BRIJLAL AND CO Vs. MADHYA PRADESH ELECTRICITY BOARD

JUDGEMENT

(1.) This is an application on behalf of the defendant-respondent under Section 10 of the Code of Civil Procedure, 1908 for stay of the plaintiff's suit in this Hon'ble Court. The relevant facts are stated as follows.

(2.) In 1970 Madhya Pradesh Electricity Board, a statutory body, hereinafter described as "the Board", had invited tenders for the supply of galvanised bolts and nuts for high tension and transmission lines. The terms and conditions of supply, specification of the bolts and nuts and quantity were contained in the Board's specification (1) "Project TR-47". The plaintiff M/s. Brijlal and Company a registered partnership firm at 22, Burtolla Street, Calcutta, hereinafter described as "the Contractor" duly submitted its tender which was accepted by the Board. Free samples of bolts and nuts were submitted fay the Contractor to the Board. The said samples were approved and formal order was placed by the Board on 30th October. 1970. It was agreed between the parties that the petitioners would open a Letter of Credit in Calcutta after receipt of the security deposit from the Contractor. The contractor submitted the Bank guarantee in respect of security deposit which was accepted by the Board on November 30, 1970. The Board also issued instructions for opening the Letter of Credit on the Central Bank of India, Brabourne Road Branch, Calcutta. The said letter of Credit was opened for Rs. 5.09.422.92 P., being 95% of the value of 151 tonnes and 2200 Nos. of galvanised bolts and nuts including inter-State Sales Tax @ 3%. The Contractor's case, however, is that the Board should have opened the Letter of Credit for a sum of Rs. 16.69,941.90 P. which, according to the Contractor, was total contracted price for goods to be supplied, exclusive of sales tax and Rs. 50.098.26 P. which would be the sales tax @ 3% on the said full value. According to the petitioner, the Contractor commenced the despatch of bolts and nuts on or about 6th December, 1970. The parties subsequently agreed that the goods should be sent on the basis of "Freight to pay" and not "Freight paid". According to the Board, since February, 1971, the Contractor was supplying bolts and nuts not according to the specifications and that the goods were defective. The said defective supplies constituted gross breach of the terms and conditions of the contract. It has been alleged that the Contractor failed to replace the said defective goods. Further, the contractor also committed breach of contract on the ground of short supply of the goods. Under these circumstances the Board cancelled the order for the balance quantity of the goods on April 6, 1971.

(3.) The contractor instituted a suit being Suit No. T. S. 330 of 1971 at the City Civil Court, Calcutta for a declaration that the contract between the parties was still subsisting, for injunction restraining the Board from claiming encashment of the security from the Rank of India, and for other reliefs. On August 21, 1971 a written statement was filed by the Board in the said City Civil Court suit. On March 12, 1972 the Board instituted a Civil Suit No. 1-B of 1972 (Madhya Pra-desh Electricity Board v. Brijlal and Company) praying for a decree for a sum of Rs. 1,45,940.13 p., Rs. 3,891.68 p. and for other reliefs. In September, 1972 the contractor made an application before the City Civil Courts for withdrawal of their suit. By an order dated September 12, 1972 the contractor was .permitted to withdraw the suit with liberty to bring a fresh suit of a comprehensive nature on the same subject-matter. On September 15, 1972 a Writ of Summons of the Jabalpur Suit filed by the Board was served on the Contractor. On September 29. 1972 the present suit was instituted in Calcutta by the Contractor against the Board. In January, 1973 the contractor filed their written statement in the Jabalpur Suit. On February 12. 1973 the present application has been filed.