Delhi High Court
Emg Hospitality Pvt Ltd vs Automobili Italia Pvt Ltd & Others on 29 October, 2014
Author: G.S.Sistani
Bench: G.S.Sistani
$~47.
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ CS(OS) 240/2013
% Judgment dated 29.10.2014
EMG HOSPITALITY PVT LTD ..... Plaintiff
Through : Mr.Alok Bhachawat, Adv.
versus
AUTOMOBILI ITALIA PVT LTD & OTHERS ..... Defendants
Through : Mr.Rajat Bhalla and Mr.Pankul Nagpal,
Advs.
CORAM:
HON'BLE MR. JUSTICE G.S.SISTANI
G.S.SISTANI, J (ORAL)
I.A. NO. 21233/2013
1. Present suit has been filed by the plaintiff under the provisions of Order XXXVII of Code of Civil Procedure for recovery of Rs.26,23,239/-.
2. As per the plaint, plaintiff is engaged in the business of wedding and event planning and management. Defendant no.1 is a private limited company. Defendants no.2 and 3 have been impleaded being Directors of defendant no.1. Defendant no.4 is a partnership firm and a dealer of Ferrari Vehicles in Delhi. Defendants no.5 and 6 have been arrayed as parties being partners of defendant no.4.
3. It is clarified by learned counsel for the plaintiff that defendant no.2 is also a partner of defendant no.4, which is a partnership concern. It is also clarified that discussions took place between the plaintiff and the Directors/partners of defendants no.1 and 4; invoice was raised on defendant no.4; and part payment was made by defendant no.1. It is submitted that defendants no.2 and 3 may be deleted from the array of CS(OS)240/2013 Page 1 of 12 parties as they are only the Directors of defendant no.1.
4. As per the plaint, somewhere in the month of October, 2011, defendants, through defendant no.3, approached the plaintiff to plan, manage and organise an event for the launch of Ferrari FF on 14.12.2011 at New Delhi. Modalities of the event were worked out at a meeting held on Precision Cars Private Limited at Jasola. It was agreed between the parties that advance payment of 50% would be made by the defendants to the plaintiff on the amount as raised in the invoice and the balance 50% payment was to be made after the completion of event.
5. Further as per the plaint, the defendant no.1 placed a formal purchase order vide PO No.001/FND/EMG EVENT dated 6.12.2011 for launch of Ferrari FF amounting to Rs.38,18,034.50. As instructed by the defendant no.2 the bill was raised by the plaintiff in the name of defendant no.4 initially, but subsequently it was requested to be raised in the name of defendant no.1.
6. Plaint also discloses that the defendants paid a sum of Rs.18,70,837/-
being approximately 50% of the invoice amount to the plaintiff on 9.12.2011 prior to the launch of the event. The plaintiff raised an invoice no.0022/2011-12 dated 12.12.2011 in the name of defendant no.1, amounting to Rs.38,18,034/-. Plaintiff further raised, invoice for additional expenses incurred in the sum of Rs.2,75,887/- vide invoice no.0023/2011-12 dated 12.12.2011, which invoice was duly confirmed by defendant no.2 vide email dated 13.12.2011. Based on the aforesaid two invoices, the present suit has been instituted under the provisions of Order XXXVII of the Code of Civil Procedure for a sum of Rs.22,23,084/- i.e. Rs.19,47,197/- (remaining 50% of Rs.3,818,034/-) plus Rs.2,75,887/-.
7. It is also the case of the plaintiff that the said event was held at Hotel Leela Palace, Chanakya Puri which was a mega success. Director of CS(OS)240/2013 Page 2 of 12 defendant no.1 duly acknowledged the excellent work done by the plaintiff through his email dated 7.6.2012. However, the defendants failed to clear the outstanding amount despite repeated requests through emails and telephone. It is also the case of the plaintiff that the event was conducted to the complete satisfaction of the defendants and it was a mega success, which is evident from the fact that photographs of the events were highlighted on the websites of the defendants and in other newspapers and magazines.
8. Defendants have filed a consolidated application seeking leave to defend.
Counsel for the defendants submits that the present suit is not maintainable in the present form and the plaintiff has suppressed and withheld material documents. Further, the counsel for the defendants submits that the suit is bad for non-joinder of parties and the plaintiff has failed to supply supporting documents for the expenses incurred at the event. Also, the expenses are grossly inflated, details of which are as under:
"K. ......
The plaintiff is also wrongly claiming an amount of Rs.3,00,000 as Planning and management cost which was never agreed to be paid by the Defendants. It is submitted that a bare perusal of the purported invoices would reveal that the Plaintiff has also charged an amount of Rs.4,51,500/- as management charges which is false and not payable to the Plaintiff. The falsity of the allegations of the Plaintiff are borne out by the documents filed by them which are contradictory to his own case.
That the car was brought to the place of the event by the Defendant No.4 through itself, hence the amount of Rs.3,00,000/- is not payable to the Plaintiff.CS(OS)240/2013 Page 3 of 12
The set up for the Launch for which the Plaintiff has claimed an amount of Rs.2,75,000/- was shoddy as a result of which the Defendant No.4 had no other option to get the work done through other vendors/own employees thereby incurring expenditure on account of the shoddy work of the Plaintiff.
There were no Hostesses provided by the Plaintiff for the event and it was the Defendant No.4 who arranged the Hostesses. Hence no amount is payable to the Plaintiff.
Plaintiff is also claiming an amount of Rs.95,000/- on account of permissions and licenses. It is submitted that the amount claimed under this head is not payable as the same is grossly inflated and an attempt by the Plaintiff to extract money from the Defendants.
The Orchestra provided by the Plaintiff was not upto the mark for which the Defendants had to suffer great embarrassment. Furthermore, the Plaintiff has charged for 4 girls and 4 unique instruments whereas there were only 2 girls present with 2 unique instruments.
The Plaintiff has also charged an amount of Rs.12,50,000/- towards video mapping in the purported invoice which was also not of the desired quality. The defendants had to arrange the same by their own employees/vendors incurring additional costs.
9. Unconditional leave to defend is sought by the defendants on the ground that the plaintiff has suppressed and concealed material documents including the correspondence exchanged between the plaintiffs and defendant no.4, wherein the plaintiff was repeatedly requested to submit original invoices from the vendors with detailed description of the work executed, payment verification and payment receipt from the vendors.
10. It is submitted by counsel for the defendants that the Director of the CS(OS)240/2013 Page 4 of 12 plaintiff, Shri.Sharad Mathur, acknowledged the receipt of email dated 24.5.2012 and agreed to remain present with the supporting documents.
11. Leave is also sought on the ground that in the absence of documents, the invoice sought to be relied upon by the plaintiffs, cannot be a ground for basing the claim under Order XXXVII of Code of Civil Procedure.
12. It is further submitted by counsel for the defendants that the invoices, which is the basis of the present suit, has been grossly inflated and, thus, it casts a suspicion on the authenticity of the invoiced amount.
13. Another ground raised by the defendants for grant of leave to defend is that the plaintiff has failed to carry out some of the jobs and the event was not properly organised, the same was not as per the timelines, the defendants have not only suffered harassment but losses as the defendants incurred expenses on account of the plaintiff not performing its obligations, and defendant no.4 claims to have suffered losses to the tune of Rs.23.50 lakhs. Right has been reserved to file a counter claim or institute proper proceedings in the appropriate Court of law.
14. It has also been argued by counsel for the defendants that the accompanying affidavit to the suit is not a proper affidavit in the eyes of law and on this ground the defendants are entitled to unconditional leave. Counsel further submits that the plaintiff also claims pre-filing interest at the rate of 18%, per annum, while there is no written agreement between the parties to claim interest and, thus, the present suit could not be maintainable under the provisions of Order XXXVII of CPC and the defendants would be entitled to unconditional leave to contest. Another ground raised in the present application seeking leave to defend is that the plaintiff has failed to file original documents on record.
15. In rejoinder, learned counsel for the plaintiff has relied upon Sanjay Kohli v. Vikas Srivastava & Ors., reported at 2012 (130) DRJ 458; S.M.V. CS(OS)240/2013 Page 5 of 12 Agencies Pvt. Ltd. v. Cross Country Heritage Hotel & Anr., reported at 203 (2013) DLT 790; and Sushila Mehta v. Bansi Lal Arora, reported at ILR 1982 Delhi 320, to buttress his arguments that even in the absence of a written document with regard to interest a suit under Order XXXVII of Code of Civil Procedure would be maintainable and interest would be payable by the defendants.
16. I have heard counsel for the parties and have carefully perused the documents. Before dealing with the rival submissions of counsel for the parties, it would be useful to re-visit the law laid down by the Apex Court with regard to dealing with an application for leave to defend. The Apex Court in the case of M/s.Mechelec Engineers & Manufacturers Vs. M/s.Basic Equipment Corporation AIR 1977 SC 577 has drawn up the parameters to be considered by the court while dealing with the application for leave to defend. Relevant paras of the judgment reads as under:
"8. In Smt. Kiranmoyee Dassi and Anr. v. Dr. J. Chatterjee 49 C.W.N. 246 , Das. J., after a comprehensive review of authorities on the subject, stated the principles applicable to cases covered by order 37 C.P.C. in the form of the following propositions (at p.
253):
(a) If the Defendant satisfies the Court that he has a good defence to the claim on its merits the plaintiff is not entitled to leave to sign judgment and the Defendant is entitled to unconditional leave to defend.
(b) If the Defendant raises a triable issue indicating that he has a fair or bona fide or reasonable defence although not a positively good defence the plaintiff is not entitled to sign judgment and the Defendant is entitled to unconditional leave to defend.
(c) If the Defendant discloses such facts as may be deemed sufficient to entitle him to defend, that is to say, although the affidavit does not positively and immediately make it clear CS(OS)240/2013 Page 6 of 12 that he has a defence, yet, shews such a state of facts as leads to the inference that at the trial of the action he may be able to establish a defence to the plaintiff's claim the Plaintiff is not entitled to judgment and the Defendant is entitled to leave to defend but in such a case the Court may in its discretion impose conditions as to the time or mode of trial but not as to payment into Court or furnishing security.
(d) If the Defendant has no defence or the defence set up is illusory or sham or practically moonshine then ordinarily the Plaintiff is entitled to leave to sign judgment and the Defendant is not entitled to leave to defend.
(e) If the Defendant has no defence or the defence is illusory or sham or practically moonshine then although ordinarily the Plaintiff is entitled to leave to sign judgment, the Court may protect the Plaintiff by only allowing the defence to proceed if the amount claimed is paid into Court or otherwise secured and give leave to the Defendant on such condition, and thereby show mercy to the Defendant by enabling him to try to prove a defence."
17. While deciding an application for leave to defend, the Court must consider that the defence, sought to be raised, is a strong and plausible defence, which is bona fide and not sham or moonshine, and can only be proved on evidence, and in case it is found that defendant has been able to raise a strong and bona fide defence to the claim, which is not sham or moonshine, the defendants would be entitled to unconditional leave. The defendants must also satisfy the Court that a triable issue has been raised, which would entitle the defendants to an unconditional leave.
18. Learned counsel for the plaintiff has placed reliance on the email dated 6.12.2011, a copy of which has been placed on record to show that the purchase order was attached and sent to the plaintiff. A scanned copy of the purchase order has been placed on record, relevant portion of which reads as under:
CS(OS)240/2013 Page 7 of 12 S.NO. QUANTITY DESCRIPTION UNIT TOTAL
PRICE (INR)
(INR)
01. -n.a.- LOGISTICS FOR 3,00,000.00 3,00,000.00
FERRARI CAR
SHIFTING AND
PLACEMENT
Planning and
management cost
Car Causing
Pulleys
Crane
Technicians
Manpower
Trials
02. -N.A.- SETUP FOR 3,00,000.00 3,00,000.00
LAUNCH 2,75,000.00 2,75,000.00
Backdrop and side
wall-white finish
MDF
Side Box Structure -
20 ft X 6ft X 15ft
White Floor - 30ft X
20ft
Trussings for
projection
Trussing for lighting
Present plantform -
8ft X 8ft
Podium with
branding
LCD Plasma in front
of podium for logo
03. -N.A. TECHNICALS 1,25,000.00 1,25,000.00
15,000.00 15,000.00
Light & Sound 35,000.00 35,000.00
CS(OS)240/2013 Page 8 of 12
AV setup - Single 40,000.00 40,000.00
Projector setup
Generators
Ambience Lighting
04. -N.A.- TENTAGE AND 20,000.00 20,000.00
DECORE
Entrance Gate with
Branding
05. -N.A.- ENTERTAINMENT 12,50,000.00 12,50,000.00
& TECHNOLOGY 6,50,000.00 6,50,000.00
Byrd call Orchestra
TBL from Mumbai
Video Mapping
Launch Setup
06. Total Cost 30,10,000.00 30,10,000.00
SUBTOTAL: 30,10,000.00
AMOUNT PAYABLE: 30,10,000.00
MANAGEMENT 4,51,500.00
CHARGES 15%
SERVICE TAX 10.3% 356534.50
TOTAL (INR): 3818034.50
19. Subsequently on the same date i.e. 6.12.2011, the plaintiff was asked to send a scanned copy of a cancelled cheque to enable the defendants to transfer the amount in the account of the plaintiff. The plaintiff vide email dated 9.12.2011 was informed that 50% payment, being Rs.18,70,837/-, had been processed. The plaintiff vide email dated 13.12.2011 informed the defendants with respect to costs for additional events incurred. This communication was duly acknowledged by the defendants vide email dated 13.12.2011 wherein the plaintiff was asked to add Cue Manager, if any, and the cost of van for transport. The plaintiff was also requested to send the revised costs.
CS(OS)240/2013 Page 9 of 1220. Learned counsel for the plaintiff submits that the emails placed on record would show that the defence, sought to be raised, by the defendants is an afterthought as at no point of time the defendants had sought for break-up and vouchers, neither the same was agreed upon by the parties and the payments were to be made as per the purchase order placed by the defendants where the amounts have been clearly spelt out item-wise. Counsel further submits that the defendants have placed reliance on an email dated 10.12.2011, a reading of which itself would show that it is a forged and fabricated document as it is dated 10.12.2011 and the contents of the email talks about shoddy work of the plaintiff whereas the event was fixed for 14.12.2011 and the defendants could not have commented on the shoddy work prior to the date of the launch.
21. Reliance is also placed by counsel for the plaintiff on the email dated 7.6.2012 wherein one of the Directors had apologized to the plaintiff for not being able to help the plaintiff to secure the money despite work being carried out to his expectations. Counsel for the plaintiff also submits that an email dated 15.12.2011 was addressed to a third person giving details of the plaintiff agency, to show that the defendants were satisfied with the work of the plaintiff. Further reliance is also placed on the details of the websites and press cuttings to show that the event was a success, which would belie that the work carried out by the plaintiff was shoddy.
22. The submission of counsel for the defendants that the payments are not due and payable, as the plaintiff failed to supply the necessary information, is without any force as the defendants have unable to show a single document in support of their argument that details were to be provided by the plaintiff vendor-wise under item-wise. On the contrary, the purchase order placed by the defendants shows that precise amounts were worked out item-wise and only thereafter the purchase order was CS(OS)240/2013 Page 10 of 12 placed on the plaintiff. The purchase order reflects precise figures and does not mention that the figures were either to be reconciled or they are approximate or any other supporting documents were to be provided. In my view, the defendants have not been able to raise a triable issue with regard to non-supply of supporting documents. The defence of the defendants is moonshine and sham.
23. As far as the submission of counsel for the defendants that the plaint is not supported by a proper affidavit is concerned, the same is also without any force, copy of the affidavit filed along with the plaint was shown to the counsel for the defendants and he was unable to point out any defect in the same. Another argument raised by counsel for the defendants is with regard to the interest claimed by the plaintiff prior to the filing of the suit.
24. In the case of Sushila Mehta (supra) it was held as under:
(15) Fourthly, counsel submitted that assuming that the plaintiff is entitled to sue for recovery of Rs.1,00,000 on a written- contract, she is not entitled to join the claim for Rs.36,000 which, he said is a claim in the nature of damages. I do not agree. It is a claim for interest. Whether she is entitled to interest or not is another question. Order 37 Rule I says that the plaintiff can "recover a debtor liquidated demand in money payable by the defendant, with or without interest, arising on a written contract". The claim for interest can be joined with a claim for money under Order 37 Rule 1 (2)(b)(i) Civil Procedure Code. This is clear from the statute."
25. In the case of S.M.V. Agencies Pvt. Ltd. (supra) it was held as under:
"12. The plaintiff has also claimed interest @12% per annum. There is no written contract regarding the rate of interest. However, in the absence thereof also, interest can be awarded for the reason of the defendants having wrongfully withheld the monies of the plaintiff. It stands established as aforesaid that the plaintiff demanded back the money vide letter dated 10th September, 2008 and legal notice dated 27th October, 2009. The defendants inspite CS(OS)240/2013 Page 11 of 12 thereof did not refund the monies."
26. In view of the settled position of law, it cannot be said that the plaintiff cannot claim interest prior to the filing of the suit under the provisions of Order XXXVII CPC. Even otherwise being a commercial transaction the plaintiff has claimed interest at the rate of 18%, per annum.
27. Having regard to the fact that a detailed purchase order was placed by defendant no.1, which has been extracted in para 18 above, which gives details of the work to be carried out and the agreed rates, which would show that the defence sought to be raised is baseless and an afterthought, and further the conduct of the defendants can also be viewed from the fact that reliance is placed on an email dated 10.12.2011 with respect to the shoddy work whereas the event was fixed on 14.12.2011, present application is dismissed. Suit is decreed in favour of the plaintiff and against the defendants no.1 to 3 with pendente lite and future interest at the rate of 12%, per annum, from the date of filing of the present suit till realisation. Let a decree sheet be drawn up accordingly.
28. Application stands disposed of.
I.A.2103/2013 (O 38 R 5), 12535/2013 (O 37 R 3(4) & 21233/2013 (O 37 R 2/3)
29. Applications stand dismissed in view of the order passed in the suit.
G.S.SISTANI, J OCTOBER 29, 2014 msr /pdf CS(OS)240/2013 Page 12 of 12