Delhi District Court
M/S. Plasopan Enginers vs M/S. Multiple Zones India Pvt. Ltd on 18 April, 2012
1
IN THE COURT OF SH. SANJEEV AGGARWAL LD. ADJ03
(CENTRAL) DELHI
CS NO. 1354/2008
M/S. PLASOPAN ENGINERS
(INDIA) PVT. LTD.,
HAVING ITS REGD. OFFICE AT :
B10, CHIRAG ENCLAVE,
NEW DELHI - 110048.
WORKS AT :
20/1, K.M., OLD SHERSHAH SURI MARG,
OPPOSITE SECTOR37,
FARIDABAD - 121003,
HARYANA.
THROUG ITS DIRECTOR
SH. MAYANK LALANI /
MANAGER (ACCOUNTS)
SURENDER SHARMA. ....PLAINTIFF
VERSUS
1.M/S. MULTIPLE ZONES INDIA PVT. LTD.
A186, Okhla Indl. Area, Phase1, New Delhi110020 SERVICETHROUGH ITS MANAGING DIRECTOR AND ALSO AT: C40, OKHLA INDUSTRIAL AREA, PHASEII, NEW DELHI110020
2. SH.MANPREET SINGH MANAGING DIRECTOR, M/S MULTIPLE ZONES INDIA PVT.LTD.
A186, OKHLA INDL. AREA, PHASEI, NEW DELHI110020 AND ALSO AT: CS NO. 1354/2008 M/S. PLASOPAN ENGINERS (INDIA) PVT. LTD. VS. M/S. MULTIPLE ZONES INDIA 1/26 2 C40, OKHLA INDUSTRIAL AREA PHASEII, NEW DELHI110020 ........DEFENDANTS Date of Institution of the suit : 06.08.2007 Date on which order was reserved : 13.04.2012 Date of decision : 18.04.2012 J U D G M E NT
1. Vide this judgment, I shall dispose off suit for recovery of Rs.19,78,000/ alongwith the pendente lite interest @ 24% p.a. and cost.
2. It is stated that the plaintiff is a company incorporated under the companies Act. 1956 and the suit has been filed by the authorized representative of the company duly authorized in this regard by board resolution.
3. It is stated that the defendant no.1 is also a private limited companyy having its principal office at A186, Okhla Industrial Area, Phase II, Delhi and defendant no.2 is the managing Director of the defendant no.1 company.
CS NO. 1354/2008 M/S. PLASOPAN ENGINERS (INDIA) PVT. LTD. VS. M/S. MULTIPLE ZONES INDIA 2/26 3
4. It is further stated that the plaintiff was in the need of one multi location customized ERP software and for this purpose they made enquiries in the market. Defendant no.2 on behalf of defendant no1. Approached the plaintiff for the said purpose and assured the plaintiff they are having expertise in developing the said multi location customized ERP software. The defendant no.2 further represented and assured the plaintiff that he will supply the required software with all attachments within the time schedule fixed by the plaintiff and the plaintiff will have no grievance with regard to timing and quality of software.
5. The defendant no.2 further represented to the plaintiff by saying that he delivers the customized software within the stipulated period fixed by his customers and he has a long chain of satisfied customers and in case the service provided by the defendants are not found to be satisfactory by the plaintiff, the defendants shall return CS NO. 1354/2008 M/S. PLASOPAN ENGINERS (INDIA) PVT. LTD. VS. M/S. MULTIPLE ZONES INDIA 3/26 4 back the money received by them from the plaintiff to the plaintiff. Besides the above, the defendant no. 2 stood personal guarantor in favour of defendant no.1.
6. It is further stated that believing the words and assurances of the defendant no.2 the plaintiff placed the purchase order for the said purpose on 11.6.2002 and made the payment to the defendant from time to time as agreed.
7. It is further stated that on one pretext or another, the abovesaid software was not developed and completed by the defendants. The plaintiff wrote letters dated 28.1.04, 2.6.04 and 8.6.04 in this regard. Thereafter a meeting was organized between the parties on 26.7.04 and certain action points were decided/ short listed in this meeting. On the persistent request and specific assurance of the defendants that they will do the needful to develop and design the software to the satisfaction CS NO. 1354/2008 M/S. PLASOPAN ENGINERS (INDIA) PVT. LTD. VS. M/S. MULTIPLE ZONES INDIA 4/26 5 and requirement of the plaintiff, plaintiff agreed to approve the modules of SRS (system requirement specification) and thereafter executed a formal agreement dated 2.8.04 in this regard. At the time of signing the formal agreement dated 2.8.04 and at the time of signing the SRS modules on 20.9.04, the defendant no.2 once again reiterated and reaffirmed his commitments that they shall complete and handover the software within 60 days from the date of signing of the module i.e on or before 20.11.04 and also that in case of delay, if any in the supply of the finally tested and completed software beyond the agreed period, the defendants shall bear a penalty of 5% per week of the contract amount i.e 5% of Rs. 3,90,000/.
8. It is also stated that at the time of testing many defects and deficiencies were noticed in the software sought to be developed by the defendant no.1 and defendants promised that they would remove those deficiencies CS NO. 1354/2008 M/S. PLASOPAN ENGINERS (INDIA) PVT. LTD. VS. M/S. MULTIPLE ZONES INDIA 5/26 6 which were noticed at the testing/ trial stage and the defendants will hand over the above customized software for carrying out the full fledged testing/ working on the software of the plaintiff and its dealers / distributors which has not been done till date.
9. It is further stated that every time the plaintiff has approached the defendants, the defendants have assured the plaintiff that the software is at the final stage and is likely to be handed over to them for the final testing purpose.
10.It is further stated that till date plaintiff has made a payment of Rs. 3,40,000/ against the agreed amount of Rs. 3,90,000/ in terms of the purchase order dated 11.6.02, the plaintiff was supposed to make a payment of 33% as advance, 33% on testing stage and balance after two months after the release / handing over of the software after its final testing. Therefore, the plaintiff was CS NO. 1354/2008 M/S. PLASOPAN ENGINERS (INDIA) PVT. LTD. VS. M/S. MULTIPLE ZONES INDIA 6/26 7 supposed to make the payment of only Rs. 2,57,400/ before the release of the software, but despite that the plaintiff has made a excess payment of Rs. 82,600/ to the defendants.
11.It is further stated that the plaintiff has made verious written request to the defendant for sending the software for testing purpose and also for incorporating the necessary correction in the software. But the defendant did not fulfill their part of promise.
12.It is further stated that in a letter dated 28.2.06 the defendant had mentioned that the operation of the ERP software requires SQL server 2000 and also the necessary licenced window HP software. It is stated that the said requirement was never communicated at the time of initial discussion in the year 2000 and also in August 2004 when the agreement dated 2.8.2004 was signed by the plaintiff.
CS NO. 1354/2008 M/S. PLASOPAN ENGINERS (INDIA) PVT. LTD. VS. M/S. MULTIPLE ZONES INDIA 7/26 8
13.It is further stated that thereafter plaintiff wrote a letter 8.3.06 to the defendant. The plaintiff agreed for procuring/ accepting the abovesaid SQL server 2000, but on the successful demonstration of the abovesaid ERP software alleged to have been developed by the defendants, if it is shown to the plaintiff at the business place by the defendant on their computers. Despite that the plaintiff had not received any communication in this regard from the defendant and plaintiff had been writing various letters to the defendant to fulfill their part of contract. Finally a legal notice dated 24.5.06 was issued to the defendant despite that defendants have failed to deliver the software. Therefore the plaintiff has been forced to file the present suit for the recovery of Rs. 19,78,000/ alongwith interest pendente lite and future @ 24% p.a alongwith cost.
14.A joint Written Statement has been preferred on behalf CS NO. 1354/2008 M/S. PLASOPAN ENGINERS (INDIA) PVT. LTD. VS. M/S. MULTIPLE ZONES INDIA 8/26 9 of defendant no. 1 and 2 in which it is stated that the plaintiff has not approached the court with clean hands. That in order to camouflage its own weakness and non availability of appropriate software and hardware, have filed the present suit to unjustifiable enrich himself. That defendant is an esteem body corporate and had already completed the development of ESR for which modules were approved by the plaintiff and no job is left from the side of defendant, but it was the plaintiff who was not certain as to the job he wanted from defendant and kept on changing its requirements which were met as possible by the defendant. It is the plaintiff who kept on changing its requirement every now and then, which was catered from time to time and delay if any arose were solely due to abrupt frequent changes in requirement and non availability of SQL Server 2000 and window XP client version licensed software on the plaintiff's end.
15.It is further stated that the suit of the plaintiff is without CS NO. 1354/2008 M/S. PLASOPAN ENGINERS (INDIA) PVT. LTD. VS. M/S. MULTIPLE ZONES INDIA 9/26 10 any cause of action as the plaintiff is a wrong doer. The ERP was complete, but the same could not run at the plaintiff's place due to the lack of server and window XP licensed software and the suit is bad for misjoinder of necessary parties.
16.It is further stated that it is the plaintiff who had approached the defendant and placed the order for ERP software after repeated inspection and satisfaction to the competence of defendants. It is denied that any promise of returning money received was ever made to the plaintiff.
17.The defendants have admitted the purchase order dated 11.6.02 placed upon defendant no1. But it is stated that payment was based on step by step progress of the project, as the defendants completed various phases the plaintiff were bound to make the payment and yet the plaintiff has not tendered the whole CS NO. 1354/2008 M/S. PLASOPAN ENGINERS (INDIA) PVT. LTD. VS. M/S. MULTIPLE ZONES INDIA 10/26 11 consideration.
18.It is denied that plaintiff and defendant reached to any agreement dated 2.8.04 or otherwise with respect to invoking of penalty of 5% per week etc. No such agreement having penalty clause was signed by the defendant with plaintiff at any point of time. If any such document is available with plaintiff as to penalty clause it is a fabricated and fake document. It is pertinent to mention here that defendant completed the project within the stipulated date and was handed over to the plaintiff.
19.It is further stated that the project could not be tested at the site of the plaintiff because of lack of required SQL server 2000 and window XP client version on the plaintiff's end. The defendant even intimated this deficiency to the plaintiff from time to time but the said deficiency was not cured hence ERP software could not CS NO. 1354/2008 M/S. PLASOPAN ENGINERS (INDIA) PVT. LTD. VS. M/S. MULTIPLE ZONES INDIA 11/26 12 function properly as it showed bugs.
20.Defendants have admitted the payment of Rs.3,40,000/ from the plaintiff, but it is denied that any excess payment has been made in contravention of the agreement of the work completed.
21.It is further stated that it is pertinent to mention here there project was complete and at the time of testing had run smoothly at the site of defendant. The project has run at the site pf plaintiff also, but there was a problem of frequent bugs and held ups, due to plaintiff not having required licensed server and software. That as plaintiff was reluctant to buy the required software and server, hence wanted to cover up his omissions by implicating defendants.
22.It is further denied that the plaintiff wrote letters date 8.3.06 or any other letter . It is also denied that CS NO. 1354/2008 M/S. PLASOPAN ENGINERS (INDIA) PVT. LTD. VS. M/S. MULTIPLE ZONES INDIA 12/26 13 defendants were served with any legal notice dated 24.5.06.
23.In these circumstances, it is prayed that the suit of the plaintiff is without any cause of action and was liable to be dismissed.
24.Amended replication was filed by the plaintiff to the amended written statement of defendant no1. And 2 in which the averments made in the Written Statement were denied in toto and those made in the amended plaint were reiterated as correct.
25.From the pleading of the parties, following issues were framed on 8.10.07 : ISSUES
1. Whether plaintiff has not approached the court with clean hands ?OPD CS NO. 1354/2008 M/S. PLASOPAN ENGINERS (INDIA) PVT. LTD. VS. M/S. MULTIPLE ZONES INDIA 13/26 14
2. Whether suit has been filed without any cause of action?OPD
3. Whether suit is bad for misjoinder of parties?OPD
4. Whether plaintiff is entitled to recover suit amount ? OPP
5. If answer to issue no. 4 is in favour of plaintiff then whether plaintiff is entitled to interest, if yes, at what rate and from when?
OPP
6. Relief.
26.Thereafter, plaintiff in support of its case has examined two witnesses. Pw1 is Kapil Dev Sharma, authorized representative of the plaintiff company and Pw2 is Sh. Mayank Lalani, Director and authorized representative of plaintiff company.
CS NO. 1354/2008 M/S. PLASOPAN ENGINERS (INDIA) PVT. LTD. VS. M/S. MULTIPLE ZONES INDIA 14/26 15
27.Defendants had moved and application u/o 9 R 7 for setting aside the exparte order dated 20.10.09 which was allowed vide detailed order dated 26.8.10 subject to cost of Rs. 3000/ and liberty was granted to defendants to cross examine Pw2 and to lead their defence. Thereafter Pw2 was cross examined on behalf of defendants. However, despite various opportunities no witness of defendant was examined and consequently the defendants evidence was closed vide order dated 12.7.2011 and the matter was fixed for final arguments.
28.I have heard the learned counsel for plaintiff Sh.Om Prakash Sehrawat and counsel for defendant Sh.Jitender Kamra and perused the evidence and documents on record. My issue wise findings are as under : Issue no.1
29.The onus to prove this issue was upon the defendants. CS NO. 1354/2008 M/S. PLASOPAN ENGINERS (INDIA) PVT. LTD. VS. M/S. MULTIPLE ZONES INDIA 15/26 16 The defendants as discussed above have not led any evidence on the record to prove this issue. Even otherwise defendant have failed to demonstrate to this court, from the pleadings or the documents as to how the plaintiff have not approached this court with clean hands or to say that the plaintiff's conduct was such for which only they could be faulted. This issue is accordingly decided in favour of plaintiff and against the defendants. Issue No.3
30.Similarly, since no evidence has been led by the defendants on record, as to who else were the necessary parties if not the defendants, without whose presence the present suit could not be decided completely and effectually. Accordingly this also is decided in favour of plainittff and against the defendants. Issue(s) no. 2, 4 and 5 These issues are taken up together as they are CS NO. 1354/2008 M/S. PLASOPAN ENGINERS (INDIA) PVT. LTD. VS. M/S. MULTIPLE ZONES INDIA 16/26 17 interconnected with each other.
31.On these issues, the plaintiff has examined two witnesses, PW1 Sh. Kapil Dev Authorized Representative of the plaintiff as well as the Manager (Human Resources). However, PW1 has admitted in his cross examination that he was not present at the time of execution of contract / purchase order dated 11.06.2002. He also stated that he was not aware whether the initial contract was amended / revised. He was also not aware whether as to the revised sale consideration / payment, which was to be made to the defendant. Therefore, this witness is not a primary witness, regarding the execution of the purchase order dated 11.06.2002 and alleged revised agreement Mark A4. On the basis of which, the plaintiff has claimed penalty @ 5% per week.
32.The plaintiff has examined one more witness namely Sh. Mayank Lalani as PW2, who is the Director of the CS NO. 1354/2008 M/S. PLASOPAN ENGINERS (INDIA) PVT. LTD. VS. M/S. MULTIPLE ZONES INDIA 17/26 18 plaintiff company as well as the Authorized Representative. He has stated in his affidavit that he had signed the purchase order dated 11.06.2002, which bears his signatures, which is Ex.PW1/C. In his cross examination, he has clarified that he had signed the purchase order and none else had signed the purchase order except him and Rs. 3,00,000/ was the consideration for developing ERP. He also admitted that it was correct that the payment of Rs. 3,00,000/ was settled between the parties was to be disbursed step by step on the progress of the development of ERP. He further stated that the test model of ERP was not put by the defendants before them and that the defendants used to come to their sites with their laptops to show the test of the ongoing assignment and most of the time whatever rectification was sought by the plaintiff was not done properly and that he also admitted that it was correct that for smooth running of ERP one needs a proper hardware and a licensed software and he clarified CS NO. 1354/2008 M/S. PLASOPAN ENGINERS (INDIA) PVT. LTD. VS. M/S. MULTIPLE ZONES INDIA 18/26 19 that their office's system was having Windows 98, MS Office installed and hardware as per their requirement, which was already in place.
33. From the testimony of PW2 as discussed above, the plaintiff company has been able to prove Ex.PW1/C (purchase order), which was even otherwise not denied by the defendants in their written statement. However, at the same time, the plaintiff company has failed to prove agreement Mark A4, dated 02.08.2004, as the original of the said agreement has not been produced in the court, when the said document was marked as Mark A4. The defendant, in the cross examination of PW2, had given a suggestion that said document was a forged and fabricated document, which was even otherwise marked as Mark A4, and further that it was never executed between the parties. Since the best evidence that is the original of said agreement dated 02.08.2004 was never produced in the court, their adverse inference has to be CS NO. 1354/2008 M/S. PLASOPAN ENGINERS (INDIA) PVT. LTD. VS. M/S. MULTIPLE ZONES INDIA 19/26 20 drawn against the plaintiff for not producing said vital piece of evidence. Therefore, said revised agreement dated 02.08.2004 stands not proved.
34.The plaintiff has also relied upon various correspondence(s) allegedly exchanged with the defendants regarding the deficiencies in the software, which was to be developed by the defendants, as per their requirements from time to time. In the cross examination of PW1 and PW2, the defendant has suggested that the said letters were never sent to them, even otherwise, plaintiff have not been able to prove that said letters were indeed dispatched to the defendant at their address, as neither any dispatch register or other documentary evidence with regard to the letters sent by the plaintiff to the defendant, has been proved on the record.
35.Though the defendants have not lead any evidence on CS NO. 1354/2008 M/S. PLASOPAN ENGINERS (INDIA) PVT. LTD. VS. M/S. MULTIPLE ZONES INDIA 20/26 21 the record that their office(s) were not situated at A186, Okhla Industrial Area, New Delhi, and C40, Okhla Industrial Area, New Delhi, where the legal notice was sent by the plaintiff, dated 24.05.2006, which is Ex.PW1/O. It appears that the defendants have been duly served, as the plaintiff has also annexed the postal receipts regarding the sending of the said notice, which is Ex.PW1/P and courier receipt is Ex.PW1/Q. In view of the evidence of the plaintiff's witnesses on oath regarding the sending of the said legal notice, which is also backed up by the postal and the courier receipts and the fact that defendants have failed to prove that when the said notice was sent to them, they were not having their office address at A186, Okhla Industrial Area, PhaseI, New Delhi, and the address of the defendant has been mentioned as A186, Okhla Industrial Area, PhaseI, New Delhi, in the Ex.PW1/C, which is the purchase order or initial contract between the parties dated 11.06.2002. Therefore, legal notice, CS NO. 1354/2008 M/S. PLASOPAN ENGINERS (INDIA) PVT. LTD. VS. M/S. MULTIPLE ZONES INDIA 21/26 22 which was correctly posted at the correct address of the defendants is deemed to have been served only upon the defendant no. 1 company in due course of postal business, unless contrary evidence was brought on the record by the defendant no. 1, which defendant no.1 has failed to prove, as discussed above. The evidence on behalf of the defendant no. 1 is nil as against the statements made by PW1 and PW2 on oath, tested on the furnace of cross examinations.
36.Though, the plaintiff's witnesses i.e. PW1 and PW2 have failed to prove the correspondence(s) made by the plaintiff bank to the defendant no. 1 to remove / rectify the deficiencies in the software, which the plaintiff company had directed the defendant no.1 to develop, as per their customized need. However, defence of the defendants that they had completed the software as per the requirement of the plaintiff, but plaintiff kept on changing their requirements from time to time and the CS NO. 1354/2008 M/S. PLASOPAN ENGINERS (INDIA) PVT. LTD. VS. M/S. MULTIPLE ZONES INDIA 22/26 23 delay arose on behalf of the abrupt frequent changes in the requirement of the plaintiff and SQL Server 2000 and window XP client version licensed software on the plaintiff's end and the defendants completed various phases of the plaintiff and that is why the plaintiff made a payment of Rs. 3,00,000/ has not been proved. Since the defendants have not lead any evidence on the defence taken by them and there is nothing on the record to show that the defence taken by the defendants was correct and the testimonies of PW1 and PW2 were not correct.
37.The allegations made by the PW1 and PW2, though not backed up by the correspondence(s), relied upon by the plaintiff, which were allegedly exchanged by the plaintiff with the defendant no. 1 company. At the same time, PW1 and PW2 have made the allegations on oath regarding the contents of the plaint that the defendant, despite various requests and reminders, did not develop CS NO. 1354/2008 M/S. PLASOPAN ENGINERS (INDIA) PVT. LTD. VS. M/S. MULTIPLE ZONES INDIA 23/26 24 the software in question to the satisfaction and requirement of the plaintiff, despite pointing out many defects and deficiencies in the software sought to be developed by the plaintiff every time. As the allegations made by the PW1 and PW2 on this score on oath have gone unchallenged, further nothing has come out in their cross examination, which shakes their credibility or reliability with regard to their testimonial depositions and defendants have not lead any evidence in rebuttal to displace evidence lead by the PW1 and PW2 on this aspect.
38.As discussed above, the plaintiffs have failed to prove the rectified agreement dated 02.08.2004, which is Mark A4, for the reasons discussed above and admittedly the plaintiff company had paid Rs. 3,40,000/ the plaintiff to the defendant no. 1 company, for which they are entitled for refund, due to noncompletion of the contractual work i.e. the development of the software as per their CS NO. 1354/2008 M/S. PLASOPAN ENGINERS (INDIA) PVT. LTD. VS. M/S. MULTIPLE ZONES INDIA 24/26 25 customized needs by the defendant no. 1 company. Though, it is admitted by PW1 in his cross examination that there was no clause as of the payment of interest between the parties. However, I am of the considered opinion that interest @ 6% simple interest is fair interest on the amount, which is found due to the plaintiff from the defendant no. 1, looking into the commercial nature of transaction between the parties. In these circumstances, suit of the plaintiff is decreed for a sum of Rs. 3,40,000/ along with interest @ 6% per annum from the date of the filing of the suit till its realization along with the costs.
39. In view of the aforesaid discussion, Issue No. 1 is decided in favour of the plaintiff and against the defendants, as it cannot be said from the above discussion that suit of the plaintiff is without any cause of action. Similarly, Issues no. 4 an 5 are also decided in favour of the plaintiff and against the defendant, as CS NO. 1354/2008 M/S. PLASOPAN ENGINERS (INDIA) PVT. LTD. VS. M/S. MULTIPLE ZONES INDIA 25/26 26 discussed above.
RELIEF
40.In view of my findings as discussed above, suit of the plaintiff is decreed for a sum of Rs. 3,40,000/ along with interest simple @ 6% per annum from the date of the filing of the suit till its realization along with the costs. Decree sheet be prepared accordingly.
41.File be consigned to the record room. ANNOUNCED IN THE OPEN (Sanjeev Aggarwal) COURT ON 18.04.2012. ADJ(Central03)/Delhi CS NO. 1354/2008 M/S. PLASOPAN ENGINERS (INDIA) PVT. LTD. VS. M/S. MULTIPLE ZONES INDIA 26/26