Pico Deepali Overlays Consortium & Ors v. Deepali Desings & Exhibits Private Limited

PRATEEK JALAN, J

S. RAVINDRA BHAT, J MARCH 27, 2019 "pv/j"

* IN THE HIGH COURT OF DELHI AT NEW DELHI Reserved on: 07.03.2019 Pronounced on: 27.03.2019 + RFA(OS)(COMM) 22/2017 & CM Appl. 42543/2017 & 2903-2904/2019 DEEPALI DESIGNS & EXHIBITS PVT LTD ..... Appellant versus PICO DEEPALI OVERLAYS CONSORTIUM & ORS. ..... Respondents + RFA(OS)(COMM) 3/2018 & CM Appl. 7562-7563/2018, 7618-7619/2018, 18773-18774/2018, 45489-45490/2018, 10570-10571/2019 PICO DEEPALI OVERLAYS CONSORTIUM & ORS. ..... Appellants versus DEEPALI DESIGNS & EXHIBITS PRIVATE LIMITED ..... Respondent Present:- Mr. Raghvendra Singh, Adv. for Deepali Designs & Exhibits. Ms. Ginny J. Rautray & Ms. Anushka Ashok, Advs. for PICO. Ms. Lakshmi Gurung & Ms. Easha Kadian, Advs. for ITD. CORAM: HON'BLE MR. JUSTICE S. RAVINDRA BHAT HON'BLE MR. JUSTICE PRATEEK JALAN MR.JUSTICE PRATEEK JALAN % 1. These cross appeals are directed against a judgment dated 18.07.2017 passed by the learned Single Judge in C.S. (Comm.) 1590/2016. The appellant in RFA(OS) (Comm.) 22/2017, Deepali Designs and Exhibit Pvt. Ltd. (hereinafter, "Deepali" or "the plaintiff") is the plaintiff in the said suit, and the appellants in RFA (OS) (Comm.) 3/2018 are three of the six defendants in the said suit, viz., PICO Deepali Overlays Consortium (hereinafter, "PDOC" or "the Consortium"), PICO Hong Kong Ltd. (hereinafter, "PHKL"), and PICO Event Management India Pvt. Ltd. (hereinafter, "PEMI"). (These three defendants, being the contesting defendants in the suit, are also hereinafter collectively referred to as "the defendants"). By the impugned judgment, the learned Single Judge has granted a decree of the suit in part, upon a finding of an admission in favour of Deepali and against the defendants, in the sum of ₹4,19,05,956/-. Relevant Facts and Contractual Clauses 2. By an agreement dated 09.12.2010 (hereinafter referred to as "the Consortium Agreement"), Deepali, PHKL and PEMI agreed to form a consortium to submit an Expression of Interest in response to a tender opened by the Organizing Committee Commonwealth Games, 2010 (hereinafter, "OC"). The proposed project was a turnkey project in respect of supply, erection, commissioning, maintenance and removal of Games overlays at various venues at the Commonwealth Games, and was divided into seven clusters. The Consortium Agreement (Clause 7) contemplated participation of the parties to the extent of 60:20:20 for PHKL, PEMI and Deepali respectively. They contributed to the capital of the consortium in the same proportion. The consortium was to operate under the trade name "PICO Deepali Overlays Consortium". 3. Of the various terms and condition for the operation and governance of the consortium set out in the Consortium Agreement, clauses 7.4 and 8.2 provided for the manner of distribution of the income received by PDOC from the OC. They read as follows: "7.4 The Final settlement of fees and the final distribution of profit as well as any remaining assets of the JV will take place after the complete payment of the fees with respect to the project by Delhi 2010. 8.2 The assignment of the activities of the project shall be effected by means of specific purchase orders issued by the JV and forwarded to the JV member or members responsible for each such activity. Following five (5) days after full delivery of all goods and / or completion of all works/services mentioned in each purchase order, each JV member shall issue and deliver to the JV the relevant invoice. The invoiced amount shall be paid to the relevant JV member by the JV after each respective payment by Delhi 2010 and within thee (3) days after the aforementioned payment is effected by Delhi 2010. It is agreed that remuneration by Delhi 2010 shall be deemed to have been received by the JV only if it has been duly deposited with the bank accounts of the JV designated for this purpose. From the amounts received by the JV, following say legal deduction, 4% of it will remain in a reserve in order to be used in case of debts of the JV as a result of poor workmansh