Pre-suit interest and acknowledgment by cheque under sale of goods law upheld despite dishonour and limitation challenge.

Pre-suit interest on the price of goods may be awarded under Section 61(2) of the Sale of Goods Act, 1930 where no contract to the contrary is pleaded or proved, and a specific express agreement to pay interest is not for such discretion. The limitation objection, raised for the first time in second appeal, failed because the effect of post-dated cheques issued toward discharge of the debt was a mixed question of law and fact; a cheque may amount to an acknowledgment of liability, and later dishonour does not by itself negate that acknowledgment. The decree for price and interest was affirmed.

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Issues: (i) Whether pre-suit interest could be awarded on the price of goods sold in the absence of an express finding of agreement to pay interest. (ii) Whether the plea that the claim was barred by limitation could be entertained in second appeal, and whether the issue of dishonoured cheques amounted to acknowledgment of liability saving limitation.

Issue (i): Whether pre-suit interest could be awarded on the price of goods sold in the absence of an express finding of agreement to pay interest.

Analysis: Section 61(2) of the Sale of Goods Act, 1930 empowered the court, in the absence of a contract to the contrary, to award interest at such rate as it thought fit on the amount of the price from the date the price was payable. Since no contract to the contrary had been pleaded or proved, the court had discretion to grant interest even without a specific finding of an express agreement for interest. The rate awarded was found to be reasonable on the facts.

Conclusion: The award of pre-suit interest was upheld and the contention against it failed.

Issue (ii): Whether the plea that the claim was barred by limitation could be entertained in second appeal, and whether the issue of dishonoured cheques amounted to acknowledgment of liability saving limitation.

Analysis: The limitation plea had been abandoned in the courts below and was raised for the first time in second appeal. As the question depended on whether the issuance of post-dated cheques, later dishonoured, amounted to acknowledgment of liability, it involved a mixed question of law and fact. The court held that a cheque issued in purported discharge of a debt may, depending on the circumstances, amount to an acknowledgment in writing of liability, and dishonour does not by itself negate the acknowledgment made when the cheque was issued. The plea therefore could not be decided in the appellant's favour on the existing record.

Conclusion: The limitation objection was rejected and did not defeat the decree.

Final Conclusion: The decree for the price of goods and interest was affirmed, and the appeal was dismissed with costs.

Ratio Decidendi: In a suit for the price of goods, pre-suit interest may be awarded under Section 61(2) of the Sale of Goods Act, 1930 in the absence of a contract to the contrary, and a cheque issued in discharge of a debt may amount to acknowledgment of liability for limitation purposes even if it is later dishonoured, depending on the circumstances.

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