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IN THE HIGH COURT OF DELHI
Neena Bansal Krishna, J.
Deepali Designs and Exhibits Private Limited - Appellant
Versus
Encompass Events Private Limited - Respondent
CS(COMM) 56 of 2020
Decided On : 10-10-2022




The court affirmed the independent nature of the agreement between the parties and established that summary judgment is appropriate when there is no real prospect of the defendant successfully defending the claim.

Headnote:(A) Code of Civil Procedure, 1908 - Order XIIIA - Summary Judgment - Application for summary judgment filed by the plaintiff for payment recovery based on an independent agreement - Defendant's alteration of payment terms post-negotiation not binding - Claim for Rs.7,11,99,507/- based on executed contract and additional services rendered affirmed - No viable defense established by defendant; claims that payment contingent upon third-party receiving payments dismissed. (Paras 1, 5, 41, 42)

(B) Legal Principles - The twin tests of no real prospect of successfully defending the claim, and absence of compelling reasons for leading evidence establish grounds for summary judgment. (Paras 16, 20, 41)

(C) Appeals for interest at 24% rejected; interest granted at 6% per annum from the date amounts became payable. (Paras 37, 42)

Table of Content
1. summary judgment application filed (Para 1)
2. contract formation with defined terms (Para 2 , 3 , 4 , 5)
3. claim of non-payment and remitted amount (Para 6 , 7 , 8)
4. defendant's arguments on contractual obligations (Para 9 , 10 , 11 , 12)
5. defendant's financial challenges (Para 13 , 14)
6. summary judgments under cpc (Para 15 , 16 , 17 , 18 , 19 , 20)
7. contractual terms negotiated and accepted (Para 21 , 22 , 23 , 24 , 25)
8. independence of agreements explained (Para 26 , 27 , 28 , 29)
9. defense of quality of deliverables (Para 30 , 31 , 32 , 33 , 34)
10. interest payment obligations (Para 35 , 36 , 37)
11. arbitration clause defense rejected (Para 38 , 39 , 40)
12. implications of twin test on case outcome (Para 41)
13. judgment delivered and relief granted (Para 42 , 43 , 44 , 45)

JUDGMENT

I.A.1529/2022

1. An application under Section XIIIA of Code of Civil Procedure, 1908 (hereinafter referred to as "CPC") has been filed on behalf of the plaintiff for Summary Judgment.

2. The facts in brief are that in October, 2018 the defendant approached the plaintiff in Delhi for supply of infrastructure and services for "Pravasi Bhartiya Divas-2019" to be held from 21st January, 2019 to 23rd January, 2019 at Varanasi, Uttar Pradesh. Various correspondences were exchanged for negotiations between October, 2018 to December, 2018 which resulted into an Agreement dated 27th December, 2018 through e-mail which recorded the scope of infrastructure and services to be supplied by the plaintiff and the consideration to be paid by the defendant was decided as Rs.12,98,00,000/- inclusive of Goods and Service Tax (GST). The payment schedule was agreed as under:

    "50% advance with work order latest by tomorrow

    25% part-payment on or before 15th January.

    Balance within 30 days of completion of event"

3. On 29th December, 2018 the Billing Department of the defendant prepared a draft written Agreement describing the agreed scope of infrastructure and services, but proposed the different timing of payment viz:

    "50% of service fee at start of work without GST

    25% of service fee with our GST after deliverables are confirmed by related government authorities (encompass client (UP Financial corp.)

    Balance payment after completion of complete project amount to encompass from UPFC."

4. The plaintiff protested to the unilateral variation in the timing of payment by the Billing Department of the defendant as the contract between the parties already stood concluded. Discussions were again held between the plaintiff and the Authorized Representative of the defendant over the telephone on 01stJanuary, 2019 and the payment schedule as agreed on 27th December, 2018 was reaffirmed and reiterated. The defendant consequently withdrew the draft Agreement, and the parties did not sign the said Agreement.

5. The Purchase Order No. DOPO18120145 dated 31st December, 2018 was sent by the Billing Department of the defendant to the plaintiff on 3rd January, 2019 for the purpose of preparing the invoice and payment of GST. Since, this Purchase Order was prepared on 31st December, 2018 i.e. prior to the telephonic conversation between the parties on 01st January, 2019, it contained the payment term as was proposed in the draft Agreement. At this stage it was agreed and understood between the parties that the payment terms as agreed in the e-mail annexed dated 27th December, 2018 and as reiterated and agreed by the parties on 01st January, 2019 shall be binding on the parties. The plaintiff successfully executed his contract and "Pravasi Bhartiya Divas-2019" was successfully held from 21st January, 2019 to 23rd January, 2019 at Varanasi, Uttar Pradesh. The plaintiff on the request of defendant supplied additional infrastructure and services at the agreed cost of Rs.57,23,000/- inclusive of GST. The services were duly accepted and utilized by the defendant without any complaint about any deficiency in service or defective goods. However, the defendant has

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