Jaspal Singh ( 1 ) DEFENDANTS No. 2 and 3 are partnership firms. During the year 1974 their partners approached the plaintiff company for purchase of printing and book binding machines to be imported from German Democratic Republic. The same year defendant No. 5 Rajasthan Financial Corporation wrote two tetters to the plaintiff. They are dated September 18, 1974 and September 19, 1974. By those tetters the plaintif was informed that it had sanctioned ban to defendant No. 2 to the tune of Rs. 11,18,000. 00 and to defendant No. 3 to the extent of Rs. 3,25,000. 00 regarding proposed purchase of the machines and that the documents regarding them shall be retired by it from the bankers of the plaintiff. Thereafter a flrm order dated September 23,1974 was placed by defendant No. 3 on the plaintiff company for the supply of three book binding machines to be Imported from German Democratic Republic valued at Rs. 2,56,400. 00 besides, sates tax and transportabon costs. Defendant No. 2 also followed the suit and off September 24, 1974 it too placed an order with the plaintiff company for the supply of two imported offset printing machines valued at Rs. 9,69,800. 00 besides sales tax and transportation charges. After the execution of the two contracts the plaintiff company approached defendant No. 6 M/s. Projects and Equipments Corporation of India Limited for-the necessary release order in favour of defendants No. 2 and 3. The said order was issued on November 18, 1974. On coming to know of the issuance of the release order the plaintiff company wrote on November 18, 1974 to defendant No. 5 with copies to defendnts No. 2 and 3 asking them to send to it complete despatch instructions as well as the name of the bankers, for the negotiation of the documents relating to the machines. From there on started the trouble. The plaintiff company claims that despite several reminders defendants No. 2 and 3 instead of sending complete instructions for the despatch of the machines started representing that the formalities for the disbursement of the loan were being finalised between them on the one hand and defendant No. 5 on the other, leading to a threat by the plaintiff company to apprach defendant No. 6 for re-allotment of the machines. Consequent upon that threat defendant No. 4 Rajasthan State Government undertaking assured the plaintiff telegraphically that dispatch instructions shall be given. This was followed by a letter of June 21,1975 from it to the effect that assets and liabilities of defendants No. 2 and 3 had been taken over by a company with a limited liability under the name and style of M/s. Mayur Offset Private Limited (defendant No. 1) with a firm loan facility so as to enable it to purchase the machines from the plaintiff company. However despite all this nothing tangible came to be achieved. Ultimately defendant No. 6 on being approached by the plaintiff company cancelled the release orders. However, this did not prove to be the end of the matter. On coming to know of the cancellation of the release order defendant No. 4 approached defendant No. 6 to withdraw the cancellation of the release orders assuring implementation of the contract. This led defendant No. 6 to withdraw the cancellation of the release order. Later, having been paid a token sum of Rs. 5000. 00 as advance, one machine out of the contracted machines was despatched to Jaipur. Though the said machine reached Jaipur during the last week of December, 1975 neither the documents for the same were retired nor any steps were taken in that direction with the "result that on or about February 23,1976 the bankers of the plaintiff company returned the said documents while the machine lying at Jaipur besides incurring demurrage was being exposed to damage on account of exposure to sun and rain. Once again defendant No. 6 was approached for cancellation of the release order issued in favour of defendant No. 1 and acting on that Defendant No. 6 approached defendant No. 1. Defendant No. 4 again intervened and requested defendant No. 6 not to cancel the release order but to extend the time further assuring that the machines would be taken delivery of. As even thereafter nothing happened on 19th April, 1976 defendant No. 6 canceller the abovesaid release orders and the machine lying at Jaipur was brought back. The plaintiff company alleges that on account of this it had suffered heavy loss and after adjusting the above mentioned sum of Rs. 50,000. 00 it has claimed Rs. 2,64,341. 14 as damages. ( 2 ). The plaintiff company alleges that on account of this it had suffered heavy loss and after adjusting the above mentioned sum of Rs. 50,000. 00 it has claimed Rs. 2,64,341. 14 as damages. ( 2 ). Defendants No. 1 to 3 in their written statement have claimed that they had always been prepared to perform their part of the obligation but unfortunately the delay was caused by defendant No. 5 and that at the time of the payment of Rs. 50,000. 00 as advance it had been made clear to the plaintiff company that they would not be able to retire the documents unless defendant No. 4 and 5 made financial contributions. It is not disputed by these defendants that a machine was despatched to Jaipur, However, their case is that this was done by the plaintiff without receiving the confirmation from defendant No. 1 regarding fulfilment of financial commitments by defendants No. 4 and 5 and that consequently it is plaintiff alone who is to be blamed for what transpired later. Thay further claim that the recalling of the machines from Jaipur before the last date of allotment order, that is 17th April, 1976, and before cancellation of the order, was entirely illegal and that consequently the plaintiff is not entitled to demand damages etc. On the contrary they claim that they are entitled to the refund of Rs. 50,000. 00 along with interest. ( 3 ) COMING to defendant No. 4 it too has contested the suit. As per it, it had not made any commitment with the plaintiff to take the machines or to retire the documents despatched in favour of defendant No. 1. It claims that neither they were legally liable to take delivery of the machines nor to compensate defendant No. 6 against losses and that since there was no commitment, agreement or contract with the plaintiff company with regard to the delivery of the machines no liability can be affixed on it. ( 4 ) THE perusal of the written statement of defendant No. 5 would go to show that it too is contesting its liability. ( 4 ) THE perusal of the written statement of defendant No. 5 would go to show that it too is contesting its liability. Though it admits having issued letters dated September 18 , 1974 and September 19,1974 but claims that in the said letters it had been made clear that the documents would be retired from the bankers only on the defendants No. 2 and 3 complying with all the terms and conditions of the sanction of loan and execution of the documents, and that as defendants No. 2 and 3 had not completed the formalities required to be fulfilled by them, it (defendant No. 5) was not in a position to make any commitment regarding the disbursement of the sanctioned loan. Liability of defendant No. 5 is also challenged by it on the ground that there was no privity of contract between it and the plaintiff and that it would have written to the plaintiff regarding despatch instructions etc. only after defendants No. 2 and 3 had availed of the loan after complying with all the terms and conditions of disbursement of loan to them, ( 5 ) THE pleadings of the parties led to the framing of the following issues. "1. Whether the plaint has been signed and verified and the suit has been filed by a duly authorised person? O. P. P. 2. Whether the Plaintiff acting on the assurance of the defendant No. s 4 and 5 had suffered losses? If so, to what extent? O. P. P. 3. Whether the Defendants are liable to pay for damages incurred by the plaintiff on account of demurrage charges, transport charges, interest, godown charges and insurance? OPP 4. Whether the plaintiff is entitled to the suit amount? OPP 5. Relief?" ( 6 ) BEFORE I proceed to deal with the issues framed it may be mentioned that defendants No. 1 to 3 and defendant No. 6 were proceeded against exparte. With these observations let me come into grip with the issues framed. ISSUE N0. 1 ( 7 ) DURING arguments the learned counsel for defendants No. 4 and 5 had not said a word on this issue. Even otherwise in view of the statement of Public Witness-2 Ajit Raj Surana who is the Deputy Managing Director of the plaintiff company and in view of the resolution Ex. ISSUE N0. 1 ( 7 ) DURING arguments the learned counsel for defendants No. 4 and 5 had not said a word on this issue. Even otherwise in view of the statement of Public Witness-2 Ajit Raj Surana who is the Deputy Managing Director of the plaintiff company and in view of the resolution Ex. Public Witness 2/1 it stands proved that plaint has been signed and verified and the suit has been instituted by a duly authorised person. Issue No. 1 thus goes in favour of the plaintiff. ISSUES NO. 2 to 4 ( 8 ) A few facts were not disputed during arguments and even otherwise they stand proved from the statement of Public Witness-2 Sh. Ajit Raj Surana and they are that defendants No. 2 and 3 had approached the plaintiff for supply of the machines in dispute and had placed orders for the same (Ex. P-5 and P-6 ). Thereupon release orders of defendant No. 6 were solicited which ultimately defendant No. 6 did issue (See Ex. P-43 and P-44 ). As per Sh. Ajit Surana after the issuance of the release orders by defendant No. 6 he had met the Managing Director of defendant No. 5 who had orally assured him that the payments would be arranged in full by defendant No. 5 and that the loan in fact had been sanctioned in favour of defendants No. 2 and 3. In support reliance has also been placed on two letters issued by defendant No. 5. They are Ex. P-1 and P-2. Whereas Ex. P-1 is dated September 18,1974, Ex. P-2 is a letter dated September 19, 1974. The first relates to the machinery ordered by defendant No. 3 and the second to the machinery ordered by defendant No. 2. In both these letters which, as already noticed above, are admitted to have been written by defendant No. 5 to the plaintiff the following common passage appears "in case the party makes compliance of all the terms and conditions of sanction of our loan and execute the documents for the same, we hereby agree to retire the documents of these machines from your bankers. ". This was followed by a spate of letters. I shall however be referring only to a few of them. Ex. ". This was followed by a spate of letters. I shall however be referring only to a few of them. Ex. P-7 and P-8 were written by the plaintiff company on November 18, 1974 to defendant No. 5 by which it was informed about issuance of the release orders and seeking confirmation so as to enable the plaintiff company to despatch the released machines to Jaipur. The next letter is Ex. P-13. It too was addressed by the plaintiff company to defendant No. 5 and is dated 11th February, 1975. It mentions that the plaintiff company was "anxiously" awaiting the despatch instructions from it and that the delay in getting despatch instructions had been causing "heavy financial losses by way of godown rent, interest, re-insurance etc. " and that in case no despatch instructions were received by February 20,1975 the PEC would be approached for cancellation of the release order. In reply to that letter defendant No. 5 wrote letter Ex. P-14. The relevant portion of it is as under: "we refer to your letter No. F. RA 650 dated 11. 2. 1975. The question of disbursement of loan sanctioned in favour of M/s. Varda Offset Press, Jaipur, and M/s. Karvas Bindery, Jaipur, was considered by our Board of Directors recently. A final decision is likely to take a little more time. We have to request you to kindly hold on the machines in favour of the above concerns. We expect to write to you in this connection as early as possible. " This was followed by yet another letter from the plaintiff company to defendant No. 5 acknowledging the receipt of the letter of defendant No. 5 dated 18th February, 1975. It noticed the fact that the final decision regarding disbursement of loan was likely to take a little more time. The plaintiff company wrote that its difficulty had already been explained and that in any case "in view of your assurance we shall wait for your final despatch instructions "upto 28thy February, 1975". However, as no ostensible progress was made in the matter, defendant No. 5 wrote yet another letter to the plaintiff. It was on 1st March, 1975 and is Ex. P-16 by which the plaintiff company was informed that final decision was likely to take some more time. However, as no ostensible progress was made in the matter, defendant No. 5 wrote yet another letter to the plaintiff. It was on 1st March, 1975 and is Ex. P-16 by which the plaintiff company was informed that final decision was likely to take some more time. And, in that very letter defendant No. 5 wrote "we request you to kindly hold on the machines in favour of the above named concerns. We hope to convey you our-further advise at an early date. " On March 17,1975 the plaintiff company wrote yet another letter to defendant No. 5 complaining that neither the company had received the despatch instructions nor any information as to when the disbursement of the sanctioned loan would be completed. This letter was replied to by defendant No. 5 by which the plaintiff company was invited to meet its Managing Director. At this stage we find defedant No. 4 entering into the picture. It informed the plaintiff company that it was considering joint sector venture with defendants No. 2 and 3 and advised the plaintiff company to "please retain the allotted machinery. Despatch instructions shall follow shortly. " This was on 7/8th of May, 1975. On 13th May, 1975 the plaintiff company wrote yet Indo European Machinery Co. Private Ltd. Vs. Mayur Offset Press Pvt. Ltd. 305 another letter to defendant No. 5 requesting it to issue despatch instructions latest by May 31, 1975 and holding it responsible for all the losses. On 21st June, 1975 defendant No. 5 wrote to the plaintiff as under. "we have to inform you that a new company Mayur Offset Press Pvt. Ltd. , Jaipur has been formed to implement the scheme. A term loan of Rs. 12. 95 has already been sanctioned to the newly formed company. We have advised the company to take necessary action. " ( 9 ) FINDING no further response, the plaintiff company wrote to defendant No. 6 on July 18, 1975 seeking permission to supply the machines to their other clients. However defendant No. 4 intervened again and requested defendant No. 6 not to issue cancellation order for at least one more month within which period it expected to finalise "all the necessary arrangements for payment" to the plaintiff company. A copy of this letter was forwarded to the plaintiff company too and the same is Ex. P- 24. However defendant No. 4 intervened again and requested defendant No. 6 not to issue cancellation order for at least one more month within which period it expected to finalise "all the necessary arrangements for payment" to the plaintiff company. A copy of this letter was forwarded to the plaintiff company too and the same is Ex. P- 24. In response to that letter defendant No. 6 stayed its hands. On 25th September, 1975 defendant No. 1 senta cheque for the amount of Rs. 50,000. 00 as advance payment towards two printing machines and along with it wrote a letter which is Ex. P-26 informing the plaintiff company that defendant No. 5 had sanctioned a loan in their favour and assuring that the bills of the plaintiff company will be paid as and when they are presented to their bankers. It was thereafter that one of the machines was despatched to Jaipur but the documents were never retired from the bankers. Nor the delivery of the machines was taken. ( 10 ) THE documents having been noticed above, let us have a quick look at the oral evidence as well. And, in this respect it is the statement of Ajit Raj Surana (Public Witness-2) which attracts the attention. He says that the Managing Director of defendant No. 5 had orally assured him that the payment would be arranged in full by defendant No. 5 and that loan stood sanctioned in favour of defendants 2 and 3. What is, however, important to note is that the plaint is silent about any such meeting or oral assurance and this to my mind, is sufficient in itself to ignore it. Even otherwise, the documents placed on the record by the plaintiff itself would go to show that the defendant No. 5 had agreed to retire the documents pertaining to the machines from the bankers of the plaintiff subject to the condition that the "party makes compliance of all the terms and conditions" of the sanctioned loan and "executes the documents for the same" and throughout defendant No. 5 remained stuck to this position. Thus the liability of defendant No. 5 to retire the document was not unconditional and the plaintiff knew about it all along and rather accepted this position. Thus the liability of defendant No. 5 to retire the document was not unconditional and the plaintiff knew about it all along and rather accepted this position. Admittedly defendants 2 and 3 never complied with the terms and conditions of the sanction of the loan nor any document in terms thereof was executed and this too was brought to the notice of the plaintiff company. Even the leters Ex. P-9 and P-10 written by defendants 2/3 to the plaintiff would have shown that the said defendants had not complied with the 1974 had informed the plaintiff company that as the "required formalities ad not been completed by defendants No. 2 and 3, therefore it was "not in a position to make any commitment regarding disbursement of the sanctioned loan". ( 11 ) IT appears that in the meanwhile stepped in defendant No. 4 which telegraphically informed the plaintiff about the proposal to set up a Joint Sector Venture and requesting the plaintiff to "please retain allotted machinery". Significantly, defendant No. 4 did not accept or undertake any liability. True, defendant No. 4 approached defendant No. 6 to "finalise all the necessary arrangements for payment" to the plaintiff (Ex. P-24) but then if defendant No. 6 allowed any relief without terms, no liability can be fixed on defendants No. 4 and 5 as defendant No. 6 is none other than the business associate of the plaintiff. In any case, on letter dated September 25, 1975 (Ex. P-26) from the newly formed defendant No. 1, the plaintiff supplied a machine without laying any claim regarding damages, interest etc. for the period in question as against any of the defendants. Rather, the plaintiff pointed out that after encashment of the cheque for Rs. 50,000. 00 sent by defendant No. 1, the plaintiff company would be "glad to arrange despatch" of the other ordered machines as well. Everything was thus forgotten and forgiven. ( 12 ) IT is true that thereafter the documents with regard to the machine supplied to defendant No. 1 were not retired. But then, significantly the machine was not despatched at the instance of either defendant No. 4 or defendant No. 5. There was therefore, no undertaking with regard to it by either defendant No. 4 or by defendant No. 5. Thus with regard to it also none of them can be held liable. But then, significantly the machine was not despatched at the instance of either defendant No. 4 or defendant No. 5. There was therefore, no undertaking with regard to it by either defendant No. 4 or by defendant No. 5. Thus with regard to it also none of them can be held liable. ( 13 ) ASSUMING, for argument s sake, that defendants 4 and 5 are liable, what is the extent of their liability? ( 14 ) PUBLIC Witness-2 states that storage and demurrage charges were paid by the plaintiff for failure of the defendants No. 1 to 5 to take delivery of the machine and that the plaintiff company is entitled to those charges besides insurance charges and interest at 18%. As per him the plaintiff company had to incur expenses as detailed in Ex. Public Witness 2/3 and that Ex. Public Witness 2/3 "is a true statement from the account books of the plaintiff". He has also produced copies of entries in the cash book (Ex Public Witness 2/4 to Ex. Public Witness 2/6) besides copies of the journal (Ex. Public Witness 2/7 and Ex. Public Witness 2/8) and copy of ledger (Ex. Public Witness 2/9 ). ( 15 ) IT was argued on behalf of the plaintiff that Ex. Public Witness 2/3 being a copy of the books of account kept in the course of business, is not only admissible but relevant also under section 34 of the Evidence Act and that coupled with the statement of Public Witness- 2. it would constitute sufficient evidence to charge defendants 1 to 5 with liability.