Satyam Fraud

Topics: Contract, Breach of contract, Plaintiff Pages: 7 (2280 words) Published: February 1, 2013
Andhra High Court
Ledalla Ravichandar And Another vs M/S Satyam Computer Services ... on 7 February, 2011 THE HON'BLE SRI JUSTICE N.R.L. NAGESWARA RAO



Ledalla Ravichandar and another

M/s Satyam Computer Services Limited, A Public Limited Company, represented by Authorised Signatory

Counsel for the Appellants: Ledalla Ravichandar and another

Counsel for the Respondent: M/s Satyam Computer Services Limited, a Public Limited Company Rep. by authorised Signatory.


The City Civil Court Appeal is filed by the defendants in O.S.No.327 of 1994 on the file of the III Senior Civil Judge, City Civil Courts, Secunderabad, are the appellants herein. The suit was filed for recovery of Rs.2,00,000/-.

2. According to the case of the plaintiff, the first defendant was offered as Programmer Trainee vide letter dated 26-03-1993 on a consolidated stipend of Rs.2,250/- per month and the first defendant signed the letter of appointment on 05-04-1993 agreeing the terms and he underwent training. As guaranteeing the due performance of the terms, the second defendant stood as a surety and both the defendants executed a surety bond on 27-04-1993 and subsequently, the first defendant joined on 03-05-1993, at programme training and was paid stipend at the rate of Rs.2,250/- per month and after successful completion of the training, he was absorbed into the plaintiff company as Software Engineer vide appointment letter, dated 15-12-1993 with retrospective effect i.e., from 01-10- 1993. But, however, the first defendant left the services abruptly from 12-07- 1994 onwards. As per the terms of the contract, the defendants have to pay liquidated damages of Rs.2,00,000/- and stipend charges and also the expenses incurred by the plaintiff. Totally, the plaintiff claimed a sum of Rs.2,78,500/- as due, but confined to the liquidated damages of Rs.2,00,000/-.

4. The defendants filed a written statement, denying several allegations in the written statement and pleading that there was no sufficient work and no programmes were given and due to the lack of infrastructure, the future of the first defendant was not as expected. The agreement about the payment of damages and the undertaking deed have been given are not correct. The period of training and absorption and leaving the company is not disputed. The contract will not enable the plaintiff to get any remedies.

5. On the basis of the above pleadings, the following issues were framed for trial:

1) Whether the plaintiff is entitled for recovery of Rs.2,00,000/- from the defendants?

2) Whether the suit is not maintainable under law?

3) To what relief?

6. On behalf of the plaintiff, PW.1 was examined and marked Exs.A-1 to A-11. On behalf of the defendants, DW-1 was examined.

7. After considering the rival contentions, the learned III Senior Civil Judge, City Civil Courts, Secunderabad, decreed the suit for an amount of Rs.2,00,000/-. Aggrieved by the said judgment, the present CCCA is filed.

8. The points that arise for consideration are:

1) Whether the plaintiff suffered any damages or loss and if so, whether the plaintiff is entitled for the amount claimed?

2) Whether the damages granted by the lower Court is legal and sustainable? 3) To what relief?


So far as the facts are concerned, it is not in dispute that the first defendant joined in service as a trainee and the second defendant stood as a guarantor and executed the agreement Ex.A-3. It is also not in dispute that the defendant worked for some time after he was absorbed and thereafter, he left the services. Though several contentions were raised about the validity of the contract for claiming the damages, the evidence of defendants i.e. DW-1 does not disprove the terms of the contract. But, the fact remains that the Ex.A-3 was executed by both the defendants and the terms therein are not in dispute. Therefore, the only...
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