( 1 ) THIS is a suit for recovery of the price of machine together with interest amounting to Rs. 12,59,354. 13 p. and loss of profit to the tune of Rs. 15,00,000/ -.

( 2 ) A thumbnail sketch of the plaintiff's case is that in or about March, 1977 it was agreed between the plaintiff and defendant which sells the products of Strojimport of Czechoslovakia in India, that the defendant would sell and deliver to the plaintiff a Gear Hobbing Machine Model of-16 manufactured by M/s. ZPS Gottwaldov, Praha, Czechoslovakia for a price of Rs. 8,24,474. 67 p. on terms and conditions set forth in the order dated 26. 03. 77 of the plaintiff and accepted by the defendant. At the time of entering into the said reagreement, the plaintiff duly intimated the defendant that the machine would be put to immediate use for meeting the ever-increasing demand of the plaintiff's products in the market thereby leading to higher profit. In terms of the agreement the plaintiff paid a sum of Rs. 8,24,474. 67 p. by three cheques dated 02. 03. 77 for Rs. 50,000/-, dated 29. 03. 77 for Rs. 7,24,474. 67 p, and dated 30. 03. 77 for Rs. 50,000/-, all drawn on Dena Bank, Park Street branch which was duly encashed by the defendant. On 31. 03. 77 the defendant delivered to the plaintiff at its Works at 1/2b, Khagendra chatterjee Road, Calcutta five boxes said to contain the machine including accessories thereof, out of which one was found to be in broken condition. On 01. 04. 77 after unpacking the boxes and preliminary examination of the same, the machine was found to be not of the Model OF-16 as agreed to be sold, the machine parts were soaked and cavities thereof filled with water and there were extensive rust on the body of the machine, on many vital parts of the accessories, electronic assemblies were loose and shaky and some parts missing, the machine including the accessories were not in the original packing of the manufacturer and without any packing list inside and the contents of the boxes were not packed in waterproof papers and that no literature or instruction manual of the manufacturer was there. Immediately the plaintiff brought the same to the notice of the defendant through its Manager over phone on 01. 04. 77 followed by a letter dated 02. 04. 77 to the defendant rejecting the machine and accessories with a request to replace the machine by a new one. The defendant failed and wrongfully refused to comply with the said requisition of the plaintiff. The machine which has since been lying at the plaintiff's Works was inspected and surveyed by a Chartered engineer and a qualified Marine Surveyor who found the same badly damaged and not in accordance with the order placed. Instead of supplying a Gear Hobbing Machine OF-16, manufactured by ZPS gottwaldov. Praha, Czechoslovakia, the defendant had supplied an old and used machine Model OF-16, manufactured by M/s. TOS Celakovice e. P. There was a sale of the said machine by description, but the defendant committed breach of contract by supplying a machine which did not correspond with the description, for which the plaintiff has suffered damages. There was thus a total failure of consideration and the plaintiff is entitled to refund of the amount of Rs. 8,24,474. 67 p. together with interest @ 18% p. a. to the tune of Rs. 4,34,879. 46 p. under the provisions of the Indian Sale of Goods Act, 1930 and by way of damages. Installation, commission and utilization of the said machine would have enabled the plaintiff to earn a minimum profit of rs. 5,00,000/- p. a. which for the last three years would have aggregated to Rs. 15,00,000/-, of which the defendant had and has due notice and/or knowledge. Hence the suit.

( 3 ) THE suit is contested by the defendant by filing a written statement inter alia denying the material allegations made in the plaint. The defence case, in short, is that the plaintiff company made a formal enquiry in or about February, 1977 for purchase of on