THE HON’BLE SRI JUSTICE ABHINAND KUMAR SHAVILI AND THE HON’BLE SRI JUSTICE VAKITI RAMAKRISHNA REDDY CITY CIVIL COURT APPEAL No. 2 of 2018 JUDGMENT: (Per Hon’ble Sri Justice Vakiti Ramakrishna Reddy This Appeal is filed by the appellants/plaintiffs against the Judgment and Decree dated 06.09.2017 passed in O.S.No.163 of 2005 (hereinafter will be referred as ‘impugned judgment’) on the file of Chief Judge City Civil Court at Hyderabad (hereinafter will be referred as ‘Trial Court’), wherein the suit filed by the plaintiffs against the defendant for recovery of money was dismissed.

2. For the sake of convenience, the parties shall be referred to as they were arrayed before the Trial Court.

I. BRIEF FACTS:

3. The plaintiff No.2 and the defendant entered into a Business Transfer Agreement (BTA) dated 04.09.2001 under which the plaintiff No.2 agreed to transfer the business of the plaintiff No.1 for Rs.68,84,500/-. While 70% of the consideration i.e., Rs.48,19,150/- was paid upfront, the balance of 30% i.e., Rs.20,65,350/-, due by 31.12.2001 under Clause 3.3.2, was not paid.

4. Instead, the defendant gave oral assurances, leading the plaintiffs to continue transactions on its behalf. Between 2001 and 2004, the respondent made part payments and, in a fax, dated 14.07.2004 (Ex. A-24) admitted the liability. Despite these allegations, the defendant continued part payments in October and December 2004 in relation to other suits (O.S. No.513/2005 and O.S. No.255/2005) and compromised O.S. No.190/2005 by paying Rs.37,00,000/- on 01.09.2008.

5. Having exhausted all remedies, the plaintiffs instituted the present suit seeking restoration to pre-agreement status, damages of Rs.31,80,639/- with future losses, or alternatively Rs.1,22,00,000/- as damages. Notably, the respondent/defendant remained ex parte for nearly 16 months before filing a written statement and failed to examine any witnesses or adduce evidence in defense.

6. The defendant resisted the claim, contending that the BTA dated 04.09.2001 was subject to the conditions stipulated under Clauses 3 and 5 therein. It was contended that the plaintiffs had to increase the subscriber base to 5,140 and ensure monthly collections of Rs.8,03,400/-. The plaintiffs allegedly failed to meet these obligations and misrepresented both subscriber numbers and collections. The defendant therefore denied liability for the alleged balance of Rs.20,65,350/-.

II. ISSUES FRAMED BY THE TRIAL COURT

7. On the basis of pleadings, the Trial Court framed the following issues:

i. Whether the plaintiff is entitled for the suit amount together with interest @ 18% per annum?

ii. Whether the plaintiff is entitled for "status-quo ante" position?

iii. Whether the plaintiff is entitled for damages and future loss together with interest @ 18% per annum?

iv. Whether the plaintiff is entitled for declaration that the clauses 5.5, 8 and 10 of the Agreement dated 04.09.2001 as void?

v. Whether the suit claims are in time?

vi. To what relief?

III. EVIDENCE ON RECORD

8. During the course of trial, one B.V. Narsimha Reddy, the General Power of Attorney holder of Plaintiff No.2, represented the plaintiffs and deposed on their behalf as PW1 and got marked Exs.A1 to A43 on their behalf, whereas the defendant neither examined itself or any witness nor produced any documentary evidence on its behalf.

IV. FINDINGS OF THE TRIAL COURT

9. The Trial Court dismissed the suit by judgment dated 06.09.2017, holding that:

a. The plaintiffs failed to prove fulfillment of contractual conditions under Clause 3.3.2 of the BTA.

b. Without establishing subscriber strength and collection figures, the balance of Rs.20,65,350/- did not become payable.

c. The clauses challenged by the plaintiffs (5.5, 8 and 10) could not be said to be unconscionable or opposed to public policy.

d. Consequently, the plaintiffs were not entitled to the relief claimed.

V. SUBMISSIONS OF THE PARTIES:

a) Submissions on behalf of the Appellants/Plaintiffs:

10. The plaintiffs contend that the judgm