JUDGMENT

R.C. Lahoti, CJI.-The Food Corporation of India, the appellant herein filed a suit for recovery of Rs. 79,82,105.44p. against four defendants (in fact two sets of defendants) namely (i) the Assam Cooperative Marketing and Consumer Federation Limited through its Managing Director; (ii) the General Manager of the Federation (comprising the first set); (iii) the State of Assam through its Chief Secretary; and (iv) the Secretary to the Government of Assam in the Supply Department (comprising the second set) respectively impleaded as defendant Nos.1, 2, 3 and 4. Hereinafter, defendant Nos. 1 and 2 shall be referred to as the Federation and defendant Nos. 3 and 4 shall be referred to as the State for convenience sake.

2. According to the plaintiff, the State through its procuring agent, the Federation, requested the plaintiff through the Government of India to take over 20,000 metric ton of procured paddy of kharif season 1975-76 as per specification and price to be fixed by the Government of India. The request was acceded to by the plaintiff. It was also agreed that the plaintiff shall pay 90 per cent of the amount as advance in nine instalments on the condition that the bala