CONTINENTAL AND EASTERN AGENCIES Vs. COAL INDIA LIMITED

JUDGEMENT

(1.) This is a suit for recovery of Rs.5,89,434/- towards agency commission. Plaintiff is agent of defendant no.3, an Italian company, in India. Defendant no.1 is a Public Sector Undertaking and is a unit of defendant no.2. Brief resume of facts pleaded by the plaintiff in respect of its claim is like this:-

(2.) Defendant no.1 floated a global tender for purchase of two Hydraulic Crankshaft Grinding Machines on 24.9.1986. Plaintiff gave an offer dated 22.9.1986 for two machines. Earlier plaintiff had supplied four similar machines to defendant no.1 vide their order dated 5.2.1985. Later defendant no.1 sought some clarifications and also the amendment in terms if four machines were purchased instead of two.

(3.) In original offer the plaintiff had offered that agency commission would be 15% of FOB value of order. By letter dated 7.3.1987, plaintiff offered discount of 5% on commission if entire order was placed on plaintiff and 100% commission was paid on receipt of shipping documents. By letter dated 10.8.1987, defendant no.1 wrote to plaintiff that requirement was raised to four Grinder Machines, and the plaintiff should submit reduced price bid accordingly. By letter dated 14.8.1987 plaintiff did the needful and informed defendant no.1 that price of machine will be same and be multiplied by four in place of two and discount of 5% on agency commission of 15% would be valid if (i) entire order is placed on plaintiff and (ii) 100% agency commission released on presentation of shipping documents. By letter dated 9.11.1987, defendant no.3 informed defendant no.1 that plaintiff would not accept any amount less than already offered by them, as their work involved lot of expenditure. Defendant no.1 thereupon placed order dated 25.4.1988 addressed to defendant no.3 on plaintiff at Delhi who in turn forwarded it to defendant no.3 at Italy only for two machines. An amendment dated 6.5.1988 was issued by defendant no.1 to this order. Clause 2 of amendment was as follows:-