S.B. Sinha, J. - (1.) This appeal is directed against a judgement and decree dated 16.6.94 passed in Commercial Suit No. 209 of 1991, whereby and where under, the learned Trial Judge decreed the plaintiff-respondent's suit. The plaintiff-respondent filed a suit against the appellant herein for recovery of a sum of Rs. 38,056.81P., being the balance amount of price of goods supplied to the appellant with interest at the rate of 12% per annum. The basic fact of the matter is not at all in dispute.
(2.) A contract was entered into by and between the plaintiff and the defendant for supplying some goods. The general conditions of the contract for such supply which were to take place are:- 8. 3 Failure and termination- Should the contractor fail to deliver the stores or any instalment thereof, within the period prescribed for such delivery the Chairman shall without prejudice to his other rights be entitled at his option either: (a) To recover from the contractor as agreed liquidated damages and not by way of penalty, a sum of 2 per cent of the price of any stores which the Contractor has failed to deliver as aforesaid for each month or part of a month during which the delivery of such store may be in arrears or (b) To purchase elsewhere, without notice to the Contractor on the account and at the risk of the Contractor the stores not delivered or others of a similar description without cancelling the contract in respect of the consignments not yet due for delivery, or (c) To cancel the contract or a portion thereof, and if so desired, to purchase or authorise the purchase of stores not so delivered or others of a similar description at the risk and cost of the Contractor. In the event of action being taken under (b) or (c) above, the Contractor shall be liable for any loss which the purchaser may sustain on that account provided that the purchase or if there is an agreement to purchase, then such agreement if made within six months of the date of such failure. But the Contractor shall not be entitled to any gain on such purchase made against default. The manner and method of such purchase shall be at the entire discretion of the Chairman, whose decision will be final. It shall not be necessary for the Purchaser to serve a notice of such repurchase on the defaulting contractor. This right shall be without prejudice to the right of the Purchaser to recover damages for breach of the contract by the contractor." "9. (a) Extension of time for delivery:- As soon as it is apparent that delivery period - as prescribed in the contract cannot be adhered to, an application for extension of time shall be sent by the contractor to the office issuing the acceptance of tender and a copy thereof endorsed both to the Inspector and the Indentor specified in the Schedule. The discretion to decide whether extension of time should be allowed or not either with liquidated damages or otherwise will rest with the Chairman."
(3.) Admittedly, the plaintiff supplied materials to the defendant-appellant worth Rs. 7,85,930.32P., and the defendant appellant had also paid to the plaintiff a sum of Rs. 7,53,485.89P. However, the defendant having regard to its power to realise liquidated damage at the rate of 2% in terms of Clause 8(a) of General Condition of Supply withheld the aforementioned amount of Rs. 32,444.43P. The learned Trial Judge in view of the rival contentions between the parties, to the effect as to whether the defendant-appellant was entitled to withhold payment of the said sum to the plaintiff or not, inter- alia, framed a issue which is to the following term: " Was a sum of Rs. 38,056.81P., due and owing to the plaintiff from the defendant as the business transaction between them since 1989 and onwards precisely described in para 36 of the plaint?";