M/S Software One India Pvt Ltd v. C & S Electric Ltd

RAJIV SAHAI ENDLAW, J. MAY 07, 2019 "gsr" (Corrected & released on 6th June, 2019)

* IN THE HIGH COURT OF DELHI AT NEW DELHI % Date of decision: 7th May, 2019 + CS(COMM) NO. 271/2016 & IA No. 12596/2016 (u/O VII R-11 CPC) SOFTWARE ONE INDIA PVT. LTD. ..... PLsAINTIFF Through: Mr. Manoj Kumar Sahu, Adv. Versus C&S ELECTRIC LTD. ...DEFENDANT Through: Mr. Chander M. Lall, Sr. Adv. with Ms. Nancy Roy & Mr. Rupin Bahl, Advs. CORAM: HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW 1. The plaintiff has sued the defendant for recovery of Rs.1,18,55,172/- pleading that: (i) the plaintiff is a software licensing company; (ii) the defendant placed a purchase order dated 27th June, 2011 on the plaintiff seeking delivery of various software licenses of Microsoft from the plaintiff, for a period of three years, on year 1, year 2 and year 3 basis; (iii) under the said purchase order, the defendant was liable to pay license fee of Rs.52,75,531/- for each of the three years and the plaintiff was to deliver to the defendant software licenses of Microsoft on yearly basis for a consecutive period of three years; (iv) an Enterprise Enrollment Agreement dated 28th June, 2011 was entered between the plaintiff, Microsoft and the defendant, for a term of 36 months, on year 1, year 2 and year 3 basis; as per the said agreement all the products were to be imported directly from the principal publisher Microsoft to the defendant and the plaintiff was appointed as the re-seller to meet the terms of pricing and delivery of licenses and payment of billing etc. to the defendant; (v) the aforesaid Enterprise Enrollment Agreement could only be terminated or renewed as per the termination clause thereof; in view of the termination clause, it was clear that the defendant had no right to terminate the already existing enrollment under the agreement and the defendant had a right only to terminate the ability to enter into new enrollments under the agreement, by giving 60 days notice; (vi) in compliance with the agreed terms of the purchase order, the software licenses were duly delivered to the defendant for year 1 and the defendant in turn had also paid outstanding dues for the year 1 invoice as raised by the plaintiff on the defendant; Microsoft in turn raised an invoice on the plaintiff for year 1 and the plaintiff duly made payment against the said invoice as raised by Microsoft; (vii) the plaintiff, for due compliance of year 2 of the purchase order had delivered the software licenses to the defendant and raised an invoice dated 7th July, 2012 on the defendant and the defendant was liable to pay Rs.59,27,586/- including taxes to the plaintiff within a month of the date of the invoice; Microsoft raised a corresponding invoice dated 28th June, 2012 for year 2 for a sum of Rs.52,72,532.79 on the plaintiff and the plaintiff made payment thereof to Microsoft; (viii) however, the defendant failed and refused to make the payment against the invoice dated 7th July, 2012 in spite of repeated requests and reminders of the plaintiff; the plaintiff got served a legal notice dated 8th April, 2013 on the defendant; (ix) the defendant, in response dated 22nd April, 2013 to the legal notice of the plaintiff, took a stand that the defendant had consulted and communicated to Microsoft vide letter dated 27th April, 2012 that the defendant did not wish to renew the Enterprise Agreement; however the said stand of the defendant was incorrect as the Enterprise Agreement was perpetual in nature for an agreed term of 36 months and could not be terminated mid-term; (x) the plaintiff also received a letter dated 30th May, 2013 from Microsoft informing the plaintiff that Microsoft had communicated to the defendant that the Enterprise Agreement was perpetual and could not be terminated mid-term; and, (xi) Microsoft raised an invoice dated 28th June, 2013 for year 3 on the plaintiff and the plaintiff has made payment thereof as well. The plaintiff raised a corresponding invoice dated 15th July, 2013 on the defendant for a sum of Rs.59,27,586/- but which also has not been paid by