PRADEEP NANDRAJOG, J. ( 1 ) UNDER noted five issues, framed vide order dated 6. 3. 2000, require adjudication:-"1. Whether the plaint has been signed, verified and suit has been instituted by an authorized person on behalf of the plaintiff" 2. Whether the suit is barred by time" 3. To what amount, if any, is the plaintiff entitled" 4. Whether the plaintiff is entitled to any interest" If so, at what rate and for what period" 5. Relief. " ( 2 ) SUIT seeks recovery of Rs. 24,23,074. 58, having three components as under:- (a) Principal sum. . . . . Rs. 12,11,537. 29 (b) Interest @18% p. a. . . . . . Rs. 12,11,537. 29 (c) Legal notice fee. . . . . Rs. 2,500/- ( 3 ) CASE of the plaintiff is that it appointed defendant as its distributor for sale of pesticides. By November 1989 a sum of Rs. 14,11,537. 29 remained outstanding. A notice dated 6. 11. 1989 was served upon the defendant demanding said sum to which defendant responded vide letter dated 20. 11. 1989 admitting that a sum of Rs. 13. 20 lacs was due. That defendant No. 2 who is partner of defendant No. 1 thereafter came to office of the plaintiff at Delhi on 11/1/1990 and acknowledged as well as confirmed that amount due and payable was rs. 14,11,537. 29. Since amount was not cleared, plaintiff which had a bank guarantee in sum of Rs. 2 lacs encashed the same and thus Rs. 12,11,537. 29, as principal, remained due and payable. Reckoned with effect from the date said sum was payable, interest @18% per annum till date of suit has been claimed which comes to Rs. 12,79,400. 61, but plaintiff has restricted the same to rs. 12,11,537. 29. It is pleaded that the defendant acknowledged liability to pay vide letters dated 30/6/1988, 20/11/1989, 11/1/1990 and 4/3/1991. ( 4 ) CASE pleaded by the defendant is a denial of any outstanding liability. It is stated that defendant No. 1 was not to receive any material beyond the limits of the bank guarantee i. e. Rs. 2 lacs. That it did not receive pesticide beyond a credit limit of Rs. 2 lacs. That plaintiff had employed field assistants and sales representatives who used to procure orders directly. It is stated that defendant No. 1 was not to receive any material beyond the limits of the bank guarantee i. e. Rs. 2 lacs. That it did not receive pesticide beyond a credit limit of Rs. 2 lacs. That plaintiff had employed field assistants and sales representatives who used to procure orders directly. That defendant was extending a helping hand in movement of pesticides to third parties which was directly booked by the field assistants. That sometimes these third parties, on whom direct orders were booked by the field assistants and sales representatives, used to make payment to the defendant. These payments were duly remitted to the plaintiff. That defendant was paying salary to the field assistants and sales representatives which were being reimbursed by the plaintiff. According to the defendants, this was being resorted to by the plaintiff as it did not want to show that field assistants and sales representatives were its employees. Explaining letter dated 20. 11. 1989, defendant states that employees of the plaintiff stated that they were having accounting problem. Defendants were convinced that nothing untoward would happen. Letter dated 20. 11. 1989 was accordingly written, acknowledging that defendant No. 1 was to pay a sum of Rs. 13. 2 lacs to the plaintiff. Similarly, letter dated 11. 1. 1990 acknowledging Rs. 14,11,537. 29 payable by defendant No. 1 to the plaintiff, has been explained. ( 5 ) BEFORE dealing with the evidence, I may extract from the pleadings of the defendant, for the reason, in my opinion in its pleadings defendant accepted that by close of the financial year 1989 it had to pay a sum of Rs. 13,20,000/-to the plaintiff, but thereafter explains as to why said sum is not payable. ( 6 ) IN part 4 of the written statement the defendant has referred to its statement of account which records that Rs. 13,26,613/- is payable by it to the plaintiff. But thereafter, plaintiff has stated in the same para that it was liable to pay Rs. 13. 2 lacs to the plaintiff. ( 7 ) PARA 4 of the written statement is spread over 7 pages. It is a prolix paragraph. 13,26,613/- is payable by it to the plaintiff. But thereafter, plaintiff has stated in the same para that it was liable to pay Rs. 13. 2 lacs to the plaintiff. ( 7 ) PARA 4 of the written statement is spread over 7 pages. It is a prolix paragraph. Towards the last part of the para, defendants have pleaded as under:-"the defendant submits that the pronotes collected were transferred to the plaintiff-Company and when the pronotes were to expire, the defendant wrote to the plaintiff-Company informing them to take a suitable action as the limitation is expiring and the pronotes will not be of any use. But the plaintiff-Company has not taken any action. Therefore, the defendant is not liable to pay the sums. The defendant submits that out of the said sum of Rs. 13,26,613/- which is alleged to be due from the defendant, the defendant sent pronotes in favour of the company vide registered letters dated 12. 9. 1989 for a sum of Rs. 1,53,850/-and on 9. 2. 1990 for a sum of Rs. 15,627/- totalling about Rs. 1,69,477/ -. The defendant paid a sum of Rs. 15,000/- to one Mr. B. Papa Rao, Sales Officer of the plaintiff-Company and intimated the same to te Director, vide letter dated 24. 1. 1991 for which the company has not given any credit. The defendant also supplied pesticides worth of Rs. 48,950/- to Mr. Papa Rao and his relatives and gave intimation to the Director for the said sum also, but the plaintiff has not given any credit. The defendant submits that the company had promised to give credit discount if a larger turnover is shown and the minimum discount to be given was Rs. 2 lakhs. Therefore, a sum of Rs. 2 lakhs have to be deducted from the amounts alleged due from the defendants. The defendants submit that one M/s. Nagarjuna Agro Chemicals, the distributor of the plaintiff-Company for Ongole agreed to collect some of dues and passed it on to the company on the instructions of Mr. Papa Rao. Thus, a sum of Rs. 22,355/-has to be given credit. If all the aforesaid amounts are credited in the account of the defendant, only a sum of Rs. 8,70,831/- will be due. The defendant submits that further from the aforesaid Rs. 8,70,831/-, the plaintiffs have encashed a bank guarantee for a sum of Rs. Papa Rao. Thus, a sum of Rs. 22,355/-has to be given credit. If all the aforesaid amounts are credited in the account of the defendant, only a sum of Rs. 8,70,831/- will be due. The defendant submits that further from the aforesaid Rs. 8,70,831/-, the plaintiffs have encashed a bank guarantee for a sum of Rs. 2 lakhs which the defendant had given to the plaintiff company in the year 1984-85. Further deducting a sum of Rs. 2 lakhs from 8,70,831/-, a sum of Rs. 6,70,831/- will be shown as due from the defendant. From the said sum of Rs. 6,70,831/-, the defendant had supplied material to the people for the sums mentioned against them amounting to Rs. 7,86,756/ -. As a result, it is the defendants who have to receive some money from the plaintiffs. It will be the defendant who will have to receive a sum of Rs. nearly 1 lakh from the plaintiff itself. Therefore, it is not correct to say that a sum of Rs. 14,11,537. 20/- is due from the defendant. " ( 8 ) THE defendant explains washing of its liabilities as under:- (a) The pro-notes totalling. . . Rs. 1,69,477/- (b) Payment to Mr. B. Paparao on behalf of the plaintiff. . . Rs. 15,000/- (c) Supply of pesticides to mr. B. Paparao. . . Rs. 48,950/- (d) Credit discount to be given by the plaintiff to defendant. . . Rs. 2,00,000/- (e) Dues to be collected by M/s. Nagarjuna Agro Chemicals to be passed on to the plaintiff as per instructions of mr. B. Paparao. . . Rs. 22,355/- (f) Amount recovered by encashment of bank guarantee. . . Rs. 2,00,000/- (g) Material supplied by the defendant to third parties. . . Rs. 7,86,756/- ( 9 ) THUS, according to the defendant it had to receive Rs. 1 lac from the plaintiff. ( 10 ) PRIMA facie, having admitted that as per its statement of account defendant had to pay Rs. 13,26,613/ -. The defence that defendant could not have received goods more than the amount secured by the bank guarantee is palpably false. Further, onus was on the defendant to have led evidence to show that the amounts, adjustment whereof was sought were either paid, or incurred at the instance of the plaintiff. 13,26,613/ -. The defence that defendant could not have received goods more than the amount secured by the bank guarantee is palpably false. Further, onus was on the defendant to have led evidence to show that the amounts, adjustment whereof was sought were either paid, or incurred at the instance of the plaintiff. ( 11 ) BEFORE dealing with the evidence of the plaintiff, I would deal with defendant's evidence in light of the case pleaded by the defendant. Defendants have examined defendant No. 2 as their witness. I may note that the defendant no. 2 is a partner of defendant No. 1. In his deposition filed by way of an affidavit, witness has stated that as per the agreement dated 20. 6. 1981, Ex. DW-1/1, vide clause 6, it was recorded that pesticides to be supplied would be limited to the extent of the bank guarantee. ( 12 ) THE witness has proved plaintiff's letter dated 21. 7. 1984 as Ex. DW-1/2 in which it was stated by the plaintiff that outstanding amount has accumulated much beyond the bank guarantee levels and if future supplies were to be received by the defendants, bank guarantee should be enhanced. The witness has stated that employees of the plaintiff appointed as field assistants and sales representatives were being paid salary by the defendant for which credit adjustments had to be given. He has proved letters Ex. DW-1/3 to Ex. DW-1/12 to prove the said point. ( 13 ) THE witness has further stated that a party, Shri Durga Fertilizers, had declined to issue a promissory note. This fact was intimated to the plaintiff by the defendants vide letter dated 11. 10. 1989, Ex. DW-1/13. The witness has explained letters dated 20. 11. 1989 and 11. 1. 1990 by stating that defendants acknowledged liability in the said letters on verbal assurances that nothing untoward would happen. Witness has further stated that in February 1990, Durga Fertilizers handed over a promissory note in sum of Rs. 77,943/ -. The same was sent by the defendants to the plaintiff under cover of defendant's letter dated 9. 2. 1990, Ex. DW-1/14. ( 14 ) IN para 7 of his affidavit by way of evidence, defendant No. 2 stated that he had sent promissory notes to the plaintiff totalling Rs. 1,69,477/ -. He stated that the plaintiff promised to give a discount in sum of Rs. 2. 1990, Ex. DW-1/14. ( 14 ) IN para 7 of his affidavit by way of evidence, defendant No. 2 stated that he had sent promissory notes to the plaintiff totalling Rs. 1,69,477/ -. He stated that the plaintiff promised to give a discount in sum of Rs. 2 lacs. ( 15 ) NOT a word has been spoken by the witness pertaining to the defence taken that at the asking of the plaintiff, Rs. 15,000/- was paid to Mr. B. Paparao and that at the asking of the plaintiff pesticide worth Rs. 48,950/- was supplied to Mr. B. Paparao. Not a word has been spoken by the witness pertaining to the plea taken in the written statement that M/s. Nagarjuna Agro Chemicals, a distributor of the plaintiff agreed to collect some of the dues and pass on the same to the plaintiff. Not a word has been spoken by the witness, much less persons named, to whom, at the asking of the plaintiff material worth rs. 7,86,756/- was supplied. No proof of any entitlement to credit discount has been submitted. ( 16 ) I fail to understand the relevance of the promissory notes in sum of rs. 1,69,477/- reference whereof has been made in the written statement and in the statement of DW-2. If these promissory notes were acknowledging payment with a promise to pay the sum to the plaintiff, defendant had to establish that there was an agreement between the plaintiff and the defendant and in respect of material supplied by the defendant to the parties executing the promissory notes, it was agreed that the plaintiff would receive direct payment from the said parties. Nothing of the kind has been established. ( 17 ) EX. DW-1/3 to DW-1/12 are defendant's letters written between December 1983 to January 1984 informing plaintiff that they had paid certain amounts to the persons named therein engaged as field assistants by the plaintiff. Reimbursement was sought for. Ex. DW-1/15 is a letter written from the plaintiff to the defendant on 15. 3. 1982 recording that it was sending Rs. 750/- as reimbursement on account of field assistants for the months of November and december 1981 and January 1982. ( 18 ) FROM these documents it does appear that field assistants employed by the plaintiff were being paid certain expenses by the defendants and plaintiff was reimbursing the same. 3. 1982 recording that it was sending Rs. 750/- as reimbursement on account of field assistants for the months of November and december 1981 and January 1982. ( 18 ) FROM these documents it does appear that field assistants employed by the plaintiff were being paid certain expenses by the defendants and plaintiff was reimbursing the same. However, onus was on the defendant to have shown what amount was paid by it to the field representatives and what amount under this head was reimbursed by the plaintiff. ( 19 ) IN fact, averments of the defendants in para 4 of the written statement do not refer to any adjustment on account of any payment made to the field representatives. There cannot be variance between pleading and proof. ( 20 ) THUS, the admission that as per accounts of the defendant, rs. 13,26,613/- is payable to the plaintiff remains intact. The justification as to why the amount admitted as payable is not to be paid, having not been sustained by the defendants, inevitable conclusion has to be that the sum of rs. 13,26,613/- stands admitted as payable by the defendant to the plaintiff out of which Rs. 2 lacs stands received by way of encashment of bank guarantee. ( 21 ) HOWEVER, there is something more. ( 22 ) THE defendant has not denied writing letters dated 20. 11. 1989, 11. 1. 1990 and 4. 3. 1991. Letter dated 20. 11. 1989 which has been proved as Ex. PW-1/7 is in response to plaintiff's legal notice dated 6. 11. 1989 proved as Ex. PW-1/6. The defendant has replied back to the plaintiff's lawyer as under:- ( 23 ) THEREAFTER, on 11. 1. 1990, vide Ex. PW-1/8, defendant acknowledged that it had to pay Rs. 14,11,537. 29 to the plaintiff. The letter reads as under:- ( 24 ) FURTHER, on 4. 3. 1991, vide Ex. PW-1/9, defendant acknowledged as under:- ( 25 ) THE theory propounded by the defendant that it wrote the letters in good faith is exploded by the fact that Ex. PW-1/7 was in response to the legal notice. The letter contains an admission in harmony with the admission in the written statement. It is hard to believe that when plaintiff had blown the war bugle by causing a lawyer's notice to be served upon the defendant, defendant responded in good faith. PW-1/7 was in response to the legal notice. The letter contains an admission in harmony with the admission in the written statement. It is hard to believe that when plaintiff had blown the war bugle by causing a lawyer's notice to be served upon the defendant, defendant responded in good faith. Further, by acknowledging a higher liability vide ex. PW-1/8 and Ex. PW-1/9, I see no place for any kind of good faith for the reason, if at all, the accounting problem of the plaintiff would have got over by the year 1989. There is no rationale for the theory of good faith continuing over three years. ( 26 ) ADMISSIONS by the opposite party are the best evidence of a party. I need not therefore discuss evidence led by the plaintiff. ( 27 ) IT is true that vide Ex. DW-1/1, being the agreement between the parties, vide clause VI it stands recorded that the pesticides supplied would not exceed the bank gurantee limit, but Ex. DW-1/2 being plaintiff's letter dated 21. 7. 1984 shows that the agreed limit of the bank guarantee was not treated as the upper limit for the supply of pesticides on credit to the defendant. In fact, the said letter shows that the plaintiff informed defendant that it i. e. defendant had received pesticides much beyond the sum covered by the upper limit of the bank guarantee. ( 28 ) HAVING discussed the evidence I proceed to deal issue wise. ( 29 ) PLAINTIFF is a limited company. Suit has been instituted on behalf of the plaintiff by Mr. A. Vasudevamurthy. He is the director of the plaintiff and has proved Ex. PW-1/1 being the certified copy of the resolution passed by the board of directors of the plaintiff on 26. 3. 2003 empowering him to file the suit and do all acts necessary for the purposes of instituting the suit including its prosecution. ( 30 ) THE witness was not cross examined as PW-1/1. ( 31 ) I accordingly decide issue No. 1 by holding that the plaint has been signed and verified by a duly authorized person and that the suit has been instituted by a duly authorised person. ( 32 ) ON the issue of limitation being issue No. 2; the suit has been instituted on 27. 4. 1993. ( 31 ) I accordingly decide issue No. 1 by holding that the plaint has been signed and verified by a duly authorized person and that the suit has been instituted by a duly authorised person. ( 32 ) ON the issue of limitation being issue No. 2; the suit has been instituted on 27. 4. 1993. It is settled law that acknowledgment of a debt within limitation extends limitation from the date of acknowledgment. ( 33 ) AS per the pleadings of the defendant, accounts were reconciled in the year 1989 and for the period ending 31. 3. 1989 a sum of Rs. 13,26,613/- was payable. In view of the Ex. PW-1/7 to Ex. PW-1/9 being defendant's acknowledgments dated 20. 11. 1989, 11. 1. 1990 and 4. 3. 1991, acknowledgment being within 3 years of 31. 3. 1989, limitation has got extended by another 3 years. Last acknowledgment was on 4. 3. 1991. Thus, the suit has been instituted within limitation inasmuch as a suit to recovery, money has to be filed within 3 years with cause of action accrued. ( 34 ) ON issue No. 3, in view of the evidence discussed above I hold that after adjusting the sum recovered by the plaintiff by encashing the bank guarantee, a sum of Rs. 12,11,537,29/- is payable by the defendant to the plaintiff as on 31. 3. 1989. I have based my decision on the admissions by the defendants but only want to note that the plaintiff has proved as Ex. PW-1/4 the statement of accounts pertaining to the defendant which shows a sum of rs. 14,11,537/- as outstanding. ( 35 ) ON issue No. 4, noting that the agreement Ex. DW-1/1 does not contain any provision for interest and in the absence of any evidence being led pertaining to market usage in the trade, interest payable has to be as per the interest Act, 1978. Only documents on record showing that interest was demanded is vide Ex. PW-1/6, being plaintiff's legal notice dated 6. 11. 1989. Thus, plaintiff would be entitled to interest w. e. f. 6. 11. 1989. ( 36 ) INTEREST has to be paid at the rate at which scheduled banks were offering interest on fixed deposits. No evidence has been led on the rate of interest. PW-1/6, being plaintiff's legal notice dated 6. 11. 1989. Thus, plaintiff would be entitled to interest w. e. f. 6. 11. 1989. ( 36 ) INTEREST has to be paid at the rate at which scheduled banks were offering interest on fixed deposits. No evidence has been led on the rate of interest. However, my inquiry from the manager of United Commercial Bank, Delhi high Court Branch has furnished information that in the year 1989, on fixed deposits of up to 3 years, interest @12% per annum was offered by scheduled banks. Thereafter, there was a steady decline in the interest offered which fell to as low as 5. 75% per annum and currently is offered @8% per annum. I hold on issue No. 4 that the plaintiff would be entitled to interest @9% per annum with effect from 6. 11. 1989 on the sum of Rs. 14,11,537. 29. Since bank guarantee in sum of Rs. 2 lacs was encashed on 30. 9. 1992, with effect from said date, interest at the aforesaid rate is held payable on the sum of rs. 12,11,537. 29. ( 37 ) THE suit is accordingly decreed as under:- (a) Decree in sum of Rs. 12,11,537. 29 is passed in favour of the plaintiff and against the defendants being the sum due towards pesticides supplied by the plaintiff to defendant No. 1. (b) Interest @9% per annum with effect from 6. 11. 1989 till 30. 9. 1992 on the sum of Rs. 14,11,537. 29 is held payable by the defendant to the plaintiff and so stands awarded. (c) Interest @9% per annum with effect from 1. 10. 1992 till date of suit on the sum of Rs. 12,11,537. 29 is held payable and is so awarded against the defendant and in favour of the plaintiff. (d) Pendent lite and future, post decretal interest, till date of realisation is awarded to the plaintiff against the defendants @9% per annum. Plaintiff would be entitled to proportionate costs.