ABB LIMITED TEYNAMPET Vs. BHAGWANDAS METALS LIMITED

JUDGEMENT

(1.) THIS appeal has arisen from the judgment of the learned Single Judge made in C. S. No. 1192/94 a suit for money decree.

(2.) THE case of the plaintiff is as follows: the plaintiff had discussion with the defendant for the purchase of two medium frequency induction furnace type ITM K4/2000, with three mechanicals and other accessories. As per the minutes dated 21. 7. 1992, the defendant had agreed for the same, for which the plaintiff paid a sum of Rs. 11,35,000/- by two cheques. This was subject to the execution of a written contract with detailed drawings to be furnished by the defendant after clearance of the plaintiff's then intended public issue. No drawing was sent by the defendant. Hence, the plaintiff's intended public issue did not materialise. The plaintiff received a letter from the defendant in the third week of November 1992, and he was unable to agree with the terms and conditions found therein. In view of the same, there was no concluded contract between the parties, and that is why, the defendant returned back the cheque dated 30. 11. 1992, for Rs. 5 lakhs. But, the defendant refused to return the advance amount despite repeated demands. Even assuming that there was any concluded contract, as the defendant failed to send drawings, it is to be held that the defendant alone had committed breach of contract, and therefore, the defendant is liable to refund the advance amount of Rs. 11,35,000/- with interest.

(3.) THE suit was resisted by the defendant by filing a written statement stating that there was no condition that the advance was subject to the execution of written contract; that the minutes inter alia provided that the total price for supply of the equipment would be Rs. 109 lakhs inclusive of Central Excise Duty, but exclusive of Central Sales Tax, Freight, Insurance, etc. ; that according to Clause 2 (i) of the Minutes, 15% of the contract value i. e. , Rs. 16,35,000/- was to be paid as interest free advance; that out of this, Rs. 5 lakhs was to be paid as deposit along with the order, and the balance advance of Rs. 11,35,000/- was payable in two instalments; that the defendant sent a letter on 4. 11. 1992 along with a detailed layout and foundation drawings for enabling the plaintiff to commence their civil work; that the defendant also accepted the offer by the letter dated 3. 11. 1992; that under the circumstances, there was a concluded contract between the parties; that the contract cannot be cancelled without the defendant's written consent; that the defendant had already spent substantive sum and had manufactured the furnace partially; that in view of the same, the defendant had agreed to refund a sum of Rs. 6,35,000/- to the plaintiff after deducting Rs. 5 lakhs; that the interest claimed at 30% is not maintainable; that the defendant had actually suffered a damage of Rs. 55 lakhs and if at all, after deducting a sum of Rs. 11,35,000/-, the plaintiff is still liable to pay Rs. 43,65,000/- with interest at 18%; that the plaintiff is also bound to pay Rs. 1,10,00,000/- towards liquidated damages; that the defendant is not only entitled to set off, but also entitled to a decree for a sum of Rs. 1,10,00,000/- as counter claim, and hence, the suit was to be dismissed and a decree for the counter claim be granted.