High Court Of Delhi
KLG SYSTEL LIMITED - Appellant
Versus
FUJITSU ICIM LIMITED - Respondent
Interim Application 3402 of 1999
Decided On : 04/23/2001
Defendant - Summary Suit - Order XXXVII of the Civil Procedure Code - Section 20 of the Civil Procedure Code - Sale of Goods Act - Grant of Leave to Defend
Fact of the Case:
The Defendant sought leave to defend a summary suit filed under Order XXXVII of the Civil Procedure Code, claiming that the software supplied by the Plaintiff was defective and that no written agreement was available for reliance. The Defendant also challenged the territorial jurisdiction of the court.
Finding of the Court:
The court found that the suit was maintainable under Order XXXVII of the Civil Procedure Code, and that territorial jurisdiction existed as the cause of action had arisen in Delhi. The court also held that the suit should be tried under the summary procedure of Order XXXVII of the Civil Procedure Code.
Issues: The issues included the maintainability of the suit under Order XXXVII, territorial jurisdiction, and the Defendant's plea for leave to defend the summary suit.
Ratio Decidendi: The court applied the provisions of Order XXXVII of the Civil Procedure Code, Section 20 of the Civil Procedure Code, and the Sale of Goods Act to determine the maintainability of the suit and the grant of leave to defend.
Final Decision: The court dismissed the Defendant's application for leave to defend and decreed the suit with costs.
( 1 ) BY this application the Defendant has prayed for the grant of leave to defend the present summary suit filed under Order XXXVII of the Code of Civil procedure (hereinafter referred to as, the Civil Procedure Code ). It is contended by the Defendant that out of the contracted sale consideration of approximately Rs. 25 lakhs the defendant has already paid approximately Rs. 19 lakhs, at which stage it was discovered that the software supplied by the Plaintiff was defective. It is submitted that at this juncture the Plaintiff offered to supply another software programme but by that time the Defendant had already incurred damages stipulated in its contract with the party to whom the software had to be supplied. Each party knew of the other, as well as their respective contractual obligations. It was also argued that Order xxxvii of the Civil Procedure Code. was not attracted as no written agreement is available for reliance viz a viz the summary suit. Territorial jurisdiction was assailed on the foundation that the Purchase Order dated 2nd August, 1994 was issued by the Defendant for supply to be effected in Cochin, and no part of the cause of action had arisen in Delhi. The Defendant s Branch office in delhi had no connection with the transaction, and that the plaint does not aver any such role. Order XXXVII of the Civil Procedure Code does not apply since the Purchase Order envisages that billing instructions were to be issued separately, on the basis of the satisfaction of fertilizers and Chemicals Travancore Ltd. (hereinafter referred to as the FACT ). It is submitted that the plaintiff has admitted the failure of the software package. It is then contended that Fact Engineering and design Organization (hereinafter referred to as the fedo ) is a necessary party. It is stated that time was of the essence of the contract and its performance had not been completed. As FACT was not satisfied with the software package it levied damages of Rs. 9,30,375. 00. on the Defendant and also encashed a Bank Guarantee of rs. 5. 12 lakhs. It has been highlighted that despite specific Orders dated 31st July, 1998, the Plaintiff has failed to file the original of Annexure-II dated 25th august, 1994 and should not be allowed to rely on it. (However, on a perusal of the file it appears that this document was filed on 18th August, 1998.) Learned counsel for the Defendant has further argued that the software "autovesl was not satisfactory and isogen was not supplied at all. Reliance was placed on Indian biotech Co. (P) Ltd. v. Assam State Co-op Marketing and consumers Federation Ltd. 36 (1988) DLT 60 and Delhi travels and Tours v. Motorola 84 (2000) DLT 753. In the former case the provisions of the Sale of goods Act, 1930 (hereinafter referred to as the Act) were not even considered. In the latter, the decision to grant leave to defend rested on the appreciation of the facts of the case, and hence is of no assistance to the Defendant/applicant.
( 2 ) THE contention of Mr. S. N. Kumar, Learned senior Counsel appearing for the Plaintiff is that the suit is maintainable under Order XXXVII of the Civil Procedure Code as the complete contract is available in the shape of the invoice. He has submitted that the contract between the parties envisages the supply of seven items all of which were supplied. The controversy about Autovesl was of the Defendants making, inasmuch as despite an order for this software they had subsequently requested for an alternate software, namely, Pvelite. Although, the plaintiff was not contractually obligated to substitute autovesl with Pvelite, because of the Defendant s request the Plaintiff even complied with this fresh requirement. It has been submitted, and not controverted by the Defendant, that in fact even Pvelite was supplied by the Plaintiff to the Defendant. It is contended that autovesi was not unsatisfactory in any respect, and that this alleged controversy has been generated only beca
referred : Indian Biotech Co.(P) Ltd. v. Assam State Co op Marketing and Consumers Federation Ltd.
Delhi Travels and Tours v. Motorola
M/s. Michalec Engineers and Manufacturers V. M/.s. Basic Equipment Corporation
Santosh Kumar v.Bhai Mool Singh
Messrs. Punjab Pen House v. Samrat Bicycle Ltd.
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