Judgment :- (Appeal preferred against the judgment and decree of the learned single Judge dated 15.5.01 passed in C.S. No.70 of 1995 (and counter-claim) as stated therein.) S.J. Mukhopadhaya, J. 1. The plaintiff, who is the appellant herein, has challenged the judgment dated 15.5.2001 passed by the learned single Judge in C.S. No.70 of 1995 as also the decree dated 15.5.2001 passed therein. 2. The suit for recovery of money and also for permanent injunction preferred by the plaintiff/appellant has been dismissed by the first Court and the counter claim made by the first defendant/respondent to the extent of Rs.65 lakhs with interest at the rate of 9% per annum has been allowed in favour of the first defendant/respondent for payment by the plaintiff/appellant. 3. The case of the plaintiff was that it is a reputed company manufacturing various products such as textiles, machineries and also involved in other activities. The first defendant, being interested to purchase a 'Binny Reverse Super Gangsaw Model 3530' for cutting heavy granite stones, approached the plaintiff. The first defendant had agreed to purchase the Gangsaw being manufactured by the plaintiff for a total cost of Rs.67,63,873/= for which a sum of Rs.2 lakhs was paid in advance in May 1992. There being delay of civil works in the proposed factory of the first defendant at Banswara in Rajasthan, the installation of machinery started little late. In November 1992, the first defendant informed the plaintiff that they will be in a position to receive the machinery for which civil works necessary for installation would be completed by January 1993. A sum of Rs.2,25,000/= was paid by the first defendant to the plaintiff separately for installation, commissioning and foundation supervision by the plaintiff. Joint meeting between the officers of the plaintiff and the first defendant company took place on different dates. One of such meeting held on 19.1.93 at Madras as per which the first defendant agreed to pay erection, commissioning and foundation supervision charges of Rs.2,25,000/=. Joint meeting between the officers of the plaintiff and the first defendant company took place on different dates. One of such meeting held on 19.1.93 at Madras as per which the first defendant agreed to pay erection, commissioning and foundation supervision charges of Rs.2,25,000/=. It was also agreed by the first defendant in that meeting that it shall pay the balance of consideration to the plaintiff as per the time schedule, as per which 75% of the value of the machinery is to be paid by the first defendant to the plaintiff by February-March 1993 and remaining 25% retention amount was to be released subject to the furnishing of a performance bank guarantee of 15% of the total value of the contract by the plaintiff. The plaintiff was also supposed to produce performance certificate granted by M/s.Sohani Granites, which was to be obtained by the plaintiff. It was agreed upon that on furnishing the bank guarantee and performance certificate by the plaintiff, the first defendant was to release the balance 25% of the amount. 4. Further case of the plaintiff was that the plaintiff made first despatch of the machineries in March 1993 and received a sum of Rs,18,48,000/= from Rajasthan State Industrial and Investment Corporation, who had sanctioned term loan in favour of the first defendant for the purchase of the machinery. The second part of the machinery was despatched in June 1993 whereinafter a sum of Rs.37,73,800/= was paid by the first defendant to the plaintiff towards total cost of Rs.67,63,873/=. A Memorandum of Understanding was entered between the plaintiff and the first defendant on 21.6.93 as per which the plaintiff executed a performance guarantee through Canara Bank (2nd defendant) in favour of the first defendant for a sum of Rs.8,40,750/=. The guarantee was given by Canara Bank/2nd defendant on 2.11.93 which was in force till 31.3.95, but could have been invoked before 28.2.95. It was also accepted in the plaint that a sum of Rs.11,50,000/= was received by the plaintiff from the first defendant on 23.11.93 and as on the date of filing, the plaintiff was due to receive only a sum of Rs.66,899/= out of the 75% of the value and a sum of Rs.15,53,149/= towards 25% of the retention money. 5. It was also accepted in the plaint that a sum of Rs.11,50,000/= was received by the plaintiff from the first defendant on 23.11.93 and as on the date of filing, the plaintiff was due to receive only a sum of Rs.66,899/= out of the 75% of the value and a sum of Rs.15,53,149/= towards 25% of the retention money. 5. Further, according to the plaintiff, the first defendant had confirmed by its letter dated 23.2.93 that it has to pay a sum of Rs.66,899/= being the balance due on account of 75% of the value of the machineries. The plaintiff proceeded with the performance trial while certain complaints were made by the first defendant with regard to performance and functioning of the machineries including failure of imported silent block. Various defects were stated by the first defendant by its letter dated 26.4.94 which it had noticed during the operation of the machine, which was suitably replied by the plaintiff on 29.4.94. There were various correspondence between the plaintiff and the first defendant and ultimately the plaintiff carried out the performance trial on 10.12.94 and according to the plaintiff, the parameters noted on that day were completely satisfactory. The machine had also been performing very well and three months trial could have been successfully carried out based on the parameters by March 1995. While so, even before completion of the performance trial, the first defendant, without settling the claims of the plaintiff for a sum of Rs.66,899/= which was still due on account of 75% of the value of the machineries, committed fraud by invoking the bank guarantee given by the plaintiff through the 2nd defendant in the month of January 1995. It was alleged by the plaintiff that the first defendant wanted to enrich itself unlawfully by invoking the back guarantee and tried to draw the sum of Rs.8,40,750/= being the value of bank guarantee without paying the 25% retention money and a sum of Rs.66,899/= as was due out of the 75% of the value. A specific plea was taken by the plaintiff that when the first defendant owes large money to the plaintiff, it was not entitled to invoke the bank guarantee and the first defendant had not even exhausted the period of three months, being the time fixed for performance trial. A specific plea was taken by the plaintiff that when the first defendant owes large money to the plaintiff, it was not entitled to invoke the bank guarantee and the first defendant had not even exhausted the period of three months, being the time fixed for performance trial. As the first defendant owes a sum of Rs.15,40,073/= towards cost of the machineries supplied by the plaintiff without waiting for the performance trial period to be over, the action taken by the first defendant in invoking the bank guarantee is unwarranted. The first defendant was trying to play fraud on the plaintiff causing loss to the plaintiff to make unlawful gain for itself. The first defendant was not entitled to invoke the bank guarantee and in view of the fraudulent act on the part of the first defendant, the plaintiff was constrained to file the suit praying for permanent injunction restraining the first defendant from invoking the bank guarantee furnished by the 2nd defendant at the instance of the plaintiff and also for granting a decree for balance of the amount of Rs.15,40,073/= still due to the plaintiff towards cost of the machineries supplied by it. 6. The first defendant filed written statement contesting the claim of the plaintiff and also made counter claim. It was pleaded that the first defendant suffered loss to the tune of Rs.4 crores, but confined its claim to Rs.1 crore. The first defendant took plea that the suit for recovery of Rs.15,40,073/= filed by the plaintiff, being the rest of the value of the machinery retained by the first defendant and the prayer for permanent injunction was not maintainable in view of the agreement entered into between the parties, i.e., the plaintiff and the first defendant on 9.1.95. The amount retained by the plaintiff towards value of the machineries supplied by the plaintiff is payable to the plaintiff only after the plaintiff establishes the satisfactory performance of the Gangsaw providing the agreed rated performance and production. The plaintiff had not furnished any document showing satisfactory performance of the machinery supplied by it and, therefore, the plaintiff cannot claim the retention amount of the machinery. Even as on the date of filing of the suit the amount has not become payable. The plaintiff had not furnished any document showing satisfactory performance of the machinery supplied by it and, therefore, the plaintiff cannot claim the retention amount of the machinery. Even as on the date of filing of the suit the amount has not become payable. Moreover, the first defendant referred to an earlier letter dated 6.1.95 invoking the bank guarantee furnished by the plaintiff and given by the 2nd defendant bank. As per the agreement dated 9.1.95, the first defendant has surrendered the bank guarantee to the 2nd defendant Bank and, therefore, there was no question of obtaining any interim order of injunction as was sought for by the plaintiff. The plaintiff had suppressed material facts that the bank guarantee in question was surrendered to the 2nd defendant/bank and the satisfactory performance of the machinery as was to be established by the plaintiff had been extended till April 1995. The plaintiff had agreed to pay compensation of Rs.5 lakhs to the first defendant on 9.1.95 and it further agreed to give up the claim to the extent of Rs.2 lakhs from out of the balance of the amount then due to the plaintiff. The plaintiff had failed to show its performance and had admitted unsatisfactory performance of the Gangsaw by paying an amount. However, the plaintiff has been given time to establish such satisfactory performance of the Gangsaw upto 25.4.95. The plaintiff, in its plaint, does not even claim to have completed the work to show satisfactory performance during the trial undertaken by it. The plaintiff had not come with clean hands and thereby is not entitled to equitable relief of injunction. 7. The first defendant raised counter-claim based on the terms and conditions of the contract, which it entered into with the plaintiff. According to the first defendant, the plaintiff assured that the Gangsaw machine will be in conformity with the technical specification and plaintiff had made a specific representation that the gangsaw machine manufactured by it belongs to Super Gangsaw variety used in stone cutting industry in Italy and other parts of the world. The plaintiff had assured an average cutting speed of 30 mm/hour for its machinery and also assured that the machine has got an installed capacity for producing 3500 sq. mtrs. per month. The plaintiff had assured an average cutting speed of 30 mm/hour for its machinery and also assured that the machine has got an installed capacity for producing 3500 sq. mtrs. per month. The plaintiff had guaranteed performance of equipment as laid down in the said specification for a period of one year from the date of commissioning or eighteen months from the date of supply, whichever is earlier, against defective design, material and workmanship. The plaintiff had also undertaken to rectify the defects at its own cost during the warranty period and on the basis of the aforesaid claim of the plaintiff, the first defendant had placed its orders with the plaintiff for supply of the gangsaw with accessories and the plaintiff had also undertaken to erect and commission the gangsaw at the factory of the first defendant at Banswara, Rajasthan and it had also assured to establish satisfactory performance trial by proving rated production for a period of three months from the date of commissioning. As per the terms of the contract, 75% of the agreed price was to be released by the first defendant and the plaintiff was to furnish bank guarantee to the tune of Rs.8,40,750/= for satisfactory performance of the machine during the warranty period. The first defendant was liable to release 25% of the sale price on proving rated capacity and satisfactory performance by the plaintiff. As the plaintiff could not establish satisfactory performance of the gangsaw since its erection and commissioning, it failed to fulfill the essential conditions of contract. This was mainly due to fault in design, inherent defects and poor workmanship. The details of the various parts replaced for proving the rated capacity were furnished in Annexure-I to the statement. 8. Further case of the first defendant was that the plaintiff committed breach of contract having failed to prove rated performance and production. The plaintiff filed the suit to forestall the defendant from instituting the suit by itself for recovering the loss caused to it with damages. The three gangsaw machines earlier manufactured by the plaintiff had not functioned properly and for that, all the respective purchasers had to repudiate the contract and they rejected the machines. The plaintiff filed the suit to forestall the defendant from instituting the suit by itself for recovering the loss caused to it with damages. The three gangsaw machines earlier manufactured by the plaintiff had not functioned properly and for that, all the respective purchasers had to repudiate the contract and they rejected the machines. Denying the claim made by the plaintiff, the first defendant took a plea that the plaintiff is liable to pay a sum of Rs.1 Crore for all the loss caused to the first defendant, even though the first defendant is actually entitled for recovery of Rs.4 Crores. The claim was made that the plaintiff was liable to pay Rs.70,10,029/= being the price of the gangsaw and other accessories supplied by the plaintiff together with transportation and erection expenses incurred by the first defendant. The first defendant had incurred expense of Rs.1,32,222/= for processing granite blocks. The first defendant had availed loan facility to an extent of Rs.1,09,40,000/= from Rajasthan Industrial and Investment Corporation (hereinafter referred to as RIICO) and Rs.50,00,000/= from Punjab National Bank, Banswara Branch. The first defendant had repaid a sum of Rs.1,41,44,637/= up to 15.1.88. Besides that, the first defendant also claimed that it is entitled to payment of compensation for the loss caused to it on the ground of non-performance of gangsaw supplied by the plaintiff, the loss being calculated either on the basis of loss of profit that would have been earned by the first defendant, but for the non-performance of the gangsaw or on the basis of depreciation of the usage to a sum of Rs.1,69,18,000/= invested in the project calculating the interest at the market rate of 18% per annum. The loss thus shown to have been caused to the first defendant on that account works out to Rs.4,14,28,000/= as per the details given in Annexure-V to the statement, but the first defendant limited its claim against the plaintiff to a sum of Rs.1 Crore only. 9. The plaintiff filed a reply statement stating that the gangsaw supplied by the plaintiff to the first defendant had achieved satisfactory performance as evident from periodical reports prepared by the plaintiff's engineer and attested by the first defendant. 9. The plaintiff filed a reply statement stating that the gangsaw supplied by the plaintiff to the first defendant had achieved satisfactory performance as evident from periodical reports prepared by the plaintiff's engineer and attested by the first defendant. The first defendant used the machine for cutting granite blocks for more months and, thereby, made huge returns and deprived the plaintiff of its legitimate dues and the plaintiff was compelled to sign the minutes dated 9.1.95 granting compensation of Rs.5 lakhs to the first defendant and also was forced to agree to give fresh bank guarantee for a sum of Rs.3,40,000/=. 10. On the above pleadings, the trial court framed the following issues: - "1) Whether the suit is maintainable in view of the agreement entered on 9.1.1995? 2) Whether the objection of the plaintiff for encashment of the Bank Guarantee is sustainable? 3) Whether the Gangsaw machine supplied by the plaintiff was in accordance with the specification? 4) Whether the Gangsaw machine supplied by the plaintiff fulfilled the terms and conditions of sale? 5) Whether the plaintiff demonstrated the satisfactory performance of the machine? 6) Whether the plaintiff is not bound by the warranty? 7) Whether the plaintiff is liable to pay the defendant a sum of Rs.1 Crore as claimed in the counter claim? 8) Whether the supporting accessories could be utilised by the defendant when the Gangsaw machine supplied by the plaintiff is not in a proper working condition? 9) To what relief the parties are entitled to?" 11. On appreciation of evidence, the trial court decided issue No.1 in favour of the plaintiff and held that the suit filed by the plaintiff was maintainable. So far as the 2nd issue is concerned, having noticed that at the instance of the plaintiff and pursuant to agreement, Ex.A-6, the 2nd defendant recalled its earlier letter dated 6.1.95 invoking the bank guarantee, the learned trial court held that the 2nd issue had become infructuous. Issue Nos. 3 to 8 were taken up together and they were decided against the plaintiff and in favour of the first defendant. Issue Nos. 3 to 8 were taken up together and they were decided against the plaintiff and in favour of the first defendant. The learned trial court held that the gangsaw machine supplied by the plaintiff could not be successfully worked out and, therefore, the plaintiff is not entitled to any amount claimed by it and also held that due to the action of the plaintiff, the first defendant had incurred loss and decreed a sum of Rs.65 lakhs, being the payment to be made by the plaintiff in favour of the first defendant together with interest at the rate of 9% per annum from the date of decree till realisation and also proportionate costs. 12. The following plea was taken by the learned counsel for the plaintiff/appellant to assail the judgment: - a) The performance of gangsaw supplied by the plaintiff was fine, as was proved and mere shortfall cannot be termed to be breach of contract. At best it could be termed as a breach of warranty ; b) Even if it is held that there is breach of condition of contract, in view of sub-section (2) of Section 13 of the Sale of Goods Act, 1930, it should be treated to be breach of warranty and not breach of contract; c) In any case, there being a quantum or amount fixed in the bank guarantee, the damage cannot be assessed exceeding the quantum so fixed in the bank guarantee; d) The trial court, while allowing compensation and damages in favour of the first defendant, failed to quantify the damages in a proper manner; and e) It is the first defendant who failed to co-operate with the plaintiff for showing the rated performance. Reliance was placed on one or other judgments, which will be referred at the appropriate place. 13. It is not necessary to discuss any evidence in respect of the first issue as regards maintainability of the suit preferred by the plaintiff or the 2nd issue, which has become infructuous, since none of the counsel for the parties assailed such portion of the judgment. 14. 13. It is not necessary to discuss any evidence in respect of the first issue as regards maintainability of the suit preferred by the plaintiff or the 2nd issue, which has become infructuous, since none of the counsel for the parties assailed such portion of the judgment. 14. Admittedly, the plaintiff has caused Ex.B-15, a brochure, advertising details and specification with regard to its 'Super Gangsaw Beaver 3530 Series', which the plaintiff was manufacturing and was intended for cutting granite blocks, which it described as the first of its kind in the country manufactured in collaboration with M/s.M.T.S. Engineers of Italy. As per the aforesaid brochure as advertised and caused by the plaintiff, Binny Beaver Super Gangsaw is the heaviest of its kind weighing sixty tonnes and it is produced entirely with indigenous components except for the bearings. It proudly announced that the Super Gangsaw manufactured by the plaintiff was specifically designed with a drive unit incorporating the latest Lenze control AC drive provided for accurate drop rating. The machine is to contain 3.5 metres, 7 tonnes fly wheel supported by massive bearing housings capable of delivering maximum torque required for heavy cuts. It contains a fabricated steel connecting rod which ensures smooth and accurate operation and has extra heavy duty dual silent blocks of revolutionary design protecting the fly wheel bearings from shocks ensuring long life. The machine was said to have users friendly control panel, grit feeder, line feeder and grit reclamation unit fully automatic and thus eliminates human errors. The machine was 100% guaranteed against manufacturing defects with commitment for free replacement of defective parts. Cutting feed rate of the machine as assured by the plaintiff is 30 mm/hour. With these assurances and specifications, the first defendant was made interested to place an order for supply of the Super Gangsaw Beaver 3500 Series and communications were exchanged between the parties since 1992. 15. Ex.A-1 dated 30.5.92 is a letter by the first defendant – M/s.Mayur Floorings Pvt. Ltd. to the plaintiff – M/s. Binny Limited, Engineering Division. As per the said letter, the first defendant forwarded an advance of Rs.2 lakhs by way of a draft and placed orders for supply of Binny Beaver Super Gangsaw. Ex.A-2 is a letter in reply dated 1.6.92 wherein the plaintiff confirmed the supply of Binny Beaver Super Gangsaw under the terms and conditions stipulated therein. As per the said letter, the first defendant forwarded an advance of Rs.2 lakhs by way of a draft and placed orders for supply of Binny Beaver Super Gangsaw. Ex.A-2 is a letter in reply dated 1.6.92 wherein the plaintiff confirmed the supply of Binny Beaver Super Gangsaw under the terms and conditions stipulated therein. This is the first terms and conditions reached between the parties for supply of the machine. The plaintiff offered to supply machine for a price of Rs.56.05 lakhs excluding excise duty and tax of Rs.6 lakhs, besides charging for erection and commissioning at the rate of Rs.2,25,000/=. It was made clear that the plaintiff will despatch 50% of the machineries during the month of June 1992 and balance 50% of the machinery in the month of July 1992. Since the machine was to be purchased by the first defendant and finance was to be provided by RIICO, the proforma invoice was to be sent to RIICO by 15.6.92. The plaintiff had undertaken to give total drawings for civil foundation and site inspection during execution of civil foundation and had also undertaken supervision of commissioning, erection and operation for which separate fee of Rs.2,25,000/= was levied on the first defendant. The plaintiff was to furnish 15% value of the machinery by way of bank guarantee and agreed for retention of 25% value of the machinery by the first defendant for a period of one year from the date of supply. Exs.A-3 and A-4 are the communications exchanged between the plaintiff and the first defendant showing the proposed date of commissioning and trial. 16. In the month of January 1993, a meeting was held between the officials of the plaintiff and the first defendant and the proceedings of the meeting is Ex.A-6, which is signed by the officials of both the plaintiff and the first defendant. Again, both the parties agreed upon giving supervision charges of Rs.2,25,000/= towards erection, commissioning and foundation supervision by the plaintiff. The amount was to be paid before January 1993 and 75% of the value of machine was to be paid by the first defendant to the plaintiff in two instalments on 15.2.93 and 5.3.93. The first defendant agreed to pay Rs.45.08 lakhs being 75% value of the machine by 5.3.93. The amount was to be paid before January 1993 and 75% of the value of machine was to be paid by the first defendant to the plaintiff in two instalments on 15.2.93 and 5.3.93. The first defendant agreed to pay Rs.45.08 lakhs being 75% value of the machine by 5.3.93. It was agreed that the plaintiff shall furnish a bank guarantee for 15% of the value of the machine as performance guarantee and on the plaintiff obtaining performance certificate from M/s.Sohani Granites, to whom it had already supplied a Super Gangsaw, the rest of the amount was to be released. The first defendant, on its part, agreed to provide supplementary works and materials to enable the plaintiff to have trial runs and establish satisfactory performance of machine by April 1993. 17. The major part of the amount, as promised by the first defendant being 75% of the value, was paid by the first defendant within time, but commissioning was delayed. Exs.A-7 to A-10 would show that there were correspondence between the parties, which suggests that the plaintiff had promised to despatch the machineries to the factory site of the first defendant. Ex.A-11 is the minutes of the meeting held between the officers of the plaintiff and the first defendant on 21.6.93, wherein it was agreed upon to reschedule the time of erection and commissioning. The plaintiff confirmed that the first lot of consignment, for which payment has been received, will be despatched on 28.6.93 and on payment of a further sum of Rs.18,00,000/= the remaining machineries will be despatched to the site of the first defendant. The first defendant agreed to provide all necessary requirements needed by the plaintiff to show satisfactory performance of the machinery. Further meeting took place between the officials of the plaintiff and the first defendant on 21.11.93 as evident from Ex.A-15. The first defendant expressed its total dissatisfaction over the delay in supplying the plant and machinery by the plaintiff thereby causing a very substantial interest burden on the first defendant with proximity to the tune of Rs.15 lakhs. In the said meeting, the first defendant made an appeal to the plaintiff for adequate compensation and the plaintiff accepted that the delay was due on their account and assured the first defendant that the plant will be commissioned by 15.1.94. In the said meeting, the first defendant made an appeal to the plaintiff for adequate compensation and the plaintiff accepted that the delay was due on their account and assured the first defendant that the plant will be commissioned by 15.1.94. Final modalities of execution were discussed and on that basis, an agreement was reached between the parties. As per the said agreement, the plaintiff assured that the balance of the remaining plant and machinery except the connecting rod will be supplied before 30.11.93 and the connecting rod and balance, if any, left out will be despatched on or before 10.12.93. It was stated that one T.K.Chandrasekhar, erection engineer of the plaintiff's company had already left for Banswara for supervising the site in which machine was to be erected and the terms of payment was rescheduled. The total value of the machine was agreed to be Rs.67,76,949/= and the amount already become payable to the plaintiff, being 75% value, was Rs.52,90,699/=. The first defendant having already paid a sum of Rs.37,73,800/= and a further payment of Rs.11,50,000/= paid on the very date of the meeting and, as on the date of joint meeting, a sum of Rs.3,66,899/= alone was shown to be due to the plaintiff. The plaintiff agreed to pay a sum of Rs.5 lakhs as compensation towards interest incurred by the first defendant and a further sum of Rs.2 lakhs was to be adjusted towards further payments. It was shown that after adjusting Rs.5 lakhs plus Rs.2 lakhs, the total amount payable to the plaintiff would be Rs.66,899/= towards the 75% of the value of the machine. It was also agreed that the first defendant will issue a letter to RIICO recommending release of the balance of 25% of the amount to be made directly to the plaintiff on successful three months commissioning. The plaintiff had assured to start the operation of gangsaw by 15.1.94. 18. Ex.A-19, the letter dated 16.4.94, written by the plaintiff to the first defendant, which suggests that the gangsaw was to be put in operation by 14.3.94 after setting right the minor technical problem and the machine was ready for commissioning on 25.3.94. The plaintiff had requested the first defendant to keep ready all the materials to make it operational. 18. Ex.A-19, the letter dated 16.4.94, written by the plaintiff to the first defendant, which suggests that the gangsaw was to be put in operation by 14.3.94 after setting right the minor technical problem and the machine was ready for commissioning on 25.3.94. The plaintiff had requested the first defendant to keep ready all the materials to make it operational. The aforesaid letter was replied by the first defendant vide Ex.A-20 dated 20.4.94, which shows contrary to what has been stated by the plaintiff in their letter dated 16.4.94 (Ex.A-19). The first defendant stated that even though the gangsaw was started on 9.3.94 for its full-fledged production, the silent block was not working properly and a gap was noticed between rubber coating and its cover and, therefore, silent block was to be replaced. The first defendant also pointed out by the said letter that the silent block was giving problem to other purchasers of similar machines like M/s.Siddhi Stones at Jaipur and, therefore, when the original was replaced with another set of silent blocks by the plaintiff itself, the same problem arose. The first defendant suggested the plaintiff to import silent blocks, to which the plaintiff had agreed, but the performance could not be continued because of the defects in the machine and not because of want of grit or granite blocks as was suggested by the plaintiff vide letter, Ex.A-19. The first defendant by Ex.A-20 also pointed out other defects and mentioned that eccentric pin was loose from the bearing and this led to stoppage of machine. Eccentric pin was to be sent to Ahmedabad for fabricating a new pin and all these defects took place in the presence of the site engineers of the plaintiff's company and when the pin was replaced and the machine was started, the bearing got loose from the housing and came out from the connecting rod in the presence of the site engineers of the plaintiff's company. The motor was found consuming more power than the prescribed standard power due to which transformer also burnt. The housing has to be replaced as suggested by the engineer of the plaintiff and due to all these defects, the result was that the machine could cut only 3 to 4 inches of granite blocks for which consumption of electricity was too much. The housing has to be replaced as suggested by the engineer of the plaintiff and due to all these defects, the result was that the machine could cut only 3 to 4 inches of granite blocks for which consumption of electricity was too much. The first defendant by their reply letter dated 20.4.94 (Ex.A-20) denied the stand taken by the plaintiff vide Ex.A-19 that there was shortage of grit or granite blocks. The plaintiff was requested to rectify the defects and to start performance trials. 19. Ex.A-23 is the minutes of the meeting held between the officials of the plaintiff and the first defendant company on 21.10.94 at the office of the plaintiff at Madras. From the proceedings of the said meeting it is evident that there were defects in the connecting rod components and for that steps were taken to deliver the connecting rod components, which was in progress. The plaintiff assured the first defendant to give top priority in processing the assembly of connecting rod and to despatch the same by 31.10.94. 20. Test performance commenced since December 1994. The plaintiff submitted only one performance report for trolley Nos. 16 to 23 to suggest that the performance was satisfactory. The plaintiff had undertaken to get 24 trolleys of granite blocks, each trolley to contain two blocks of specific measurement. The performance report was to be prepared by the plaintiff and was to be counter signed by the officials of the first defendant company. Plea was taken by the plaintiff that though performance report was prepared, but the officials of the first defendant refused to sign the performance reports for 17th to 23rd trolley, the performance of which was satisfactory. Ex.A-29 series are the performance reports in respect of 16th and other trollies on which both the parties put their signatures. From the said performance report of the 16th trolley, it appears that the performance was yet to be established and the word "very good/good/satisfactory" were struck down and it was written by the officers of the plaintiff that the performance was yet to be established. That means, till the 16th trolley, the performance was not satisfactory. Ex.A-24, the report of the 16th trolley further shows that down feed rate average is 16 mm/hour only. As per the specification and the undertaking given by the plaintiff vide their brochure, the average down feed rate should have been 30 mm/hour. That means, till the 16th trolley, the performance was not satisfactory. Ex.A-24, the report of the 16th trolley further shows that down feed rate average is 16 mm/hour only. As per the specification and the undertaking given by the plaintiff vide their brochure, the average down feed rate should have been 30 mm/hour. Only if average speed of 30 mm/hour was maintained, the installed capacity of 3500 sq. mtrs. per month could be achieved, which was the understanding given by the plaintiff to the first defendant pursuant to the brochure, Ex.B-15. 21. Learned counsel for the appellant placed reliance on the report of trolley Nos. 20 to 23 to suggest that the gangsaw machine was working satisfactorily, but the officials of the first defendant did not choose to sign on it. Ex.A-29 (D) is a report showing performance in respect of 16th, 17th, 18th and 19th trolley taken on 30.1.95 and recorded on a letter head of the plaintiff. It shows average down feed rate of 8.23 mm for the 16th trolley; 9.69 mm for the 17th trolley; 8.10 mm for the 18th trolley and 7.57 mm for the 19th trolley, i.e., the average being 8.38 mm for the four trolleys. The report of the 20th trolley shows maximum down feed of 12 mm/hour. In the 21st trolley maximum down feed was shown to be 17 mm/hour. Even the on-site report in respect of the 23rd trolley maximum down feed of 17 mm/hour was found, as is evident from Ex.A-17. 22. One of the plea taken by the plaintiff is that there was regular power cuts due to which the maximum performance could not be shown and thus there was no laches on its part. But from Ex.A-29 series, particularly the report relating to 16th, 17th and 18th trolleys it would be evident that except for power cut to the extent of 3 to 3-1/2 hours per day, there was continuous supply of electricity. During the 17th trolley, the total supply of power was 192 hours out of which total power cut was 24 hours, so 168 hours sawing time was taken. Similarly, 18th trolley report suggests that the total number of sawing hours was 257 and the power cut was only 29 hours and, thereby, total sawing time was 212 hours. During the 17th trolley, the total supply of power was 192 hours out of which total power cut was 24 hours, so 168 hours sawing time was taken. Similarly, 18th trolley report suggests that the total number of sawing hours was 257 and the power cut was only 29 hours and, thereby, total sawing time was 212 hours. According to the first defendant, there was continuous power supply and the Hydel project from which power is supplied to the entire State of Rajasthan is situated few kilometres from the factory site of the first defendant and there was no sudden failure of power or unexpected failure except power cut for 3 to 3-1/2 hours, which was made with pre-notified notice. 23. Ex.A-22 is a letter written by the plaintiff to the first defendant dated 23.8.94 which suggests that they asked for three more months time for establishing performance. Ex.A-23 is the minutes of the meeting held between the officials of both the companies, wherein it was accepted that the delay was due to import of accessories. P.W.1 admitted in his evidence that their own official in Ex.A-17 has accepted only 17 mm/hour achievement during the 23rd trolley. P.W.1 also admitted that the plaintiff has so far produced only four gangsaw machines and the first one was supplied to a Hyderabad company, which was not working and the 2nd gangsaw machine supplied to M/s.Siddhi Stones, Jaipur was also not working. The 3rd machine, supplied to the first defendant, was also not in working condition. When the problem in running the machine was pointed out by the first defendant during the performance period, the plaintiff has replied that the defects pointed out by the first defendant occur during the commissioning. The trial court noticed that the last meeting was held and certain agreements were reached between the plaintiff and the first defendant on 9.1.95 vide Ex.A-26, wherein it was agreed that the first defendant shall not encash the bank guarantee and time up to April 1995 was allowed for the plaintiff to show performance. The trial court noticed that the last meeting was held and certain agreements were reached between the plaintiff and the first defendant on 9.1.95 vide Ex.A-26, wherein it was agreed that the first defendant shall not encash the bank guarantee and time up to April 1995 was allowed for the plaintiff to show performance. Even after filing of the suit, a commission was taken at the instance of the first defendant to inspect the gangsaw, which was lying idle in the factory site of the first defendant and an Advocate Commissioner was appointed and the plaintiff was directed to provide technical assistance for operating the machine for the commissioner to see for himself with regard to the satisfactory performance of the machine. The officials of the plaintiff accompanied the commissioner, but on the plea that a particular knob was not available, the officials of the plaintiff failed to even start the machine to prove its functioning or its efficiency. 24. Learned counsel for the plaintiff relied on a Patna High Court decision in Kanak Kumari Sahiba – Vs – Chandan Lall Khattry & Another reported in AIR 1995 Patna 215. It was submitted that the cutting of granite being the condition of contract, speed of cutting is warranty and so Section 59 of the Sale of Goods Act, 1930, is attracted. As per the Sale of Goods Act, it does not include in itself any specific rule as to the quantum of damage to be awarded in case of breach of warranty and for that purpose the provisions of Section 59 of the Sale of Goods Act are controlled so far as quantum of damages, by the provisions laid down under Sections 73 and 74 of the Contract Act. 25. Reliance was also placed on Sections 12 and 13 of the Sale of Goods Act, 1930, to suggest that the claim as made could be allowed only if there is breach of warranty. It was submitted that the sale having been effected, the goods having been delivered and taken into actual possession by the defendant, if the performance of the goods is not up to the mark, Section 13 of the Sale of Goods Act, 1930, shall be attracted and breach of some condition to be treated as breach of warranty. It was submitted that the sale having been effected, the goods having been delivered and taken into actual possession by the defendant, if the performance of the goods is not up to the mark, Section 13 of the Sale of Goods Act, 1930, shall be attracted and breach of some condition to be treated as breach of warranty. The purchaser by taking delivery under Section 13 could elect to treat it as a breach of warranty, for which under Section 59 of the Contract Act entails him to a diminution or extinction of the price. 26. In the case of Mangilal Karwa – Vs – Shantibai reported in AIR 1956 Nagpur 221, the Court held that where the buyer has set up breach of warranty of quality in order to claim diminution of price under Section 59 (1) (a) he is entitled to all damages resulting as a natural and ordinary consequence of his breach of contract in supplying a damaged article or an article of an inferior quality than the one contracted for. 27. In the present case, the first defendant could prove that the plaintiff bargained for purchase of its gangsaw with assured installed capacity with average down feed rate of 30 mm/hour. It was assured that the machine will cut 3500 sq. mtrs. per month. The plaintiff was to show satisfactory performance during the trial run, but it could not prove its satisfactory performance. Even the performance never reached the assured down feed rate of 30 mm/hour after its installation and even when the Advocate Commissioner went to see for himself with regard to the satisfactory performance, the plaintiff failed to show that the gangsaw was in running condition. When the gangsaw machine supplied by the plaintiff to the first defendant being not up to the standard as was assured, particularly with regard to capacity of down feed rate, the plea taken by the counsel for the plaintiff that it only amounts to breach of warranty cannot be accepted. 28. So far as the quantification of damage is concerned, the trial court has noticed the fact that the first defendant had so far paid a sum of Rs.52,23,800/= to the plaintiff for the purchase of the machinery; the plaintiff itself has admitted that a huge amount has been paid by way of interest to RIICO by the first defendant. 28. So far as the quantification of damage is concerned, the trial court has noticed the fact that the first defendant had so far paid a sum of Rs.52,23,800/= to the plaintiff for the purchase of the machinery; the plaintiff itself has admitted that a huge amount has been paid by way of interest to RIICO by the first defendant. As per Ex.A-26, the plaintiff itself has agreed to pay a compensation of Rs.7 lakhs because of loss incurred by the first defendant by paying interest for the amount borrowed from RIICO. Taking into consideration the aforesaid fact that a sum of Rs.52,23,800/= has already been paid by the first defendant towards the price of the machine, adding interest thereto, the trial court assessed the damage to the extent of Rs.65,00,000/= and decreed the said amount in favour of the first defendant with interest at the rate of 9% per annum from the date of decree till the realisation of the amount. Therefore, it cannot be stated that the damage was not properly quantified. 29. In the facts and circumstances, we find no ground made out to interfere with the impugned judgment dated 15.5.2001 passed by the trial court in C.S. No.70 of 1995. There being no merit, the appeal is dismissed with proportionate costs. Consequently connected miscellaneous petition is closed.