Delhi District Court
Vatika Hotels Pvt. Ltd vs Lenskart Solutions Pvt. Ltd on 20 September, 2024
IN THE COURT OF SH.RAJ KUMAR TRIPATHI:
DISTRICT JUDGE (COMMERCIAL COURT)-08,
SOUTH-EAST DISTRICT, SAKET COURTS, NEW DELHI
CS (COMM.) No. 13/2023
(Vatika Hotels Pvt. Ltd. vs. Lenskart Solutions Pvt. Ltd.)
CNR No. DLSE-01-000118-2023
Vatika Hotels Pvt. Ltd.
Vatika City Center,
5th Floor, Tower-A,
Sector 83, Near Kherki Daula Toll Plaza on NH-8,
Gurugram-122 012, Haryana.
......Plaintiff
Through: Mr. Mayank Mishra,
Ms. Prerna Sharma and
Ms. Anukriti Kudesia, advocates
Versus
Lenskart Solutions Pvt. Ltd.
W-123, Greater Kailash, Pocket- 2,
New Delhi-110 048.
......Defendant
Through: Mr. Amit Bajaj, advocate
Date of filing of suit : 04.01.2023
Arguments concluded on : 23.08.2024
Date of Judgment : 20.09.2024
JUDGMENT:
1.1 Plaintiff has filed the present suit against defendant for seeking recovery of an amount of Rs.12,91,588/- including interest along with pendente lite and future interest @ 18% per annum and costs of the suit.
Brief facts of the case:-
2.1 Plaintiff is a company registered under The Companies Act, 1956, having its Registered Office at Flat CS (COMM.) No. 13/2023 (Vatika Hotels Pvt. Ltd. vs. Lenskart Solutions Pvt. Ltd.) Page No. 1 of 30 No.621-A, 6th Floor, 6, Nehru Place, New Delhi and Corporate Office at Vatika City Centre, 5 th Floor, Tower-A, Sector-83, Gurugram-122 004 (near Kherki Daula Toll Plaza on NH-8). 2.2 Plaintiff claims to be a sought after hospitality service provider having been in the industry for over twenty years and a pioneer in providing customized and optimized end- to-end solutions for integrated facilities management to its clients across educational, residential, and commercial sectors in addition to hotels, resorts, townships and other industries. Plaintiff currently provides facility management services at 115 + sites in eight cities across the country through its facility management division, namely 'Enviro'. The present suit has been filed by plaintiff through Mr. Krishan Kumar Sharma, who has been duly authorized to represent plaintiff vide Board Resolution dated 25.10.2021.
2.3 Defendant, one of India's fastest growing eyewear businesses, operates an online store through its website www.lenskart.com as well as physical stores offering eyewear retail. Defendant, in the course of its business, has a warehouse located at Khasra No. 29/24/2, 25/2/1, 30/4/1, 5/1, 6/1/2, Revenue Estate Begumpur, Khatola, Tehsil District, Gurugram- 122 022, Haryana (hereinafter referred as 'the property'). 2.4 Plaintiff has been providing facility management services to defendant at the property since January, 2018. To formalise this arrangement, the parties entered into an Integrated Facility Management Service Agreement ("IFMS") on 31.05.2018 for a period of one year at a monthly service fee of Rs.8,03,128/-, payable by defendant to plaintiff. The said IFMS CS (COMM.) No. 13/2023 (Vatika Hotels Pvt. Ltd. vs. Lenskart Solutions Pvt. Ltd.) Page No. 2 of 30 was renewed by the parties from time to time.
2.5 Parties executed a second IFMS on 31.01.2019 (in short 'Agreement') for providing trained manpower, housekeeping, upkeep and pantry services at the said property ('Services'). Under the Agreement dated 31.01.2019, plaintiff was to charge a monthly fee of Rs.8,59,272/- towards the services provided to defendant.
2.6 As per Clause 6, the Agreement dated 31.01.2019 was valid for a period of one year, commencing from 22.01.2019 till 21.01.2020, after which the Agreement could be further extended at any time with the mutual consent of both the parties. 2.7 Since the Agreement dated 31.01.2019 was set to expire in January 2020, plaintiff followed up with the defendant to renew the Agreement. Defendant expressed its willingness to execute a new agreement and further requested the plaintiff to continue providing services at the said property in the interim. 2.8 In view of the subsisting business relationship and good faith between the parties, plaintiff continued providing services at the said property upon the oral understanding of the parties till 10.07.2020 i.e. even after the expiry of the Agreement. This fact was also eventually affirmed by the defendant vide its reply to legal notice dated 14.01.2021. Defendant continued accepting services without any demur or protest, which further made the plaintiff believe that the Agreement between the parties would be renewed.
2.9 Despite sharing executed copy (by plaintiff's authorized representative) of the renewed IFMS with defendant on 30.01.2020 and issuing multiple follow up e-mails on CS (COMM.) No. 13/2023 (Vatika Hotels Pvt. Ltd. vs. Lenskart Solutions Pvt. Ltd.) Page No. 3 of 30 04.02.2020, 06.02.2020, 19.02.2020, 02.03.2020, 15.04.2020, 28.04.2020, 14.05.2020, 28.05.2020 and 20.06.2020, defendant continued to falsely assure the plaintiff that the IFMS would be executed and renewed shortly but failed to do so. 2.10 There was a 'continuing' contractual relationship between the parties. Plaintiff continued to provide services at the said property of defendant on the oral understanding/agreement between the parties in return of money consideration for the same as envisaged in terms of IFMS dated 31.05.2018 as well as 31.01.2019. Therefore, plaintiff claims that it ought to be compensated for the work done i.e. quantum meruit. 2.11 Defendant unilaterally terminated the agreement in July, 2020. Vide e-mail dated 10.07.2020, defendant admitted that plaintiff had continued to provide services at the property based on oral understanding. Plaintiff alleges that such termination by defendant was contrary to the terms of the agreement between the parties which resulted in serious losses. Such unilateral termination of the oral agreement between the parties was in blatant breach of the obligations of defendant under the IFMS in as much as:-
i) The defendant was required to issue a written notice at least 30 days prior to termination of the agreement between the parties (Clause 7 of IFMS dated 31.01.2019). However, no such notice was issued to plaintiff;
ii) The defendant was liable to pay the outstanding dues towards the services provided by plaintiff within 30 days of receipt of invoice issued by plaintiff (Clause 2.1 and 3.1 of IFMS dated 31.01.2019). However, these dues were never cleared by CS (COMM.) No. 13/2023 (Vatika Hotels Pvt. Ltd. vs. Lenskart Solutions Pvt. Ltd.) Page No. 4 of 30 defendant within time; and
iii) As on date, Rs.92,739/- remains due to be paid by defendant towards arrear charges for revision in minimum wage for the period between 01.07.2018 till 30.11.2019 along with Rs.7,63,965/- remaining to be paid towards facility management charges for March, 2020.
2.12 Plaintiff sent several reminder mails to defendant with regard to pending invoices on 14.07.2020, 23.07.2020, 27.07.2020, 31.07.2020, 07.08.2020, 10.08.2020, 17.08.2020, 20.08.2020, 24.08.2020, 27.08.2020, 08.09.2020, 14.09.2020, 17.09.2020, 30.09.2020 and 06.10.2020 but to no avail. Thereafter, plaintiff sent demand notice to defendant on 02.12.2020 calling upon defendant to pay Rs.8,56,704/- within seven days of receipt of notice. However, defendant neither gave any response nor paid the outstanding dues.
2.13 Plaintiff again sent legal notice to defendant on 11.01.2021. In response to the same, defendant replied on 14.01.2021, wherein, it was stated as under:-
"the arrangement could have been extended with mutual consent by way of a fresh agreement in writing after the said expiry of the agreement, however, no fresh agreement was executed in this regard and you had been continuing services on the basis of oral arrangement since 12.01.2020".
2.14 Defendant refused to acknowledge that any payments were due to plaintiff. In fact, defendant cleverly and arbitrarily stated that the outstanding amount has been set off against the alleged expenses incurred by it to control a fire incident. As per plaintiff, defendant denied its legitimate claim on account of the fire incident. Moreover, there is no clause in CS (COMM.) No. 13/2023 (Vatika Hotels Pvt. Ltd. vs. Lenskart Solutions Pvt. Ltd.) Page No. 5 of 30 the Agreement which provides for or allows such set off of claims between the parties. Pertinently, defendant had continued to enjoy the services of plaintiff based upon oral understanding between the parties, which was acknowledged by defendant in para no.13 of its reply.
2.15 Plaintiff alleges that defendant has deprived the payments on unfounded and unjustified pretext. With regard to the fire incident, dating back to August, 2019, plaintiff states that the issue of fire incident was brought up by defendant only when it sought payment against pending invoices on 10.07.2020. It is matter of fact that no loss/injury or damage to life or goods was caused to defendant as a result of such fire. As such, these allegations were made by defendant only to shy away from paying the amounts due to plaintiff in terms of the Agreement. 2.16 Even otherwise, the stand taken by defendant in its reply is an afterthought since-Firstly, refueling of the 750 KVA Diesel Generator Sets (DG Sets) was carried out in compliance with the protocol and as a regular practice. Thus, no responsibility for the fire can be cast on the plaintiff; and Secondly, the alleged incident took place due to defendant's installing and using non-standard equipment in the DG Sets. These issues were identified basis the Performance Report of the DG sets prepared by plaintiff on 22.04.2019, and the same were informed to defendant vide e-mails dated 27.08.2019 and 12.09.2019. However, no action was taken by defendant to rectify the same.
2.17 Plaintiff avers that "major activities like repair and maintenance" were outside the scope of work of plaintiff under CS (COMM.) No. 13/2023 (Vatika Hotels Pvt. Ltd. vs. Lenskart Solutions Pvt. Ltd.) Page No. 6 of 30 the Agreement. Therefore, any loss on this account cannot be attributed to plaintiff.
2.18 Plaintiff has denied its liability qua the reasons of defendant multiple times including vide corrigendum notice dated 12.04.2021 as well as reply notice dated 13.04.2021. Despite the same, defendant has failed to release the outstanding amounts to plaintiff whilst repeatedly leveling false and baseless allegations only with the malafide intent to wriggle out of its payment obligations.
2.19 Plaintiff constantly followed up with the defendant for payment of the said arrears and charges vide communications dated 10.07.2020, 14.07.2020; 23.07.2020; 27.07.2020, 3107.2020; 07.08.2020; 10.08.2020; 17.08.2020; 20.08.2020; 24.08.2020; 27.08.2020; 08.09.2020; 14.09.2020; 17.09.2020; 30.09.2020 and 06.10.2020. Despite the issuance of such multiple reminder emails, defendant has not bothered to come forward in compliance of its obligations. Defendant deliberately and willfully avoided to pay the outstanding amount due to the plaintiff in terms of the Agreement.
2.20 Plaintiff issued a Demand Notice dated 02.12.2020, calling upon defendant to make a payment of INR 8,56,704/- to the plaintiff within a period of seven days from the receipt of the said notice. Plaintiff also issued another legal notice dated 11.01.2021 demanding payment of outstanding amount. 2.21 Defendant responded to the said demand notice, wherein, he completely disregard the terms of the Agreement and has refused to acknowledge that any payments were due to the plaintiff. Defendant stated that the outstanding amount has been CS (COMM.) No. 13/2023 (Vatika Hotels Pvt. Ltd. vs. Lenskart Solutions Pvt. Ltd.) Page No. 7 of 30 set off against the alleged expenses incurred by defendant to control a fire incident. However, no set off clause provided in the Agreement.
2.22 Plaintiff alleged that defendant has willfully breached the terms of Agreement with an intention to deprive its legal dues. Owing to willful default on the part of defendant to make good of its liability towards the plaintiff, it has been constrained to institute the present suit against defendant. 2.23 Finding no other alternative, before filing of the suit, plaintiff filed an application u/s 12A of The Commercial Courts Act, 2015 for Pre-Institution Mediation and Settlement before South-East District Legal Services Authority. However, defendant did not respond/attend the same on account of which Pre-Institution Mediation was treated as non-starter vide report dated 21.02.2022.
Defence of defendant 3.1 Pursuant to summons issued to defendant, defendant has contested the suit by way of filing written statement. 3.2 In the written statement, defendant took preliminary objections that plaintiff company has failed to file any documents to show that it is an incorporated entity registered under The Companies Act. The plaintiff company has also not filed its Memorandum, Articles and/or any other document. Further, the plaint has not been signed, verified and instituted by a competent person. The alleged Board Resolution as filed on record is not supported with minutes of meeting of the alleged board meeting. 3.3 The suit of plaintiff is for a claim of monies CS (COMM.) No. 13/2023 (Vatika Hotels Pvt. Ltd. vs. Lenskart Solutions Pvt. Ltd.) Page No. 8 of 30 allegedly due but plaintiff has failed to file any ledger account with the plaint. Plaintiff has also not filed the audited books of account on record and has failed to file the details of the accounts as submitted before the Registrar of Companies. Plaintiff has also not filed audited balance sheet to show the name of defendant in the list of debtors.
3.4 Plaintiff has no cause of action against defendant as it is not liable to pay any amount as alleged in the plaint or otherwise. Rather, it is the plaintiff, who is liable to make payment to defendant.
3.5 Defendant alleges that plaintiff has made contradictory statements and has resorted to shifting its position in its pleadings and documents filed with the plaint. In the legal notice dated 11.01.2021, it was alleged that plaintiff and defendant had entered into Facility Management Agreement dated 30.01.2020. In reply dated 14.01.2021, it was specifically stated on behalf of defendant that the parties had lastly entered into Facility Management Agreement dated 31.01.2019. Plaintiff has also filed a corrigendum dated 12.04.2021, now stating that the parties had entered into Facility Management Agreement dated 31.01.2019. In the said corrigendum, there is no reference to any Facility Management Agreement dated 30.01.2020 but a copy of the alleged agreement has been filed with the plaint. 3.6 Plaintiff has filed the present suit with ulterior motives and illegal designs. The suit has been filed to coerce and pressurize the defendant to accede to the illegal and unlawful demands of the plaintiff and the continuation of the same would not be in the interest of justice.
CS (COMM.) No. 13/2023(Vatika Hotels Pvt. Ltd. vs. Lenskart Solutions Pvt. Ltd.) Page No. 9 of 30 3.7 Defendant admits that it is a company incorporated under the provisions of The Companies Act. Mr. Ajay Nagar is the Authorized Representative of defendant company, who has been authorized vide requisite authority to initiate, prosecute and defend the proceedings on behalf of defendant. 3.8 Defendant company is engaged and associated with the business of eye wear, sunglasses, contact lenses, prescription lenses and accessories thereof and also has considerable know- how, expertise and experience as well as engaged in the marketing including wholesale marketing and distribution of said goods including through e-commerce portal in the name of "LENSKART".
3.9 As per defendant, plaintiff represented itself to be professionally managed agency having best-in-class expertise and capabilities in integrated facility management and maintenance services through its facility management division 'Enviro' and had approached the defendant to provide its said services. Defendant got swayed by the representations of the plaintiff and agreed to enter into an arrangement with the plaintiff. Lastly, defendant had executed Integrated Facility Management Services Agreement (IFMS) dated 31.01.2019 with the plaintiff for providing facility management services at its property at KH. No. 29/24/2, 25/2/1, 30/4/1, 5/1, 6/1/1, 6/1/2, Revenue Estate Begumpur Khatola, Tehsil District Gurugram, Haryana.
3.10 Defendant avers that under Clause 1.0 of the said Agreement, it was specifically recorded that object of the Agreement was to provide trained manpower to defendant. In CS (COMM.) No. 13/2023 (Vatika Hotels Pvt. Ltd. vs. Lenskart Solutions Pvt. Ltd.) Page No. 10 of 30 terms of Clause 4.1 of the said Agreement, plaintiff had undertaken to carry out assignments entrusted to the plaintiff with utmost diligence. Plaintiff had further undertaken to indemnify and hold the defendant harmless of all losses on account of any liability, claims, actions, fines, penalties, losses, liabilities, damages, suits or judgments (including without limitation the cost of defending or settling any action, claim or demand) which the defendant may suffer or incur or which may be made against the defendant including for any act or omission of the plaintiff or its staff, agents or employees. 3.11 Defendant alleged that the services provided by the plaintiff were completely sub-standard and the requisite deliverables as per the understanding between the parties were not delivered. The work done by the plaintiff's team was not as per expected standards and of an extremely poor quality. The standard quantity and quality of the deliverables were also not adhered to by the team of the plaintiff and the defendant had to constantly take up the said issues with the plaintiff but there was still no improvement.
3.12 A fire incident happened when plaintiff's team was negligently refueling the running DG set 1010 KVA at the premises of the defendant. The "SOP FOR FILLING THE DIESEL IN INBUILT DG TANK" prepared for the said purpose specifically provided for switching "OFF" the DG set at least 15 Minutes before refilling of inbuilt fuel tank but despite the same, refueling was being done without the DG set being switched off, which directly resulted in fire having occurred. Fortunately, there was no loss to life and limb, though the said negligence could CS (COMM.) No. 13/2023 (Vatika Hotels Pvt. Ltd. vs. Lenskart Solutions Pvt. Ltd.) Page No. 11 of 30 have caused a major mishap.
3.13 The said fire caused due to negligence of the plaintiff's team caused huge losses to the defendant. Defendant had to hire an alternate DG Set and had to spend an amount of Rs.3,35,240/- towards rental of the same. The cost of repairs of damaged DG set came to Rs.83,750/-. The fire extinguisher used, cost the defendant Rs.12,650/-. Testing of the DG set after repairs for 15 hours, set the defendant back by another Rs.2,72,000/-. Thus, the total direct losses to defendant came to Rs.7,03,640/-. That was apart from the other incidental losses including loss of working hours, mental agony and harassment caused to the defendant.
3.14 Plaintiff was required to provide trained manpower to defendant and had undertaken to carry out assignments entrusted to them with utmost diligence. However, the services provided by plaintiff were sub-standard and unprofessional. Rather than taking responsibility of the said incident which occurred due to the negligence of it's team, plaintiff sought to deflect the issue on frivolous pretexts. Even after the said incident, the team of the plaintiff continued to operate in a similar negligent manner. A mail dated 26.08.2019 was accordingly issued on behalf of defendant to the plaintiff. The said mail was duly responded by plaintiff on 27.08.2019, which sought to deflect and sidestep the issue of negligence. A mail dated 10.09.2019 was issued responding to each of the defenses sought to be put by the plaintiff and also computation of the amount to be debited owing to the negligence of the plaintiff. 3.15 Plaintiff had undertaken to indemnify and hold the CS (COMM.) No. 13/2023 (Vatika Hotels Pvt. Ltd. vs. Lenskart Solutions Pvt. Ltd.) Page No. 12 of 30 defendant harmless of all losses and the plaintiff was thus liable to make good the said losses to the defendant. Defendant had accordingly deducted the said amount from the management fee payable to the plaintiff under the Agreement. Apart from the deduction of the said amount, all other amounts were duly paid by the defendant to the plaintiff without fail. However, despite repeated requests and reminders, plaintiff failed to clear the salary of the staff deputed at the defendant's place for the month of March 2020.
3.16 Plaintiff sought to put the non-payment of the salaries on the alleged non clearance of invoices by the defendant. There was constant follow up in that regard by the defendant with the plaintiff being moved by the plight of the staff all through but the plaintiff refused to budge. 3.17 Defendant contends that all through the period, the quality of services continued to be extremely poor. To make matter worse, the plaintiff's team had continued to follow the same process even after the said fire incident. Also due to non- payment of salaries, the staff stopped carrying out their assigned activities causing serious prejudice to the defendant. 3.18 Defendant avers that since things did not improve and to mitigate any further losses due to continuous unprofessional and sub-standard work and also not heed to the illegitimate actions and demands of the plaintiff any further, it was decided to completely end the arrangement with the plaintiff. 3.19 In terms of Clause 6.0, the said Agreement was valid for a fixed term of one year w.e.f. 22.01.2019 and it came to an end by efflux of time on 21.01.2020. The arrangement could have CS (COMM.) No. 13/2023 (Vatika Hotels Pvt. Ltd. vs. Lenskart Solutions Pvt. Ltd.) Page No. 13 of 30 been extended with mutual consent by way of a fresh agreement in writing after the said expiry of the Agreement. However, no fresh agreement was executed in this regard and plaintiff had been continuing services on the basis of oral arrangement since 22.01.2020. Accordingly, vide communication dated 10.07.2020, the said arrangement was terminated with immediate effect for all intents and purposes. It was categorically stated in the said communication that defendant had already cleared all pending payments till June 2020 and plaintiff was requested to share the invoices till the date of termination.
3.20 Defendant avers that plaintiff was required to provide services with professional care, skill and in accordance with reasonable expected standards. However, as is apparent from the aforesaid, plaintiff miserably failed to provide services with professional care and skill or in accordance with reasonably expected standard. Despite the said being the position, plaintiff had the audacity to raise demands from the defendant for the alleged dues. Immediately, on the said frivolous demands from the end of the plaintiff, it was informed that the said amount was not due and payable. There had been fundamental breach of the terms of engagement and the plaintiff is thus, not entitled to claim the amount as alleged or otherwise from the defendant. 3.21 Defendant had not pressed the incidental losses including for loss of working hours, mental agony and harassment caused to defendant owing to continuing relationship with plaintiff. However, considering the persistence of the plaintiff with illegal, unlawful and illegitimate demands and cessation of relationship, defendant had also pressed the demand CS (COMM.) No. 13/2023 (Vatika Hotels Pvt. Ltd. vs. Lenskart Solutions Pvt. Ltd.) Page No. 14 of 30 for said losses which were assessed at Rs.25,00,000/-. Plaintiff was called upon to pay the said amount to defendant which however, plaintiff has failed to pay.
3.22 Defendant contends that the suit of the plaintiff is completely false, frivolous, baseless and vexatious and plaintiff is not entitled to recover any amount from the defendant. Rather, it is the plaintiff, who is liable to refund the security deposit to the defendant.
3.23 Denying all the other allegations and averments of the plaint, defendant prayed to dismiss the suit of plaintiff with exemplary costs.
Replication 4.1 Plaintiff filed replication to written statement of defendant, wherein plaintiff denied the averments and allegations made in the written statement and reiterated its stand as mentioned in the plaint.
4.2 Plaintiff averred that the grievance i.e. poor quality of services and deliverables was never raised with plaintiff at any point of time during subsistence of contractual relationship between the parties. Same is further corroborated from the fact that defendant has not placed on record any mail exchanges or other correspondences etc. vide which it had communicated issues with the services provided by plaintiff during subsistence of Agreement. Thus, the averments regarding quality of services and deliverables are merely bald and unsubstantiated averments which merit no consideration.
4.3 In respect of fire incident in DG sets, plaintiff stated that it had shared a snag list (transition report) with defendant in CS (COMM.) No. 13/2023 (Vatika Hotels Pvt. Ltd. vs. Lenskart Solutions Pvt. Ltd.) Page No. 15 of 30 2018, which included issues observed by plaintiff in the DG sets. Plaintiff repeatedly notified the defendant that the requisite compliance with respect to the DG sets were not in place and missing, including the No Objection Certificate ("NOC") issued by the Fire Department as well as licence for the High-Speed Diesel ("HSD") Tank and Day Tank. There was no Underground HSD Tank at the property, which is mandatory as per the guidelines. Additionally, the Solar Power Plant was not in working condition and the second DG set was of low capacity, resulting in inadequate power supply at the property. The major problems faced by plaintiff at the property were communicated to defendant vide Transition Report, details of which are given in para no.15 of the replication.
4.4 In respect of deployment of staff, plaintiff stated that all the personnels deployed at the property (details given in para no.16 of replication) had requisite educational qualifications and were adequately and regularly trained by plaintiff. Plaintiff averred that the deductions made by defendant are totally illegal. Defendant has not claimed any relief in the written statement in respect of the loss allegedly suffered by it due to fire incident at the property. Thus, defendant is not entitled for any deduction as claimed in the written statement.
Issues 5.1 From the pleadings of the parties, the following issues were framed on 13.10.2023:-
(i) Whether the plaintiff is entitled for decree of a sum of Rs.12,91,588/- against defendant, as prayed for? OPP.
(ii) Whether the plaintiff is entitled for any interest as claimed, CS (COMM.) No. 13/2023 (Vatika Hotels Pvt. Ltd. vs. Lenskart Solutions Pvt. Ltd.) Page No. 16 of 30 if so, at what rate and for which period? OPP.
(iii) Relief.
Evidence & list of documents:-
6.1 In support of its case, plaintiff examined two witnesses i.e. PW1 Mr. Vikram Singh Yadav, General Manager (Operations) of plaintiff company and PW2 Mr. Prashant Ranjan Pandey, Assistant Vice President (Technical). 6.2 Before coming to the testimony of plaintiff's witnesses, the documents relied upon by PW1 are put in a tabulated form as under:-
S.No. Details of documents Exhibit
Marks
1. Copy of Integrated Facility Management Ex.PW1/1 Service Agreement dated 31.05.2018
2. Copy of Integrated Facility Management Ex.PW1/2 Service Agreement dated 31.01.2019
3. Copy of Integrated Facility Management Mark-A Service Agreement dated 30.01.2020
4. Copy of e-mails between dated 30.01.2020 Ex.PW1/4 till 03.06.2020
5. Copy of e-mails dated 10.07.2020 Ex.PW1/5
6. Copy of tax invoices issued by plaintiff Mark-B
7. Copy of e-mails between 10.07.2020 till Ex.PW1/7 06.10.2020
8. Copy of demand notice dated 02.12.2020 Ex.PW1/8
9. Copy of legal notice dated 11.01.2021 Ex.PW1/9
10. Copy of reply dated 14.01.2021 Ex.PW1/10
11. Copy of e-mail dated 06.09.2019 Ex.PW1/11
12. Copy of e-mail dated 01.10.2019 Ex.PW1/12
13. Copy of letter inter/offer of employment of Mark-C plaintiff employees
14. Copy of HDFC Bank Account Statement Mark-D from March 2020 to May 2020
15. Copy of e-mails dated 27.08.2019, Ex.PW1/15 CS (COMM.) No. 13/2023 (Vatika Hotels Pvt. Ltd. vs. Lenskart Solutions Pvt. Ltd.) Page No. 17 of 30 10.09.2019 and 12.09.2019
16. Copy of Corrigendum notice dated Ex.PW1/16 12.04.2021
17. Copy of reply notice dated 13.04.2021 Ex.PW1/17 6.3 The documents relied upon by PW2 are as under:-
S.No. Details of documents Exhibit Marks
1. Copy of Snag List/Transition Mark-X
Report
2. Copy of Performance Report Mark-Y
dated 22.04.2019
7.1 On the other hand, defendant in its defence has
examined its AR Mr. Sahil Arora as DW1, who filed his evidence by way of affidavit, Ex.DW1/A, wherein, he has deposed about the same facts as mentioned in the written statement. The documents relied upon by DW1 are put in a tabulated form as under:-
S.No. Details of documents Exhibit
Marks
1. Copy of certificate of incorporation Mark-D/1
2. Copy of certificate of incorporation upon Mark-D/2 change of name
3. Board Resolution dated 08.06.2022 Ex.DW1/3
4. Authority letter dated 01.04.2023 Ex.DW1/4
5. E-mail dated 10.07.2020 at 11:03 PM Ex.DW1/5
6. E-mail dated 26.08.2019 at 6:23 PM Ex.DW1/6
7. E-mail dated 26.08.2019 at 6:25 PM Ex.DW1/7
8. E-mail dated 10.09.2019 at 12:01 PM Ex.DW1/8
9. E-mail dated 10.07.2020 at 4:22 PM Ex.DW1/9
10. E-mail dated 10.07.2020 at 14:52 PM Ex.DW1/10
11. E-mail dated 10.07.2020 at 14:29 PM Ex.DW1/11
12. E-mail dated 10.07.2020 at 1:41 PM Ex.DW1/12
13. E-mail dated 10.07.2020 at 12:26 PM Ex.DW1/13 CS (COMM.) No. 13/2023 (Vatika Hotels Pvt. Ltd. vs. Lenskart Solutions Pvt. Ltd.) Page No. 18 of 30
14. Reply-cum-legal notice dated 14.01.2021 Ex.DW1/14 Findings and Analysis 8.1 I have heard and considered the submissions advanced by learned counsel for parties and perused the material on record.
9.1 The issue wise findings are as under:-
Issue no.1 Whether the plaintiff is entitled for decree of a sum of Rs.12,91,588/- against defendant, as prayed for? OPP.
10.1 Onus to prove this issue lies on plaintiff. In order to discharge the onus to prove the issue, plaintiff has examined two witnesses i.e. PW1 Mr. Vikram Singh Yadav and PW2 Mr. Prashant Ranjan Pandey, who filed their evidence by way of affidavit, Ex.PW1/A and Ex.PW2/A respectively, wherein they have corroborated and reaffirmed the facts as mentioned in the plaint.
10.2 As per PW1, he had been working with plaintiff since 01.04.2011. He was the principal point of contact for the Agreements in dispute. He was Incharge of overall operations at the defendant's warehouse, including the clients meetings, monitoring of site activity and specialized work when dispute arose between the parties. He has deposed that vide e-mail dated 10.07.2020 (Ex.PW1/5), defendant categorically admitted that plaintiff had continued to provide soft services at the said property till July 10, 2020 on the basis of oral understanding between the parties. Defendant has not paid the rightful dues of plaintiff despite several requests and reminders. 10.3 He further deposed that it was explicitly agreed CS (COMM.) No. 13/2023 (Vatika Hotels Pvt. Ltd. vs. Lenskart Solutions Pvt. Ltd.) Page No. 19 of 30 under Clauses 2.1 and 3.1 of the Agreement that defendant was under an obligation to release payments to plaintiff within 30 days of receipt of invoice issued by plaintiff. The plaintiff's representatives approached defendant on several occasions for payment of following outstanding amounts under the Agreement:-
a. Towards arrear charges, amounting to Rs.92,739/- from August 1, 2019 till November 30, 2019; AND b. Towards charges for the month of March, 2020 under the Agreement to the tune of Rs.7,63,965/-. 10.4 PW1 further deposed that feeling aggrieved and cheated by the default on the part of defendant, plaintiff sent demand notice dated 02.12.2020 calling upon defendant to make payment of Rs.8,56,704/- within a period of seven days from the date of receipt of said notice. Plaintiff issued another legal notice dated 11.01.2021, demanding the payment of outstanding amount. Defendant responded to the demand notice vide reply dated 14.01.2021, wherein it refused to acknowledge that any payment was due to plaintiff.
10.5 PW2 Mr. Prashant Ranjan Pandey in his affidavit of evidence has deposed that he had been working with plaintiff since May 11, 2011 and he is fully conversant with the facts and circumstances of the case. He has deposed on the same lines as deposed by PW1. He has supported and corroborated the facts as mentioned in the plaint and deposed by PW1. 10.6 PW1 Mr. Vikram Singh Yadav and PW2 Mr. Prashant Ranjan Pandey, were cross-examined at length by counsel for defendant but nothing has come on record to doubt CS (COMM.) No. 13/2023 (Vatika Hotels Pvt. Ltd. vs. Lenskart Solutions Pvt. Ltd.) Page No. 20 of 30 their veracity. They remained firm and consistent throughout their deposition and defendant failed to assail their testimony.
Thus, there is no reason to doubt the testimony of plaintiff's witnesses. From the testimony of plaintiff's witnesses, it stands proved on record that defendant is liable to pay an amount of Rs.8,56,704/- to plaintiff in terms of the Agreement entered between the parties.
10.7 On the other hand, defendant has examined its AR Mr. Sahil Arora, who has deposed on the lines of defence as taken in the written statement. He does not have any personal knowledge about the facts of this case. He was not in employment of defendant company at the time of Agreement entered into between the parties or even at the time when the alleged fire incident took place at defendant's property. His testimony is solely based on the basis of record maintained by defendant.
10.8 From the pleadings and evidence of the parties, the following undisputed facts can be culled out:-
(i) Parties entered into an Integrated Facility Management Service Agreement (IFMS) on 31.05.2018 for a period of one year at a monthly service fee of Rs.8,03,128/-.
(ii) Parties executed second IFMS on January 31, 2019 for providing trained manpower, housekeeping, upkeep and pantry services at the property of defendant. Under the said Agreement, plaintiff was to charge a monthly fees of Rs.8,59,272/- towards services provided to defendant.
(iii) The Agreement dated 31.01.2019 came to an end by efflux of time on 21.01.2020, in terms of Clause 6.0.CS (COMM.) No. 13/2023
(Vatika Hotels Pvt. Ltd. vs. Lenskart Solutions Pvt. Ltd.) Page No. 21 of 30
(iv) Plaintiff continued to provide services to defendant till 10.07.2020 on the basis of oral understanding between the parties.
(v) Defendant terminated the Agreement on 10.07.2020.
10.9 As per defendant, vide communication dated 10.07.2020, the arrangement i.e. providing of services by plaintiff on the basis of oral arrangement since 22.01.2020 was terminated with immediate effect for all intents and purposes. In the said communication, it was clearly stated that defendant had already cleared all pending payments till June, 2020 and plaintiff was requested to share the invoices till the date of termination. 10.10 Admittedly, defendant has not made payment against tax invoices Mark-B raised by plaintiff despite requests and reminders made vide mails dated 10.07.2020 till 06.10.2020, Ex.PW1/7 (colly.), demand notice dated 02.12.2020 (Ex.PW1/8) and legal notice dated 11.01.2021 (Ex.PW1/9). Defendant has raised mainly two defences against the claim of plaintiff i.e. (1) the services provided by plaintiff were completely sub-standard and of an extremely poor quality and (2) a fire incident was caused due to negligence of plaintiff's team which caused huge losses to defendant.
10.11 For easy reference, the relevant portion of cross- examination of DW1 is reproduced herein below:-
"The issue of sub-standard services was raised in August, 2019 by the defendant. I am not aware whether the issue of sub-standard services was raised before the fire incident.
Ques.-11 Are there any documents on record to show that the issue of sub-standard services was raised before the fire incident?
Ans.- No. Ques.-12 Were there any other issues raised by the CS (COMM.) No. 13/2023 (Vatika Hotels Pvt. Ltd. vs. Lenskart Solutions Pvt. Ltd.) Page No. 22 of 30 defendant apart from sub-standard services? Ans.- I have already responded that in my affidavit, Ex.DW1/A as well as in documents relied upon by defendant.
I am not aware, if during the subsistence of the Agreements, the plaintiff ever refused to provide services.
Ques.-39 How was the manpower which provided services by the plaintiff at the warehouse recruited? Ans.:- It was taken care of by the Admin.
Ques.-40 Was the manpower which provided services by the plaintiff at the warehouse, interviewed by the defendant?
Ans.- I am not aware.
Ques.-41 I put it to you that number of persons deployed at site was jointly decided by the plaintiff and defendant. What do you have to say?
Ans.- Yes. The staff was deployed at the instructions of the defendant.
Ques.-49 Why was the Agreement renewed by
the defendant in 2019, if the services were
unsatisfactory?
Ans.- I do not know."
10.12 From the aforesaid cross-examination of DW1, it is
to be noted that DW1 has been evasive in his reply. To most of the questions, he stated that he is not aware or he does not know. Thus, he tried to dodge the questions put to him by giving specific and categorical reply.
10.13 It is an admitted fact that the IFMS was renewed twice between the parties. Defendant continued to avail the services of plaintiff till 10.07.2020 on the basis of oral understanding between the parties. Defendant has failed to produce any proof/evidence which would establish that the allegation of sub-standard manpower and poor quality services was raised with plaintiff during subsistence of contractual relationship between the parties. Defendant has produced nothing on record to suggest that the issue of sub-standard services was raised with plaintiff. To the question "why was the CS (COMM.) No. 13/2023 (Vatika Hotels Pvt. Ltd. vs. Lenskart Solutions Pvt. Ltd.) Page No. 23 of 30 Agreement renewed by defendant in 2019, if the services were unsatisfactory?", DW1 Mr. Sahil Arora could not tell as to why the Agreement was renewed despite the services of plaintiff being unsatisfactory. If defendant was not satisfied with the services provided by plaintiff, it is incomprehensible as to why it continued to avail its services till July, 2020. The availment of services of plaintiff suggests that defendant was satisfied with the same and that is why it continued to avail its services. In view of above, the plea raised by defendant regarding substandard and poor quality of services in its written statement appears to be afterthought and taken to avoid just claim of plaintiff. 10.14 As per PW1, all the personnels deployed by plaintiff at the said property had requisite educational qualifications and were adequately and regularly trained by plaintiff. Whilst interviewing new recruits for deployment at the said property, the candidates were also interviewed by defendant. He stated that Mr. Raybhan and Mr. Bharat were appointed as Supervisors-Fire and Safety. Mr. Raybhan, at the time of the incident had work experience of around five years. Whereas, Mr. Bharat, had attended one year diploma in Fire Technology and Industrial Safety Management with the National Council for Vocational Training, Ministry of Skill Development and Entrepreneurship. He further stated that Mr. Abdin and Mr. Pawan were appointed as Senior Service Engineer-Electrical and Service Engineer respectively at the said property. While Mr. Abdin is a well qualified electrician, certified by National Council for Vocational Training, Ministry of Skill Development and Entrepreneurship, Mr. Pawan has an ITI diploma in Electrical Engineering from CS (COMM.) No. 13/2023 (Vatika Hotels Pvt. Ltd. vs. Lenskart Solutions Pvt. Ltd.) Page No. 24 of 30 Government ITI, Kaithal, Haryana along with experience of sixteen years at the time of the fire incident. He further deposed that the manpower deployed at the said property was not only trained but also experienced.
10.15 The aforesaid deposition of PW1 has not been controverted and has remained unchallenged despite lengthy cross-examination conducted by counsel for defendant. On the other hand, defendant has placed nothing on record to suggest that the quality of manpower provided by plaintiff was sub- standard and the staff deputed at site was not experienced and unqualified. Accordingly, the claim of defendant that services provided by plaintiff were substandard and of poor quality is without any basis and substance.
10.16 In respect of salary of employees deployed at the property, PW1 has deposed that all the salaries of the employees were paid in entirety for all period of time. To this effect, defendant failed to clear the charges for the plaintiff's services provided in the month of March, 2020 amounting to Rs.7,63,965/- along with arrears from July 1 st, 2019 till November 30th, 2019 amounting to Rs.92,739/-. He has proved the copies of bank account statement of plaintiff from March to May 2020 [Ex.PW1/14 (colly.)], reflecting timely payment of salaries made to personnel deployed at the property. Defendant has brought nothing on record to suggest that the staff deployed at the site was not paid by plaintiff.
11.1 Now coming to the other defence of defendant i.e. a fire incident happened at the property due to plaintiff's fault and defendant suffered losses on account of the same.CS (COMM.) No. 13/2023
(Vatika Hotels Pvt. Ltd. vs. Lenskart Solutions Pvt. Ltd.) Page No. 25 of 30
11.2 As per defendant, the fire incident which occurred at the property in August, 2019 was on account of the poor quality of services and deliverables on the part of plaintiff/its team along with negligence in refueling the DG sets while they were in operation. Defendant alleged that the said incident caused huge losses to them for which it ought to be indemnified. 11.3 Defendant avers that it had to hire an alternate DG set and had to spend an amount of Rs.3,35,240/- towards rental for the same. The cost of repairs of damaged DG set came to Rs.83,750/-. The fire extinguisher used, cost the defendant Rs.12,650/-. The testing of the DG set for fifteen hours after repairs set the defendant back by another Rs.2,72,000/-. Thus, the total direct losses to defendant came to Rs.7,03,640/- 11.4 To debit the alleged losses, defendant deducted an amount of Rs.7,03,640/- from the management fee payable to plaintiff in terms of the agreement. Defendant alleges that plaintiff deliberately defaulted on payment of salaries to the staff due to which the staff stopped carrying their assigned activities causing serious prejudice and even more losses to defendant. 11.5 To prove the aforesaid defence, defendant has examined its AR Mr. Sahil Arora as DW1. The relevant portion of cross-examination of Mr. Arora is reproduced hereunder for ready reference:-
"I do not know exact month and date of the fire incident. It is correct that in the month of March, 2020, the services were provided by plaintiff company to defendant company at their site. Ques. 17- Can you tell us the specifications of the DG set that caught fire?
Ans. No, I cannot.
Ques. 18- How many DG sets were installed at the site?CS (COMM.) No. 13/2023
(Vatika Hotels Pvt. Ltd. vs. Lenskart Solutions Pvt. Ltd.) Page No. 26 of 30 Ans. I am unable to recall.
Ques.19- Who is the owner of DG sets installed at site?
Ans. I do not know.
Ques. 53- Who informed you about the fire incident? Ans. I got the information from the record only. Ques. 54- I put it to you that you do not have any personal knowledge of the fire incident. What do you have to say?
Ans. Yes.
Ques.26- Can you tell us what is prescribed in the SOP?
(shown Ex.PW1/15, wherein it is mentioned that "check SOP and attachment, e-mails) Ans. I am not aware of the SOP.
Ques. 27- Has any SOP been placed on record by the defendant?
Ans. I am unable to recall.
Ques. 27- I put it to you that the SOP being referred to was not approved by the defendant. What do you have to say?
Ans. I am not aware about the SOP.
Ques. 29- For how many days was the alternate DG set deployed at the site?
Ans. It is already mentioned in my affidavit. Ques. 30- Can you show from the affidavit? Ans. After going through the same, it is not mentioned.
Ques. 34- Can you tell us the date on which the alternate DG set was deployed at site?
Ans. I do not know the exact date.
Ques.35- Can you tell us the break up of: (1) Rs.3,35,240/- claimed towards cost of hiring alternate DG set; (2) Rs.83,750/- claimed towards cost of repairing DG set; (3) Rs.12,650/- claimed towards cost of fire extinguisher and (4) Rs.2,72,000/- claimed towards testing DG set for fifteen hours.
Ans. I am not aware.
Ques.36- Have any documents been placed on record to show such break up of: (1) Rs.3,35,240/- claimed towards cost of hiring alternate DG set; (2) Rs.83,750/- claimed towards cost of repairing DG set; (3) Rs.12,650/- claimed towards cost of fire extinguisher and (4) Rs.2,72,000/- claimed towards testing DG set for fifteen hours.
Ans. No. Ques.46- Was any loss of life or limb suffered by defendant due to the fire incident?
Ans. No. CS (COMM.) No. 13/2023 (Vatika Hotels Pvt. Ltd. vs. Lenskart Solutions Pvt. Ltd.) Page No. 27 of 30 Ques. 69- Was any external investigation conducted by defendant in relation to the fire incident? Ans. I am not aware."
11.6 Admittedly, there was no loss of life or limb suffered by defendant due to the fire incident. Defendant has neither filed any external investigation report nor examined any expert witness to prove that the fire incident occurred due to negligence on the part of plaintiff's team. Defendant has failed to prove any loss or substantiate its claim of the alleged loss as mentioned in para no.7 of the preliminary submissions of the written statement. Thus, the alleged loss as claimed by defendant is only presumptive. Defendant has miserably failed to prove on record about the loss allegedly suffered by it due to fire incident caused on account of negligence on the part of plaintiff. Thus, the deduction of Rs.7,03,640/- from the management fees of plaintiff is totally unjustified and unwarranted.
11.7 Defendant has claimed that it has already cleared all pending payments till June, 2020. Plaintiff was requested to share the invoices till the date of termination i.e. 10.07.2020. In terms of Clauses 2.1 and 3.1 of the Agreement, plaintiff's representatives demanded payment of outstanding amount mentioned in Mark-B. Defendant has not filed any proof on record that the payment against the invoices Mark-B was made to plaintiff. Defendant has neither filed its ledger account nor produced its bank statement to prove that the payment against the invoices Mark-B was made to plaintiff. Thus, the claim of defendant that payment of entire dues was made to plaintiff remained unsubstantiated and not proved.
11.8 For the foregoing reasons and discussions, I am of CS (COMM.) No. 13/2023 (Vatika Hotels Pvt. Ltd. vs. Lenskart Solutions Pvt. Ltd.) Page No. 28 of 30 the view that plaintiff has succeeded to discharge the onus to prove issue no.1. Accordingly, this issue is decided in favour of plaintiff and against the defendant. Plaintiff is held entitled to recover an amount of Rs.12,91,588/- from defendant. Issue no.2 Whether the plaintiff is entitled for any interest as claimed, if so, at what rate and for which period? OPP.
12.1 Plaintiff has claimed pendente lite and future interest on the principal amount @ 18% per annum. PW1 Mr. Vikram Singh Yadav in para no.41 of his evidence affidavit, Ex.PW1/A has stated that defendant is liable to pay a principal sum of Rs.8,56,704/- in terms of the Agreement between the parties as well as interest of Rs.4,34,884/- calculated @ 18% per annum from the due date of payment till filing of the suit as mandated under the Agreement. The same assertion has been reiterated by PW2 Mr. Prashant Ranjan Pandey in para no.25 of his affidavit of evidence.
12.2 I have already held in para no.11.8 that plaintiff is entitled to recover the amount as prayed in prayer clause (a) of the suit. As defendant withheld the legitimate dues of plaintiff without any cogent and sufficient reason, therefore, plaintiff is entitled for grant of interest. The rate of interest i.e. 18% per annum claimed by plaintiff appears to be on higher side. No justification has been furnished by plaintiff for grant of interest at such a higher rate. In such circumstances, I am of the view that plaintiff is entitled for interest only at a reasonable rate. In my view, interest of justice shall be subserved, if plaintiff is granted interest @ 8% per annum.
CS (COMM.) No. 13/2023(Vatika Hotels Pvt. Ltd. vs. Lenskart Solutions Pvt. Ltd.) Page No. 29 of 30 12.3 In view of above, this issue is decided in plaintiff's favour and against the defendant.
Relief 13.1 For the reasons and discussions made above and findings given on issues no.1 and 2, the suit filed by plaintiff is decreed with cost. Defendant is directed to pay an amount of Rs.12,91,588/- to plaintiff. Defendant is further directed to pay interest on the principal amount of Rs.8,56,704/- @ 8% per annum from the date of filing of the suit i.e. 04.01.2023 till realisation of the amount.
14.1 Decree Sheet be prepared accordingly.
Digitally
15.1 File be consigned to Record Room. Raj signed by Raj
Kumar Tripathi
Kumar Date:
2024.09.21
Tripathi 16:58:51
+0530
Announced in the open court (RAJ KUMAR TRIPATHI)
Dated: 20.09.2024 District Judge (Commercial Court)-08,
South-East District, Saket Courts,New Delhi CS (COMM.) No. 13/2023 (Vatika Hotels Pvt. Ltd. vs. Lenskart Solutions Pvt. Ltd.) Page No. 30 of 30