutes of the said meeting. Ex.D.3 is the e-mail dtd:6/9/2011 intimating the details of Fabrics sales held on 6/9/2011. Ex.D.4 is an e-mail dtd:8/10/2011 sent by the 1st defendant to the plaintiff company requesting a date for demonstration of ERP System. Ex.D.5 is the e-mail dtd:2/10/2011 sent by plaintiff to defendant No.1 company. Ex.D.6 is the e-mail dtd:30/9/2011 by the plaintiff company to defendant No.1 reveal that they received the FRD which was very macro level and missed significant details and reporting the dis- satisfaction for not sending the complete team. Ex.D.7 & Ex.D.8 are also e-mails dtd:20/8/2011 & 19/8/2011 respectively. Ex.D.9 dtd:19/8/2011 is also 30 O.S.No.395/2014 an e-mail sent to the plaintiff company. Ex.D.11 is the e-mail dtd:19/8/2011 reveal that the defendant No.1 company has sent an e-mail to the plaintiff company explaining the reasons for change in the Team. In the e-mail the 1st defendant company has stated that the one Mr.Hemanth comes with a lot of experience in the Garments and Textile field and he has taken large role in Textile and Garments Division and he is an able person. Ex.D.12 & Ex.D.13 are e- mails sent by the plaintiff to the 1 st defendant company intimating that it is hard for him to arrange the senior people. Ex.D.14 is the e-mail sent by the plaintiff to defendant No.1 company reveal further transactions were held between them. Ex.D.15 to Ex.D.22 are the various e-mails reveal communication held between the plaintiff and the 1 st defendant and the 1st defendant company has responded to queries of the plaintiff company.
29. Ex.D.23 is the copy of the micro soft intellectual property license agreement format. Ex.D.24 is the 31 O.S.No.395/2014 current bank account statement of HDFC Bank containing 17 pages reveals the bank transaction of the 1st defendant company and Ex.D.25 is the certificate under Section 65-B of the Indian Evidence Act, 1972 declaring that those documents produced by the defendants are computer generated documents and hence, admissible in evidence.
30. Ex.D.26 is the copy of the letter dtd:4/2/2013 reveal that the plaintiff issued a notice to defendant No.1 stating its displeasure at having received the invoice dtd:28/1/2013 for an amount of Rs.9,10,116/- and rejected the invoice as mis-representative in nature.
31. In the cross-examination of P.W.1, he has stated that ERP means Enterprise Resource Planning. He has further stated that after receiving the proposal from the defendant No.1, the plaintiff company decided to give contract, but they have not consulted any technical person in this field before entering in to contract with the 1st defendant. They consulted 32 O.S.No.395/2014 Mr.Ravishankar for looking after the project in technical field. But, he has not produced any documents or evidence in this regard. He has further stated that period of installation was six months and they paid a sum of Rs.18 Lakhs towards license fee. They have no control over the leave policy of the 1st defendant company.
32. In the cross-examination, D.W.1 has stated that he was involved in implementation of ERP Software to the plaintiff company. He has stated that the plaintiff company customized the software sold by the 2nd defendant and gave it to plaintiff for standard implementation. He has denied the suggestion that the defendant No.1 company has failed to execute the work order placed by the plaintiff. He also denied the suggestion that they have not made available licensed software to the plaintiff.
33. On perusal of the above evidence, it is clear that the plaintiff and the defendant No.1 entered in to an agreement for supply of software system to the 33 O.S.No.395/2014 plaintiff company and in furtherance of the contract, defendant No.1 company has purchased the software license from the defendant No.2 company and installed to the plaintiff company. However, some dispute arose between plaintiff and defendant No.1 company regarding the mode of service and according to the plaintiff, the service of the defendant No.1 is not up to the level of the terms of the contract.
34. It is evident that the plaintiff company has entered into a contract with the 1 st defendant company by knowing all the requirements available to them as per the agreement. Therefore, the question of misrepresentation by the defendant No.1 does not arise. On perusal of the evidence, it reveal that the plaintiff company wanted particular employee of the defendant No.1 company have to be deputed for execution of the work order. The plaintiff cannot insist the defendant No.1 as to send a particular employee to work with plaintiff company to execution of the work or implementation of the work order. However, 34 O.S.No.395/2014 the defendant No.1 company being the other party to the contract has every right to decide as to whom should be deployed for service for implementation of the work order. There is no specific contract to the effect that particular persons are to be sent for implementation of the work order.
35. It is admitted fact that defendant No.1 company has issued a notice to the plaintiff along with an invoice for a sum of Rs.9,10,116/- calling upon the plaintiff to pay the amount as a fee for services performed by the defendant No.1 company. After receiving the said notice, the plaintiff has filed this suit stating that he has already terminated the contract and claiming an amount of Rs.22,57,910/-.
36. Absolutely, there is no evidence adduced by the plaintiff to show that a damages of Rs.22,57,910/- was caused to the plaintiff company due to the breach of contract. Further, there is no such specific assessment of the damages by the qualified expert as to ascertain what is the damages caused to the 35 O.S.No.395/2014 plaintiff company. On the other hand, the defendant No.1 company has proved that it has performed its part of the contract. The plaintiff has failed to prove that the contract has been broken and he suffered loss by breach of contract. Admittedly, the plaintiff has not rescind the contract. Therefore, he is not entitled for damages.
37. For the above reasons, though the plaintiff has able to prove that it has entered in to agreement with the 1st defendant for customization of software solutions and issued work order to the 1 st defendant, but, failed to prove that defendant No.1 had not completed the work order. Therefore, plaintiff is not entitled for Rs.19,60,100/- and Rs.2,97,810/- for non- delivery of software solutions and amount spent for obtaining license of microsoft dynamics NAV 2009 totally to the tune of Rs.22,57,910/-. When the plaintiff is not entitled for recovery of the said amount, the question of awarding interest at the rate of 18% p.a. and damages does not arise. Hence, I 36 O.S.No.395/2014 answer Issue No.1, 2 & 6 in the Affirmative and Issue No.3 to 5 in the Negative.
38. ISSUE No.7:- According to the defendant No.2, he had no role in the sale of license of the software product purchased by the plaintiff and therefore, he is not liable to pay any amount to the plaintiff. To support his contention, Head of the Microsoft Business Applications represented by Samik Roy has been examined as D.W.2. In his evidence by way of affidavit, he has reiterated the averments made in the written statement.
39. According to D.W.2, he has not made any representations or recommendations to the plaintiff as to what software products would be most suitable to the plaintiff's business since the same could only be determined by defendant No.1 after suitably studying the plaintiff's business and investigating the actual requirements of software products.
40. In the cross-examination nothing is elicited to cast the liability of the 2nd defendant company except 37 O.S.No.395/2014 an e-mail representation of its employee under Ex.P.19 responding to the plaintiff's company's e-mail, nothing is on record to show that the 2 nd defendant company is also liable for the damages caused to the plaintiff.
41. On perusal of the records, there is no direct transactions between the plaintiff and the 2 nd defendant. Further, the 2nd defendant is not the party who made proposal. There is no contract between the plaintiff and 2nd defendant. Further, there is no such tripartite agreement between plaintiff, defendant No.1 & 2. Therefore, the defendant No.2 has no role in the sale of the licensed products purchased by the plaintiff. Hence, I answer Issue No.7 in the Affirmative.
42. ISSUE No.8:- The plaintiff has failed to prove that he is entitled for recovery of money and damages as claimed in the plaint. Hence, he is not entitled for any reliefs. Therefore, I answer Issue No.8 in the Negative.
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43. ISSUE No.9:- In view of findings on issue Nos.1 to 8, I proceed to pass the following:-
ORDER Suit of the plaintiff is dismissed with costs. Draw decree accordingly.
(Dictated to the Judgment Writer, transcribed and computerized by her, corrected and then pronounced by me in the open Court on this the 2 nd day of November, 2019.) (Dinesh Hegde) XIX ADDL.CITY CIVIL & SESSIONS JUDGE, BANGALORE CITY.
ANNEXURE I. List of witnesses examined on behalf of :
(a) Plaintiff's side :
P.W.1 - Ramesh Kumar P.Shah
b) Defendants' side :
D.W.1 - Razi Mohammed D.W.2 - Samik Roy II. List of documents exhibited on behalf of :
(a) Plaintiff's side :
Ex.P.1 True copy of MOA
Ex.P.1(a) Complete Memorandum of
Association
Ex.P.2 Computer generated sheet of
the services to be provided by
defendant No.1
Ex.P.3 Computer generated copy of
MOA of defendant No.2
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O.S.No.395/2014
Ex.P.4 Computer generated copy of
advertisement of defendant No.1
Ex.P.5 Computer generated sheet of
proposal dtd:29/6/2011
Ex.P.6 Computer generated sheet of
work order
Ex.P.7 Computer generated tax invocie5
letters and 7 postal
acknowledgments
Ex.P.8 Another true copy of tax invoice
Ex.P.9 & P.10 Xerox copies of 2 cheques
Ex.P.11 Computer generated e-mail
dtd:17/9/2011
Ex.P.11(a) to Print out of Ex.P.11 to 16
P.16(a)
Ex.P.12 Another e-mail dtd:18/8/2011
Ex.P.13 True copy of e-mail dtd:19/8/2011
Ex.P.14 to Xerox copies of e-mails of
Ex.P.24 different dates
Ex.P.25 Certificate under Section 65-B of
Indian Evidence Act
Ex.P.26 One more e-mail conversation
Ex.P.27 Certificate under Section 65(B) of
Indian Evidence Act
(b) Defendants' side:-
Ex.D.1 E-mail dtd:17/8/2011
Ex.D.1(a)& (b) Attachment to Ex.D.1 Ex.D.2 E-mail dtd16/9/2011 Ex.D.2(a) Attachment to Ex.D.2 Ex.D.3 E-mail dtd:6/9/2011 Ex.D.3(a) Attachment to Ex.D.3 Ex.D.4 E-mail dtd:8/10/2011 Ex.D.5 E-mail dtd:2/10/2011 Ex.D.6 to D.22 E-mail conversations of different dates 40 O.S.No.395/2014 Ex.D.23 Microsoft Intellectual Property License Agreement Ex.D.24 1st defendant's current account Bank statement with HDFC Bank Ex.D.25 Certificate under Section 65-B of Indian Evidence Act Ex.D.26 Copy of the letter dtd:4/2/2013 written by plaintiff to 1st defendant (Dinesh Hegde) XIX ADDL.CITY CIVIL & SESSIONS JUDGE, BANGALORE CITY.
GVU/-
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O.S.No.395/2014 2/11/2019 Plaintiff - KP D.1 - TSM D.2 - SBM For Judgment Judgment pronounced in open court vide separate detailed judgment with the following operative portion:-
ORDER Suit of the plaintiff is dismissed with costs.
Draw decree accordingly.
(Dinesh Hegde) XIX ADDL.CITY CIVIL & SESSIONS JUDGE, BANGALORE CITY.