N. Sathish Kumar, J.

1. The suit is filed for recovery of a sum of Rs. 26,73,183.70 together with interest at the rate of 12% per annum on Rs. 23,58,576.13 from the date of the plaint till the date of realisation.

2. The brief facts of the case of the plaintiff are as follows:

"(i) According to the plaintiff, the 1st defendant is the subsidiary of the 2nd defendant and looking after the contract for erection, alignment and commissioning of 18 Mill feeding conveyors from M/s. Asia Power Projects Ltd.,[in short "APPL"] which is the Principle contractor of M/s. Neyveli Lignite Corporation for the expansion project of Thermal Power Station No. 1, and awarded sub contract to them for the work of erection, alignment and commissioning of said 18 Mill feeding conveyors (9 conveyors in unit 1 and 9 conveyors in unit 2) through a Purchase Order (Work Order) dated 20.06.2002. The said purchase order specifically stipulates the responsibilities of both the parties viz., the plaintiff and the 1st defendant.

(ii) The plaintiff stated that the 1st defendant failed in the timely supply of materials for the erection and assembly. The letters submitted by the plaintiff to the 1st defendant dated 16.08.2002, 09.09.2002, 29.10.2002, 20.02.2003, 26.02.2003, 13.03.2003, 28.03.2003 and 14.06.2003 specifically proves the failure of the 1st defendant in the timely supply of materials. Even after seven months from the scheduled date of completion of the work, the 1st defendant was not able to supply all the materials for the execution and completion of the work. Hence, the plaintiff suffered heavy financial loss, therefore, they are entitled for compensation against their loss from the 1st defendant.

(iii) The plaintiff further states that since the 1st defendant fixed the terms without considering the offer of the plaintiff, payment terms in the said work order were not acceptable to them. Hence, on receipt of the said work order, the plaintiff, by their letter dated 12.07.2002, stipulated their payment terms. Thereafter, the 1st defendant consented to make the payment according to the terms of the plaintiff's letter and requested the plaintiff to proceed with the work. Accordingly, the plaintiff commenced the work on 16.07.2002 with the available material supplied by the 1st defendant. However, the 1st defendant did not make prompt payment against the bills submitted by the plaintiff. This action of the 1st defendant created heavy financial crisis and loss to the plaintiff.

(iv) The plaintiff also states that the delay in taking decisions by the 1st defendant caused considerable re-work and multiplication of job and overtime work, such as, working round the clock including Sundays and holidays to compensate the time lost by the delay in proper directions for modifications. Expenses for these re-works and over time works involved extra financial commitments to the plaintiff heavily. Therefore, a meeting was convened between the 1st defendant and the plaintiff, wherein the decisions pertaining to revised rate, additional payments, immediate release of pending payments and revised work order were taken.

(v) According to the plaintiff, most of the decisions were not given effect to by the 1st defendant which resulted in delay in payment against consumables, which, in turn, interrupted the supply of the same, particularly, welding electrodes, oxygen and DA cylinders and difficulty in meeting the demands of the works, which destroyed the smooth relationship in between the plaintiff and their workers. Therefore, the plaintiff was forced to issue a legal notice dated 2.7.2003 to the 1st defendant demanding a sum of Rs. 17,28,597.75 due to the plaintiff for the works carried out by them and for the refund of the sum of Rs. 1,20,324/- the amount retained by the 1st defendant from the bills, due to the plaintiff. The 1st defendant issued reply to the not