Pradeep Nandrajog, J.

( 1 ) THE present order disposes of the 3 captioned interim applications, one filed by the defendant and the other two filed by the plaintiff. Suit has been filed by the plaintiff invoking the provisions of Order xxxvii of the Code of Civil Procedure. By and under IA No. 2268/1995, defendant prays for leave of this Court to defend the suit. By and under IA Nos. 3773/1995 and 3805/1997, plaintiff prays for a decree on admission.

( 2 ) SUIT is based on a written acknowledgement of the defendant dated 23. 6. 94. The same reads as under:

( 3 ) BACKDROP to the acknowledgement aforesaid, as pleaded in the plaint is that the plaintiff company is a merchant exporter dealing in mainly pharmaceutical goods and medicines. Defendant company is a manufacture of medicines and pharmaceutical goods. As per the plaint, in the year 1991, defendant approached the plaintiff with a proposal that it could manufacture high quality Ampicillin Trihydrate. Plaintiff placed its requirement of bulk quantity of Ampicillin Trihydrate. Defendant expressed to the plaintiff that it was short of finds to manufacture bulk quantity of Ampicillin Trihydrate and desired some funds. Being in urgent need for supply to its customers and in particular foreign buyers, plaintiff agreed to advance money to the defendant. By and under 5 cheques dated 5. 11. 1991,16. 11. 1991, 7. 12. 1991, 29. 2. 1992 and 2. 5. 1992 in the sum of Rs. 2,00,000/-, Rs. 1,00,000/-, Rs. 1,00,000/-, Rs. 5,00,000/- and Rs. l2,00,000/- each, plaintiff advanced a total sum of Rs. 21,00,000/- to the defendant. It is alleged that the defendant neither manufactured, much less supplied Ampicillin Trihydrate to the plaintiff and as a consequence thereof, plaintiff suffered loss of business and goodwill with its customers.

( 4 ) IT is alleged in the plaint that Sh. Vivek Gupta, Director of the defendant acknowledged receipt of advance in sum of Rs. 21,00,000/- from the plaintiff for executing order of Ampicillin Trihydrate. He acknowledged, in writing, liability of the defendant to repay to the plaintiff the said sum of Rs. 21,00,000/ -.

( 5 ) PRAYER made in the suit is to pass a decree in favour of the plaintiff and against the defedant in sum of Rs. 21,00,000/- together with interest 24% per annum.

( 6 ) AS noted, by and under IA No. 2268/95, defendant seeks leave of this court to defend the suit.

( 7 ) IN the application, defendant has admitted execution of the letter dated 23. 6. 1994 written by Sh. Vivek Gupta, Director of the defendant.

( 8 ) GROUNDS on which leave to defend is prayer for is that it was the plaintiff which desired of the defendant to manufacture Ampicillin Trihydrate. Total quantity required by the plaintiff was 60 M,t. It was stated by the plaintiff that the medicine required was for export to Russia. Since manufacturing capacity of the defendant was limited, plaintiff desired that defendant should increase its manufacturing capacity. Rs. 21,00,000/- was paid by the plaintiff to the defendant as earnest money. Defendants spent substantial amount in expanding the capacity of its plant. Due to political turmoil in the earnest Soviet Union, orders received by the plaintiff for supply to Soviet Union were cancelled. Plaintiff never gave raw material for the manufacture of medicine. Plaintiff was to supply the raw material. In anticipation of the orders from the plaintiff, defendant did not accept the offer from the open market.

( 9 ) IT is further stated that being aware of the fact that it was the plaintiff which was in breach of the contract, plaintiff never demanded return of the money advanced.

( 10 ) IN respect of the acknowledgement dated 23. 6. 1994, it is pleaded that plaintiff expressed its serious accounting and tax difficulty in explaining payment of Rs. 21,00,000/ -. Plaintiff desired that defendant should return Rs. 21,00,000/- to the plaintiff and in return, since plaintiff was expecting an order of over Rs. 15 crores to European countries, services

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