JUDGMENT :

S. SUJATHA, J.

1. This appeal is directed against the judgment and decree dated 10.11.2011 passed in O.S. No. 6522/2005 on the file of the XIV Addl. City Civil Judge, Bangalore [Trial Court].

2. For the sake of convenience, the parties are referred to as per their status before the Trial Court.

3. The plaintiff instituted the suit for recovery of Rs. 17,70,000/- along with costs and future interest against the defendant.

4. The plaint averments are that the plaintiff is doing business of manufacture and sale of different types of cranes. The defendant had placed order for supply of EOT crane and Gantry as per the Quotation No. SVI/QTN/592/2004 dated 04.03.2004. Part payment of Rs. 3,00,000/- was made on 14.05.2004 through demand draft by the defendant. Defendant through its representative Mr. Sateesh Katti sought for changes in the orders placed by the defendant. In view of the changes opted, the plaintiff informed through their letter dated 24.8.2004 that the changes if carried out will incur an additional cost of 25% for which the defendant agreed and on confirmation, the defendant issued another part payment of Rs. 2,00,000/- vide demand draft No. 210282 dated 25.9.2004 drawn on Punjab National Bank, Bangalore. The defendant placed further orders for delivery of single EOT crane and handling attachments for continuous loading and made another part payment of Rs. 3,00,000/- as advance payment. In the offer letter the terms of payment was mentioned as 35% advance with the order, 55% against delivery and 10% after erection and commissioning. At the request of the defendant, the plaintiff agreed to receive part payment. The total amount payable by the defendant on different purchases is Rs. 38,70,000 (Rupees thirty eight lakhs seventy thousand only). Out of the said amount, the defendant has remitted a sum of Rs. 21,00,000/- (Rupees Twenty one lakhs only). After giving deductions to the payment made, the defendant is still due in a sum of Rs. 17,70,000/- (Rupees seventeen lakhs seventy thousand only). However, the defendant has failed to make the balance payment and issued a notice on 5.7.2005 raising untenable objections. Hence, deducting the amount of Rs. 21,00,000/- paid by the defendant, the plaintiff sought for the relief of judgment and decree against the defendant for payment of Rs. 17,70,000/- with interest @ 18% p.a. from the date of filing of the suit till the date of realisation along with costs.

5. On service of suit summons, the defendant appeared through its learned counsel and filed written statement repudiating the claim. The defence set up was that the plaintiff has supplied 2 EOT cranes and a portion of Gantry crane. The payment of Rs. 3,00,000/- was made on 14.5.2004 for the purchase of 2 EOT cranes and not relating to the quotation dated 4.3.2004 which indeed was cancelled. The plaintiff has supplied only 2 EOT cranes and Gantry without the Hoise (Crab) which costs about 10,00,000/-. As such, the plaintiff did not erect the Gantry crane. The EOT cranes supplied were of substandard quality. The weight of EOT crane was also not balanced as such it fell down many times at the time of carrying the granite block. Alleging manufacturing defects in the Gantry crane and the side supporters not having sufficient weight, the defendant contended that it was compelled to engage the services of local crane operators and had to hire the cranes. On bringing this fact to the notice of the plaintiff, a meeting was convened between the parties herein. The plaintiff admitted the poor quality of EOT cranes supplied by him and further agreed to refer the matter to third party for investigation and report. Hence, the defendant has engaged the services of M/s. Cranes and Hoists situated in Koteshwar, Udupi District, Karnataka, which made the valuation of the cranes supplied by the plaintiff. The entire amount for the cranes supplied has been paid by the defendant. However, the plaintiff is demanding the amount for the crane h