SAMSUNG INDIA ELECTRONICS PRIVATE LIMITED  Vs BLUEFLUX DIGITAL PRIVATE LIMITED

OMP(T) (COMM) 56/2020 Page 1 of 7
$~20 (original side)
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ O.M.P. (T) (COMM.) 56/2020 & I.A.8479/2020,
I.A.8646/2020, I.A. 783/2020
SAMSUNG INDIA ELECTRONICS PRIVATE LIMITED
….. Petitioner
Through: Mr. Tarang Agarwal , Adv.

versus
BLUEFLUX DIGITAL PRIVATE LIMITED ….. Respondent
Through: Mr.
Rahul Kumar , Adv.

CORAM:
HON’BLE MR. JUSTICE C.HARI SHANKAR
O R D E R (O R A L)
% 18.01.2021

1. By this joint application, the pa rties seek disposal of the present
petition as the disputes between them have been amicably settled
under the aeg is of the Delhi High Court Medi ation & Conciliation
Centre. The terms of settlement have been placed on record and shall
be treated as an anne xure to the present order. They may, for ready
reference be reproduced thus: I.A.783/2020 (under Order XXII Rule 3 of CPC)

“1. TERMS OF SETTLEMENT

1.1. The Parties agree and acknowledge that the Sales and
Supply Agree ment dated 14.09.2018 executed between the
Parties hereto stands fully ter minated with effect fro m
24.09.2020 and all rights and obligations thereunder stand
fully satisfied/ concluded. Subject to co mpliance of the term s
of this Settlement Agreement by Sa msung BlueFlux hereby
2021:DHC:205OMP(T) (COMM) 56/2020 Page 2 of 7
undertakes not to question or challenge the termination of the
Agree ment, in any m anner whatsoever.

1.2. The Parties hereby further agree and acknowledge that
Samsung shall, on a ‘·without prejudice’ and ‘no admission ’
basis and only for the purposes of the present settle ment,
transfer/ divert only the transferable stock specified in
Schedule – II to its new distributor(s), subject to the following
terms and conditions:

(a) The transferable stock shall be transported by
BlueFlux (at its own costs) to the new distributor(s) of
Samsung (as intim ated to BlueFlux by Sa msung),
within a period of ten (10) days fro m the date of
execution of this Settle ment Agree ment. BlueFlux
shall give prior notice (in writing) of atleast 24 hours
to Sa msung co mmunicating the place and ti me from
where the transferable stock would be transported so that Sa msung can ensure that the representative is
present to verify the transferable stock specified in
Schedule – II.

(b) BlueFlux shall ensure that the transferable stock
is in the sa me condition as found during the joint
physical verification held in Nove mber, 2020. I n case,
during verification at the ti me of transportation by
BlueFlux, any product(s) or package(s) from the
transferable stock is found to be different and/ or in a damaged condition (as per the judgment of Samsung),
the said product(s) would be rejected by Samsung/its
distributor(s) and no am ounts would be payable to
BlueFlux for those product(s).

(c) Simultaneous to the delivery of the transferable
stock to the new distributor(s) of Samsung, BlueFlux
shall raise GST invoice(s) and E-way bill(s), as
required under applicable GST laws, upon the new
distributor(s) of Sa msung.

(d) Subject to points above, Sa msung shall ensure
that the distributor to who m the transferable stocks
would be transferred pays the total a mount of Rs.
1,00,43,971/-(Rupees One Crore Forty Three Thousand Nine Hundred and Seventy One only) being
2021:DHC:205OMP(T) (COMM) 56/2020 Page 3 of 7
the am ount payable towards transferable stock,
inclusive of all applicable taxes, excluding the GST
input tax amount, as per Schedule- II. to this Settlem ent
Agreement, or such other deducted am ount, in case
any damaged product(s) is/are found at the tim e of
inspection at the pre mises of BlueFlux (as mentioned
in (a) above), directly to BlueFlux within a period of
one (1) week fro m the delivery of the transferable
stock and/ or raising of GST invoice(s) by BlueFlux,
whichever is later.

(e) BlueFlux agrees to be fully liable to pay/transfer
GST input tax a mount of Rs.18,43,930/- (Rupees
Eighteen Lakhs Forty-Three Thousand Nine Hundred
and Thirty only) as per applicable GST laws.

(f) Subject to points above, Sa msung shall ensure
that the distributor to who m the transferable stocks
would be transferred sub mits two post-dated cheques
of Rs. 9,21,965/- (Rupees Nine Lakhs Twenty One
Thousand Nine Hundred and Sixty Five) each dated
25.01.2021 and 25.02.2021 respectively, being the amount equivalent to GST input tax a mount, as per
Schedule- II to this Settle ment Agree ment, or such
other deducted amount, in case any damaged
product(s) is/ are found at the ti me of inspection at the
prem ises of BlueFlux (as mentioned in (a) above), with
BlueFlux, within a period of one (1) week from the
delivery of the transferable stock and/or raising of G ST
invoice(s) by BlueFlux, whichever is later.

(g) BlueFlux agrees and undertakes to furnish proof
of paym ent of GST input tax amounts to Sa msung
towards the Stock transferred in the month of
Dece mber 2020 on or before 23.01.2021 and towards
the Stock transferred in the month of January 2020 on
or before 23.02.2021, post which BlueFlux shall
beco me entitled to deposit the aforesaid post-dated
cheques (as m entioned in (f) above).

(h) Parties agree that in case of failure of BlueFlux
to furnish proof of paym ent of GST input tax am ounts
to Samsung (i) Sa msung will be entitled to forfeit the
amount of Rs. 18,43,930/- (Rupees Eighteen Lakhs
2021:DHC:205OMP(T) (COMM) 56/2020 Page 4 of 7
Forty-Three Thousand Nine Hundred and Thirty only)
and consequently, be entitled to stop pay ment towards
the aforesaid cheques (as stated in (f) above) deposited
with BlueFlux; and (ii) BlueFlux would be liable to
compensate the distributor/ Sa msung, as the case m ay
be, for the entire tax amount, denial of input credit,
including interest and penalty, to be determined by
concerned authorities. In such an eventuality, if the
said post-dated cheques (as referred in clause (f)
above) are presented by BlueFlux and dishonoured due
to “stop pay ment” on account of reasons set out in this
clause, it is hereby agreed and acknowledged that
BlueFlux shall not be entitled to initiate any
proceedings against Samsung for such dishonour of
cheque(s). It is hereby expressly agreed and
acknowledged that the present clause shall not be
construed to be barred under Section 28 of the Indian
Contract Act, 1872, and the present negative covenant
shall be entitled to be specifically perfor med in term s
of Section 42 of the Specific Relief Act, 1963 (as
amended).
1.3. The Parties further agree and acknowledge that in view
of BlueFlux’ s request, Sa msung, only as a gesture of goodwill
and with a view to mitigate financial loss suffered by
BlueFlux, on a ‘without prejudice’ basis and without adm itting
any liability in this regard whatsoever, is agreeable to assist
BlueFlux in relation to its outstanding dues from its
dealers/retailers as mentioned in Schedule -III, in the
following li mited manner and based upon the ter ms and
conditions stipulated hereinafter:

(a) the representatives of Sam sung would assist
BlueFlux by doing joint calls alongwith representatives
of BlueFlux to the dealers/ retailers of BlueFlux, as mentioned in Schedule- III;

(b) the representatives of Sa msung would make
joint visits with the representatives of BlueFlux to the
offices/shops of dealers/retailers of BlueFlux, as
mentioned in Schedule- III;

2021:DHC:205OMP(T) (COMM) 56/2020 Page 5 of 7
(c) this exercise would be conducted by Sa msung
for a maxi mum period of forty (40) days starting 15
January 2021.

1.4. BlueFlux agrees and acknowledges that Sa msung has
not verified the list contained in Schedule -III (neither the
names of the dealers/retailers mentioned therein nor the
alleged amounts shown as outstanding therein from the
respective dealers/retailers). BlueFlux further agrees and
acknowledges that since Sa msung has no privity or
contractual or legal relationship with the dealers/retailers of
BlueFlux, Sa msung assu mes no liability, of any nature
whatsoev er, towards BlueFlux for making recoveries fro m its
dealers/retailers or from any other third party.

1.5. BlueFlux further agrees and acknowledges that no
liability can be fastened upon Sa msung or its representatives/
affiliates, in case any am ount sought to be recovered by
BlueFlux from its dealers/retailers or third parties is not fully
or partially recovered or re mains outstanding.
1.6. BlueFlux further agrees that in no event would
Samsung be made a party or be called as a witness in any
legal proceeding(s) initiated between BlueFlux and or any of BlueFlux’s dealers/retailers or any third party in any of their
inter -se dispute in relation to any outstanding a mounts or
delivery of Sa msung products or for any other reason
whatsoever. BlueFlux assures and confirms Samsung that if
any legal proceeding(s), clai m(s) and/ or action(s) are initiated
against Sa msung, or if Sa msung is dragged in any legal
proceeding as a co-Defendant, in an inter-se dispute between
BlueFlux with its dealer(s), retailer(s), in such an event,
BlueFlux shall be accountable and responsible, and hereby
undertake to take steps to defend all such proceeding(s),
claim(s) and/ or action(s), if any, on behalf of Samsung, at its
own costs, risks and expenses and also inde mnify Samsung
and bear the costs, charges, fees (professional or otherwise),
court fees etc. incurred by Sa msung, as a result of, arising
from , or in connection with, or relating to any such
proceeding(s) clai m(s) and/ or action(s).

1.7. Within one week of execution of this Settle1nent
Agreement, Samsung shall refund credit balance of Rs.
2021:DHC:205OMP(T) (COMM) 56/2020 Page 6 of 7
2,35,247/- (Rupees Two Lakhs Thirty- Five Thousand Two
Hundred and Forty-Seven) to BlueFlux.

l.8. Within one week of execution of this Settleme nt
Agree ment, Sa msung shall return the original bank guarantee
bearing no. 0123320BG0000010 dated 16.06.2020 of Rs.
10,00,000/-(Rupees Ten Lakhs only) to BlueFlux, which was
furnished by BlueFlux pursuant to the term s of the
Agree ment.
1.9. BlueFlux further agrees and undertakes to irrevocably
release and covenant not to sue, or commence or continue any
action, suit or proceeding, against Sa msung in respect of (a)
the settle1nent in relation to the lifting/ diverting of the
transferable Stocks; and/ or (b) the li mited assistance being
provided by Samsung to BlueFlux in relation to the
outstanding amount being recoverable by BlueFlux from its
dealers/retailers; and/or (c) the outstanding a mount
purportedly recoverable by BlueF lux from its
dealer(s)/retailer(s); and/or (d) refund of credit balance a s
mentioned in Clause 1.7 above; and/ or (e) bank guarantee as
mentioned in Clause 1.8 above.

1.10. The Parties agree and acknowledge that pursuant to
completion of the obligations of the Parties under this
Settle ment Agree ment, Sa msung shall not be liable to pay any
amounts to BlueFlux, on any account whatsoever.

2. CESSATION OF LEGAL PROCEEDINGS AND
RELEASE OF CLAIMS

2.1. As a pre-condition to the Clause 1 above, BlueFlux
agrees to, on or before the next date of hearing i.e.
11.01.2021, unconditionally withdraw the Section 9 Petition
filed before the Ld. District Judge, Co mmercial Court- III,
Patiala House Couse, New Delhi, by filing an appropriate
application.

2.2. As a pre-condition to Clause 1 above, the Parties agree
to treat the purported arbitration proceedings (alongwith all
Orders passed and proceedings presided over by the Ld. Sole
Arbitrator) initiated by BlueFlux as null and void for all intents and purposes. BlueFlux further agrees to
unconditionally withdraw the said purported arbitration
2021:DHC:205OMP(T) (COMM) 56/2020 Page 7 of 7
proceedings within two weeks fro m the date of execution of
this Settle ment Agree ment.

2.3. The Parties shall, within two (2) weeks from the
execution of this Settle ment Agreement, file a joint
application before the Hon’ble High Court of Delhi in the
Section 14 Petition for placing on record this Settle1nent
Agree ment and disposing off the Section 14 Petition in terms
of this Settle ment Agreement. A copy of the joint application
duly executed and verified by the Parties is appended to this
Settle ment Agreem ent as Schedule- IV and the original thereof
is being retained by Sa msung for filing the sam e before the
Hon’ble Delhi High Court.
2.4. The Parties hereto agree and acknowledge that they
have amicably resolved all the disputes arising out of, relating
to, or having any connection with the Agree ment, including
all the claims in the proceedings initiated by either Party, and
have no further clai ms or dem ands against each other arising
out of the sam e, in any m anner whatsoever.”

2. In view of the fact that disputes stand settled, this petition does
not survive for consideration or adjudication. It is accordingly
disposed of in terms of the aforesaid settlement. The parties shall
remain bound by the terms of settlement.
3. In view of the fact that the disput es stand settled, the orders
passed in the arbitral proceedings do not survive, and would
accordingly stand set aside.

4. The petition stands disposed of in the aforesaid terms.

C.HARI SHANKAR, J
JANUARY 18, 2021/ kr
2021:DHC:205