Court dismisses defendant's arguments on claim limitation & interest award in motor accessories case

The court dismissed the defendant's arguments regarding the limitation of the claim for motor accessories supplied and the award of interest. The plea of limitation was considered abandoned as it was not raised earlier and required factual investigation. The acknowledgment of liability through post-dated cheques reset the limitation period. Regarding interest, the court found that interest could be awarded in the absence of a contract to the contrary, and the lower appellate court's decision to award interest at 12% was deemed reasonable. The appeal was dismissed, affirming the lower court's decision to decree the suit with interest.

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Issues Involved:
1. Limitation of the claim for the price of motor accessories supplied.
2. Award of interest in the absence of a contract for interest.

Detailed Analysis:

1. Limitation of the Claim for the Price of Motor Accessories Supplied:

The defendant argued that the claim for the amount of Rs. 5,274.71 demanded under bill No. 94 dated 1-4-1962 was barred by limitation as per Article 14 of the Limitation Act, 1963, which prescribes a three-year period from the date of delivery of goods. The suit was filed on 6-4-1965, more than three years from the delivery date, making it allegedly time-barred.

The court noted that although a general plea of limitation was raised, it was not pressed in the trial court or the lower appellate court. The defendant had effectively abandoned this plea. Furthermore, the plea of limitation was not raised in the memorandum of appeal filed before the High Court and was introduced only during the arguments of the second appeal.

The court emphasized that limitation is a mixed question of fact and law. Since the plea was not raised earlier and required factual investigation, it could not be entertained for the first time in the second appeal. The court also considered the acknowledgment of liability by the defendant through the issuance of post-dated cheques on 12-5-1962. The issuance of these cheques was seen as an acknowledgment of the debt, thereby providing a fresh period of limitation under Section 18 of the Limitation Act. The court concluded that the plea of limitation was devoid of merit and could not be raised at this stage.

2. Award of Interest in the Absence of a Contract for Interest:

The plaintiff claimed interest at the rate of 12% per annum on the unpaid bills, asserting that there was an agreement to this effect. The lower appellate court, however, did not record any finding on the existence of such an agreement. The defendant contended that interest for the period prior to the suit could not be awarded without a finding of an agreement for interest, citing the Privy Council decision in B. N. Ry. Co. Ltd. v. Ruttanji Ramji and the Supreme Court decision in Thawardas Pherumal v. Union of India.

The court referred to Section 61(2) of the Sale of Goods Act, 1930, which allows the court to award interest at a rate it deems fit in the absence of a contract to the contrary. The defendant did not allege any contract to the contrary and denied any business dealings with the plaintiff. Consequently, the court had the discretion to award interest on the amount due.

The court found that the lower appellate court had exercised its discretion appropriately in awarding interest at the rate of 12%, which was not unreasonable given the circumstances. The defendant had issued cheques for the price claimed and then stopped payment without a valid excuse, raising a false defense and repudiating liability. The court held that the award of interest was justified and reasonable.

Conclusion:

Both contentions raised by the defendant were found to be devoid of merit. The appeal was dismissed with costs, affirming the lower appellate court's decision to decree the suit with interest at the rate of 12% per annum.

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