Inflow Technologies is in the business of IT Infrastructure distribution services. Inflow became the distributor of M/s. Network Appliance B V (“NetApp”) in the year 2007. Apara Enterprises Solutions Private Limited (Apara) became the Channel Partner of Inflow and used to supply the NetApp products to end customers PAN India. During the course of business transactions, Apara failed to pay/clear the invoices to Inflow, which resulted in huge credit outstanding. Inflow stopped supplies of NetApp products to Apara since Apara did not clear the outstanding payments.
Subsequently, Yahoo India Private Limited being the customer of Apara was in need of NetApp products & services. Yahoo assured Apara and Inflow through letters stating that the invoice value will be credited only to ESCROW account jointly maintained by Inflow and Apara. Based on the assurance of Yahoo, Inflow supplied NetApp products & services to Apara and Apara in turn supplied to Yahoo. In spite of the assurance given by Yahoo, Yahoo failed to deposit the invoice amount of Apara into the designated ESCROW Account.
With commitment not being honoured by Yahoo & Apara and having no other alternative to recover the outstanding amount, Inflow filed a Civil Money Recovery Suit before the City Civil Court at Bangalore. Upon scrutiny of the documents as well as the evidence given by the witnesses, the Court has held that Yahoo is liable and responsible for the payment payable to Inflow by Apara and accordingly directed Yahoo and Apara to jointly pay a sum of Rs.8,56,48,460.90 along with the interest @9% per annum.