- (1.) THIS is plaintiff's appeal under section % of the Code of Civil Procedure against the judgment and decree dated 7-8-1980 passed by the learned Addl. District Judge No. l, Baran in civil suit No. 14/77. The brief facts are as under : -
(2.) THE plaintiff had supplied 181. 25 tonnes of super phosphate (the manure) to the defendant-respondent at the rate of Rs. 200/- per tonne between the period from 8-5-1971 to 16-7-1971. According to the terms of the agreement between the parties, as contained in the defendant's letter dated 10-4-1971 (Ex. A-4), the defendant was to pay 25% of the value of the manure at the time of its receipt and the remaining 75% was to be paid in three equal instalments; to be paid within 60 days, 120 days and 180 days of the date of receipt of the manure. THE above said manure of the value of Rs. 36205/- was supplied to the defendant by the plaintiff-appellant by 16-7-1971, but neither the initial amount of 25% was paid on receipt of the manure nor was the remaining amount paid within the period specified in the terms of agreement between the parties. THE defendant, however, paid a sum of Rs. 36,205/- vide a cheque and such payment was received by the plaintiff on 9-4-1974. On 7-5-1977 the plaintiff filed the suit for recovery of Rs. 16122. 70 p. against the defendant pleading that since the price of the manure had not been paid by the defendant in terms of the agreement between the parties the plaintiff had served notice dated 6. 10. 1971 stating that the defendant would be liable to pay the interest at the rate of 12% per annum on the amount in question and the liability to pay the interest had been acknowledged by the defendant in its letter dated 11-7-1974 (Ex. A-23 ). It was pleaded that on 9-4-1974 a sum of Rs. 48514. 70 p. (including interest) was due from the defendant and after adjusting the sum of Rs. 36205/- received on that date, the balance amount of Rs. 12309. 70 p. remained due to the plaintiff from the defendant who had failed to pay the same inspite of demand and service of notice dated 5-5-1975 and that on the date of filing of the suit a sum of Rs. 3913/- had become due by way of interest on the above said amount of Rs. 12309. 70 p. and as such the defendant was liable to pay to the plaintiff a sum of Rs. 16122. 70 p. on the date of filing of the suit. THE plaintiff thus claimed a decree for the suit amount against the defendant with costs. THE suit was contested by the defendant who pleaded that the plaintiff had offered to sell to the defendant 300 tonnes of the manure but had supplied 181. 25 tonnes and that the supply was made in defective packing and not in the form asked for and as such the defendant has suffered a loss of Rs. 22868/- which amount the plaintiff was liable to pay to the defendant but with a view to maintain good-will and at the intervention of the District Agriculture Officer the defendant had paid to the plaintiff the above said sum of Rs. 36205/- vide cheque dated 30. 3. 1974 in full and final settlement of the claim of the plaintiff. THE defendant denied having agreed to pay interest or having acknowledged any liability therefore. THE suit was also contested on the ground that it was barred by time. THE defendant also pleaded that the court had no territorial jurisdiction to try the suit. After framing the necessary issues and recording the evidence produced by the parties, the learned trial court held that it had jurisdiction to try the suit and that there was no agreement to pay interest on the amount in question and that no interest was demanded by the plaintiff from the defendant and the plaintiff was not entitled to receive any interest. It was also held that the suit was barred by time. Consequently, vide the impugned judgment, the suit filed by the plaintiff-appellant was dismissed. Feeling aggrieved, the plaintiff has approached this court by filing this appeal. I have heard the learned counsel for the parties and have also perused the record of the case. The first contention raised by Shri KN Gupta, the learned counsel for the plaintiff-appellant, is that in its letter dated 11-7-1974 (Ex. A- 23) the defendant had acknowledged its liability to pay the interest although it had refused to pay the same on the ground that certain claims were due to the defendant from the plaintiff and that the supply of the manure having been made by 16-7-1971 on which date the first instalment of payment was to be received the acknowledgement was made within the period of three years from the said date and due to this acknowledgement the period of limitation stood extended for another three years. Reliance has been placed on Explanation (a) of Sub-section (2) of Section 18 of the Limitation Act, 1963 (the Limitation Act ). The cbntention of the learned counsel for the defendant-respondent on the other hand is that there was no acknowledgement of liability to pay the interest in the letter (Ex. A-23) and that on the contrary the defendant had denied the liability to pay the same and as such the period of limitation cannot be said to have been extended. In order to appreciate the arguments of the learned counsel for the parties it will be advantageous to re-produce section 18 of the Limitation Act, which reads as under : - "18. Effect of acknowledgement in writing - (1) Where, before the expiration of the prescribed period for a suit or application in respect of any property or right, an acknowledgement of liability in respect of such property or right has been made in writing signed by the party against whom such property or right is claimed, or by any person through whom he derives his title or liability, a fresh period of limitation shall be computed from the time when the acknowledgement was so signed. (2) Where the writing containing the acknowledgement is undated, oral evidence may be given of the time when it was signed; but subject to the provisions of the Indian Evidence Act, 1872 (1 of 1872), oral evidence of its contents shall not received. Explanation - For the purposes of this section, - (a) an acknowledgement may be sufficient though it omits to specify the exact nature of the property or right, or avers that the time for payment, delivery, performance or enjoyment has not yet come or is accompanied by refusal to pay, deliver, perform or permit to enjoy, or is coupled with a claim to set off, or is addressed to a person other than a person entitled to the property or right, (b) the word "signed' means signed either personally or by an agent duly authorised in this behalf, and (c) an application for the execution of a decree or order shall not be deemed to be an application in respect of any property or right. "
(3.) BARE reading of Explanation (a), quoted above, makes it clear that whenever the acknowledgement of liability is made although it is accompanied by refusal to pay or is coupled with a claim to set off the period of limitation would get extended and fresh period of limitation shall be computed from the time when the acknowledgement was so signed. In letter (Ex. A-23) the defendant had written to the plaintiff that as already informed the defendant has suffered a loss of Rs. 22868. 60 p. on account of breach of contract in supply of the manure committed by the plaintiff who had failed to settle the said claim of the defendant and as far as the claim of the interest made by the plaintiff was concerned the defendant had many times informed the plaintiff that the defendant's claim should be settled and the amount remaining unpaid would be paid to the plaintiff and that as the claim had not been settled the demand for interest was unreasonable. This letter clearly shows that acknowledgement of liability had been made by the defendant although it had refused to pay the same to the plaintiff on the ground that the plaintiff had not settled the defendant's claim in respect of the damages for breach of contract on its part. This acknowledgement of the liability with refusal to pay, coupled with the claim to set off, is certainly covered by the Explanation (a) quoted above and, as such, I am of the view that period for filing the suit stood extended for three years w. e. f. 11-7-1974, the date of Ex. A-23. It appears that inspite of the clear averment made in para 3 of the plaint that the defendant had acknowledged its liability in the letter dated 11. 7. 1974 and the defendant had not denied the writing of the said letter but had only disputed the fact that in the said letter the liability had been acknowledged the learned trial court did not deal with this aspect of the matter and computed the period of limitation w. e. f. the date that the amount was originally payable under the terms of agreement between the parties. The finding of the learned trial court on this issue, therefore, cannot be sustained and is set aside and it is held that the suit filed by the plaintiff on 7-5-1977 was within time. The next point raised before me is as to whether the learned trial court rightly held that the plaintiff-appellant was not entitled to charge interest on the amount in question inspite of the fact that the payment of the price for the manure supplied to it had not been paid by the defendant. From the record I find that in para 3 of the plaint it has specifically been pleaded by the plaintiff that since the amount had not been paid by the defendant the plaintiff had informed the defendant vide notice dated 6-10-1971 that the interest at the rate of 12% per annum would be payable because of the delay in payment of the amount. The receipt of the above said notice has not been denied in the written statement and has also been admitted in the letter dated 11-10-1971 (Ex. A-11) written by the defendent to the plaintiff stating that the telegram dated 6-10-1971 claiming interest at the rate of 12% per annum had been received. According to the terms of the agreement mentioned in the defendant's letter dated 10-4-1971 (Ex. A 4) the payment of the price of the manure was to be made according to the time fixed therein. There is no dispute that the payment was not made within the specified time and inspite of service of notice of demand in which interest at the rate of 12% per annum was also claimed. The liability to pay the amount of the manure supplied to the defendant has not been disputed and, as such, the defendant retained the amount of Rs. 36205/- from the date the payment became due till it was actually paid to the plaintiff on 9-4-1974. The amount of interest thus could be claimed by the plaintiff under the provisions of the Interest Act. Moreover, clause (a) of sub-section (2) of Section 61 of the Sale of Goods Act provides that in absence of a contract to the contrary the court may award interest at such rate as it thinks fit on the amount of the price to the seller in a suit by him for the amount of the price from the date of the tender of the goods or from the date on which the price was payable. As noted above, the price of the goods supplied by the plaintiff to the defendant was fixed in the terms reduced in writing in Ex. A-4 and the amount having not been paid, the plaintiff could claim interest from the defendant till the date of payment. It appears that the provisions of section 61 of the Sale of Goods Act had not been brought to the notice of the learned trial court who has not dealt with the same. In these circumstances, in my view, the learned trial court has erred in holding that since there was no agreement between the parties to charge interest and interest had not been demanded the plaintiff could not claim interest from the defendant. The interest has been claimed at the rate of 12% per annum and it has not been disputed before me that this rate cannot be said to be excessive in any way. In light of the discussion above, I set aside the finding of the learned trial court on the above said issue and hold that the plaintiff should be awarded interest at the rate of 12% per annum. The plaintiffs case that it had adjusted the amount received on 9-4-1974 firstly towards interest stands corroborated from its bill (Ex. 10) which had been sent to the defendant claiming the remaining sum of Rs. 12309. 70 after adjusting the above said amount on 9-4-1974. It is not disputed that if this adjustment is made by the plaintiff the amount remaining due would come to Rs. 12309. 70 p. on 9. 4. 1974 and the plaintiff remained entitled to receive from the defendant the interest at the same rate of 12% per annum on the above said amount of Rs. 12309. 70 p. till the payment was made. The suit amount was thus due to the plaintiff on the date of filing of the suit. No other point has been raised before me. (10) For the reasons recorded above, I accept this appeal, set aside the impugned judgment and decree dated 7-8-1980 passed by the learned Additional District Judge No. l, Baran and pass a decree for the suit amount of Rs. 16122-70 p. with costs in favour of the plaintiff-appellant and against the defendant-respondent and also hold that the defendant is further liable to pay to the plaintiff interest at the rate of 6% per annum on the principal sum of Rs. 12309. 70 p. from the date of institution of the suit till the date of realisation of the amount. The appeal stands decided accordingly. .;