JUDGMENT - J.A. PATIL, J.:---This is a suit for recovery of a sum of Rs. 15,43,633.84/- with future interest thereon. The plaintiffs' case in brief is as follows :---

2. The plaintiffs are a company registered under the Companies Act and are also a Government of India undertaking. The main business of the plaintiffs is to act as canalising agents for the import and supply of foreign cotton to Indian textile mills. The defendants are a partnership firm and they owned a textile mill at Nagammainagar in Tamil Nadu. In February 1977 the plaintiffs had issued a circular to all the textile mills including the defendants inviting offers for purchase of cotton proposed to be imported by the plaintiffs. The defendants thereafter by their letter dated 26-2-1977 requested the plaintiffs to register their demand for 500 bales of Brazilian cotton at the rate of Rs. 4,975 per candy for June/July shipment. The defendants also stated that they would be arranging for the subsidiary import licence as well as for the bank guarantees. In view of the said letter the plaintiffs sent to the defendants a contract in standard form dated 18th March, 1977 in duplicate to enable the defendants to return one copy thereof duly signed by them. The defendants, however, did not return the copy duly signed nor did they inform the plaintiffs immediately that they were not interested in buying the said cotton. In the absence of such a letter from the defendants the plaintiffs assumed that the defendants had accepted the said contract. According to the plaintiffs even though the defendants did not return the standard form of contract there was a valid contract since the defendants had agreed to purchase 500 bales of Brazilian cotton at the rate of Rs. 4975 per candy on the terms and conditions mentioned in the said circular. The plaintiffs thereafter, issued shipment instructions to the foreign suppliers for Brazilian cotton and by their letter dated 22-8-1977, the plaintiffs informed the defendants that 527 bales of Brazilian cotton were shipped by the foreign suppliers per "S.S. Jalayamuna" from Santos to Kochin under the plaintiffs import licence. Thereafter, by a telegram dated 25-8-1977, the plaintiffs informed the defendants that they had received documents in respect of the consignments and requested the defendants to inform about the mode of the payment and clearing arrangement. The defendants, however, by their letter dated 2-9-1977 stated that they did not accept the contract and that they had not confirmed the same nor they had subsidiary licence to import. The plaintiffs by their letter dated 13-9-1977 informed the defendants that they could not cancel the contract and requested them to accept the documents against the payments. However, the defendants by their letter dated 1-10-1977 repeated their previous contention.

3. The plaintiffs further averred that after the goods arrived at Kochin port the defendants failed to take delivery thereof, with the result that the plaintiffs had no alternative but to clear the goods and store them in their godown. On 31-10-1977 the plaintiffs called upon the defendants to take delivery of the said cotton bales within 15 days and further informed that otherwise the same would be sold at the risk and cost of the defendants. The defendants by their letter dated 8-11-1977 denied their liability to take delivery of the goods and denied that they had entered into any contract with the plaintiffs. Since the defendants did not take delivery of the said cotton, the plaintiffs were required to sell the same to M/s. Bunge A.G. Zurich at a rate of US $ 57.25 per bale and they realized a sum of Rs. 9,61,811.96 ps. The invoice value of the said cotton including clearance charges, demurrages, interest, carrying charges and C/F charges etc. were Rs. 22,13,998.63/-. Thus according to the plaintiffs they have suffered a loss of Rs. 12,52,186.68/-. It appears that the plaintiffs called upon the defendants to pay the said amount. But s

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