Debangsu Basak, J.

The plaintiff seeks money decree against the defendant.

According to the plaintiff, it had entered into an agreement with the defendant to buy 450 metric tonnes of cast iron scraps at a rate of Rs.4,000/-per metric tonne. As consideration thereof the plaintiff paid an advance of Rs.18 lakhs by four several cheques between the period September 1, 1990 and September 13, 1990. All the aforesaid cheques were encashed and proceeds thereof appropriated by the defendant. According to the plaintiff, the defendant failed and neglected to deliver any cast iron scraps. The plaintiff demanded refund of the advance. Since the defendant did not have money to refund, it agreed to refund the advance with interest at the rate of 18 per cent per annum.

The defendant refunded an aggregate sum of Rs.10 lakhs during the period November 4, 1991 till April 20, 1993. The plaintiff claims that it is entitled to appropriate the said sum of Rs.10 lakhs first towards interest and then towards the principal amount outstanding.

According to the plaintiff it is entitled to interest at the rate of 18 per cent per annum as the defendant had agreed of such rate of interest. According to the plaintiff after giving credit to the interest account and after adjusting the sum of Rs.10 lakhs first towards the interest accrued and, thereafter towards principal, a sum of Rs.20,49,065/-became due and payable by the defendant to the plaintiff.

In addition to such claim the plaintiff claims a sum of Rs.6,54,825/-on account of loss and damages that it suffered for the failure of the defendant to deliver 450 metric tonnes of cast iron scraps. The plaintiff claims to have purchased 450 metric tonnes of cast iron scraps at the rate of Rs.5,000/- per metric tonne while the contracted price was Rs.4,000/-per metric tonne. The plaintiff claims difference between the purchase price and the contracted price.

The defendant has entered appearance in the suit and has filed a written statement. In the written statement the defendant claims that it is a manufacturer of cast iron sleeper plates. It sells cast iron scraps which did not meet the requirement of the defendant for its manufacturing purposes. The defendant usually sells cast iron scraps at a price lesser than the prevailing price of Steel Authority of India. Consequently, according to the defendant, since it offers a lower price that the prevailing market price there is always a great demand of cast iron scraps sold by it. The defendant admits that an agreement was entered into between the parties for case iron scraps to be sold by the defendant to the plaintiff. The defendant, however, disputes the rate. According to the defendant it agreed to sale cast iron scraps to the plaintiff at a rate of Rs.150/- per metric tonne less than the prevailing rate of pig iron inclusive of 4 per cent sales tax subject to availability. The defendant admits to have received the sum of Rs.18 lakhs as advance from the plaintiff. The defendant claims that since there was hardly any cast iron scraps available to the defendant in 19991-1992, the defendant returned an aggregate sum of Rs.10 lakhs by account payee cheque to the plaintiff.

According to the defendant, the plaintiff was aware of the unavailability of cast iron scraps with the defendant and that, the plaintiff agreed to accept the refund of the said sum of Rs.10 lakhs without any protest. For the balance sum of Rs.8 lakhs the defendant claims that it sold 137.930 metric tonne of cast iron scraps to the plaintiff for the value of Rs.7,90,614.76/-. In support of such sale the defendant relies upon 13 challans which according to the defendant bears the seal of the plaintiff and its authorized representative. The defendant raised three bills to the said supply an aggregate of a sum of Rs.7,90,614.76/-. According to the defendant, no amount is payable inasmuch as balance of Rs.9,000/- and odd was paid by the defendant pursuant to an order passed under Chapte