Bindra Travel Line Pvt. Ltd. v. Sehwag International School

12. The plaintiff not having been successful through negotiations with the defendant, sent a Legal Notice dated 03.11.2015, for claiming an amount of Rs.1,88,09,266/- along with interest. The defendant failed to reply to the Legal Notice or to pay the outstanding amount. Hence, the present Suit has been filed for Recovery of Rs.1,88,09,266/- as the outstanding amount along with the pendente lite and future interest @18% p.a.

13. The leave to defend was filed by the defendant, which was allowed vide Order dated 21.04.2017 by observing that a claim of Rs.30,00,000/towards loss of reputation and business, is not covered under Order XXXVII CPC. The plaintiff agreed to treat the Suit under Order XXXVII CPC as a Regular Civil Suit. Accordingly, the defendant was directed to file the Written Statement.

14. The defendant in its Written Statement, took the preliminary objection that the sum of Rs.1,97,400/- and Rs.9,30,600/- has been claimed for the years 2012 (between 01.04.2012 and 31.06.2012 and between 01.07.2012 and 31.03.2013), which are time barred and are liable to be rejected. It is further asserted that the plaintiff is guilty of suppression of material facts as it has concealed the e-mail dated 21.05.2015, written by the plaintiff stating that “I won‟t be able to run buses from tomorrow”. The plaintiff himself had terminated the Contract and the ouns of the same cannot be shifted to the defendant.

15. On merits, it is admitted that the parties had entered into the Agreement dated 28.03.2011, which was for a period of three years. On the expiry of this Agreement, the parties mutually agreed to extend the Agreement on fresh terms and conditions for a period of two years. The proposed Agreement dated 28.03.2014 was intended to be finalised but could never be officially signed. However, both the parties acted in letter and spirit on the terms and conditions of the Agreement, 2014. The defendant has asserted that during the subsistence of Agreement 2014, the bus services that were being provided by the plaintiff deteriorated substantially and the defendant School started receiving complaints from the parents of the students availing the bus services.

16. Further, the plaintiff was under an obligation to maintain the buses and the cost of the same was to be borne by the plaintiff, in terms of Clause 3.[1] of the Agreement of 2014. However, the plaintiff failed to adhere to these terms and conditions because of which the buses used to frequently suffer breakdowns. The air conditioners were not functional on many days in a month. The details of the breakdowns suffered by the buses, is mentioned in the documents.

17. As per the Clause 2.[5] of the Agreement 2014 and as per Clause 2.[4] of the Agreement of 2011, the buses were to run an average distance of 2600 kms every month. In the months when the average distance was not completed, the parties agreed to provide the buses on Sunday, on which date, the defendant planned picnic(s) or other recreational activities for the students.

18. The defendant has submitted that on 21.05.2015, it had informed the plaintiff about one picnic at Ambience Mall, Vasant Kunj, which had been organized by the defendant School, for which buses were required to take the students to the aforesaid place. Instead of complying with the request of the defendant to make the buses available on 22.05.2015, the plaintiff misbehaved with the staff of the defendant and also sent an e-mail dated 21.05.2015 stating that it would not be running the buses forthwith and that the payments should be cleared. Admittedly, the defendant responded vide e-mail dated 27.05.2015, whereby it accepted the request of the plaintiff for termination of Contract with immediate effect.

19. The defendant has explained that initially, there was deduction done on account of breakdown of the buses but subsequently, on the request of the plaintiff, the defendant stopped deducting the amounts on the surety of the plaintiff that in case the monthly bills were cleared after a delay of one or two days, it would not impose the penalty of Rs. 10,000/- per day, as was being demanded by the plaintiff. Further, as per the new proposed Agreement of 2014, the buses were to run @1,02,000/- and the Tempo at the monthly fee of Rs. 62,000/-. Moreover, this Agreement of 2014 did not contain any increment Clause, which existed in the Agreement of 2011. The parties agreed to decide upon the terms and conditions of the new proposed Agreement but there was no mutual consensus and the same could not be signed inter se the parties. However, the plaintiff was being paid monthly charges on the enhanced rates, as had been proposed in the Agreement of

2014.

20. The defendant has admitted that the plaintiff provided services to the defendant between February 2011 till March 2014, as per the Agreement of

2011. The proposed Agreement of 2014 was w.e.f. April 2014 till May,

2015. It is denied that the plaintiff is entitled to claim 10% enhancement every year on the premise that the proposed Agreement of 2014 was never signed by the parties. It is further explained that the amount as per the Agreement, was not to pay Rs. 64,000/- for Tempo Travellers but the amount fixed was Rs. 60,000/- per Tempo Traveller. Though in Clause NO. 2.[3] of the Agreement of 2011, it was agreed that the services provided by the plaintiff, shall be enhanced from second year of service but it is evident from Clause 2.[3] that no fixed percentage of increment had been decided and only an upper limit of 10% was specified.

21. The defendant has submitted that the said Clause was waived of by the conduct of the parties as is evident from the Statement of Account and bills/vouchers raised by the defendant; therefore the claim of the plaintiff is baseless in entirety. The defendant has claimed that the plaintiff accepted the payments in totality against the Bills that were raised by it, without any protest or demur and the plaintiff is now estopped from raising any Claim for the increment. It is further submitted that the entire amount stand paid and there is no outstanding amount.

22. The defendant has denied that the plaintiff is entitled to loss of profits in the sum of Rs.30,00,000/-. It is the plaintiff who himself had terminated the Agreement and it now does not lie in its mouth to demand for a two months‟ Notice for termination/discontinuation of the services of the plaintiff. In fact, in terms of Clause 5(d) of the Agreement of 2014, the plaintiff is bound to pay the charges for two months of transport services, to the defendant.

23. In the end, it is contested that the premature termination of the Contract, is solely attributable to the plaintiff and if the buses were idle; the same has to be considered as consequential to the act and a decision of discontinuation of the Agreement by the plaintiff. It is, thus, submitted that the Suit is without merit and is liable to be dismissed.

24. The plaintiff in his Replication has re-affirmed his assertions as made in the Plaint and refuted the averments made in the Written Statement.

25. The issues on the pleadings, were framed on 05.09.2017, which are as under:-

(i) Whether the plaintiff is entitled for the recovery of

(ii) Whether the plaintiff is entitled to interest, if so, at what rate and for what period? OPP

(iii) Whether the suit is barred by limitation? OPD

(iv) Whether the suit has not been properly valued for the purpose of Court fee and jurisdiction? OPD

(v) Relief.

26. The plaintiff in support of its case, examined its authorized representative PW-1 Sh. Amandeep Singh Bindra, who tendered his affidavit of evidence as Ex.-PW-1/A.

27. The defendant examined DW-1, Ms. Arti Sehwag, its authorized representative, who tendered her evidence by way of affidavit, Ex.-DW-1/A. The witnesses were duly cross-examined by the parties respectively.

28. Submissions heard and the Written Submissions filed by both the parties, have been perused along with the record. The issue wise findings are as under:- Issue No. 4: Whether the suit has not been properly valued for the purpose of Court fee and jurisdiction? OPD The plaintiff has valued its Suit for Rs.1,88,09,266/-, the recovery of which has been claimed by way of the present Suit. The corresponding court fee has been paid on the said amount on behalf of the plaintiff.

29. The defendant has not been able to disclose in any manner as to how the court fee that has been paid, is not in accordance with law. It is, therefore, held that the plaintiff has paid the requisite Court Fee, in accordance with law. The Issue No. 4 is decided in favour of the plaintiff. Issue No. 1 Whether the plaintiff is entitled for the recovery of Rs.1,88,09,266/-? OPP

30. Admittedly, the plaintiff entered into an Agreement dated 28.03.2011, Ex.PW- 1/2 (Ex. DW 1/2) with the defendant School for providing the transportation of the children from Delhi and NCR, to the School of the defendant.

31. The plaintiff has claimed a sum of Rs.1,88,09,266/-, the breakup for which is as under:-

I. (a) Outstanding amount against deductions and the bills between the period from April, 2015 to July, 2015 amounting to Rs.62,28,913/- ( April,2015 & May, 2015 in the sum of Rs. 25,72,982/- and June,2015 & July, 2015 in the sum of Rs.25,72,982/- and Rs.10,23,980/- towards the deductions). (b) Payments towards the annual increments @10% from 01.04.2012 till 30.06.2015 in the sum of Rs.92,80,353/-; and

II. The plaintiff in addition, has claimed Loss of Business in the sum of

I. (a)Outstanding amount against deductions and the bills between the period from April, 2015 to July, 2015 amounting to Rs.62,28,913/-:

32. To appreciate the contentions of the parties, it would be relevant to reproduce the relevant terms of the Agreement, 2011 which are as under:- “2. Fee/Charges 2.[1] The fees for the transport services will be Rs.94000- 35 seater bus, 2.[2] Above rates are including all taxes. Service Tax will be charged extra if applicable in future. 2.[3] The above rate of fees will be revised after completion of 1 year service, with a maximum increase of 10%. 2.[4] The fee mentioned in Clause 2.[1] shall be for running of buses/other vehicles for an average of 2600 kms per month per bus/vehicle. In case of extra running of buses/other vehicle beyond the average of 2600 kms per month per bus/vehicle, the Service Provider will be paid Rs.22/- per km for 35 seater bus. 2.[5] In case of increase in Diesel (Rs.40.00) rates will be revised as per actual. 2.[6] That the above consideration/fee is inclusive of owning, running & maintenance of buses, driver, conductor, and operating staff‟s salary, uniforms, taxes, insurance, fuel charges & other administration charges etc. The aforesaid amount shall also include insurance premium, registration charges, road tax, passenger tax, fitment charges, fitness charges, PUC charges and all other statutory charges payable with regard to plying, running and maintenance of buses. 2.[7] Bill shall be raised on every 1 of the starting mounts & payments will be raised on every 10 of the month. 2.[8] Payments will be made for 12 Months for the yellow colour buses if temporary buses will be running in school payments will be accordingly on monthly basis as per actual for white colour buses.

3 Covenants and Representations of Service Provider: 3.[1] The Service Provider shall alone be responsible for bearing cost of owning, running and maintenance of buses and other vehicles, including cost of fuel, wear and tear, payment of salaries and uniform to drivers, conductors, and other operating staff etc. And other statutory benefits and liabilities towards drivers and other maintenance staff.”

33. This Agreement was for a period of three years i.e. until 31.03.2014. The relevant parts of the Agreement which has been reproduced above, provide that it was agreed by the parties that the plaintiff shall provide 35 seater buses @ Rs. 94,000/- per month. Further, admittedly, vide Letter dated 03.07.2012, four new buses were added to the existing Agreement, on the same terms and conditions and the four buses were agreed to work from 01.07.2012 to 31.06.2015. It was also agreed that all the remaining terms and conditions shall remain the same as in the existing Contract.

34. With the Agreement expiring in March, 2014, the parties agreed to extend the Contract further but the plaintiff insisted for re-negotiation of the terms and formal signing of the Agreement, for the period of next two years. It is not under challenge that the terms of the proposed Agreement were negotiated through various e-mails and a proposed Agreement dated 28.03.2014, was drafted. As per the defendant, it had forwarded the signed copy of the fresh proposed Agreement dated 28.03.2014(hereinafter referred to as Agreement,2014) attached with the email dated 12.11.2014 for the plaintiff for signatures but there were certain objections to certain Clauses and the plaintiff after making certain changes sent it back to the defendant for its approval. Subsequently, the defendant after accepting the changes made by the plaintiff assured the plaintiff that they will send back the signed copy to the plaintiff.

35. Thus, admittedly, though the broad terms in regard to financial discipline were settled but the parties could not be at consensus ad idem to sign the proposed Agreement dated 28.03.2014. DW-1Ms. Arti Sehwag in Paragraph No. 8 of her affidavit of evidence had stated that though the Agreement dated 28.03.2014, was proposed for a period of two years and the parties had an intention to sign the same but unfortunately, it was never officially signed. However, the defendant and the plaintiff both acted in letter and spirit as per the terms and the conditions of the Agreement, 2014.

36. It is further stated in Paragraph No. 9 of the affidavit of evidence, Ex. DW-1/A that after detailed negotiations, parties agreed to pay an amount of Rs.1,02,000/- for every bus and Rs. 62,000/- for every Tempo Traveller, in terms of the proposed Agreement dated 28.03.2014. DW-1 Ms. Arti Sehwag has further admitted in her cross-examination that “it is correct that financial terms were implemented, in terms of the Agreement dated 28.03.2014, Ex.PW-1/10 w.e.f.01.04.2014.” It is, therefore, admitted that the rates for the supply of buses/Tempo Travelers got revised from 01.04.2014, as mentioned above. It is also not disputed that the subsequent bills w.e.f. 01.04.2014 were issued at the revised rates.

(i) Recovery of Rs.20,42,727/- towards the Bills for the Months of

37. The main aspect which is being disputed in respect of these bills, are the deductions that were made. DW-1 Ms. Arti Sehwag, has admitted in her cross-examination that the Bills were being paid after some deductions which were not objected by the plaintiff. She denied the suggestion that such deductions which were being made from the bills, were not accepted by the

38. PW-1 Sh. Amandeep Singh Bindra has claimed that the deductions being made from monthly bills, were illegal, but has not explained anything further. In the cross-examination, it was suggested to PW-1 Sh. Amandeep Singh Bindra that the deductions were made for charges due to breakdown of buses and it was also suggested that no objection was ever taken on the deductions made on this account. It was further explained that all the payments were being received through RTGS and cheques. PW-1 Sh. Amandeep Singh Bindra had further admitted that the exact amount of the bills, was never received. He tried to explain that he was raising objection with regard to less amount received against the bills verbally as well as in emails but could not produce any e-mails wherein objection to deduction had been taken.

39. It is further explained that though as per the Agreement 2011, the defendant had to reimburse the plaintiff for the fuel charges but as a practice, the plaintiff was raising the total bills and since the payment of diesel was being made directly to the Fuel Agency/Depot by the defendant, it was being deducted regularly from the bills as submitted by the plaintiff.

40. The plaintiff had claimed that it was maintaining a Ledger Account in which all the payments credited or debited, were being reflected but the Ledger Account has not been produced by the plaintiff. It is the defendant, who has produced the Ledger Account, Ex.DW-1/3, which shows that there were certain amount being deducted on a monthly basis and the balance amount was being credited to the plaintiff, since the inception of the Agreement in 2011 and no objection whatsoever had been taken during this entire period till the dispute arose in the year 2016, when the Suit has been filed.

41. It is, therefore, proved from the evidence of both the parties coupled with the Bills exhibited as Ex.PW1/14 to Ex. PW1/75, and the Ledger Account Ex.DW-1/3, relied upon by the defendant that the plaintiff was raising the Bills for the entire amount as agreed by the parties under the Agreement. Since the Fuel charges were being paid by the defendant directly to the Fuel Agency, the payments were being made after adjustment of the fuel charges, to the plaintiff who accepted them without any protest.

42. In support of the deductions being made on account of fuel charges, has also relied upon the Judgement delivered by the Civil Judge, Haryana in CS(OS) 213/2018, titled M/s Highway Filling Station vs. Sehwag International School & Ors., which was delivered on 23.02.2022, wherein it was observed that the fuel charges were being paid by the defendant No. 1 i.e. the defendant herein directly to the petrol pump and a sum of Rs.5,30,255/-, which was due from the defendant School to the plaintiff, M/s Highway Felling Station, was allowed for the months of April and May, 2015 along with the interest @9% p.a., from May 2015 till the realisation.

43. The evidence as on record, therefore, establishes that the defendant had been deducting the fuel charges and was crediting the balance amount of the bills raised by the plaintiff, to its account. The perusal of the bills Ex.PW-1/14 to Ex.PW-1/75 also corroborate the deduction on account of the fuel charges.

44. The Bills for the month of April 2015 and May, 2015, have not been paid by the defendant as is also reflected from the Ledger Account of the defendant, Ex. DW-1/3. The Bills dated 30.04.2015 and 31.05.2015, which are exhibited PW-1/72 and PW-1/73 respectively, are in the sum of Rs.12,86,491/- respectively, which add up to Rs.25,72,982/-. The plaintiff has admitted that a sum of Rs.5,30,255/- towards the fuel charges, which have been paid by the defendant to M/s Highway Filling Station by virtue of the Judgement dated 23.02.2022 passed by the Civil Judge, is liable to be deducted.

45. It is thus, held that an amount of Rs.20,42,727/- is payable to the plaintiff towards the Bills for the month of April & May,2015.

(ii) Recovery of Rs.24,92,000/- towards the Bills for the Months of June,

46. The plaintiff has claimed Recovery of Rs.24,92,000/- for the services provided by the plaintiff, for the month of June and July, 2015.

47. The main aspect for consideration is whether the Agreement got terminated on 21.05.2015 by the plaintiff and no bus service was provided thereafter and whether it was the defendant who terminated it vide its e-mail dated 27.05.2015.

48. According to the defendant, the plaintiff had sent a Letter dated 21.05.2015 through email, Ex.PW-1/D-8 (Ex.DW-1/36), whereby it terminated the Contract, the relevant part of which reads as under:- “Dear Manoj, Kindly clear my payments status. I won‟t be able to run buses from tomorrow. Even I haven‟t paid salaries to my staff.”

49. This e-mail of 21.05.2015 was replied by the defendant vide its e-mail Letter dated 27.05.2015, Ex.PW-1/176, which reads as under:- “Dear Mr. Bindra, This is with reference to you mail dated 21st May, 2015 where you had stated that you will not run the buses from 22/05/2015 and the challenges faced by the school due to incompetent transport services provided by you. Please find below few of the problems:  AC was not working in Chhara route for three days (16-4- 15 to 18-4-15)  1 Tempo was not there on route from 23-4-15 to 29-4-15 (Inova was going to complete the route)  Chharki Dadri bus broke down thrice and route got delayed around 1 hour. Parent were shouting at our transport incharge.  AC was not working in 2 Tempo & 1 Bus on 9/5/15.  AC was not working in 2 Tempo & 1 Bus on 11/5/15 & 12/5/15, 1 route was combined & another route Inova was sent.  Drivers & conductors don‟t give proper information when ever buses broke down.  Our travellers and students have also placed their concerns many number of times regarding the break down of buses and behaviour of the drivers and conductors. Due to the above problems parents were highly dissatisfied and upset with the school administration. Whereas school administration had no role or control in the above mentioned issues. Also note that the language you used while communicating with me and Manoj may times was unacceptable. Often you threaten the school administration not to run the buses and that also at the nick of time and refusal to support the school. You did not even acknowledge to the sms and e-mail written by our Chairperson, which is totally unprofessional. Keeping all the matters in mind school management has decided to discontinue with your transport services with immediate effect... Jonathan Farwell Head-Administration”

50. It has been argued on behalf of the plaintiff that the Letter dated 21.05.2015, cannot be termed as a Letter of Termination of Agreement, but it merely indicated that because the Bills were not being cleared and plaintiff had not able to pay the salaries to the staff, it would not be able to continue with the services of providing the buses.

51. In this context, it is pertinent to refer to the cross-examination of PW- 1, Mr. Amandeep Singh Bindra, which reads as under:- “It is wrong to suggest that vide email Ex.PW1/D-8 (Colly) suddenly I have asked the defendant that I am not able to run the buses. It is wrong to suggest on confronting portion A to A on Ex.PW-1/D-8 that I specifically asked the defendant that I will not able to run the buses because my payment was not cleared. Vol. inspite of the email Ex.PW1/D-8 I keep providing the services. It is wrong to suggest that I provided bad services after my email dated 21.05.2015 vol. thereafter school were closed. The buses were used after 21.05.2015 and during summer vacation for taking the staff and drop them to their destinations. The buses were not used for summer vacations trips as I was not asked to provide the buses. Vol. on 27.05.2015 I received email from the defendant that buses are to be discontinued with immediate effect. It is wrong to suggest that I was asked to continue the services of buses and when I failed to continue same the agreement was terminated. It is wrong to suggest that I discontinued to provide buses to the defendant vide Ex.PW1/D-8. Vol. the buses remained parked in the school during the summer vacation. The vehicles remained parked in the school upto the end of June, 2015”

52. From the Letter dated 21.05.2015 Ex.PW-1/D-8 (Ex.DW-1/36) when read along with these admissions made in the cross-examination, it is evident that the plaintiff himself has conveyed his intention of discontinuing with the bus services to the defendant w.e.f. 21.05.2015, a fact which is admitted by him when he volunteers that the school was closed.

53. DW-1 Ms. Aarti Sehwag has admitted that the buses and Tempos were stationed in the school even after 21.05.2015 but has explained that no staff that is the drivers and the conductors were available since 21.05.2015 or thereafter and that the vehicles were taken away from the school, after a few days. She has denied that the buses were taken away after 27.05.2015, when the Contract was terminated by the defendant.

54. The plaintiff himself explains that the buses were not provided for picnics during the vacation as there was no such requisition. This has been refuted on behalf of the defendant. DW-1 has deposed that the buses were to run/cover an average distance of 2600 kilometres per month that during the months when the average distance was not completed, the parties had mutually agreed that the plaintiff would provide the buses on Sunday when the defendant had planned picnics or other recreational activities for the student. However, on 21.05.2015, the defendant‟s school had informed the plaintiff, of one such picnic to Ambience Mall, Vasant Kunj, which was organized by the school for which the buses were required to take the students to the place of picnic and the request was made to make the buses available on 22.05.2015. The plaintiff instead of complying with the request, misbehaved with the members of the staff and also hurled abuses at them. This was followed by the plaintiff‟s sent an e-mail dated 21.05.2015 stating that he would not be providing the buses forthwith.

55. Moreover, he has given another lame excuse of refusing to provide the buses by claiming that the buses were parked in the school till the end of June, 2015. Merely because the buses were parked and not taken away by him, cannot be considered as a circumstance showing that the Contract was not terminated by the plaintiff despite there being a clear expression of intention of the plaintiff in e-Letter dated 21.05.2015, Ex.PW1/D-8.

56. It is also pertinent to mention that the reason given in the Letter dated 21.05.2015, for discontinuing the bus services was that because the bills were not being cleared, he was not able to pay the staff. The language used in the Letter Ex. Ex.PW1/D-8 is “Kindly clear my payments status. I won‟t be able to run buses from tomorrow. Even I haven‟t paid salaries to my staff.” However, as discussed above, the Bills claimed by the plaintiff, are for the month of April and May, 2015 and for June - July, 2015. There were no such pending arrears of bills, which could have justified the non-supply of buses to the defendant on account of held up payments.

57. Further, it is pertinent to mention that the Bill for a given month was to be raised by first date of the subsequent month while payment was to be made by 10th of the given month. DW1/Arti Sehwag was confronted with the E-mail dated 20.11.2014 Ex. DW1/X-4 which admittedly was received by the Representative and was the part of negotiations of finalizing Agreement,2014, wherein the plaintiff had indicated that the date of payment was changed from 10th to 21st, but in case the defendant did not want to pay any penalty by way of interest to be imposed on delayed payment, then the date of payment be changed from 21st day to before 15th day of the month. The change of date of raising the Bills and their payment was thus, being negotiated under the new proposed Agreement, 2014 though it could not be signed. There is admission by both the parties that the financial component was agreed and was being followed. This implies that the Bill payments were being made on time and was not the actual bone of contention between the parties as has been sought to be projected by the

58. The Bill for the month of April,2015 is dated 30.04.2015 (Ex.PW- 1/72) and the Bill raised for the month of May, 2015 is dated 31.05.2015 (Ex.PW-1/73). It is but obvious that the lame explanation has been given by the plaintiff, and non-payment of the Bills was not the actual reason to terminate the services of supplying the buses to the plaintiff; rather the language of this Letter is amenable to only one interpretation that the plaintiff intended to stop the supply of buses forthwith from the date it sent the e-mail Letter dated 21.05.2015.

59. It may be observed that the real intention to terminate the services by the plaintiff, could have been prompted by the inability of the plaintiff to ally the dissatisfaction of the defendant about deficiency of Bus service that cropped up since April, 2014 about which defendant was making various complaints from time to time.

60. As has been deposed by DW-1Ms. Arti Sehwag, there were no complaints about the services provided by the plaintiff, till March, 2014 but thereafter, the bus service deteriorated and there were frequent breakdown of ACs and other poor condition of the buses in respect of which various Letters Ex.DW-1/X[3] were also written to the plaintiff, informing him about the various complaints.

61. DW-1 Ms. Arti Sehwag in her affidavit of evidence, has explained that the plaintiff miserably failed to adhere to the terms and conditions and to perform its contractual obligations due to which the buses used to often suffer breakdowns. Also, the air conditioners were not functional on many days in a month and such as in the month of July, 2014 due to nonfunctioning of the air conditioner in buses plying on route No. 2 and route No. 11 on different occasions. Consequently, the defendant was compelled to write to the plaintiff about the same on 10.04.2014 and 30.04.2014. The copy of the e-mail dated 30.04.2014 and 10.04.2014 are exhibited as DW- 1/27 and DW-1/28. The copy of the e-mail dated 20.08.2014 is Ex.DW-1/29 and the tabular chart reflecting the breakdown of buses in the month of July, 2014, is exhibited as Ex.DW-1/30.

62. DW-1 has further deposed that the defendant‟s school was receiving complaints from the parents of the students availing the bus services on various occasions such as 18.04.2014 and 14.05.2014 and the complaints so received are Ex.DW-1/34 and Ex.DW-1/35 and that the plaintiff was duly informed about these complaints. DW-1 Aarti Sehwag has further explained that she herself had talked to the plaintiff on telephone in regard to the complaint Ex.DW-1/35 but the plaintiff failed to attend to the same.

63. DW-1 Ms. Aarti Sehwag was duly cross-examined on these aspects by the plaintiff but she stood firm in her cross-examination and denied that the complaint in regard to the deficiency of services as mentioned in Letter, Ex.PW-1/D[7] was incorrect. She has also denied the suggestion that the complaint in regard to the breaking of air conditioner or any deficiency in running the buses or the tempo was addressed by the plaintiff, on the same day or on the following day.

64. It is further deposed DW-1 Ms. Arti Sehwag that despite all the efforts by the defendant to resolve the various problems, the plaintiff failed to take any appropriate measures. The defendant was left with no other option but to meet the Chairperson of the defendant‟s school, to resolve the issues. The plaintiff vide e-mail dated 24.07.2014, Ex. DW-1/31 was called to meet the Chairperson, to resolve the problems.

65. It was argued on behalf of the plaintiff that the Contract had not been terminated vide Letter dated 21.05.2015 but the plaintiff had only conveyed its inability to provide the services, in case the bills were not paid; it cannot be interpreted as a Letter of Termination. It is further argued that in fact, the Contract had been illegally terminated by the defendant vide its e-mail dated 27.05.2015.

66. As already reproduced above, the bare perusal of this e-mail dated 27.05.2015, Ex.PW-1/176, clearly makes out that it was only in response to the Letter of plaintiff, dated 21.05.2015 that this e-mail was sent by the defendant and it is not as if it is the defendant, who in the first instance, terminated the Contract. Moreover, it can also emerged that this situation arose as the plaintiff failed to provide the buses for 22.05.2015 as requested by the defendant and the letter dated 21.05 2015 was the fallout of plaintiff‟s disinclination to provide the bus service.

67. In this backdrop it is held that by the e-mail dated 21.05.2015, Ex.PW-1/D-8 the Contract was terminated by the plaintiff.

68. Having terminated the Contract, it is but obvious that the plaintiff cannot claim any charges for the services of buses/tempo after 21.05.2015 and their claim for the payment of Rs.24,92,000/- towards the service charges of the buses for the month of June, 2015 and July, 2015, are not tenable.

69. The plaintiff has further sought to justify this claim of Rs.24,92,000/as charges for two month Notice period before termination of the Agreement. It is asserting that the Contract was illegally terminated by the defendant vide its e-mail Letter dated 27.05.2015, without giving a mandatory Notice of two months prior to the termination of the Contract, as had been envisaged in the Agreement of 2014, Ex.PW1/10. It is significant to observe that it is not under challenge that this Agreement of 2014, Ex.PW-1/10 could not be finalized at the end of the plaintiff even though the defendant had signed this Agreement. The terms of the Agreement were being negotiated through exchange of various e-mails.

70. That the Agreement,2014 did not get formalized is established from the exchange of e-mails in regard to replacement of two buses by two tempos. In the e-mail dated 24.11.2024, Ex.DW1/X[4], Mr. Jonathan Farwell, the Representative of the defendant school had referred to E-mail dated 12.06.2014 written by him seeking replacement of two buses with Tempo Travellers and also the Reply of the plaintiff dated 13.06.2014, wherein the plaintiff had promised to replace two buses the two places with two Tempo Travellers in the month of December, 2014.

71. Mr. Jonathan Farwell, the Representative of the defendant, had written an E-mail dated 30.01.2015, Ex. DW1/33 wherein again a reference was made to the E-mail dated 20.11.2014, to assert that the replacement of two buses by two Tempo Travellers had been sought by the defendant which was promised to be done in May, 2014, but was not done till date and that the School was, therefore, liable to pay only for nine number of buses and for Tempo Travellers from January, 2015.

72. Furthermore, it was also being negotiated between the parties that penalty Clause of Rs. 10,000/- in case of delay of payment as was proposed in the Agreement, 2014 would to waived on the defendant agreeing not to impose any penalty for poor services i.e., break down of buses, AC not working etc. The defendant had thus, conveyed to the plaintiff that the Agreement would be signed on behalf of the defendant on 02.02.2015 as DW1/Ms. Arti Sehwag was away for a family wedding.

73. The plaintiff vide E-mail dated 31.01.2015, Ex. PW1/13 was written by the plaintiff to the defendant that he has not been getting the payments for the last many months, he had been seeking for the Agreement but every time, Mr. Jonathan Farwell, the Representative of the defendant, had been making a new excuse, he is not inclined to disturb the school activity and sought that all the pending issues may be cleared.

74. This E-mail was responded on the same day which is Ex. PW1/12 by the defendant, wherein it was highlighted that the plaintiff has failed to meet its commitment made to the defendant in the month of May, 2014 to provide the Tempo Travellers as agreed and that it had nothing to do with the Agreement of 2014. Moreover, the payments were being released without the final Agreement. It was further conveyed that the plaintiff had been asked to send some person to their office to get the Agreement signed but none had been sent by the plaintiff.

75. Again on the same day i.e., 31.01.2015, an e-mail was written to the plaintiff, wherein it was stated that despite the issues between the parties, the payments were being made every month and the money was not blocked and nothing can be more important than the payments. It reiterated that two Tempo Travellers may be substituted in place of two buses.

76. The plaintiff responded vide E-mail dated 01.02.2015, wherein the plaintiff conveyed that there are issues pending between the parties and he would be able to change the buses into the Tempo Travellers only after the issues are resolved.

77. DW-1 Ms. Arti Sehwag has admitted in her cross examination that “it is correct that the financial terms were implemented in respect of the Agreement 01.04.2014, Ex. PW1/10. No other terms were being negotiated after 01.04.2014”. She further deposed that the terms of this Agreement of 2014, Ex. PW1/10 were being discussed between the parties even after 01.04.2014, except the final terms. Since there was no final Agreement of 2014, but admittedly only the hire charges of the buses/ Tempos were increased, the terms and conditions continued to be those of the earlier Agreement, 2011.

78. As already discussed above in detail, from these e-mails, it is quite apparent that there was no consensus in respect of Clause 5 of Agreement, 2014 which provided that two months‟ Notice would be given by the school to the plaintiff for termination. Similarly, in regard to Clause 2.[8] of the Agreement, 2014 which shifted the date of payment against the Bills by 21st of every month through RTGS and also provided that in case there was a delay in payment, a penalty of Rs. 10,000/- per day, shall be paid by the school, the parties had no consensus and remained the bone of contention. It was only the revision was effected in respect of the charges for each bus and aside from that there was no change in the original terms and understanding.

79. Thus, it has emerged in evidence that the Agreement, 2014 having not fructified, its Clause providing for two months‟ prior Notice of Termination, did not become applicable. There was no such corresponding Clause in the Agreement of 2011. When there was no requirement of prior Notice, there is no question of seeking payment for the bus charges in lieu of two months‟ Notice period.

80. It is thus, evident from the overwhelming evidence and the admissions of the parties, that the Contract was terminated by the plaintiff w.e.f. 21.05.2015 Ex. PW-1/D[8] (Ex. DW-1/36). The plaintiff itself being the one terminating the Contract on 21.05.2015, cannot fasten the liability of two months‟ legal Notice period, on the defendant.

81. It is thus, held that the plaintiff is not entitled to Rs.24,92,000/claimed for the month of June,2015 and July, 2015.

(iii) Claim for Rs.10,23,980/- towards the deductions:

82. The plaintiff has further claimed the sum of Rs.10,23,980/- which are the deductions made in the Bills on account of breakdown, Toll fee, fuel charges etc. by the defendant. It has been claimed by the plaintiff that unilateral and arbitrary deductions without any basis, were being made from the bills of the plaintiff, which the defendant is liable to refund. The plaintiff was never informed about these deductions and he got to know about them only when the payments were made by the defendant.

83. PW-1 Mr. Amandeep Singh Bindra in his cross-examination, has admitted that “it is correct that exact amount of bills were never received and raised the objections verbally, as well as, by e-mails, with regard to less amount received against the bills. It is wrong to suggest that I never raised the objections either verbally or in writing.” It was suggested to PW-1 in his cross-examination that he never replied to the e-mails sent by the defendant on breakdown of buses. He also denied the suggestion that the charges were being deducted with his consent on account of breakdown of buses. The plaintiff has claimed that it objected to the deductions being made by the defendant, through various e-mails dated 30.04.2014, 23.07.2014, 20.08.2014, 01.02.2015 and 30.05.2015, which are exhibited as Ex.DW- 1/X[5] to 7 and PW-1/78.

84. In the same way, DW-1 Ms. Arti Sehwag in her cross-examination also admitted that she cannot explain the deductions as carried out in Ex.DW-1/4, in the figure Rs.34,280/- + Rs.3,360/-, of which the total comes to Rs.37,640/-. Similarly, she has admitted that the deductions in the bill, Ex.DW-1/22 of Rs.49,000/- is with regard to some required deductions. DW-1 Ms. Aarti Sehwag has admitted in her cross-examination that the bill, Ex.DW-1/4 was sanctioned for a sum of Rs.12,22,185/- but the payment made against this amount in the ledger account, Ex.DW-1/3 is Rs.11,72,165/-. She has volunteered that the bill was paid after some deductions, without any objection from the plaintiff.

85. Significantly, the plaintiff at the stage of admission/denial of the documents, has admitted the typed portions of the invoices and have only disputed the unilateral hand-made deductions. The plaintiff has made a claim of Rs.10,23,980/- towards as a total of the deductions made in the requisite bills.

86. The plaintiff has referred to e-mail dated 18.04.2014, Ex.DW-1/X-3 whereby the defendant had enlisted the issues, which with regard to the vehicles from 01.07.2014 till 17.07.2014 and requested the plaintiff to resolve the same. The e-mail was responded by the plaintiff vide e-mail dated 19.07.2014, Ex.DW-1/X-3, wherein it apologised for the inconvenience and stated that a spare vehicle was being parked in the school since the last three days. Further, air conditioner and mechanical team were also be made available from that day onwards and sought release of the payments including the balance of February, March and May, 2014.

87. The plaintiff has stated in his cross-examination that he must have rectified or replaced the air conditioners of the buses and denied the suggestion that the deductions were being made from the bills on account of his not attending the complaints immediately. He further denied that he did not rectify the complaints written to him by Jonathan Farwell, several times and further deposed that whenever the complaint was received, they were rectified. He further admitted that the problems may have been repeated once in a month but not in respect of all the vehicles. It is denied that no problems were rectified immediately. He also denied that he had received complaints from the parents of incidents regarding non-functioning of the air-conditioner, bad seat etc.

88. The appreciation of the entire evidence and the documents, leads to one inference that since July, 2014, there had been various complaints received in respect of the improper functioning of air-conditioners in the school buses and also their breakdown, as has also been recorded in various e-mails, as mentioned above. It is also borne out from the ledger, Ex.DW- 1/3, which is from 01.03.2012 till 27.04.2015 that the amounts being credited to the account of the plaintiff, were less than the amounts for which the bills were raised.

89. It is also pertinent to refer to the various bills, Ex.PW-1/14 till PW- 1/75, wherein the bills were being raised by the plaintiff for the certain amount. However, the bills, Ex.DW-1/4 till Ex.DW-1/26, from the period 31.03.2014 till 01.04.2015, show that on a regular basis, deductions were being made for the fuel charges. The deductions being made essentially were on account of the fuel charges, which have been admitted by the plaintiff, to be a valid deduction as the petrol charges were being paid by the defendant, directly to the fuel agency.

90. There are some minor deductions, which have been additionally made but it has been explained in detail by the defendant that these were on account of the diesel difference rate or some other minor deductions, which were payable by the plaintiff, about which no objection had been taken.

91. It is the plaintiff who is claiming the amounts deducted from the Bills and the onus was on it to explain that such deductions were unjustified. The plaintiff has not been able to produce any cogent evidence to show that these deductions which were being made regularly were unjustified for which he ever raised any objection.

92. The plaintiff has not been able to prove that it is entitled to sum of Rs.10,23,980/-, towards the deductions as claimed by it.

93. The plaintiff has claimed the payments due towards annual increment @10% from 01.04.2012 till 30.06.2015 amounting to Rs.92,80,353/-. Initially amount of Rs. 92,80,353/- was being pressed by Written Submissions of Plaintiff dated 16.12.2022. However, as per Additional Written Submissions on Behalf of Plaintiff dated 30.01.2024 the claim is not pressed by the Plaintiff.

94. In any case, this Claim is based on Agreement, 2014 which did not fructify. Also, similar Clause 2.[3] in Agreement, 2011 provided for increments upto 10% which was admittedly not implemented.

95. This Claim is therefore, rejected.

96. The plaintiff asserts that they are entitled to damages in lieu of loss of business as plaintiff had blocked 13 buses and other vehicles for academic session starting from 01.04.2015 to 31.03.2016. The plaintiff asserts that the defendant‟s act of termination rendered the fleet of buses useless for the entire academic year leading to economic loss in terms of monthly instalment, which were to be paid to financial institutions and new buses purchased for the defendant, were also left idle. Further this harmed the reputation of the plaintiff.

97. The plaintiff‟s claim for loss of business emanates from the act of alleged termination of Contract by the defendant. It has been already held above that the termination of Contract was not by the defendant but by the

98. Furthermore, the plaintiff has asserted that it suffered economic loss on account of monthly instalments that were being paid to the financial institutions and the new buses, which were purchased by the plaintiff for the defendant, were left idle. However, there is not an iota of evidence led by the plaintiff of there being either idling of buses or that any conditional financial burden fell upon the plaintiff on account of termination of the Contract.

99. Sections 73 and 74 of the Indian Contract Act, 1872 provide for calculation of damages and for their mitigation. Sections 73 and 74 of the Indian Contract Act, 1872 read as under: “Section 73:—

73. Compensation for loss or damage caused by breach of contract.— When a contract has been broken, the party who suffers by such breach is entitled to receive, from the party who has broken the contract, compensation for any loss or damage caused to him thereby, which naturally arose in the usual course of things from such breach, or which the parties knew, when they made the contract, to be likely to result from the breach of it. —When a contract has been broken, the party who suffers by such breach is entitled to receive, from the party who has broken the contract, compensation for any loss or damage caused to him thereby, which naturally arose in the usual course of things from such breach, or which the parties knew, when they made the contract, to be likely to result from the breach of it.” Such compensation is not to be given for any remote and indirect loss or damage sustained by reason of the breach. Compensation for failure to discharge obligation resembling those created by contract.— When an obligation resembling those created by contract has been incurred and has not been discharged, any person injured by the failure to discharge it is entitled to receive the same compensation from the party in default, as if such person had contracted to discharge it and had broken his contract. —When an obligation resembling those created by contract has been incurred and has not been discharged, any person injured by the failure to discharge it is entitled to receive the same compensation from the party in default, as if such person had contracted to discharge it and had broken his contract.” Explanation.—In estimating the loss or damage arising from a breach of contract, the means which existed of remedying the inconvenience caused by the non-performance of the contract must be taken into account. Section 74:—

74. Compensation for breach of contract where penalty stipulated for:— 34 [When a contract has been broken, if a sum is named in the contract as the amount to be paid in case of such breach, or if the contract contains any other stipulation by way of penalty, the party complaining of the breach is entitled, whether or not actual damage or loss is proved to have been caused thereby, to receive from the party who has broken the contract reasonable compensation not exceeding the amount so named or, as the case may be, the penalty stipulated for. Explanation.— A stipulation for increased interest from the date of default may be a stipulation by way of penalty. (Exception) — When any person enters into any bail-bond, recognizance or other instrument of the same nature or, under the provisions of any law, or under the orders of the 35 [Central Government] or of any 36 [State Government], gives any bond for the performance of any public duty or act in which the public are interested, he shall be liable, upon breach of the condition of any such instrument, to pay the whole sum mentioned therein. Explanation.— A person who enters into a contract with Government does not necessarily thereby undertake any public duty, or promise to do an act in which the public are interested.”

100. In Fateh Chand v. Balkishan Das, AIR 1963 SC 1405, the law relating to the damages had been propounded which reads as under: “Section 74 of the Indian Contract Act deals with the measure of damages in two classes of cases (i) where the contract names a sum to be paid in case of breach and (ii) where the contract contains any other stipulation by way of penalty. We are in the present case not concerned to decide whether a covenant of forfeiture of deposit for due performance of a contract falls within the first class. The measure of damages in the case of breach of a stipulation by way of penalty is by Section 74 reasonable compensation not exceeding the penalty stipulated for. In assessing damages the Court has, subject to the limit of the penalty stipulated, jurisdiction to award such compensation as it deems reasonable having regard to all the circumstances of the case. Jurisdiction of the Court to award in case of breach of contract is unqualified except as to maximum stipulated; but compensation has to be reasonable, and that imposes upon the Court duty to award compensation according to settled principles. *** The jurisdiction of the court is not determined by the accidental circumstance of the party in default being a Plaintiff or a Defendant in a suit. Use of the expression “to receive from the party who has broken the contract” does not predicate that he jurisdiction of the Court to adjust amounts which have been paid by the party in default cannot be exercised in dealing with the claim of the party complaining of breach of contract….”

101.

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43. On a conspectus of the above authorities, the law on compensation for breach of contract Under Section 74 can be stated to be as follows: 43.[1] Where a sum is named in a contract as a liquidated amount payable by way of damages, the party complaining of a breach can receive as reasonable compensation such liquidated amount only if it is a genuine pre-estimate of damages fixed by both parties and found to be such by the Court. In other cases, where a sum, is named in a contract as a liquidated amount payable by way of damages, only reasonable compensation can be awarded not exceeding the amount so stated. Similarly, in cases where the amount fixed is in nature of penalty, only reasonable compensation can be awarded not exceeding the penalty so stated. In both cases, the liquidated amount or penalty is the upper limit beyond which the Court cannot grant reasonable compensation.”

102. Likewise, it has been held in the Case of Maula Bux vs. Union of India(1969) 2 SCC 554., and Kailash Nath Associates vs. Delhi Development Authority, (2015) 4 SCC 136 that proof of loss or damage arising out of breach of contract is a sine qua non for payment of compensation.

103. In the present case, the plaintiff has miserably failed to prove any actual idling of the buses or losses suffered consequently by the plaintiff. It is, therefore, not entitled to the loss of business as has been claimed by it. Conclusion:

104. It is thus, held that the plaintiff is entitled only to Rs.20,42,727/- on account of the bus services provided in the month of April and May, 2015.

105. Issue No.(iii) Whether the suit is barred by limitation? OPD The plaintiff‟s claims pertain to the bills for the financial year 2014- 2015 and Loss of business. The Plaint has been filed on 26.08.2016 i.e. within the period of three years from the date on which cause of action has arisen and thus the Suit is not barred by the limitation.

106. The Suit of the plaintiff is, therefore, within limitation. Issue No. 3 is decided in favour of the plaintiff. Relief:

107. In view of the findings on the issues, it is hereby held that the plaintiff is be entitled to that amount of Rs.20,42,724/- with interest @9% for the month of April and May, 2015. The suit accordingly partly decreed. Parties to bear their own costs.

108. Decree sheet be drawn.

JUDGE JUNE 28, 2024