TRG INDUSTRIES PVT LTD Vs. CHZK DORMASH SERVICES

JUDGEMENT

(1.) The plaintiff company incorporated and registered under the Companies Act, 1956 has filed the present suit for recovery of Rs 59,98,866/-. It is the case of the plaintiff that a joint venture named and styled as BRA-TRG-BHARAT was formed for execution of the work of construction of 44 to 59.5 km Lucknow-Kanpur Road, near Unnao, UP. The contract was awarded by National Highway Authority of India to the consortium with the award value of the work of Rs 43 crore with stipulated period of twenty months for completion of the project. The plaintiff through its Chairman cum Managing Director is stated to have been authorized by the other two constituents of the Joint Venture to incur expenses, execute the work and do all the other acts and deeds including the legal proceedings relating to and connecting with execution of the work on behalf of the said Joint Venture vide Power of Attorney dated 07.02.2002.

(2.) The plaintiff made enquiries for obtaining the requisite equipment and one such equipment required was a motor grader. Defendant no.3 representing itself as an authorized dealer in Russian make Motor Grade DZ 180 fully hydraulic manufactured by defendant no.1 and to be supplied by defendant no.2 as an agent of defendant no.1 approached the plaintiff with the specifications, efficiency, performance and quality brochure as well as the terms and conditions for supply. The quotation/information dated 20.02.2002 was submitted to the plaintiff and defendant no.3 is said to have been acting and representing both defendant nos.1 and 2.

(3.) The plaintiff claims that Mr.M.Khemka of defendant no.3 assured and promised that the grader intended to be supplied to the plaintiff was the most suitable for road work in India and was manufactured with the best accessories and services. The motor grader was, however, stated to be with the mechanical gear box but it was assured that keeping in view the urgent need of the machine, mechanical gear box would be replaced by hydrostatic transmission free of cost except a lump sum payment of Rs 1.5 lakh towards customs etc. at the time of arrival of transmission from defendant no.1. The time period for supply was stated to be about three to four months. In order to assure the plaintiff, defendant no.3 is stated to have obtained affidavit from defendant no.1 dated 23.02.2002 and the same was delivered to the plaintiff under the cover of the letter of the even date. The plaintiff placed a detailed Purchase Order dated 23.02.2002 for supply, commissioning and servicing of one Motor Grader Model DZ- 180 with spares and accessories as per specifications, terms and conditions contained therein. An advance payment of Rs.15 lakh was made by the plaintiff with the Purchase Order and the supply had to be effected at the site by 06.03.2002 failing which there was a penalty of Rs 10,000/- per day. The warranty period for the grader and accessories was twelve months from date of commission at site for any manufacturing defect. The mechanical gear box had to be replaced by the defendants by a hydrostatic transmission ( complete conversion kit) free of cost at site within four months of the date of commission at site. Services of an engineer were also to be provided for the said purpose and the operators of the plaintiff also had to be trained on the machine.