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TMI Blog2017 (7) TMI 826X X X X Extracts X X X X X X X X Extracts X X X X ..... amount, the Plaintiff has to prefer a claim with the Official Liquidator and the Official Liquidator has to discharge the said claim in accordance with the rules and in accordance with prorata basis as other claims of similar nature are settled. Issue (1) is answered accordingly. Cancellation charges - Held that:- The Plaintiff stated that the materials were dispatched on 12.9.1995. However, on 19.10.1995, the Plaintiff stated that due to unavoidable circumstances, the Engineer Thiagarajan could not visit and would visit on 25.10.1995. The Engineer visited only on 11.12.1995. The Defendant issued a reminder letter on 28.12.1995. Again the Defendant issued a letter on 16.5.1996 to take back the material and return the advance. Further reminders were issued on 5.6.1996 and 6.7.1996. Finally, the Plaintiff deputed M.Sasindran in connection with the lift erection work. It was under such circumstances that on 23.6.1997, the Defendant informed that they were not interested in installing the lift. These facts in the written statement of the Defendant had not been specifically denied by the Plaintiff in their reply statement. Consequently, I hold that the Plaintiff cannot turn around a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... price adjustment was ₹ 59,213/- and the sales tax was ₹ 1,29,859/-. The total price was ₹ 1,96,072/-. The Defendant had paid an advance of ₹ 2,58,150/-. Out of the balance of ₹ 8,37,922/-, leaving 10% of the contract price, namely, ₹ 90,700/-, which was payable on completion of the installation, a sum of ₹ 7,47,222/- was payable by the Defendant. 3. It had been stated that the Defendant had to make the building suitable for installation of the lift and only thereafter, can the Plaintiff commence the installation. Consequently, the deadline for supply and installation of the lift was depending on the Defendant completing the building in time. It had been stated that the Defendant delayed in construction of the building. The Plaintiff raised invoices on 12.2.1996 for ₹ 7,47,222/- towards the materials supplied. The installation work was started in good faith. While partial erection was over, the Defendant cancelled the contract by letter dated 21.12.1996. Another letter dated 23.6.1997 was issued by the Defendant, stating that it was not interested in installing the lift. The Defendant demanded repayment of the advance amount of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that they were liable to claim 18% interest on the said advance amount and claimed a counter claim of ₹ 3,85,934/-. 5. The Plaintiff filed a reply statement to the said counter claim, denying the liability towards the counter claim. They had stated that they had started the installation work in good faith. They had further stated that it was the Defendant, who was at fault, since they did not make the building ready for installation of the lift. It had been stated that the materials were despatched on 12.9.1995 and completed by 12.7.1996. It had been stated that the Defendant had changed the design in the factory in such a way that use of the lift was not required. It was therefore stated that the Defendant had unilaterally cancelled the contract. It had been stated that the Defendant is not entitled for refund of the advance amount or for interest on the said amount. Consequently, the Plaintiff denied liability for payment of any amount towards the counter claim. 6. On consideration of the pleadings, the following issues were framed:- 1.Whether the Plaintiff is entitled for recovery of a sum of ₹ 8,37,922/- with interest at the rate of 18% p.a. as prayed for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had given a letter dated 11.1.1994, giving the specification sheets and terms and conditions. Further letters dated 19.3.1994 and 18.5.1994 had been issued by the Plaintiff. It is also an admitted fact that the lift to be supplied and erected is a special type of lift with flame proof facility. It was not a standard type. It was specifically designed for the requirement of the Defendant and it could not be used anywhere. A contract was entered into on 27.6.1994. The contract price of the lift was fixed at ₹ 9,07,000/-. There was a price adjustment of ₹ 59,213/-. This was to be used in case of escalation of prices. The sales tax paid was ₹ 1,29,859/-. 10. At the outset, it has to be mentioned that the price adjustment amount of ₹ 59,213/- had been fixed on an assumption that there might be escalation of prices. Consequently, I hold that the Plaintiff is not entitled for recovery of ₹ 59,213/-. However, the sales tax paid to an extent of ₹ 1,29,859/- is a statutory duty paid by the Plaintiff towards supply of materials for erection of the lift. This has to be recovered from the Defendant. It is also an admitted fact that the Defendant had paid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with prorata basis as other claims of similar nature are settled. Issue (1) is answered accordingly. 12. Issue (2):- The Plaintiff had supplied materials. It is the contention of the Defendant that the Plaintiff had delayed in erection of the lift. It is the specific contention of the Defendant that they had intimated the Plaintiff by letters dated 6.5.1994, 2.4.1995, 20.5.1995 and 29.5.1995. The Plaintiff was informed that there was continuous delay in supply of the materials. It had been further stated in the written statement that till 4.7.1995, there was no information about the despatch of the materials. Subsequently, on 13.7.1995, the Defendant informed the Plaintiff that their representative Thiagarajan had visited the factory, but the materials had not reached the place. Even at the earliest stage, the Defendant had been demanding repayment of the advance amount paid. The Plaintiff stated that the materials were dispatched on 12.9.1995. However, on 19.10.1995, the Plaintiff stated that due to unavoidable circumstances, the Engineer Thiagarajan could not visit and would visit on 25.10.1995. The Engineer visited only on 11.12.1995. The Defendant issued a reminder letter o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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