delhihighcourt

SPECTRA TELEVENTURES PVT LTD vs ALLIANC TELENET PVT LTD & ORS

* IN THE HIGH COURT OF DELHI AT NEW DELHI
Reserved on: 06.08.2024
Pronounced on: 06.09.2024

+ CS(COMM) 530/2016
SPECTRA TELEVENTURES PVT LTD …..Plaintiff
Through: Mr.Sanjay Bansal, Mr.Rajesh R.Dubey, Mr.Shobhit Garg, Ms.Swati Bansal, Ms.Vaishali Gupta, Ms.Ayushi Bansal, Advs.
versus
ALLIANCE TELENET PVT. LTD. & ORS …….Defendants
Through: Mr.Yudhvir Singh Chauhan, Ms.Hinu Mahajan, Mr.Aditya Sharma, Advs. for D-1.
Mr.Priyank Aggarwal, partner of D-2 is present in person (through VC).
Mr.Ashok Chhaparia, Adv. for D-2.

CORAM:
HON’BLE MR. JUSTICE NAVIN CHAWLA
J U D G M E N T
1. This Suit has been filed by the plaintiff seeking recovery of a sum of Rs.1,02,91,305.60, from the originally impleaded defendant nos. 1 to 4, jointly and severally.
Case of the Plaintiff
2. In the Suit, the plaintiff asserts that it is a company engaged in the business of installation of telecom lines, civil construction works, electrical empanelment work, and various other related works in the above said industry.
3. The plaintiff asserts that M/s Delhi Integrated Multi Modal Transmit System Pvt. Ltd. (hereinafter referred to as ‘DIMMTS’), which was originally impleaded as the defendant no.2 in the Suit, had awarded work relating to the supply, installation, testing and commissioning of electrical Sub-Station DG system for the upgradation/renovation of the Inter-State Bus Terminal at Kashmere Gate to M/s Nagarjuna Construction Company Ltd. (hereinafter referred to as ‘NCCL’), which was originally impleaded as the defendant no.3 in the Suit. NCCL, in turn, awarded the said work to the defendant no.1 vide Work Order dated 21.07.2011, for a total value of Rs.2,16,00,000/-. The defendant no.1, in turn, sub-contracted the above work to the plaintiff vide Purchase Order dated 04.08.2011 (Ex.PW1/B), for a total consideration of Rs. 2,00,00,000/-, which was accepted vide Acceptance Letter dated 17.08.2011 (Ex.PW1/C).
4. It is the case of the plaintiff that the plaintiff duly completed the said work, however, the defendant no.1 failed to pay the full consideration amount to the plaintiff in terms of the Purchase Order dated 04.08.2011, leaving a balance of Rs.84,23,985.60, which is sought to be recovered by the plaintiff from the defendants in the present Suit. The calculations for the same have been given by the plaintiff as under:
“Details of amount to be recovered

Total Project cost as per contract
20000000.00
Amount paid directly for panel by Allaince
(-)705688.00
Amount paid directly for Cable by Allaince
(-)462452.00
Amount paid for transformer
(-)4966403.40
Amount received from Alliance
(-)5441471.00
Total amount to be recovered
8423985.60

5. The plaintiff issued a legal notice dated 31.07.2014 (Ex.PW1/K) to the defendants, seeking recovery of the above amount along with interest thereon.
6. The defendant no.1 by its reply dated NIL (Ex.PW1/M), denied the liability to pay any amount to the plaintiff, giving vague denials in response to the claims of the plaintiff.
7. The plaintiff further asserts that an amount of Rs.4,53,000/- was given as an advance by the plaintiff to the defendant no.4, M/s Super Agencies, under the Proforma Invoice dated 30.03.2012 (Ex.PW1/H), for the supply of 3 Nos. of 1000 KVA, DRY TYPE, 11/0.433 KV Cast Resin transformers. The total consideration payable under the said invoice by the plaintiff to the defendant no.4 was Rs.53,44,403.40.
8. The plaintiff asserts that the defendant no.3 sent an e-mail dated 02.04.2012, asking the defendant no.4 to send the Proforma Invoice of the balance amount after adjusting the advance amount paid by the plaintiff company directly in the name of the defendant no.3. The said amount was thereafter paid by the defendant no.3 directly to the defendant no.4.
9. The plaintiff asserts that the amount of Rs.4,53,000/- is either liable to be refunded by the defendant no.1 or separately by the defendant no.4 to the plaintiff. The amount of Rs.84,23,985.60 includes this amount of Rs.4,53,000/-.
Case of the Defendant No. 1
10. The defendant no.1 filed its Written Statement inter alia claiming that the plaintiff has filed the present Suit based on a Purchase Order dated 04.08.2011, which was never completed by the plaintiff and, therefore, the plaintiff is not entitled to the amount as claimed. The defendant no.1 pleaded that for the work that was done by the plaintiff, it has already paid the plaintiff the due amount.
Proceedings in the Suit
11. By an Order dated 21.01.2016 passed by this Court in I.A. No. 25085/2015 (Ex.DW2/P1), filed by the defendant no.3 seeking deletion from the array of parties, the defendant nos.2 and 3, that is, DIMMTS and NCCL, were deleted from the array of parties. Hence, the defendant no.4, that is, M/s Super Agencies, became the defendant no.2 in the Suit and shall hereinafter be referred to as the defendant no.2.
12. Basis the pleadings of the parties, this Court by an Order dated 25.10.2016, framed the following issues:
(i) Whether the plaintiff is entitled to recover Rs.84,23,985.60P as principal amount for the work done from defendants no.1 and 2, jointly and severally? OPP
(ii) Whether the plaintiff is entitled to recover interest @ 14% as claimed? OPP
(iii) Whether the plaintiff is entitled to future interest and cost of the suit? OPP
(iv) Whether the plaintiff has not completed the project as agreed under the contract?
OPD-1
(v) Whether the defendant no.2 was entitled to forfeit an amount of Rs.4,53,000/-? OPD-2
(vi) Relief.
13. At the commencement of the hearing of this Suit, the learned counsel for the plaintiff submitted that as far as Issue No.(i) is concerned, the claim of the plaintiff is against the defendant no.1 and the defendant no.2 (M/s Super Agencies).
14. At the stage of conclusion of the final arguments, the plaintiff and the defendant no.2 reached a settlement of their disputes. This Court passed the following Order on 06.08.2024, recording the terms of the settlement as under:-
“ IA 35791/2024
1. This is an application seeking permission to place the Settlement Agreement dated 01.08.2024, executed between the plaintiff and the defendant no.2, on record.
2. The learned counsel for the plaintiff submits that the matter has been settled between the plaintiff and the defendant no.2.
3. Learned counsel for the plaintiff submits that in terms of the said Settlement Agreement, the defendant no.2 has handed over three cheques of Rs.1,50,000/- each to the plaintiff payable on 07.08.2024, 07.09.2024 and 07.10.2024, respectively.
4. Mr.Priyank Aggarwal, the partner of the defendant no.2, who appears virtually and has been identified by the learned counsel for the plaintiff, submits that the parties, that is, the plaintiff and the defendant no.2, have amicably settled their inter se disputes and have executed a Settlement Agreement dated 01.08.2024 recording the terms thereof. He undertakes that the said cheques will be duly honoured on their presentation.
5. The learned counsel for the plaintiff submits that in view of the said settlement, claim against the defendant no.2 stands satisfied.
6. He submits that as far as the claim against the defendant no.1 is concerned, the same is now only for Rs.79,70,985/- alongwith interest of Rs.17,66,900/- up to filing of the suit, and pendente lite and future interest @ 14% per annum.
7. The application be treated as disposed of recording the above Settlement and submissions of the parties.”

Submissions of the Learned Counsel for the Plaintiff
15. The learned counsel for the plaintiff submits that the defendant no.1 has admitted to the placement of the Purchase Order on the plaintiff and also the fact that it has made only partial payment against the same to the plaintiff.
16. He submits that the only defence taken by the defendant no.1 against the claim of the plaintiff is that the plaintiff failed to complete the work. He submits that the then defendant no.2, that is, DIMMTS, in its application seeking deletion from the array of parties, being I.A. No. 1224/2016, had inter alia claimed that the work of the electrical substation has been completed, paid for, and settled by it and nothing remains to be paid thereagainst. Similarly, the then defendant no.3, that is, NCCL, in its application seeking deletion from the array of parties, being I.A. No. 25085/2015, had also stated that for the execution of work relating to supply, installation, testing and commissioning of electrical Sub-Station DG System, it had placed a Work Order dated 21.07.2011 on the defendant no.1 and that it has paid, and the defendant no.1 has received, the full payment for the work done.
17. The learned counsel for the plaintiff submits that from the above pleadings, it is clear that the work of supply, installation, testing and commissioning of the electrical substation, which was sub-contracted by NCCL to the defendant no.1, and further sub-contracted by the defendant no.1 to the plaintiff, stood completed and that the defendant no.1 has received full payment for the same from NCCL.
18. He submits that therefore, the defendant no.1, in spite of receiving the full amount for the work done by the plaintiff, has failed to pay the plaintiff for the same.
19. He submits that the defendant no.1 also examined Mr. Subir Bhargava, General Manager, NCCL, as the DW-2. In his cross examination, the DW-2 also admitted that the work awarded by NCCL to the defendant no.1 had been completed and that the full payment had been made to the defendant no.1. Even the DW-2 did not state that the work awarded to the plaintiff had been completed by a third agency or by the defendant no.1 itself.
20. He submits that since it is the case of the defendant no.1 that the said work was not completed by the plaintiff, in that event, it was incumbent upon the defendant no.1 to show as to who actually completed the said work. The defendant no.1 has not made any averment in this regard in its written statement or in its evidence. He submits that this itself falsifies the case of the defendant no.1 that the work awarded to the plaintiff had not been completed by the plaintiff itself.
21. He submits that completion of the work by the plaintiff is also evidenced by the Measurement Book [Mark C (Colly)], which contains the endorsement of an officer of NCCL to the effect that the measurement has been verified.
22. He further submits that the DW-1, in his cross-examination, stated that due to the non-completion of the work by the plaintiff, DIMMTS and NCCL had withdrawn the work from the defendant no.1 and given it to a third party. Apart from the fact that no proof thereof was filed by the defendant no.1, even though the DW-2 was summoned by the defendant no.1, DW-2 too did not state that the work awarded to defendant no.1 and, in turn, to the plaintiff, was got completed by NCCL through a third party. In fact, he reiterated and admitted the contents of the application, which recorded that the defendant no.1 had been fully paid for the contract. He submits that, therefore, the defence set up by the defendant no.1, that the plaintiff failed to complete the work and that instead the work had to be completed by a third party, is false.
Submissions of the Learned Counsel for the Defendant No. 1

23. On the other hand, the learned counsel for the defendant no.1 submits that the plaintiff has failed to prove that it completed the work that was awarded to it by the defendant no.1 under the Purchase Order dated 04.08.2011. He submits that the onus of proving the same was on the plaintiff. He also submits that for the work that was done by the plaintiff, the plaintiff has been duly paid and, in fact, has been paid more than what was due. He further submits that the plaintiff has also failed to prove that the defendant no.1 had received the full amount from NCCL for the Work Order dated 21.07.2011 that was placed by NCCL on the defendant no.1, and which work was later sub-contracted to the plaintiff by the defendant no.1.
24. Referring to the cross-examination of the PW-1, he submits that the said witness stated that he does not remember if, despite receiving various reminders, the plaintiff had not completed the work. He submits that, therefore, the plaintiff has failed to prove its case, and the Suit is liable to be dismissed.
Analysis and Findings
25. From the above, the undisputed facts that emerge are as under:
(a) DIMMTS, as a principal employer, had awarded the work relating to the supply, installation, testing and commissioning of electrical Sub-Station DG system for the upgradation/renovation of the Inter-State Bus Terminal at Kashmere Gate to NCCL.
(b) NCCL, in turn, sub-contracted a part of the work to the defendant no.1 vide Work Order dated 21.07.2011.
(c) The defendant no.1, in turn, subcontracted the work awarded to it by NCCL to the plaintiff vide Purchase Order dated 04.08.2011 for a total consideration of Rs.2,00,00,000/-.
(d) DIMMTS filed an application, being I.A. No. 1224/2016, seeking its deletion from the array of parties in the Suit, asserting as under:
“8. That the primary and sole obligation for upgradation and renovation of ISBT, under its contract dated 16th July 2010, was that M/s Nagarjuna Construction Company Ltd. (Defendant No.3) and as part of its scope of work the Contractor i.e. Defendant No.3 was obliged to provide for Electrical substation and its testing and commissioning works in accordance with its Contract (the dispute and issue in contention before the Hon’ble court under the present Suit). It is an undisputed and admitted case of the Plaintiff that the said component of Electrical Substation has been completed, paid for and settled by the Applicant/Defendant No.2 and nothing remains to be paid for the said component of Electrical Substation. It is further submitted that as per the Defendant No.3’s contract with the Department of Transport, GNCTD, all payments for the works under the contract dated 16th July, 2010, were to be released and made in favour of M/s Nagarjuna Construction Company Ltd., i.e. the Defendant No.3 herein and no other party or person and the Applicant/Defendant No.2 has accordingly paid Nagarjuna Construction Company Ltd. In full for the said component of work of Electrical Substation at the ISBT cashmere Gate, Delhi.”

(e) NCCL filed an application, being I.A. No. 25085/2015 (Ex.DW2/P1), inter alia, stating as under:
“6. The complete works for the project of Upgradation/renovation of Interstate Bus was completed by the Applicant/Defendant No. 3 on 02.05.2013. Further, all amounts due and payable to Defendant No. 1 was paid and no amount is due as on date. Even as per the Plaint, the Applicant/Defendant No. 3 has paid and the Defendant No.1 has received the full payment for the work done.”

26. Therefore, NCCL did not state that the work awarded by it to the defendant no.1 and, in turn, awarded by the defendant no.1 to the plaintiff, remained incomplete or had to be done by a third party. In fact, a categorical statement was made that all amounts due and payable by NCCL to the defendant no.1 were paid, and no amount was due.
27. The DW-2, who is an employee of NCCL, was a summoned witness of the defendant no.1, and he reiterated and reaffirmed the contents of the application, that is, I.A. No. 25085/2015.
28. The defendant no.1, in its written statement, denied the plaintiff’s claim, inter alia, asserting as under:
2. That the plaintiff is claiming the amount based on work order which it never completed, without showing any proof that it ever completed the entire work order and is hence legally entitled to the amount quoted in the work order. Despite this, the defendant no. 1 has already paid the amount for the works done by the plaintiff and which is also accepted by the plaintiff in the suit and there is no amount due to be payable to the plaintiff. Moreover, the documents submitted by plaintiff speaks itself that it had received more amount than which it has shown in its purchases. The plaintiff did not fulfill its part of contract and from the very beginning its motive was to earn more & more profits and in this process it did all mischievous acts which it can do and now they have filed the present suit to gain unlawfully and fulfill their greed.
xxxxx
5.e. Para under reply is false, wrong, concocted and hence denied. It is specifically denied that the plaintiff completed the project to the satisfaction of all concerned and the same has been inaugurated with great pomp and show, for which Alliance Telenet Pvt. Ltd receive full money from NCCL, and NCCL got it reimbursed from DIMMTS in respect of the work contracted to defendant. Rather when the plaintiff did not complete the entire work order, then it had to be got completed from other agencies for which the defendant has to spent more than on which it had contracted the agreement with the plaintiff.”

(Emphasis supplied)

29. The DW1, in his statement, reiterated the above defence, stating that it had to get the work, which was awarded to the plaintiff, completed from “other agencies”. In his cross-examination, however, he stated that it was DIMMT and NCCL, which had withdrawn the work from defendant no.1 and gave it to some third party.
30. The defendant no.1, however, filed no document in proof of its assertion that it had employed “other agencies”/some third party for the completion of the work awarded to the plaintiff and, if so, who and/or the amount given to such “other agencies”. The defendant no.1 did not also file any document on record to show that DIMMT and NCCL had withdrawn the work from it. Nor did DIMMT or NCCL claim that the work was withdrawn from defendant no.1 and given to some third agency.
31. The onus of proving whether the plaintiff had not completed the project as agreed under the contract, being the Purchase Order dated 04.08.2011, that is Issue No.(iv), was on the defendant no.1. The defendant no.1 has failed to prove the same.
32. As it is admitted that the work awarded to the defendant no.1 had been completed and the defendant no.1 had been fully paid for the same, and as the defendant no.1 has failed to prove that the work was got completed by it through “other agencies”/some third party, the plaintiff has been able to prove that the work was indeed completed by the plaintiff itself and, therefore, the plaintiff is entitled to the full payment under the Purchase Order dated 04.08.2011. The plaintiff has, thus, been able to prove Issue No.(i).
33. However, as noted hereinabove, the plaintiff has settled its dispute with defendant no.2, and as a result, its claim for the principal amount now stands reduced to Rs. 79,70,985/-. Issue No.(i) is, therefore, decided in favour of the plaintiff and against the defendant no.1, holding that the plaintiff is entitled to recover an amount of Rs. 79,70,985/-, as the principal amount for the work done by it, from the defendant no.1.
34. As far as Issue Nos.(ii) and (iii) are concerned, the Purchase Order dated 04.08.2011 does not mention the rate of interest, which the plaintiff shall be entitled to in case of delay in making of the payment. At the same time, the contract between the plaintiff and the defendant no.1 is a commercial contract and, therefore, the plaintiff is entitled to interest on delayed payment.
35. The plaintiff has not led any evidence in support of the rate of interest claimed by it in the Suit. Since the contract is a commercial contract, therefore, the plaintiff is held entitled to interest at the rate of 9% per annum from 31.07.2014, the date of the legal notice of demand till the date of payment. Issue Nos. (ii) and (iii) are answered accordingly.
36. In view of the above, the issues are decided as under:
i) The plaintiff is entitled to a sum of Rs. 79,70,985/- from defendant no.1 as the principal amount.
ii) and iii) The plaintiff is entitled to interest at the rate of 9% per annum on Rs. 79,70,985/- from 31.07.2014 till the date of payment.
iv) The defendant no.1 has failed to prove that the plaintiff has not completed the project as agreed under the contract, being the Purchase Order dated 04.08.2011.
v) In view of the Order dated 06.08.2024, this issue no longer survives.
vi) In addition to the above amounts, the plaintiff shall also be entitled to the costs of the Suit.
Relief:

37. In view of the above findings, a decree is passed in favour of the plaintiff and against the defendant no. 1, directing the defendant no. 1 to pay to the plaintiff an amount of Rs. 79,70,985/- along with interest at the rate of 9% per annum from 31.07.2014 till the date of payment thereof by the defendant no.1. The defendant no. 1 shall also pay the costs of the Suit to the plaintiff.

NAVIN CHAWLA, J
SEPTEMBER 6, 2024/rv/SJ

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CS(COMM) 530/2016 Page 14 of 14