The main legal point established in the judgment is that in the absence of privity of contract, a party cannot claim a payment based on a commitment letter given by another party on behalf of a third party.

JUDGMENT :

1. The appellant–original plaintiff has assailed the judgment and decree dated 26.07.2001 dismissing the Summery Suit No.7031 of 1991 passed by Court of City Civil Judge, (Court No.8) at Ahmedabad. It is the case of the appellant that the impugned judgment and decree is required to be quashed and set aside, since the same is passed without appreciation of the evidence.

2. Learned advocate Mr.Bhatt appearing for the appellant has submitted that the Court below had already decreed the suit in favour of the defendant No.1, by the judgment and decree dated 28.08.1992 by allowing the claim of the plaintiff against the defendant No.1 for a sum of Rs.5,19,833.20, however, so far as the amount of 10%, which has been retained by defendant No.2–Andhra Pradesh State Financial Corporation, the suit was continued further and ultimately, the same is rejected.

3. Learned advocate Mr.Bhatt has submitted that the plaintiff is entitled to claim the remaining amount of Rs.1,50,815/- from the defendant No.2, in view of the contract between the plaintiff and defendant Nos.1 and 2. It is submitted that the Trial Court has not appreciated the communication/contract dated 20.04.1990, below Exh.35, wherein it is recorded that the amount of Rs.9,66,400/- would be paid to the plaintiff in view of supply of machinery. It is submitted that the Trial Court has also not appreciated the agreement between the plaintiff and defendant No.1 at Exh.58, which contains various clauses with regard to supply of machinery and the payment of amount.

3.1 Learned advocate Mr.Bhatt has invited the attention of this Court to the deposition recorded below Exh.55 i.e. the employee of defendant No.2-Corporation, and has submitted that he had admitted that an amount of 10% was retained in view of the contract between the plaintiff and defendant No.1. It is submitted that 10% amount has been retained by the defendant No.2 on the ground that there was a defect in the machinery, which was supplied by the plaintiff to the defendant No.1. It is submitted that there was no evidence adduced by the defendant No.2, which would indicate that the machinery, which was supplied by the plaintiff to the defendant No.1 was suffering with any defect. It is submitted that no technical expert was examined and hence, the amount of 10% could not have been retained by the defendant No.2 and the same was required to be paid.

3.2 Learned advocate Mr.Bhatt has further submitted that at the time of the contract, the employee/officer of the defendant No.2–Corporation, who has entered the contract, was not examined and some other person, who has been examined below Exh.55 and hence, his evidence is required to be discarded to the effect that there was defect in the machinery, which was supplied by the plaintiff to the defendant No.2. Learned advocate Mr.Bhatt has submitted that even if it is assumed that there was no privity of contract between the plaintiff and defendant No.2–Corporation, however, from the evidence on record, it can be assumed that there was a contract between the plaintiff and defendant No.2.

3.3 Learned advocate Mr.Bhatt has thus submitted that 10% amount could not have been retained by the defendant No.2 on the pretext that the machinery, which was supplied by the plaintiff to the defendant No.2, was having any defect or the plant was not erected and the commissioning of plant was not done. It is submitted that in absence of any evidence, which would prove that the plant was not in operation to the satisfaction of the defendant No.1, the defendant no.2 cannot retain the amount. Learned advocate Mr.Bhatt has further submitted that the decree of payment against the defendant No.1, is not executed and hence, the plaintiff is entitled to recover the amount of 10% of the total amount, which is retained i.e. Rs.1,50,815/- by the defendant No.2 and hence, the impugned judgment and decree is required to be quashed and set aside.

4. In response to the aforesaid submissions, learned