The court established that the terms and conditions of the purchase order, including quality guarantee and rejection of material, were binding, allowing the plaintiff to reject defective goods and claim damages.

SANJAY KISHAN KAUL, J.

( 1 ) THE plaintiff, a limited company, filed a suit for recovery of Rs. 22,66,238. 56 along with future interest @ 12% p. a. The plaint states that the plaintiff is a premier manufacturer of compressors including screw compressors. The plaintiff placed an order dated 07. 05. 1981 in pursuance to a quotation of the defendant dated 12. 12. 1979 for purchase of 60 radiator-cum-oil coolers ( for short, 'rocs') for 300 cfm screw compressors with copper fins and oil coolers and brass tube in both at Rs. 6,825/- per unit. The delivery was to be effected from May, 1981 and 15 such ROCs were to be supplied every month. The payment was to be made at delhi through negotiation of documents by New Bank of India, Connaught Circus, new Delh. It is the case of the plaintiff that the defendant had given quality guarantee for all goods for a minimum period of 12 months from the date of receipt of the material. The material on receipt in the factory was to be inspected as per the drawing or approved sample by the plaintiff and while assembling the compressors, the plaintiff had the further right to reject such material as was found defective. The decision about such rejection by the plaintiff was stated to be final and binding on the defendant. The plaintiff also claims to have had the option to cancel the order or any part thereof if delivery was not made within time. There was also a specific clause in respect to disputes and jurisdiction to the effect that only civil courts at Delhi would have jurisdiction in the matter.

( 2 ) THE defendant is stated to have sent a telex on 09. 05. 1981 suggesting a revision of the price to Rs. 8,850/- and that they would deliver 10 such ROCs per month from June. This was followed up by a letter of 10. 05. 1981 where the defendant quoted the price of Rs. 8,850/- per unit F. O. R. destination. The price was confirmed by the plaintiff. The supplies made by the defendant were found to be defective inasmuch as the complaints started coming in of oil leakage in these ROCs. Small leakages also occurred during testing by the plaintiff. This resulted in communications between the parties and the defendant even deputed persons to rectify the defects and replaced some oil coolers.

( 3 ) THE grievance of the plaintiff is that the defendant supplied defective oil coolers and out of the total 58 such coolers supplied, 51 started leaking and were found to be defective. The remaining 7 were lying with the plaintiff along with the defective ones at the risk and cost of the defendant. The plaintiff claims that though he had returned 20 of the defective coolers to the defendant, no replacement was provided and the plaintiff had to carry out risk purchase for the benefit of its customers. Not only that, by the letter dated 10. 03. 1982, the defendant refused to replace the ROCs.

( 4 ) THE plaintiff claims that the total price paid for the defective 58 ROCs is to the tune of Rs. 5,78,538. 56. The plaintiff further claims to have spent an amount of Rs. 2,00,000/- in expenses for attempting to remedy the defects. The risk purchase made from the market was stated to be to the tune of rs. 14,87,700/ -. Thus, the suit was filed for the said total amount along with future interest. It may be noticed at this stage that during the course of arguments, learned counsel for the plaintiff had stated that the figure of rs. 14,87,700/- mentioned in the plaint appears to be a mistake and the amount ought to have been Rs. 8,35,513. 53.

( 5 ) THE suit was resisted by the defendant, who even filed the counter claim. The defendant disputed the jurisdiction of this Court and claimed that the plaintiff had suppressed material facts from this Court. The contract between the parties is not denied, but the terms and conditions as set out by the plaintiff have been denied since it is the case of the defendant that the same were never signed by the defendant. It is the case of the defendant that the ROCs were made as per the