Delhi District Court
M/S Capricot Technologies Pvt. Ltd. vs . M/S P.L. Engineering Ltd. on 30 September, 2022
M/s Capricot Technologies Pvt. Ltd. Vs. M/s P.L. Engineering Ltd.
IN THE COURT OF ADDITIONAL DISTRICT JUDGE-02,
SOUTH DISTRICT, SAKET COURTS, NEW DELHI
Presiding Judge: Sh. Dinesh Kumar.
CS (Comm) No. 80/2020
Filing No. 26260/2016
CNR No. DLST01-000125-2016
In the matter of
M/s Capricot Technologies Pvt. Ltd.
Through its Authorized Representative
Office: S-17, Local Shopping Complex,
Green Park Extension, New Delhi-110016
................Plaintiff
Versus
M/s P.L. Engineering Ltd.
Through its Directors
Address: Corporate Office II, 95,
Institutional Area, Sector-32, Gurgaon-122001
.............Defendant
Date of Institution : 08.07.2016
Date of reserving the judgment : 23.09.2022
Date of pronouncement : 30.09.2022
Decision : Suit Decreed
CS (Comm) No. 80/2020
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M/s Capricot Technologies Pvt. Ltd. Vs. M/s P.L. Engineering Ltd.
SUIT FOR RECOVERY OF RS.19,18,241/-(RUPEES
NINETEEN LAKHS EIGHTEEN THOUSAND TWO
HUNDRED AND FORTY ONE RUPEES ONLY) WITH
PENDENTE LITE AND FUTURE INTEREST @24% PER
ANNUM
JUDGMENT
1. Vide this judgment, I shall dispose of the Civil Suit filed by the plaintiff for recovery of Rs. 19,18,241/-. The brief facts of the case, as per the plaint, are as under:-
1.1. The plaintiff is a company incorporated under the provisions of the Indian Companies Act, 1956 (hereinafter referred to as the plaintiff company), and is running its business under the name and style of M/s Capricot Technologies Pvt. Limited at S-17, Local Shopping Complex, Green Park Extension, New Delhi-110016.
Plaintiff is engaged in the business of selling/renewal of software, giving training and consultancy etc. The defendant company is operating from Plot No. 5, 6, 7, Udyog vihar, Phase IV, Gurgaon-122016, Haryana. 1.2. The defendant has running account in the books of plaintiff which shows a balance/outstanding amount of Rs.13,42,023/- (Thirteen Lakh Forty Two Thousand and Twenty Three Rupees only). Despite promises, the defendant did not clear the outstanding amount.
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1.3. On 09.09.2014, the defendant placed the Purchase Order to the plaintiff vide Purchase Order No. NCINHO/6390 to the plaintiff for renewal of AUTOCAD (QTY-85) and CIVIL 3D (QTY-1), as mentioned in the purchase order with the confirmation order, for the total consideration of Rs.14,72,479/- vide e-mail dated 22.09.2014.
1.4. The plaintiff successfully completed the said order to the satisfaction of the defendant. After completing the order to the satisfaction of defendant, the plaintiff raised an Invoice No. DLSR1415/160052 dated 25.09.2014 for an amount of Rs.14,72,478/-, which the defendant acknowledged on 29.09.2014. The defendant also deposited TDS for an amount of Rs.1,31,050/- towards Bill No. DLSR1415/12600522, which has been successfully released to the plaintiff by the concerned department. 1.5. After completion of the Purchase Order, the plaintiff requested the defendant by virtue of various e- mails and telephonic conversation, to release an outstanding payment of the Bill number/invoice No. DLSR1415/1600522, as the plaintiff write off in his account books the previous balance of Rs.595/-, and requested for outstanding payment as per the books of CS (Comm) No. 80/2020 Page 3 of 20 Dinesh Kumar/ADJ-02/South/Saket/30.09.2022 M/s Capricot Technologies Pvt. Ltd. Vs. M/s P.L. Engineering Ltd.
defendant, but the defendant delayed the outstanding amount without any reason.
1.6. The plaintiff sent the legal notice dated 08.12.2015 by registered AD and speed post, which was duly served upon the defendant.
1.7. The defendant vide e-mail dated 03.12.2016 accepted the outstanding amount of Rs.13,41,428/- in respect of invoice/bill of the plaintiff and stated that the same shall be paid in installments. The defendant is liable to pay a total sum of Rs.19,18,241/-, i.e. a sum of Rs.13,41,428/- towards the outstanding amount and a sum of Rs.5,76,813/- on account of interest at the rate of 24% per annum.
1.8. Hence, the present suit has been filed by the plaintiff with the following prayer:
(a) "pass a decree in the sum of Rs.19,18,241/-
(Nineteen Lakhs Eighteen Thousand Two hundred and Forty one Rupees Only) in favour of the plaintiff and against the defendant alongwith pendente-lite interest @24% per annum, till the actual and final realization of the entire decreetal amount alongwith costs of the proceedings.
(b) "Any other or further relief(s), which this Hon'ble Court deems fit and proper may also granted in favour of plaintiff and against the defendant.".
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2. The defendant filed an application under Order VII Rule 10, CPC praying for returning of the plaint as the Court of Banglore only had the jurisdiction. Vide Order dated 22.12.2017, the Court dismissed the said application. The defendant filed a revision petition before the Hon'ble High Court of Delhi against the said Order. The revision petition being CRP no.84/2018 was dismissed as withdrawn of by Hon'ble High Court of Delhi vide order dated 20.04.2018.
3. The defendant contested the suit and filed Written Statement. It is stated in the Written Statement as under:-
3.1. The defendant placed purchase order dated 09.09.2014 bearing No. NCINHO/6390 on the plaintiff for renewal of Autocad (Qty-85) and Civil 3D (Qty-1) (software) for the total consideration of Rs.14,72,479/- by e-mail dated 22.09.2014. The plaintiff raised an Invoice bearing reference No. DLSR1415/1600522 dated 25.09.2014 for an amount of Rs.14,72,479/-. 3.2. It was stated in the Invoice / Contract that "All conditions of the sale overlease are read and agreed". As per clause (2) of the terms and conditions of the invoice, contract it was agreed that "All disputes arising out of the sale are subject to Banglore Jurisdiction", which was acknowledged by the defendant on 29.09.2014.CS (Comm) No. 80/2020 Page 5 of 20
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3.3. The defendant found/noticed glaring issues and problems with the software provided by the plaintiff and raised issue in this regard with the plaintiff. Despite repeated requests, the plaintiff did not pay any heed and did not rectify the error. Therefore, the defendant was left with no other option but to renegotiate the price of the software.
3.4. The plaintiff neither attempted to respond to the request of renegotiation of defendant nor tried to resolve the issue amicably.
3.5. The legal notice was received by defendant after a period of 1 years from the date of supply of the software when they failed to rectify the problem/issues/defects in the software. When the plaintiff failed to rectify the errors, it started making illegitimate demands by making false and frivolous claims against the defendant.
3.6. The plaintiff is guilty of "suppressio veri" and "suppression facti" and has come before the Court with unclean hands.
3.7. The plaintiff in affidavit of Vipin Rai to the plaint and in Sharad Mishra's reply to the application under Order VII Rule 10, have intentionally suppressed the address of plaintiff's registered office and have denied existence of its CS (Comm) No. 80/2020 Page 6 of 20 Dinesh Kumar/ADJ-02/South/Saket/30.09.2022 M/s Capricot Technologies Pvt. Ltd. Vs. M/s P.L. Engineering Ltd.
registered office at Banglore. The existence of registered office of plaintiff at Banglore is explicit from the Invoice Contract itself. Moreover, it also gets reflected from the Board Resolution held in Banglore whereby authorizing Mr. Vipin Rai and Mr. Sharad Kumar Mishra, its AR. 3.8. The plaintiff did not fulfill the order to the satisfaction of defendant as the Purchase Order consist of various software items and requirements that were to be provided with efficiency and to the satisfaction of the defendant, which can be tested only after running the same for the period of time. Since the software provided by the plaintiff started creating troubles and problems to the defendant since inception and was not working properly, the defendant raised it grievances to the plaintiff time and again. The plaintiff paid no heed to the complaints raised by the defendant. Therefore, the plaintiff is not entitled to any of the relief prayed in the suit. Hence, it is prayed that the suit may be dismissed.
4. The plaintiff filed replication to the written statement of the defendant. It denied the contentions raised in the Written Statement and reiterated the averments made in the plaint.
5. On the basis of the record available, vide order dated 30.11.2018, the following issues were framed.
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"1) Whether this Court has no territorial jurisdiction to entertain and try the present suit? OPD "2) Whether the software supplied by the plaintiff to the defendant was defective? If so, its effect? OPD "3) Whether the plaintiff is entitled to recover the balance amount of Rs.13,41,428/- from the defendant? OPP "4) Whether the plaintiff is entitled to claim interest on the aforesaid amount? If so, for which period and at what rate? OPP "5) Relief."
6. The plaintiff examined Shri Sharad Kumar Mishra as PW1. He tendered his evidence by way of affidavit Ex.PW1/A. He has relied upon the following documents :
a) Resolution dated 16.04.2016 passed in the meeting of Board of Directors which is Ex.PW1/1.
b) Running Account of the defendant in the books of the plaintiff which is Ex.PW1/2.
c) E-mail dated 22.09.2014 with the attachment of Purchase Order which is Ex.P-2.CS (Comm) No. 80/2020 Page 8 of 20
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d) The invoice No.DLSR1415/1600522 dated 25.09.2014 for an amount of Rs.14,72,478/- which is Ex.P-1.
e) Form No. 26A taken from the Income Tax Site which is Ex.PW1/5.
f) The copies of email which are Ex.PW1/6 (colly) running into 4 pages.
g) The copy of legal notice dated 08.12.2015 which is Ex.PW1/7.
h) The receipt of the registered AD and speed post dated 09.12.2015 which are Ex.PW1/8 and Ex.PW1/9.
i) The copy of email dated 03.02.2016 which is Ex.PW1/11.
j) The certificated under Section 65 B Indian Evidence Act which is Ex.PW1/12.
7. In the meantime the matter was transferred to the Court of Ld. District Judge (Commercial Court-02), South, Saket, New Delhi, on 01.02.2020. The witness PW1 was cross examined in the Court of Ld. District Judge (Commercial Court-02), South. Vide order dated 01.02.2020, the plaintiff closed its evidence. On 07.03.2020, the matter was again transferred to this Court.
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8. The defendant did not appear and did not lead any evidence. Opportunity of the defendant to lead evidence was closed vide order dated 25.05.2022 and the matter was fixed for final arguments. None has appeared on behalf of the defendant for final arguments.
9. Ld. Counsel for the plaintiff would argue that the plaintiff has proved its case against the defendant. The defendant has admitted the invoice and the purchase order. The defendant did not make the payment despite service of legal notice. The Court in Bangalore does not have any jurisdiction in the present matter. Courts in Delhi have jurisdiction as the order was accepted at Delhi, goods were supplied from Delhi and the payment was also to be made in Delhi. Hence, it is prayed that the suit may be decreed. Ld. Counsel for the plaintiff has also relied upon the judgment passed by Hon'ble Delhi High Court in case titled "Videocon Industries Limited vs Gail (India) Limited and Anr. 2015 (222) DLT 6".
10. I have heard the submissions of the Ld. Counsel for the plaintiff, and perused the material on record. My issue wise findings are as follows.
11. Issue no. 1- Issue no. 1 is taken first as it is related to the jurisdiction of the Court. The issue reads as under:
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"1) Whether this Court has no territorial jurisdiction to entertain and try the present suit? OPD"
12. The defendant in its Written Statement has taken a ground that this Court in Delhi does not have territorial jurisdiction. It is stated that in the Invoice it is clearly mentioned "All conditions of the sale overlease are read and agreed". As per clause (2) of the terms and conditions of the invoice contract it was agreed that "All disputes arising out of the sale are subject to Banglore Jurisdiction." The said clause was acknowledged by the defendant on 29.09.2014. Hence, this Court does not have any jurisdiction in the present matter.
13. As discussed hereinabove, the defendant had moved an application under Order 7 Rule 10 CPC with a prayer to return the plaint as this Court did not have jurisdiction. The said application was dismissed by the Court vide order dated 22.12.2017. The defendant had filed a revision petition against the said order. It is stated by the defendant in the WS that the Hon'ble High Court had granted liberty to the defendant to raise the issue of jurisdiction before the Trial Court at the time of trial. I have gone through the order dated 20.04.2018 passed by the Hon'ble High Court of Delhi in C.R.P No. 84/2018 filed by the defendant herein as above-mentioned. Perusal of the order would show that the Hon'ble High Court had dismissed CS (Comm) No. 80/2020 Page 11 of 20 Dinesh Kumar/ADJ-02/South/Saket/30.09.2022 M/s Capricot Technologies Pvt. Ltd. Vs. M/s P.L. Engineering Ltd.
the petition of the defendant herein as withdrawn. No liberty was granted by the Hon'ble High Court to raise the issue at the time of trial. Only a submission was made by the Ld. Counsel for the petitioner (the defendant herein) seeking permission to withdraw the petition, the petitioner reserving the right to raise the objection of jurisdiction at the trial by pressing for an issue to be framed.
14. Be that as it may, the defendant has not led any evidence. It has also not argued the matter.
15. Section 20 of the Code of Civil Procedure, 1908, provides the law related to jurisdiction in such cases based on breach of contract. It reads as under:
"20. Other suits to be instituted where defendants reside or cause of action arises- Subject to the limitations aforesaid, every suit shall be instituted in a Court within the local limits of whose jurisdiction "(a) the defendant, or each of the defendants where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain; or "(b) any of the defendants, where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain, provided that in such case either the leave of the Court is given, or the defendants who do not reside, or carry on CS (Comm) No. 80/2020 Page 12 of 20 Dinesh Kumar/ADJ-02/South/Saket/30.09.2022 M/s Capricot Technologies Pvt. Ltd. Vs. M/s P.L. Engineering Ltd.
business, or personally works for gain, as aforesaid, acquiesce in such institution; or "(c)The cause of action, wholly or in part, arises.
"Explanation].-- A corporation shall be deemed to carry on business at its sole or principal office in India or, in respect of any cause of action arising at any place where it has also a subordinate office, at such place."
16. It is settled position of law that if under the law several Courts would have jurisdiction and the parties have agreed to submit to one of these jurisdictions and not to other or others of them it cannot be said that there is total ouster of jurisdiction. Thus, where the parties to a contract agreed to submit the disputes arising from it to a Court of particular jurisdiction which would otherwise also be a proper Court having jurisdiction under the law, their agreement, to the extent they agreed not to submit to other Courts having jurisdictions, is valid being not against public policy. If, on the other hand, they agreed to a jurisdiction which would not otherwise be proper jurisdiction to decide disputes arising out of the contract, such a clause would be void being against public policy. I get strength from the judgment of the Hon'ble Supreme Court of India in A.B.C. Laminart Pvt. Ltd. & Anr vs A.P. Agencies, Salem 1989 SCR (2) 1. Similar view has been taken by Hon'ble Supreme Court of India in Globe Transport Corporation vs CS (Comm) No. 80/2020 Page 13 of 20 Dinesh Kumar/ADJ-02/South/Saket/30.09.2022 M/s Capricot Technologies Pvt. Ltd. Vs. M/s P.L. Engineering Ltd.
Triveni Engineering Works And Ors. (1983) 4 SCC 707 wherein it has been held as under:
"7. In Hakam Singh v. M/s. Gammon (India) Ltd., [1971] 3 SCR Page 314 it was held that "corporation"
referred to in Section 20 meant not only a statutory corporation but also a company registered under the Indian Companies Act. It was also held that it is not open to the parties by agreement to confer jurisdiction on any court which it did not otherwise possess under the Code. But where two courts have jurisdiction under the Code to try a suit or proceeding an agreement between the parties that the dispute between them shall be tried in one of such courts is not contrary to public policy nor does such an agreement contravene Section 28 of the Contract Act...."
17. Hon'ble High Court of Delhi in Videocon Industries Limited vs Gail (India) Limited & Anr. 2015 (222) DLT 6 has discussed the law as to where a cause of action arises in contractual matters. It has held as under:
"5. So far as a contractual matter is concerned, three aspects give courts jurisdiction vide A.B.C. Laminart Pvt. Ltd. & Anr. Vs. A.P. Agencies, Salem, AIR 1989 SC 1239. The three aspects are (i) where the contract is executed, (ii) where the contract is to be performed and
(iii) where the payment under the contract has to be made.
"6. The fourth ground for invocation of territorial jurisdiction can be on the ground that if the respondent is a company and cause of action has accrued qua the branch office of company in Delhi. Merely because a company has its head office or registered office at New CS (Comm) No. 80/2020 Page 14 of 20 Dinesh Kumar/ADJ-02/South/Saket/30.09.2022 M/s Capricot Technologies Pvt. Ltd. Vs. M/s P.L. Engineering Ltd.
Delhi will not confer jurisdiction unless cause of action also has accrued at the place where the corporate office is or any branch office is situated or the company has no branch office. This is the ratio of the judgment of the Supreme Court in the case reported as M/s. Patel Roadways Limited, Bombay Vs. M/s. Prasad Trading Company (1991) 4 SCC 270. It is noted that in the present case the respondent no.1/Company has various branch offices including at Bharuch where the cause of action has arisen."
18. Similar view has also been taken by the Hon'ble High Court of Delhi in Iup Jindal Metals and Alloys Ltd. Vs. M/s. Conee Chains Pvt. Ltd., CS (OS) No. 576/2010, decided on 15.04.2013.
19. Perusal of the material on record in the present case would show that no cause of action has arisen in Bangalore. The defendant had issued the purchase order Ex.P-2 from its office at Gurgaon to the plaintiff at the office of the plaintiff at Yusuf Sarai, New Delhi. As per law, it was an offer by the plaintiff. The said order was accepted by the defendant at the said address at Delhi. Thus, the contract was executed at Yusuf Sarai, Delhi. Further, the goods were also shipped by the defendant to the plaintiff from the same address of Yusuf Sarai. Nothing has been brought on record by the defendant to show as to how the Courts at Bangalore had the jurisdiction in the present matter.
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20. No doubt, it is mentioned in the invoice Ex.P-1 that all the disputes arising out of the sale will be subject of Courts in Bangalore. However, as discussed hereinabove, there is nothing on record to show that any cause of action had arisen at Bangalore. Admittedly, the office of the defendant where goods were supplied is at Gurgaon. Thus, the Courts in Delhi and in Gurgaon only had the jurisdiction in the present matter. Therefore, the parties could not have conferred jurisdiction at Bangalore Courts in any manner. Hence, I hold that this Court has territorial jurisdiction to decide the present matter. Issue no. 1 is accordingly decided against the plaintiff.
21. Issue no.2, 3 and 4- These three issues are taken jointly as they require common discussion. The issues read as under:
"2) Whether the software supplied by the plaintiff to the defendant was defective? If so, its effect? OPD "3) Whether the plaintiff is entitled to recover the balance amount of Rs.13,41,428/- from the defendant? OPP "4) Whether the plaintiff is entitled to claim interest on the aforesaid amount? If so, for which period and at what rate? OPP"CS (Comm) No. 80/2020 Page 16 of 20
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22. In the present case, it has been admitted by the defendant that it had placed purchase order with the plaintiff vide PO Ex. P-2. The defendant has also admitted that it had received the material as mentioned in invoice Ex.P-1. However, the claim of the defendant in the Written Statement is that the defendant had noticed some glaring issues and problems with the software. The defendant had taken up the issue with the plaintiff, however, the plaintiff failed to rectify the errors. On the basis of the said contention, issue no.2 was framed by the Court. The burden to prove this issue was on the defendant. The defendant has not led any evidence to prove the said issue. There is nothing on record to show that the defendant had faced any issues in software as claimed by it in the written Statement. Hence issue no. 2 is to be decided against the defendant.
23. The plaintiff has relied upon, inter alia, the Invoice Ex.P-1 and the statement of account Ex. PW1/2 also to prove its case. The plaintiff has proved that it had supplied material worth Rs. 14,72,478/- to the defendant on 25.09.2014. The plaintiff has also proved, through statement of account Ex.PW1/2, on the preponderance of probabilities, that there was a mutual running current account between the parties. It is proved by the plaintiff, on the preponderance of probabilities, that on 31.12.2014, the liability of the defendant towards the CS (Comm) No. 80/2020 Page 17 of 20 Dinesh Kumar/ADJ-02/South/Saket/30.09.2022 M/s Capricot Technologies Pvt. Ltd. Vs. M/s P.L. Engineering Ltd.
plaintiff was 13,41,428/-. The present suit has been filed on 08.07.2016. The suit is within limitation. Hence, I hold that the plaintiff is entitled to recover an amount of Rs.13,41,428/- from the defendant.
24. The plaintiff has claimed the amount of Rs.19,18,241/- from the defendant which includes the principal sum of Rs.13,41,428/- and a sum of Rs.5,76,813/- on account of interest @ 24% p.a.
25. There is nothing on record to show that there was any agreed rate of interest to be paid by the defendant to the plaintiff. On the invoice Ex.P-1, on its back side, it is printed, inter alia as under:
"1.Interest will be charged @ 24% per annum for all delayed payments beyond payment"
26. It is settled position of law that interest cannot be awarded merely on the basis of a term in a bill or invoice, unless the creditor proves that such provision is based on a contract or agreement on the part of the purchaser to pay interest. This is because a credit bill or an invoice is a unilateral demand by the supplier and is neither a bilateral agreement nor a promise by the purchaser to pay interest. Interest can be awarded on the basis of a provision in a bill/ invoice, if it is supported by an agreement or promise to pay interest by the purchaser. Either an agreement to pay interest or a specific CS (Comm) No. 80/2020 Page 18 of 20 Dinesh Kumar/ADJ-02/South/Saket/30.09.2022 M/s Capricot Technologies Pvt. Ltd. Vs. M/s P.L. Engineering Ltd.
admission or promise to pay interest must be proved. In the present case, however, there is no agreement between the partis in relation to the rate of interest has been proved on record therefore, I hold that the plaintiff can not be awarded such a high rate of interest.
27. In the facts and circumstances of the case and considering the fact that at present the banks in India lend money @ 12% p.a., I hold that the plaintiff is entitled to interest @ 12% p.a. from the date of invoice i.e. 25.09.2014 till filing of the suit. The plaintiff is also entitled to interest @ 12% p.a. on the principal amount from the date of filing of the suit till preparation of decree. Issues no. 1 to 3 are accordingly decided in favour of the plaintiff and against the defendant.
28. Issue 5: Relief. As a sequel to the above findings, the suit is decreed. The plaintiff is entitled to recovery of an amount of Rs.13,41,241/- from the defendant alongwith interest @ 12% p.a. from the date of invoice i.e. 25.09.2014 till filing of the suit. The plaintiff is also entitled to interest @ 12% p.a on the principal sum from the date of filing of the suit till the preparation of decree. The plaintiff is further entitled to interest @ 6% p.a. on the principal sum from the date of decree till realization of the amount. The plaintiff is also entitled to the cost of the suit.
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29. Decree sheet be prepared accordingly.
Pronounced in the open Court on this 30th Day of September 2022. Digitally signed by DINESH DINESH KUMAR KUMAR Date:
2022.09.30 14:49:29 +0530 (DINESH KUMAR) ADDL. DISTRICT JUDGE-02 ( SOUTH) SAKET COURTS COMPLEX, NEW DELHI.CS (Comm) No. 80/2020 Page 20 of 20
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