House Of Diagnostics Llp & Anr vs Esaote Asia Pacific Diagnostic ...
2016 Latest Caselaw 2132 Del

*      IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                    Order Pronounced on: 17th March, 2016

+                    O.M.P.(I) (COMM.) No.81/2016

       HOUSE OF DIAGNOSTICS LLP & ANR            ..... Petitioners
                    Through  Mr.Sandeep Sethi, Sr. Adv. with
                             Mr.Neeraj Yadav, Mr.Sidharth Arora &
                             Mr.Saurabh Seth, Advs.

                            versus

       ESAOTE ASIA PACIFIC DIAGNOSTIC PRIVATE LIMITED &
       ORS.                                      ..... Respondents
                     Through  Mr.Manu    Seshadri,      Adv.    with
                              Ms.Sahiba Ahluwalia, Adv. for R-1.

       CORAM:
       HON'BLE MR.JUSTICE MANMOHAN SINGH

MANMOHAN SINGH, J.

I.A. No.3539/2016 (exemption) Exemption allowed, subject to just exceptions.

The application is disposed of.

O.M.P.(I) (COMM.) No.81/2016

1. Issue notice to the respondents through all modes including registered post and approved courier, on filing of process fee and Regd. A.D. Covers within a week, returnable on 18th May, 2016. The petitioners will file an affidavit of service along with tracking report about the service of the respondents on the next date.

2. Learned counsel appearing on behalf of respondent No.1 accepts the notice. Hence, issuance of notice to the said respondent is dispensed with. However, notice shall be issued to the other respondents for the date fixed.

3. Learned Senior counsel appearing on behalf of the petitioners is pressing for an ad-interim order. The prayer is strongly opposed by the learned counsel for respondent No.1.

4. The petitioners have filed the present petition under Section 9 of the Arbitration and Conciliation Act, 1996 restraining the respondents from enforcing or giving effect to the Letter of Credit dated 19th January, 2012 issued by the respondent No.3.

5. The order is sought by the petitioners on the ground of egregious fraud committed upon them by the respondent No.1 and irreparable loss/injury which would result to the petitioners if the encashment of the Letter of credit is not stopped by the intervention of this Court.

6. As per the petitioners, in June, 2011, respondent No.1 contacted the petitioners and represented to them that their machines (G-Scan Tilting MRI) are the latest development in the field of MRI Scans and the output from the machines was far better than the Typical Normal MRI systems.

7. After the various meetings were conducted between the petitioners and respondent No.1, the respondent No.1 after due inspection confirmed that all the three sites were suitable for installation of G-scan MRI machines along with the State of the Art Perforated See Thru Light Weight RF Cage.

8. It is alleged that the respondent No.1 issued a Confirmed Performa Order for 3 New G-Scans Machines along with See THRU RF Cage to be

installed at three pre-inspected and specified sites with Nine Coils, 2 Ultrasound Machines and 3 Head Coils (Work In Progress) with 5 Years Comprehensive Warranty with CMC of Rs.6.5 lacs per annum for 5 years inclusive of taxes for a total consideration of Rs.6.15 crores. The said machines were to be provided on mere payment of Rs.60 lacs as advance and the balance was against the 42 months deferred on the opening of the Letter of Credit. The same was incorporated in the Purchase Order dated 22nd September, 2011 issued by the petitioners to respondent No.1.

9. The Purchase Order dated 22nd September, 2011 was accepted by respondent No.1 on 27th September, 2011 and it was further confirmed fast production of the 3 G-Scans Machines.

10. In November, 2011, the respondent No.1 informed that all the three machines had been received by it in India. In December, 2011, the respondents No.1 & 2 acknowledged the receipt of Rs.60,00,000/- from the petitioners.

11. The petitioners got Letter of Credit opened with respondent No.3 for a sum of Rs.5.55 crores in favour of the respondent No.1 on the terms as dictated by respondent No.1. On 23rd January, 2012, the amendment was made in the Letter of Credit to the effect that documents dated upto 120 days prior to the issuance date are acceptable and as regards to period of presentation, documents to be presented within validity of the credit.

12. Thereafter, many correspondences were exchanged between the parties, from which it appears that the respondent No.1 has assured the petitioners to cure the discrepancies pointed out by the petitioners from time to time.

13. It is also a matter of fact that two machines were installed at Hargovind Enclave and Faridabad sites in October, 2012. Many other issues are raised by the learned Senior counsel appearing on behalf of the petitioners.

14. Learned counsel for respondent No.1 submits that the petitioners have earlier filed the complaint against his client before the Competition Commission of India where the same relief was sought, which is not granted. The next date fixed before the said Commission is 31st March, 2016 for hearing. As the petitioners did not get any interim order from the said Forum, now they have filed the present petition for the same relief.

15. Counsel further submits that the Letter of Credit is unconditional. Secondly, the petitioners have been using the said machines for the last four years. His client was always ready and willing to cure any defect or discrepancy if pointed out by the petitioners and they are still ready to comply with the same during the warranty period. It is further stated that in the light of correspondence exchanged between the parties, there is not even a whisper about the fraud, if any, committed by respondent No.1, nor it was ever alleged that the old machines were supplied to the petitioners. Counsel states that the said pleas raised by the petitioners in the present petition are after-thought in order to seek a stay order in respect of the Letter of Credit.

16. After hearing the learned counsel for the parties, prima-facie, I am not inclined to pass the interim order in the matter in view of the submissions made by the learned counsel for respondent No.1. The entire correspondence exchanged between the parties do not indicate about the fraud, if any, committed by respondent No.1, nor there is any specific letter issued by the petitioners that old machines have been supplied to them. It is also not denied

on behalf of the petitioners that the machines have been used by them for the last four years. The underlying dispute cannot be decided with regard to the encashment of the Letter of Credit which is an independent agreement between the parties. The said Letter of Credit is unconditional. Thus, the prayer cannot be granted at this stage. However, it is always open to the petitioners to initiate the independent proceedings for compensation or avail other remedies available as per law. It is also clarified that the Competition Commission, where the matter is listed on 31st March, 2016, would decide the complaint of the petitioners as per its own merits and without any influence of the orders passed by this Court.

(MANMOHAN SINGH) JUDGE MARCH 17, 2016