IMPORTANT POINT
Misrepresentation by one party can lead to the rescission of a contract, making it voidable at the option of the innocent party, and may result in the denial of damages to the misrepresenting party.

JUDGMENT :

SUGATO MAJUMDAR, J.

1. This is suit for damages alleging breach of contract along with consequential reliefs.

2. Nutshell of the plaint case is that the Plaintiff is carrying on business of manufacture and dealing in scientific and process instruments as sole proprietor under the name and style of M/s Electro Scientific Industries having registered office at 54B, Harish Chatterjee Street, Kolkata-700026, outside the jurisdiction of this Court. The Defendant is a public limited company, being an undertaking of Government of India, registered under the Companies’ Act 1956, having registered office at 1, Shakespeare Sarani, Kolkata-700071, within jurisdiction of this Court. The Defendant is engaged in construction of steel plant, sinter plaint, raw material handling plant and other works and has a factory at Durgapur, West Bengal.

3. In the month of November 1991, the Defendant sought offers from different suppliers including the Plaintiff for supply of certain scientific and process instruments to the Defendant. Pursuant to a negotiation, held at the registered office of the Defendant, the Plaintiff made an offer in writing for supply of the following instruments:

1. Calorific value meters

2. Ultrasonic level detectors and ultrasonic level transmitters

3. Nucleonic level measurement switch

4. Bulk flow detector

5. Moisture measurement nucleonic type moisture gauge for coke with density compensation

6. Two wire non-contact Thermometer

4. The said offer was contained in a letter dated 27.11.1991 issued by the Plaintiff. In terms of letter dated 19.11.1992, the Defendant placed order for supply of five out of the six instruments, abovementioned, on terms and conditions contained in the purchase order. The Plaintiff accepted the terms and conditions of the purchase order contained in the letter dated 19.11.1992 in terms of its letter of acceptance dated 20.11.1992. Subsequently, by a letter dated 26.11.1992, the Defendant terminated the contract, so arrived at between the parties.

5. Aggrieved by such termination of contract, the Plaintiff filed an application under Article 226 of the Constitution of India before this Hon’ble Court. In terms of the judgment and order dated 08.09.1993 this Court quashed the termination of contract. However, while quashing the purported termination this Court was pleased to accept the revised offer made by the Plaintiff for supplying the said goods at a total price of Rs. 3,50,00,000/- after taking consideration the concessional import duty in respect of the ordered goods. An appeal was preferred by the Defendant against the said Order dated 08.09.1993 passed by the Single Bench. During pendency of the appeal it transpired that the Defendant wrongfully procured cancellation of the principal order placed on the Defendant by the Steel Authority of India Limited which, according to the Plaintiff was made in order to frustrate the writ application. By the order dated 27.11.2000, the Division Bench disposed of the appeal as the same has become infructuous with a liberty to the Plaintiff to institute the suit claiming loss and damages.

6. It is averred in the plaint that the Plaintiff has suffered loss and damage to the extent of Rs. 2,29,58,598.80p. on account of termination of the contract, calculating on the basis of the original term. The Plaintiff made an alternative claim of damages to the extent of Rs. 2,08,97,420/- calculating on the basis of the revised purchase order. The particulars of loss claimed by the Plaintiff in respect of initial purchase order: