Delhi District Court
M/S Quasar Media Pvt. Ltd. (Counter ... vs M/S Y-Axis Solutions Pvt. Ltd on 12 August, 2024
1
IN THE COURT OF SH. BHUPESH KUMAR: DISTRICT JUDGE
(COMMERCIAL COURTS)-05, SOUTH-EAST DISTRICT, SAKET
COURTS, NEW DELHI
CS (Comm) No.1200/2022, and
CS (Comm) No.593/2023
M/s Y-Axis Solutions Pvt. Ltd.
3rd floor, Fortune Atrium Road no.36,
Jubilee Hills, Hyderabad-500023.
....Plaintiff/non-claimant
Vs.
M/s Quasar Media Private Limited,
(through its Business Unit Hogarth India)
Throug its Directors/Authorized Representative
D-119, Lajpat Nagar-I,
New Delhi-110024.
Email ID:- [email protected]
....Defendant/Counter-claimant
Date of Institution: 16.12.2022
Date of Arguments: 08.08.2024
Date of Judgment : 12.08.2024
JUDGMENT
1. By way of present common judgment, the suit seeking recovery of sum of Rs.86,30,586/- filed by the plaintiff company M/s Y Axis Solutions Pvt. Ltd. against defendant company M/s Quasar Media Private Limited and counter-claim filed by counter-claimant / defendant against non-claimant / plaintiff seeking recovery of sum of Rs. 74,71,301/-, shall be disposed of.
2. The plaintiff has filed the present suit for recovery of Rs.86,30,586/- alongwith interest against defendant, inter alia, on the ground that plaintiff is engaged in business of providing immigration consultancy services at global CS (Comm) 1200/22 & 593/23 Bhupesh Kumar District Judge(Commercial)-05, S-E, Saket, New Delhi/12.08.2024 2 level, having its offices across India, Dubai, Sharjah, Melbourne and Sydney etc. It has been further submitted that plaintiff company's website's traffic is more than 5 million per year and has a ranking in top 25,000 sites in the world and within top 2000 site in India.
It has been further submitted that in order to prepare new online platform in quest for preparing all new Y-Axis online platform, website and DIY Dashboard engaged M/s Landor to trace a reputed and experience company for this purpose by October, 2021, and accordingly, M/s Landor introduced the plaintiff to the defendant. It has been further stated that defendant company has represented to be expert and possess sufficient resources in development/desigining web pages, complete website, dashboard etc. and by beliving it the plaintiff has entered into an agreement with defendant on 07.06.2021. It has been further stated that clause 3 and schedule A and B of said contract, contained the scope of work which is as under :
Scope of work / services.
3.1 On the terms and conditions more particularly set out hereunder, HOGARTH hereby agrees to provide to Y-AXIS its Services along with its deliverable timelines as mutually agreed upon and more particularly stated in Schedule A duly annexed hereto and forming an integral part of this Agreement. Further, the milestone level delivery schedule, as mutually agreed upon and more particularly stated in Schedule B is duly annexed hereto and form an integral part of this ............
It has been further stated that project was to be completed within specified time line and was divided into three phases, as follows :
Phase 1 :
1. Y-Axis Website with CMS & Community
2. Global Indian Website with CMS & Community * New
3. Website Analytics Integration* New
4. Microservices to interface between CS (Comm) 1200/22 & 593/23 Bhupesh Kumar District Judge(Commercial)-05, S-E, Saket, New Delhi/12.08.2024 3 Websites & Salesforce * New Phase 2:
1.Spill Over & Feedback from Phase1
2.My Y-Axis Dashboard
3.Commerce Integration for DIY Services
4.Marketing Automation Implementation
5.Assisted Journey + Chatbot + Suggestions & Recommendations (without Al / ML)
6.Dashboard Analytics Integration
7.Existing Y-Profile & SSO Integration * New
8.Microservices to interface between Dashboard, Y- Profile & Salesforce * New Phase 3:
1.Spill Over & Feedback from Phase 2
2. Assisted Journey + Chatbot +Suggestions & Recommendations
3.Partner Ecosystem & Service Marketplace * New
4.(with Al/ ML)
5.Microservices Orchestration* New It has been further submitted that as per Schedule B of the contract, milestone 1 was to be completed by 07.10.2021. The milestone 1 consist various elements like designs, Login and signup, development of home page, service page, dashboard, global Indian website etc. In respect to consideration, it has been stated that monthly retainership fee of Rs.18,62,238 was fixed as specified in para 16 of Schedule A. It has been further submitted that it was also agreed that retainership invoice would contain 90% of the monthly retainership fee and the remaining 10% fee would CS (Comm) 1200/22 & 593/23 Bhupesh Kumar District Judge(Commercial)-05, S-E, Saket, New Delhi/12.08.2024 4 be paid at the time of delivery of milestone-1. It has been further submitted that plaintiff paid payment of Rs.7,19,800/- on 21.04.2021. Further the plaintiff has paid payment of Rs.19,77,696 per month to the defendant on 21.06.2021, 21.07.2021, 21.08.2021 and 21.09.2021. Therefore, the plaintiff has paid total sum of Rs.86,35,586/- to defendant.
It has been further submitted that defendant has not completed the milestone-1 within time line specified as per terms of the contract. The plaintiff has issued notice/email dated 04.10.2021 to defendant by stating :
"Please note that the site must go live on 7th Oct as per agreement, this will have a direct impact on invoicing and further milestones. Kindly expedite the delivery to meet the deadline."
However, in reply to the said reminder the Defendant on 4th October, 2021 itself, while admitting the severe issues with the speed submitted that they were still trying and without resolving the speed issues it would not be possible to Go-Live. The email dated 4th October, 2021 categorically specifies that "Also on speed we have tried to make improvement as much as possible, we are still trying but this should stop us from Go-Live."
It has been further submitted that thereafter, on 05.10.2021 the plaintiff wrote email to the defendant by stating that site ranking gets impacted if Google page speed insights does not recognize page speed. It has been further submitted that defendant wrote email dated 06.10.2021 again making absolutely vague, ambiguous and frivolous reasons and excuses and failed to perform work as per terms of the contract. It has been further submitted that plaintiff on 06.01.2021 again categorically wrote to the defendant that "as discussed on call, actual requirement is to get a score of 90+ for our webpages on page speed insights. However, we are willing to go live with the 6 pages (home, migrate, work, study, visa, coaching) if the page speed insights shows a CS (Comm) 1200/22 & 593/23 Bhupesh Kumar District Judge(Commercial)-05, S-E, Saket, New Delhi/12.08.2024 5 ranking of 80+. Also, note that all logins, redirections and site urls must work as desired before going Live. Kindly let us know a TAT for the same."
It has been further submitted that plaintiff even on 07.09.2021 categorically wrote that "We need speed score of 100 for Mobile ". It has been further submitted that it is admitted fact that defendant had several critical issues, hence, new site could not be launched. It has been further submitted that defendant had no solution and no concrete road maps for the resolution to the glitches and continued to postpone the same indefinitely. It has been further submitted that plaintiff in the month of November, 2021 forced to write several emails including email dated 10.11.2021 asking several critical issues regarding the project, but to no effect. It has been further submitted that Phase- I was not delivered by defendant and vide email dated 15.11.2021 the plaintiff categorically reminded that despite expiry of five weeks after the deadline, the Phase I deliverables have not been sent, but the defendant had no explanation to the same. It has been further submitted that ultimately vide email dated 06.01.2022 the plaintiff has terminated the contract, which was duly acknowledged by defendant vide email dated 06.01.2022. It has been further submitted that vide email dated 03.02.2022 the plaintiff has requested the defendant for delivery of all material qua which the payment has been made to defendant till 07.10.2021. It has been further submitted that milestone 2 was to be delivered by 07.02.2022, but the same was not delivered. It has been further submitted that due to negligent conduct of defendant and failure to prove deliverables, the plaintiff has suffered severe loss and its six different projects got stalled due to this project.
It has been further submitted that defendant company has provided a website zip file falsely and frivolously claimed to have delivered product and CS (Comm) 1200/22 & 593/23 Bhupesh Kumar District Judge(Commercial)-05, S-E, Saket, New Delhi/12.08.2024 6 that too with no instructions. The defendant was supposed to post the same live and provide appropriate demo of it.
It has been further submitted that date of delivery was extended from time to time on the request of defendant as detailed below :
Date of New Delivery New Promised Delivery Status Promised Status 7th June-Plan 1st - 7th October & Milestone No Delivery 2 on 7th February, 2022 th 11 October-Revised Plan 14th Ocotber Delivery No Delivery 18th October-Revised Plan 21st October Delivery No Delivery st 21 October-Revised Plan 22nd December Delivery No Delivery 12th November-Revised Plan 7th January Delivery No Delivery rd 23 November-Revised Plan 7th January Delivery No Delivery 9th December-Revised Plan 28th January Delivery No Delivery th 10 December No Delivery th 24 December-Revised Plan 28th January Delivery No Delivery th
7 January, 2022-Revised 1 Week Delivery No Delivery Plan 10th January-Revised Plan 21st March No Delivery It has been further submitted that defendant has violated the terms of contract as the defendant despite receipt of sum of Rs.86,30,586/- has not delivered the material on time, as per contract. It has been further submitted that hence, the defendant is entitled for refund of entire amount paid to defendant.
It has been further submitted that plaintiff had engaged new agency and completed the work of website in around June, 2022. It has been further submitted that plaintiff has received notice dated 28.04.2022 from defendant claiming damages, which was replied on 20.05.2022, wherein the plaintiff has claimed refund from defendant. Inter alia, on the basis of these submissions, prayer has been made to pass decree of sum of Rs.86,30,586/- alongwith interest @ 12% per annum.
CS (Comm) 1200/22 & 593/23 Bhupesh Kumar District Judge(Commercial)-05, S-E, Saket, New Delhi/12.08.2024 7
3. The defendant has contested the suit by filing written statement, wherein, the defendant has mentioned the facts of the matter, to the effect, that both parties entered into master service agreement dated 11.06.2021. The scope of the work and service were to be rendered by defendant to plaintiff as per Schedule-A. It has been further submitted that it was agreed between parties to complete milestone-I by 07.10.2021. The scope of milestone I and delivery timeline was set out in Schedule B of the agreement. It has been further submitted that services were rendered by defendant to plaintiff till 06.10.2021 and all the invoices were raised by defendant. It has been further submitted that defendant has rendered services as agreement to the plaintiff in time manner, however, the plaintiff sought to enlarge the scope of work beyond the framework as agreed. It has been further submitted that on 04.10.2021 the plaintiff raised a fabricated concern of page speed not being upto the mark, to which defendant clearly conveyed that page speed optimization is a separate set of service which is not included in the scope of services as enshrined under the milestone 1. It has been further submitted that plaintiff has not paid retainership fee to the extent of 90% qua which the defendant reserve their right to claim the same vide separate counter-claim. Invoice Number Invoice date Invoice amount Remarks QPRO/2021/609 08.11.2021 19,77,697 Retainership 7th Oct 2021 to 6th Nov, 2021 QPRO/2021/678 06.12.2021 19,77,697 Retainership 7th Nov 2021 to 6th Dec, 2021 QPRO/2022/011 06.01.2022 19,77,697 Retainership 7th Dec 2021 to 6th Jan, 2022 Total outstanding INR 59,33,091 It has been further submitted that defendant has time and again sent reminders and follow ups for payment of said amount, but of no avail. It has CS (Comm) 1200/22 & 593/23 Bhupesh Kumar District Judge(Commercial)-05, S-E, Saket, New Delhi/12.08.2024 8 been further submitted that in this respect emails were sent by defendant seeking payment from 3rd January 2022 to 25th April, 2022. It has been further submitted that even the plaintiff has not paid 10% retainer fee alongwith GST which comes to Rs.13,03,568/-. The details of said claim is as under :
Period Amount June 7, 2021 to July 6 2021 1,86,224 July 7, 2021 to August 6 2021 1,86,224 August 7, 2021 to September 6 2021 1,86,224 September 7, 2021 to October 6 2021 1,86,224 October 7, 2021 to November 6 2021 1,86,224 November 7, 2021 to December 6 2021 1,86,224 December 7, 2021 to January 6 2021 1,86,224 Total amount Payable 13,03,568 GST @ 18% on 13,03,568/- 2,34,642 Grant total 15,38,210
It has been further submitted that sum of Rs.74,71,301/- as mentioned above remained unpaid. It has been further submitted that deliverables as agreed under the agreement for milestone 1 stood duly completed and delivered on 04.10.2021 at 10.40 AM. It has been further submitted that on 07.10.2021 the milestone 1 was completed but the plaintiff kept on enlarge the scope of work while making attempt to include it in the ambit of milestone 1 under the garb of page speed and site rankings which was not included in the exhaustive scope of work as agreed. On this account, certain correspondences were referred from October 4 2021 to October, 7 2021.
It has been further submitted that termination of services of defendant as communicated by plaintiff on 06.01.2022 was merely a threat. On this aspect, it has been stated that services of defendant were further continued by plaintiff.
CS (Comm) 1200/22 & 593/23 Bhupesh Kumar District Judge(Commercial)-05, S-E, Saket, New Delhi/12.08.2024 9 It has been further submitted that thereafter new plans were proposed with unreasonable timelines by plaintiff and defendant clarified that the additional services shall require more time alongwith additional cost with further reminding the plaintiff to remit the due outstanding amount for four months from October, 2021 to January, 2022. It has been further submitted that after deliberations and discussions on 06.02.2022, the plaintiff again terminated the agreement and denied any pending dues to the services rendered by defendant. On this aspect, it has been stated that certain emails were exchanged between parties during 31.01.2022 to 07.02.2022. It has been further submitted that on 28.04.2022 defendant issued notice demanding outstanding amount of Rs.74,71,301/- from plaintiff, which was replied by plaintiff vide letter dated 20.05.2022. It has been further submitted that the allegations reveal that suit is nothing but a counter-blast to demand notice dated 28.04.2022 of defendant.
On merits, it was denied that plaintiff is entitled for sum of Rs.86,30,586/-. The status of company of plaintiff was denied for want of knowledge. However, the status of defendant company was not denied. The fact that M/s Landor introduced the plaintiff has not been disputed. It was denied that there was any misrepresentation or misleading assurances were given by defendant at the time when the agreement took place. The execution of agreement between parties and conditions contained in the agreement has not been disputed. In respect to payment of Rs.7,19,800/- has been disputed by stating that it was not arising out of the agreement. It has been denied that plaintiff has paid total sum of Rs.86,30,586/-. It has been further denied that since inception of work of milestone 1, the defendant was lagging behind and had acute technical issues etc. It has been further submitted that plaintiff has placed reliance on notice / emails dated 04.10.2021 and interpretation of reply CS (Comm) 1200/22 & 593/23 Bhupesh Kumar District Judge(Commercial)-05, S-E, Saket, New Delhi/12.08.2024 10 email thereto is grossly erroneous and establishes mala fide on the part of the plaintiff as the plaintiff has not disclosed complete set of email trail. It has been further submitted that plaintiff has relied upon documents in piecemeal manner. It has been further submitted that defendant states that complete reply dated 04.10.2021 clearly states as follows :
"Hi Anshul All deliverables from milestone 1 are complete. We just need deployment support from your team. We are ready for Go- Live.
Aaryan will be sharing a consolidated states update by EOD.
Also on speed we have tried to make improvements as much as possible, we are still trying but this should stop us from Go Live."
It has been further submitted that the defendant has inadvertently missed the word 'not', hence it is mere typographical error while not meaning what the plaintiff falsely alleges it to be.
In respect to email dated 08.10.2021 issued by plaintiff to defendant to get all issued under control, it has been stated that defendant has replied the said email, but the plaintiff has not annexed the same with ulterior motive. It has been further submitted that defendant has replied all emails on which the plaintiff is relying upon It has been further submitted that email dated 10.11.2021 issued by plaintiff wherein several critical issues regarding project were raised, were duly replied by defendant vide reply dated 12.11.2021. It has been further submitted that email dated 06.01.2022 vide which the plaintiff made futile attempt to terminate the agreement was duly replied, wherein, the defendant has cleared that since the defendant was not compensated since October 2021 and that removal of code was an empty action as the plaintiff would have already made a copy of the code. On this aspect, it has been stated CS (Comm) 1200/22 & 593/23 Bhupesh Kumar District Judge(Commercial)-05, S-E, Saket, New Delhi/12.08.2024 11 that in any case the plaintiff estopped from raising these concerns in a belated manner.
It has been further submitted that all deliverables in milestone were duly delivered in timely manner as agreed, which can be easily gathered from the exchanged correspondences between plaintiff and defendant. Inter alia, on the basis of these submissions, prayer has been made to dismiss the suit.
The replication to the written statement was filed by plaintiff, wherein, the contents of plaint were reiterated and reaffirmed and has generally denied the contents of the written statement.
4. Counter-claim The defendant has filed separate counter-claim of sum of Rs.74,71,301/- on the ground that vide agreement dated 11.06.2021 the defendant was retained for one year with retainership fee of Rs.19,77,697/- per month. It has been further submitted that prior to milestone of first phase i.e. 07.10.2021 retainership fee already paid, but the retainership fee for the months November-December, 2021 and January, 2022, totaling a sum of Rs.59,33,091/- not paid. By way of present counter-claim, the defendant has claimed 10% of retainership fee of Rs.1,86,224/- per month from 07.06.2021 to 06.01.2022 alongwith GST @ 18% for a sum of Rs.2,34,642/-. Hence, by way of present counter-claim, the defendant has prayed for decree of sum of Rs.74,71,301/- (i.e. 59,33,091 + 15,38,210/-).
Written statement to Counter-claim.
The plaintiff has filed written statement to the counter-claim, wherein, the plaintiff has mainly relied upon the contents of plaint and further submitted to the effect that since defendant has not completed the work within the time frame of milestone 1, hence, defendant is liable to refund the retainership fee and fee paid by plaintiff for working on the system to ascertain to provide CS (Comm) 1200/22 & 593/23 Bhupesh Kumar District Judge(Commercial)-05, S-E, Saket, New Delhi/12.08.2024 12 services for the upgradation of its website. It has been further submitted that defendant has not carried out any work in view of the contract and defendant is not entitled for any retainership fee. Inter alia, on the basis of these submissions, prayer has been made to dismiss the counter-claim.
Replication to the written statement of non-claimant was also filed on behalf of defendant/counter-claimant,wherein, the contents of the counter- claim were reiterated and reaffirmed and has generally denied the contents of the written statement.
5. After completion of pleading of parties, for the purpose of recording of evidence, the counter-claim was clubbed with main suit. On the basis of pleading of parties, following issues were framed on 01.11.2023 :
1. Whether the plaintiff is entitled for decree of a sum of Rs.86,30,586/- against defendant, as prayed for? OPP
2. Whether the plaintiff is entitled for any interest as claimed, if so, at what rate and for what period? OPP.
3. Whether the counter-claimant is entitled for decree of a sum of 74,71,301/- against plaintiff, as prayed for? OPD
4. Whether the counter-claimant is entitled for any interest as claimed, if so, at what rate and for what period? OPD.
5. Relief.
6. After framing of issues, Ld. Local Commissioner was appointed for the purpose of recording evidence of parties and the evidence of both parties were recorded before the Ld. Local Commissioner.
7. The plaintiff has examined Mr.Anshul Singhal, Manager of plaintiff company as PW-1. He has led his evidence by way of affidavit Ex.PW1/A, wherein, he has made similar deposition to that of contents of the plaint. He has relied upon following documents i.e. Board Resolution dated CS (Comm) 1200/22 & 593/23 Bhupesh Kumar District Judge(Commercial)-05, S-E, Saket, New Delhi/12.08.2024 13 18.11.2022 as Ex. PW1/1, copy of agreement dated 07.06.2021 alongwith Schedule A & B as Ex.PW1/2, statement of account as Ex.PW1/3, communication/emails exchanged between parties as Ex.PW1/4, demand notice dt. 28.04.2022 as Ex.PW1/5, reply dated 20.05.2022 as Ex.PW1/6, rejoinder dated 13.06.2022 as Ex.PW1/7, non-starter report dated 04.08.2022 as Ex.PW1/8, affidavit U/s 65B of Evidence Act alongwith replication as Ex.PW1/9 and affidavit U/s 65B of Evidence Act in support of documents as Ex.PW1/10. The witness was cross-examined at length by Ld. Counsel for defendant. However, his cross-examination shall be considered at the time of appreciation of evidence. PE was closed.
8. The defendant in support of his case has examined Mr. Yogesh Kumar, Director Finance, of defendant company as DW-1. He has led his evidence by way of affidavit Ex.DW1/A, wherein, he has made similar deposition to that of contents of the written statement. He has relied upon documents i.e. board resolution dated 29.03.2023 as Ex.DW1/1, copy of master service agreement dated 11.06.2021 Ex.DW1/2 already exhibited as Ex.PW1/D1, invoices as Ex.DW1/3 (colly.), communications between parties as Ex.DW1/4 (colly.) already exhibited as Ex.PW1/D2, email dated 10.01.2022 as Ex.DW1/5, demand notice dated 28.04.2022 as Ex.DW1/6 already exhibitted as Ex.PW1/5, copy of rejoinder dated 13.06.2022 as Ex.DW1/7 already exhibited as Ex.PW1/7, affidavits U/s 65 B of Indian Evidence Act as Ex.DW1/8 and Ex.DW1/9. The witness was cross-examined at length by Ld. Counsel for plaintiff. However, his cross-examination shall be considered at the time of appreciation of evidence. DE was closed.
CS (Comm) 1200/22 & 593/23 Bhupesh Kumar District Judge(Commercial)-05, S-E, Saket, New Delhi/12.08.2024 14
9. I have heard the arguments of Mr.Tapan Kumar Jha, Ld. Counsel for plaintiff and Mr.Nitish Chaudhary, Ld. Counsel for defendant besides going through the material available on record. Written submissions were also filed on behalf of both parties.
10. My issue-wise findings are as under : -
Issue no. 1. Whether the plaintiff is entitled for decree of a sum of Rs.86,30,586/- against defendant, as prayed for? OPP The onus to prove this issue was on the plaintiff. Ld. Counsel for plaintiff submitted that plaintiff that negotiations took place between both the parties vide which plaintiff intended to engage defendant to upgrade its website and thereafter, defendant sought six weeks time to study the system to ascertain to provide services to plaintiff in this respect, and for this purpose defendant has charged sum of Rs.6,10,000/-. It has been further submitted that after the defendant conducted detailed study of system, has agreed to provide services to plaintiff to upgrade its website, and an agreement Ex.PW1/D1 was executed between both the parties on 11.06.2021, vide which the defendant has agreed to provide its services for upgradation of website of the plaintiff in three phases and the milestone for completion of first phase was agreed as 07.10.2021.
It has been further submitted that plaintiff has retained the defendant for obtaining its services and retainer fees was fixed @ Rs.18,62,238/- per month + GST. It has been further submitted that plaintiff has paid Rs.19,77,696/- per month from 21.06.2022 to 24.09.2022. It has been further submitted that the plaintiff has already paid Rs.7,19,800/- to defendant on 21.04.2021 and as such sum of Rs.86,30,586.08/- have been paid to defendant as per statement of account Ex.PW1/3.
CS (Comm) 1200/22 & 593/23 Bhupesh Kumar District Judge(Commercial)-05, S-E, Saket, New Delhi/12.08.2024 15 Ld. Counsel for plaintiff has further vehemently submitted that the page speed score of website and search engine optimization (SEO) were integral part of contract which were never achieved by defendant. It has been further urged that this fact was disclosed by DW-2 during cross examination and attention of the Court has been diverted towards the answers to question no. 39 and 40 of cross examination of DW-2 in this respect. It has been further submitted that vide email dated 07.09.2021 part of EX.PW1/4, plaintiff informed the defendant that the page speed score for mobile was only 1 whereas the speed score of 100 was required for mobile. It has been further submitted that on 04.10.2021, plaintiff has informed the defendant that site must go live on 07.10.2021 as per agreement otherwise it would have impact on invoicing further milestone and requested defendant to expedite the matter to meet deadline. Ld. Counsel for plaintiff submitted that defendant has responded to the said email and has informed the plaintiff that they are trying to make improvements as much as possible and they are still trying but this should stop them from go live, meaning by, the defendant has informed the plaintiff that the speed of the webpage might stop them from go live.
At this stage, Ld. Counsel for defendant submitted that in the said email that due to inadvertence the defendant has not mentioned word "not" in the last line of this email and submitted that without incorporating word "not" in the said line, this line has no meaning.
Ld. Counsel for plaintiff further submitted that as per Clause 3 of Scope of Work of the contract, the parties had right to review and make change/update the scope of work. It has been further submitted that as per Clause 4.4.1(d) of the contract, the defendant was required to inform plaintiff regarding progress of the work. It has been further submitted that as per CS (Comm) 1200/22 & 593/23 Bhupesh Kumar District Judge(Commercial)-05, S-E, Saket, New Delhi/12.08.2024 16 Clause 5, the defendant could have charged extra amount for enhancing the scope of work or for providing additional services. It has been further vehemently submitted that the page speed score and search engine optimization were basic requirement of work. The plaintiff has raised these concerns with the defendant since inception and has sent email dated 22.06.2021 and 07.09.2021 to the plaintiff but the plaintiff has not done anything to improve the speed and ultimately this fact stopped the plaintiff from go live. It has been further submitted that defendant has not disputed the speed page and SCO required for higher search engine ranking and the attention of the Court was diverted towards question no. 22, 63 of cross examination of PW-1. Inter alia, on the basis of these submissions, it has been submitted that since the defendant has not achieved the scope of work even qua milestone one, hence defendant is liable to refund the fee paid for system study and monthly retainership fees from June, 2021 to September, 2021. It has been further submitted that plaintiff has examined PW-1 Mr. Anshul Singhal, who has supported the cse of plaintiff and proved on record all relevant documents.
Per contra, Ld. Counsel for defendant has submitted that defendant has examined two witnesses i.e. DW-1 Mr.Yogesh Kumar and DW-2 Ms. Smriti Singh who have supported the case of defendant. It has been further submitted that page speed or search engine optimization were never part of agreement between the parties. It has been further submitted that after initial study of system, defendant has agreed to upgrade the website page of plaintiff in different phases, but there was no condition in the agreement that the defendant was also required to improve the speed of web page of plaintiff. It has been further submitted that defendant has completed the assigned work of first phase before the date of completion of milestone one i.e., 07.10.2021 CS (Comm) 1200/22 & 593/23 Bhupesh Kumar District Judge(Commercial)-05, S-E, Saket, New Delhi/12.08.2024 17 and has informed the plaintiff vide email dated 04.10.2021, that all the deliverables are ready and the speed of the page should not stop them from go live. It has been further submitted that since the speed or site ranking was not obligation of the defendant, rather, SCO was particularly excluded from agreement as per Clause 16 of Schedule A, hence, the defendant cannot be faulted for something which was not his responsibility. It has been further submitted that even otherwise the plaintiff has not brought on record any evidence that what was the page speed of the old website of the plaintiff or that what was the page speed of new website on 04.10.2022.
Arguments heard. Material perused.
It is not disputed that the plaintiff has engaged the services of the defendant for upgrading its existing website. It is also not disputed that after brief communications through emails, the defendant has sought 6 weeks time to study the system and provide architecture for upgrading website of defendant. It is also not disputed that after initial study of system, the defendant has agreed to provide its services to plaintiff for upgrading existing website of the plaintiff in time bound manner and agreement dated 11.06.2021 Ex.PW1/D1 to commence from 07.06.2021 for one year, was executed between both the parties. Inter alia this agreement consist of scope of work and deliverable timelines as Schedule A and delivery milestones and timelines as Schedule B. Schedule A, inter alia, consist of architecture as Clause 13 that is how the website of the plaintiff would function or work. The retainership fees of Rs.18,62,238/- was also agreed between the parties as per agreement Ex.PW1/D1. Further, as per this agreement, the first milestone was to be completed by 07.10.2021. The milestones included element of design, logging and signup, development of homepage, service page, dashboard, global Indian page, nominee registration page, Australian Page, Dubai page CS (Comm) 1200/22 & 593/23 Bhupesh Kumar District Judge(Commercial)-05, S-E, Saket, New Delhi/12.08.2024 18 and Y-Axis communication set one which the plaintiff required to achieve in the milestone 1. However, from perusal of agreement it is found that there is nothing that the webpage speed or search engine optimization was job of defendant. Further, in Schedule 1 of agreement EX.PW1/D1, under the assumptions clause, it has been specifically mentioned as under:-
1. SEO analysis and maintenance is not included in scope and will be provided by Y-Axis team.
The said clause in unmistakable term reflects that rather the SEO analysis was job of the plaintiff. Under these eventualities, it is found that providing SEO was not job of defendant in view of written contract between the parties.
In respect to verbal evidence of witnesses as pointed out by Ld. Counsel for plaintiff, before proceeding ahead, here it is necessary to scrutinize the cross examination of DW-2 and PW-1 as pointed out by Ld. Counsel for plaintiff. The cross examination of DW-1 is as under :
Q 39. Is it correct that seach engine optimization is one of the multiple indicators of ranking of a website on search engine? A. Yes.
Q40. Is it correct that page speed score is one of the multiple indicators of ranking of a website on seach engine?
A. Yes.
These were the two questions put to DW-2 during cross examination on the basis of which Ld. Counsel for plaintiff has submitted that it was job of the defendant to provide search engine optimization for the improvement of ranking of website/search engine of plaintiff. However, question no.41 were put to this witness is as under:-
Q41. I put it to you that search engine optimization was part of scope of work of agreement entered into between the plaintiff and the defendant?
(objected to by Ld. Counsel for defendant as being a matter of record and barred by Section 92 of Evidence Act) A. Not a part of said agreement.
CS (Comm) 1200/22 & 593/23 Bhupesh Kumar District Judge(Commercial)-05, S-E, Saket, New Delhi/12.08.2024 19 From the answer to question no. 41, it was found that DW-2 in unmistakable term has stated that providing SEO was not scope of the work. Further, cross examination of DW-1 has been perused. Ld. Counsel for plaintiff has pointed out the answer to question no.20, 22, 28, 29, 42, 43, 45, 46, 63 of DW-1, which are as under :
Q20. I put it to you that Ex.PW1/D1 is the contract executed between the parties for the present project.
A. Yes this is the virtual contract.
(The witness is shown Ex.PW1/D1).
Q22. Can you show from the agreement where these are agreed between the parties?
A. The witness points to clause 13 of Ex.PW1/D1 (page no. 106), states that PWA as referred in para-29 is part of clause 13, "architecture" page-106, clause 13 of Ex.PW1/D1 (page no. 106), states that lead tracking as referred in para 29 is part of Clause 13, "architecture" page-106 as Analytics; SF Integration as Salesforce CRM application and API's ; CMS at page no. 109 as "Drupal Hybrid CMS"; product development is a general term referred to the whole project; Template at page no. 108; individual pages at page no. 117 at clauses 4 and 5; SEO analysis will be done by plaintiff and implemented by defendant refer to page no.115. (The witness is shown Ex.PW1/D2(Colly).
Q28. I put it to you that the defendant was ready to go live on the agreed date as per the contract, keeping aside the desired speed? A. It is incorrect. There were many other functionalities that were not ready to go live.
Q29. What do you have to say?
A. Email dated 07.10.2021 - about this it can be seen in the comments in email, "we will be sharing expected go live date shortly"; email dated 04.10.2021 at 10:40 - about this it can be seen in the comments in email, "we will be sharing consolidated status by EOD". Hence, the plaintiff were not ready to go live. Q42. I put it to you that the plaintiff insisted on a page speed of 80 plus in the present project as an add on request to milestone -1. A. No it is part of the project.
CS (Comm) 1200/22 & 593/23 Bhupesh Kumar District Judge(Commercial)-05, S-E, Saket, New Delhi/12.08.2024 20 Q43. Can you show me from Ex.PW1/D1 where page speed of 80 plus is recorded?
A. Referred to page 106, where accelerated mobile page, progressive web app, CDN and on page 115 - SEO Analysis is mentioned, hence the speed and SEO are part of agreement. Q45. I put it to you that page speed of 80 plus was delivered by the defendant as desired.
A. Not as per time lines.
Q46. Is it your case that page speed of 80 plus was delivered by the defendant at any point of time during the contract? A. Yes for few pages.
Q63. I put it to you that the defendant did not delay the go live of the milestone 1 but instead the plaintiff kept delaying the go live by introducing additional requirement beyond the contract?
A. As the defendant did not complete the basic architecture and functionalities which are required for going live without having any impact on running of current business there was no option but to ask for delivery of milestone 1 to ensure that at least the basic website requirements are met. Moreover defendant has already done a system study to understand the existing website and the implication of the same on the business. For a website to run properly basic architecture and functionalities are mandatory so that the running of current business is not impacted. Simple attribute like SEO, AMP, CWV, PWA, API's SF integration, Linkages, and Security plus QA were not ready on the agreed date as per the contract. Plaintiff did not ask for any additional requirements.
(OBJ by Ld. Counsel for defendant : that the witness has not answered the suggestion but instead has given roundabout answer, as an attempt to lead examination in chief during cross examination).
From careful scrutiny of said evidence, it is found that even though there was some issue in respect to speed of website page, but the witness has categorically stated that it was not part of contract. Further, the email dated 04.10.2021, has been perused. As per the contentions of Ld. Counsel for plaintiff, the defendant has admitted that the go live of website was not possible. In order to remove any confusion, the contents of the email dated 04.10.2021 part of Ex.PW1/4, is reproduced as under:-
CS (Comm) 1200/22 & 593/23 Bhupesh Kumar District Judge(Commercial)-05, S-E, Saket, New Delhi/12.08.2024 21 "Hi Anshul, All deliverables.............................................. Aryan will be sharing.................
Also on speed, we have tried to make improvements as such as possible, we are still trying but this should stop us from Go Live."
From careful scrutiny of contents of last line of this email, it is found that without inducting word "not" after should and before stop the line cannot be termed as complete.
Under these circumstances, it is found that only on the omission on part of defendant by not mentioning the word 'not' in the said line, it cannot be presumed that it was admission on part of the defendant and the plaintiff cannot be allowed to take benefit of bonafide mistake in writing of the said email by the defendant.
Further, in view of Section 91 of Indian Evidence Act, the contents of the writings of document cannot be proved, otherwise then proving the document itself. Further, it is based on "best evidence rule", in view of judgment in Case Tulsi vs. Chandrika Prasad,(2006) 8 SCC 322.
In case Roopkumar vs. Mohan Thedani, (2003) 6 SCC 595, it has been held to the effect by Hon'ble Supreme Court that when document is produced in terms of Section 91 of Indian Evidence Act, provision of Section 92 comes into operation for the purpose of excluding any oral agreement or statement for the purpose of contradicting, verifying, adducing or subtracting from its term.
Further, in case Kashi Nath Chatterjee vs. Chandi Chand Banerjee, (1866) SCC Online Cal 66, Full Bench of Hon'ble High Court has held as under:-
"verbal evidence is not admissible to vary or alter the terms of the written contract, where there is no fraud or mistake, and in CS (Comm) 1200/22 & 593/23 Bhupesh Kumar District Judge(Commercial)-05, S-E, Saket, New Delhi/12.08.2024 22 which the parties intend to express in writing what their words import. If a man writes that he sales absolute, intending the writing which he executes to express and convey the meaning that he intend to sale absolutely, he cannot, by mere verbal evidence, show that, at the time of the agreement, both parties intended that there contract should not be such as their written words express, but that which they expressed by their words to be an absolute sale should be a mortgaged."
Further, in case Mahinder Singh vs. State of Haryana, (1974) SCC 285 , Hon'ble Supreme Court has held to the effect that oral evidence which runs counter to an admission, contained in writing signed by a party weak piece of evidence and cannot be accepted as such.
In view of these judgments, oral evidence in respect to the contents of the documents executed between the parties not permissible except in the case of fraud etc. Reverting to the present matter, it is admitted fact that contract Ex. PW1/D1 was executed between parties. From perusal of entire contract, it is found that there is no condition that defendant was required to provide SEO. As held earlier, even this fact has been mentioned in assumptions of Schedule A of Ex.PW1/D1. Further there is nothing on record which suggest that any fraud has been committed by any of the party. Under these eventualities, it is found that the contentions of Ld. Counsel for defendant that the defendant has not provided that requisite webpage speed or search engine optimization.
In the light of this discussion, it is found that the plaintiff has failed to prove on record that it was fault of the defendant of not completing the agreed work of phase 1 within stipulated period/first milestone i.e., 07.10.2021.
Further, from admitted email dated 04.10.2021 of defendant, it reflects that deliverables for milestone 1 were ready and plaintiff was called upon to CS (Comm) 1200/22 & 593/23 Bhupesh Kumar District Judge(Commercial)-05, S-E, Saket, New Delhi/12.08.2024 23 provide deployment support team. On the other hand, plaintiff in response to same has not disputed qua deliverables, however, raised plea of speed page of website/SEO. The defendant was not required to provide the same has already been discussed.
Under these eventualities it is found that deliverable material was ready with defendant before 07.10.2021 i.e. date of 1 st milestone and in case it was not go live, the same cannot be termed as fault of defendant. Under these eventualities it is found that since defendant has prepared the deliverables, in view of contract, the plaintiff is not entitled for any refund of money, as prayed for. Accordingly, this issue stand decided in favor of defendant and against plaintiff.
11. Issue no.2 : Whether the plaintiff is entitled for any interest as claimed, if so, at what rate and for what period? OPP The onus to prove this issue was upon plaintiff. However, since issue no. 1 has been decided against plaintiff that the plaintiff is not entitled for any amount in this matter, consequently, the plaintiff is not entitled for any interest.
12. Issue no.3 : Whether the counter-claimant is entitled for decree of a sum of Rs.74,71,301/- against plaintiff, as prayed for? OPD.
The onus to prove this issue was upon defendant.
In respect to counter claim, Ld. Counsel for defendant has submitted that the defendant was engaged for one year with the retainership fee of Rs.19,77,697/- per month for upgrading the website of defendant. It is further submitted that the first milestone was till 07.10.2021 and the defendant has completed the work by 07.10.2021 and provided the same to plaintiff. It has CS (Comm) 1200/22 & 593/23 Bhupesh Kumar District Judge(Commercial)-05, S-E, Saket, New Delhi/12.08.2024 24 been further submitted that it is now for the plaintiff to upload the same on any search engine including google etc., however, the job of defendant stands complete when the defendant has handed over the assigned work to plaintiff on time. It is further submitted that even thereafter, the defendant continued with the rest of work till January 2022 and provided the same to plaintiff, but the plaintiff has not paid the retainership fee for the month of November, December of 2021 and January of 2022.
On the other hand, Ld. Counsel for plaintiff submitted that the defendant is not entitled for any amount on the ground that once the defendant has failed to complete the assigned job in the first milestone, therefore, he is not entitled for any other work. It has been further submitted that even after milestone 1, the defendant has not provided any services. Hence, defendant is not entitled to any retainership fee.
Arguments heard. Material perused.
It is not disputed that contract dated 11.06.2021 Ex.PW1/D1 was effective from 07.06.2021 and was for one year. Inter alia, as per this agreement, the defendant was retained for one year with retainership fee of Rs.18,62,238/- per month.
Further as per demand notice 28.04.2022 Ex.PW1/5, issued by defendant, the plaintiff has terminated the contract on 06.01.2022. The fact of termination of the contract has been disputed plaintiff in reply dated 20.05.2022 Ex.PW1/6 to said notice. However, the defendant has claimed the retainership charges etc. for three months only i.e. November, Decemeber, 2021 and January, 2022. Even the fact that plaintiff has terminated the contract on 06.01.2022, the question arises whether the defendant is entitled for retainership amount.
CS (Comm) 1200/22 & 593/23 Bhupesh Kumar District Judge(Commercial)-05, S-E, Saket, New Delhi/12.08.2024 25 On this aspect, it is found that plaintiff has retained the services of defendant for upgrading the website of plaintiff, for which defendant was required to complete the work in different phases. Hence, it was a contract between both parties vide which defendant had agreed to provide services for upgrading the website of plaintiff, against services charges to be paid in the form of retainership fee per month.
Now the question arises whether the defendant has provided any services to plaintiff, as per contract. On this aspect it is found that defendant was required to complete the work in different phases and milestones were fixed for the same i.e. first milestone was till 07 th October, 2021 and second milestone was four months from the date of first milestone.
As discussed in issue no.1 the fact has been proved on record that the defendant has completed first milestone by 7th of October, 2021 and this issue has been decided against plaintiff and in favor of defendant.
In respect to services, if any, provided by defendant after 07.10.2021, agreement Ex.PW1/D1 perused carefully. Here it is necessary to reproduce clause 6.1 of the agreement, which is as under :
"HOGARTH shall raise the monthly retainership invoice for a given month's services in the first week of a calendar month. The invoice shall be supported by report/backup, if any, as may be required by Y-AXIS. For the purpose of this agreement, the monthly invoice period shall start from 7th day of of a calendar month to 6 th day of the following calendar month.
In view of this clause, the defendant was required to send report/backup alongwith invoice raised in respect to retainership fee.
From the plain reading of this clause, it reflects that purpose of supplying of support documents alongwith invoice is that plaintiff should know the progress of work done for upgradation of its website. In this CS (Comm) 1200/22 & 593/23 Bhupesh Kumar District Judge(Commercial)-05, S-E, Saket, New Delhi/12.08.2024 26 respect, cross-examination of DW-1 and DW-2 perused. The relevant portion of his cross-examination of DW-1 in this respect is as under :
Q. 41. Did you provide any support or any supporting documents with your invoices raised to plaintiff company?
Ans. No as it was not required in respect to in-line with the agreement terms.
Q. 42. I put it to you as per agreemement you were required to provide supporting documents alongwith invoices raised. Ans. Any supporting documents alongwith invoice was to be specifically asked for by the plaintiff.
From the perusal of cross-examination of DW-1 it is found that alongwith raised by defendant, no other report / backup was sent to plaintiff. In this respect the evidence of DW2 is also perused and found that this witness is also silent on this score. Under these circumstances, it is found that fact of not sending any report / backup alongwith invoice was contradictory to the terms of contract.
Further, evidence of DW-1 and DW-2 again perused carefully and from perusal of cross-examination of both these witnesses, it is found that defendant has removed the codes of deliverables. The relevant portion of cross exmaination of DW-1 in this respect is as under :
Q. 110 I put it to you that defendant company is not entitled for any payment from plaintiff company as per agreement was never handed over to plaintiff company.
Ans. All work was delivered to plaintiff company, however, the code was only shared for milestone 1 since defendant company did not receive any payment post that as a part of final hand over. Q. 111. I put it to you that deliverables as per agreement were not handed over to plaintiff.
Ans. All work was delivered to plaintiff company, however, the code was only shared for milestone 1 since defendant company did not receive any payment post that as a part of final hand over.
CS (Comm) 1200/22 & 593/23 Bhupesh Kumar District Judge(Commercial)-05, S-E, Saket, New Delhi/12.08.2024 27 From the perusal of cross examination of DW2, it is found that the code for the work done after milestone 1 was not shared by defendant with plaintiff. Further, there is nothing on record which show that what sort of work and how much work was carried out by defendant as per contract Ex.PW1/D1, after 07.10.2021.
By way of present counter-claim, the defendant has claimed retainership fee from the plaintiff for the months of Nov-December, 2021 and January, 2022 alongwith certain interest in respect to payments already received.
Considering the entire facts and circumstances that defendant has acted in violation of terms of clause 6 of agreement Ex.PW1/D1 and has failed to brought on record that defendant has provided any services to plaintiff for the months of November-December, 2021 and January, 2022. Hence, it is found that defendant is not entitled for any such retainership fee.
Further, the defendant has prayed for unpaid amount towards 10% of retainership fee alongwith 18% GST of sum of Rs.1,86,224/- from the month of June, 2021 till January, 2022. But none of the defendant witness has explained that how the said amount has been calculated. Under these circumstances, due to lack of evidence, it is found that defendant are not entitled for said amount also.
13. Issue no.4 : Whether the counter-claimant is entitled for any interest as claimed, if so, at what rate and for what period? OPD The onus to prove this issue was upon defendant. However, since issue no. 3 has been decided against counter-claimant/defendant that counter-
claimant/defendant is not entitled for any amount in this matter, consequently, the counter-claimant/defendant is not entitled for any interest.
CS (Comm) 1200/22 & 593/23 Bhupesh Kumar District Judge(Commercial)-05, S-E, Saket, New Delhi/12.08.2024 28 Relief.
In the light of above discussion, it is found that suit filed by the plaintiff and counter-claim filed by defendant stands dismissed.
Copy of this judgment be also placed with counter-claim. No order as to cost.
File be consigned to record room.
Dictated and announced Digitally signed
by BHUPESH
on 12th August 2024 BHUPESH KUMAR
KUMAR Date:
2024.08.12
17:05:11 +0530
(BHUPESH KUMAR)
District Judge (Commercial Courts)-05
South-East District, Saket, New Delhi
CS (Comm) 1200/22 & 593/23 Bhupesh Kumar
District Judge(Commercial)-05, S-E, Saket, New Delhi/12.08.2024