Dishonoured cheques and written acknowledgment preserved limitation, while statutory interest remained recoverable after dishonour.

Dishonoured cheques issued toward discharge of liability were treated as giving rise to a fresh cause of action, so the recovery suit was not barred by limitation. The court also accepted a written acknowledgment in the defendant's handwriting as supporting limitation. On interest, it held that statutory interest could be awarded on negotiable instruments even without an express agreement for interest, and any prior arrangement against interest did not negate the legal consequence after dishonour. The appeal therefore failed on both limitation and interest, and the decree for the plaintiff was sustained.

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Issues: (i) whether the suit for recovery was barred by limitation notwithstanding the dishonoured cheques and the written acknowledgment, and (ii) whether the defendant was liable to pay interest despite the absence of an agreement for interest.

Issue (i): whether the suit for recovery was barred by limitation notwithstanding the dishonoured cheques and the written acknowledgment.

Analysis: The cheques were issued towards discharge of the liability and their dishonour gave rise to a fresh cause of action for the suit. A dishonoured cheque cannot be treated as part-payment for the purpose of limitation, but it can still support the claim where it is accepted as discharge of the debt and later dishonoured. Ex. P. 1 was found to be a valid acknowledgment in the handwriting of the defendant, which also supported saving limitation.

Conclusion: The suit was within limitation and the objection on limitation failed.

Issue (ii): whether the defendant was liable to pay interest despite the absence of an agreement for interest.

Analysis: Section 80 of the Negotiable Instruments Act, 1881 governs interest on negotiable instruments even where no rate of interest is stipulated, and any prior arrangement against interest does not defeat the statutory consequence after dishonour. Once the cheques were dishonoured, the defendant remained liable for interest as provided by law.

Conclusion: The defendant was liable to pay interest and the challenge to the award of interest failed.

Final Conclusion: The appeal failed on both limitation and interest, and the decree in favour of the plaintiff was sustained.

Ratio Decidendi: A dishonoured cheque issued towards discharge of liability can furnish the basis of a cause of action and does not prevent the debtor's liability to interest under the negotiable instruments law after dishonour, while a valid acknowledgment independently supports limitation.

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