TaxTMI 
TaxTMI 
2024 (10) TMI 1846
X X X X Extracts X X X X
X X X X Extracts X X X X
.... building amounting to an aggregate sum of Rs.34,18,085/-. In addition to seeking recovery of the aforesaid amount, the appellant had also sought recovery of interest at the rate of 12% per annum with effect from 18.11.2019 to 17.03.2020, which was quantified at Rs.1,34,850/-. 3. The appellant (hereafter also referred to as plaintiff) carries on the business / profession in the name of sole proprietorship concern - M/s Place Studios. He states that he is an architect by profession and is, inter alia, engaged in the profession of architecture, urban designing, master planning, interior design and other allied services. 4. The respondent (hereafter also referred to as defendant) is a private company and engaged in the business of manufacturing pneumatic casings, inner tubes and tyres for all types of vehicles. PLAINTIFF'S CASE 5. It is the plaintiff's case that in December 2018, the defendant had approached him in his office at Delhi for availing consultancy services for designing the new building and existing locker room as R&D building as per Book of Requirements (hereafter also referred to as 'BOR'). 6. The plaintiff claims that on 28.01.2019, he sent a consultancy ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....payable under the first PO at the third stage. In addition, the plaintiff also raised an Invoice (Invoice no.06 dated 10.07.2019) for a sum of Rs.30,000/- plus IGST of Rs.5,400, being 60% of the amount payable under the second PO. 11. The defendant paid a sum of Rs.1,62,000/- against Invoice no.5 under payment advice dated 02.09.2019. Similarly, the defendant also paid a sum of Rs.32,400/- in respect of Invoice no.6 dated 10.07.2019. The plaintiff claimed that it did not raise invoices for the remaining 40% of the amount under the first PO as the same were construction linked and the defendant did not keep the plaintiff informed as to the stage of construction. The plaintiff claimed that he had completed the entire work but the defendant had failed and neglected to pay the amounts due. He claimed that he had done additional works and had pursued the defendant to pay for the same but the defendant had failed and neglected to do so. 12. The defendant, thereafter, stopped communicating with the plaintiff and refrained from answering his telephone calls. The plaintiff claims that the defendant failed to make the payments as due. 13. In the aforesaid context, the plaintiff clai....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 15. The defendant stated that in terms of the first PO, the payments were to be made in the following stages: STAGE I TWENTY (20) PERCENT amount payable upon concept approval by Client; STAGE II TWENTY (20) PERCENT amount payable upon estimate (i.e. BOQ) and Tender Out; STAGE III TWENTY (20) PERCENT amount payable, out of which; i) Ten (10) Percent amount payable upon- 100% delivery of Civil and structure drawing; and ii) Ten (10) Percent amount payable upon100% delivery of balance drawings i.e. for Services related to electrical, plumbing, finishes, HVAC, firefighting, etc. as clarified under S. No. 1 to 10 of Scope of Work in the said Purchase Order. STAGE IV FORTY (40) PERCENT amount payable out of which: i.10% on 30% of completion of works at site ii.10 % on 60 % of completion of works at site iii.10% on 100% of completion of works at site iv.10% after completion of Snag List for the complete Project and submission of as-built drawings by the Plaintiff. It is further clarified that the Plaintiff was obliged to visit the site and perform the Services mentioned under S. No. 11 to 13 of the Scope of Work under the said Purch....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d. He claimed that the defendant had burdened him with new scope of work but despite various requests, no fresh purchase order was issued for the additional and extra work done by him. 20. He claimed that he sent an email dated 07.10.2019 requesting the defendant for gist of the cost of the additional work along with a fee for additional works based on the cost of the existing building, additional service works for plumbing and fire-fighting etc. in the R&D Building. He submitted that although the payment advice dated 02.09.2019 was sent against tax Invoice bearing no.5 dated 08.07.2019 and tax Invoice bearing no.6 dated 10.07.2019; the defendant did not make any payment against the said tax invoices. He claimed that his demand for the payment of fees at the rate of 7.5% of the cost of construction for the additional and extra works was based on the guidelines issued by the Council of Architecture of India. He acknowledged that the plaintiff had received a sum of Rs.3,54,000/- against Invoice no.13 dated 20.03.2019 (Ex.PW1/8) and Invoice no.2 dated 07.05.2019 (Ex.PW1/9) but the defendant had not paid the amount due under the remaining invoices. 21. The plaintiff produced the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ervices and deliverables at various stages. The learned Commercial Court also examined various communications and concluded that there was no confusion that the documentation for the existing locker room was a part of the plaintiff's existing work as the BOR had clearly referred to the same. The learned Commercial Court also observed that the plaintiff was unable to establish that the defendant was insisting on additional work, which was not a part of the plaintiff's proposal. 25. The learned Commercial Court also found that the plaintiff had neither made any averments nor led evidence regarding completion of the works covered under his scope of works under the first PO. The plaintiff had relied upon the list of drawings and documents furnished during the period 21.02.2019 to 23.08.2019 (Ex.PW1/3) but the same was denied by the defendant. The said list only showed the drawings and documents which were sent by mail on various dates. However, neither the emails nor the documents and the drawings sent by the plaintiff had been filed or proved. 26. The learned Commercial Court also evaluated the communications and had concluded that the plaintiff had not furnished the CAD files, ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... existing locker room building should be done by the Consultant, based on the concept and the indicative Data Sheets provided by CIPL. Any value engineering (alternative solution to the original concept given by CIPL, which can bring some benefits) is encouraged from the consultant but must be discussed in advance with pros and cons and cost implications with the CIPL team for a final agreement. 2.2. Seek all required inputs for making the entire detailed designfrom the respective technical owner of CIPL team. 2.3. The Design and initial drawing should be briefed to the CIPLtechnical teams and approval will be given by Continental team before final drawings made. 2.4. Ensure the drawings for the mentioned sites are done as perContinental requirements and Continental standards (BCS) as these designs will be finalized by CIPL first and any change in drawing required during execution needs to be redesigned and re-submitted to CIPL. 2.5. Exterior finish, false ceiling, external developments withlandscape and roads around building is to be included in the consultant scope of work. Consultant should provide best in class and financially feasib....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the defendant hire the external consultants (electrical as well as HVAC consultants) and pay the fees directly to them and the plaintiff would complete the project at the costs as agreed inclusive of plumbing plus fire fighting consultant and structural consultant fee. It is material to note that in his communications, the plaintiff did not focus on execution of extra works on assurance of payments for the same. It is evident from the communications exchanged between the parties that the controversy pertains to the extent of work including the plaintiff's scope of work. 34. In his e-mail dated 22.05.2019, the plaintiff had articulated his grievance that the initial SOP that was shared with him did not indicate the extensive work that he and his team were doing therefore, the costs of executing the work had gone up. The plaintiff set out the requirements which were missing from the SOPs sent to him at the initial stage. The said broad requirements as set out in his e-mail are reproduced below: 1. "We were sent the initial S.O.P without the diagrammatic input considerations that was hared (sic shared) with us in our first meeting. We are talking about the colourful servi....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... will continue Continental will be forced to take legal actions accordingly. I hope you understand the sensivity of the matter and provide the solutions on priority. Thanks.." 38. Notwithstanding that the defendant had disputed the issues raised by the plaintiff in his e-mail dated 22.05.2019, it is apparent that the defendant agreed to pay additional amount of Rs.50,000/- and to issue the second PO (Ex.P3). The second PO mentions the description as "Augmentation order for R&D Consultant". It is apparent from the above that the second PO was merely to augment the first PO (Ex.P2) which was for "Consultant for services required in R&D". It is material to note that the second PO did not mention any additional work. It is also relevant to note that the plaintiff did not reject the second PO. It is also necessary to note that the scope of work as set out in the first PO is quite extensive. It is evident from a plain reading of the same that it is in conformity with the consultancy proposal furnished by the plaintiff (Ex.DW1/3). The scope of work as set out in the said proposal is set out below: "1. Preparation of space planning layout options as per d....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ept design approval shall be on chargeable basis on mutually agreed actual area as per points through 1 to 3 of scope of work 1. Acoustic Consultants. 2. Landscape Consultants. 3. Utility Consultant." 40. The relevant extract of the Annexure-I to the Consultancy Proposal specifying the work that has been excluded from the petitioner's scope of work is set out below: "xiii. The following work is excluded from the scope of M/s. Place Studios: • Permanent Placement/ every day visit of architect's staff at site. • Project Management for the project. • Procurement of materials by the architect • Any utility design or related works, such as, air, gas etc. • Hiring of Landscape or lighting consultant for the job. • Soil Testing for the project. • Site Survey for the project, • Sanctioning of plans, designs & drafting from anyone except client such as authority, building, management e.t.c." 41. In view of the above, we do not find any merit in the plaintiff's claim that he had executed any work, which was beyond the plaintiff's scope of work as a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ided, the plaintiff was required to produce the drawings that were supplied to establish his case that all drawings were in fact provided. However, the plaintiff neither produced the drawings nor the e-mails forwarding those drawings. He merely provided a list referring to certain drawings, which he claimed had been supplied to the defendant. The defendant in its affidavit (Ex.DW1/A) had specified that the plaintiff had failed to submit the final finished drawings despite repeated requests and therefore, the defendant was compelled to engage another consultant (M/s Nirman Engineering Consultants Private Limited) and had issued a purchase order for a sum of Rs.6,25,000/- to the said consultant). Paragraph 18 of the said affidavit is set out below: "18. I say that the Plaintiff failed to submit the final finished drawings despite repeated requests by the answering Defendant causing delay in work and loss to the Defendant due to which Defendant was compelled to engage another consultant M/s Nirman Engineering Consultants Private Limited through Purchase Order No.124/4900249003/24.09.2019 valued at Rs.6,25,000/- for the Project. I further say that the Answering Defendant has s....