K. Ramaswamy, J. —The appellant set up an industry at Unnao in Uttar Pradesh. Heputup an application to the District Industry Centre, Unnao on 13.6.86 for the supply of about 300 M.T. of G.P. Steel Sheets. The Government of India had constituted the respondent as statutory authority to canalise the procurement of the canalised items for imports and for onward delivery to the consumer industries. The General Manager of the District Industry Centre recommended to the respondent of the appellants’ requirement of 300 M.T. In furtherance thereof, on 24.8.87, the respondent had written a letter to the appellants that they could arrange supply of 50 M.T. and directed the appellants to open letters of credit with them and to comply with the requirements mentioned in the letter referred to therein, Relevant terms are as under :

“3. Please note that Margine Insurance is to be arranged by us. For this purpose suppliers will send a cable advice to us immediately after the shipment. Suitable provision in this regard has been made in our Purchaser Order.

4. On receipt of documents from the suppliers, our Port Offices will get in touch with your banker. Please note that the consignment (s)