JUDGMENT : K.S. Jhaveri, J. The appellants, original defendants, have challenged the judgment and decree passed by the learned Principal Senior Civil Judge, Panchmahals at Godhra in Special Civil Suit No.10/1992 whereby, a joint and several decree for Rs.35,89,184/- along with interest at the rate of 12% per annum from the date of filing of suit till its realisation was passed against the appellants herein, original defendants. 2. The respondent, original plaintiff, is a public Corporation registered under the Companies Act, 1956 whereas, appellant no.1 herein, original defendant no.1, is a partnership firm and the rest of the appellants are its Partners. The respondent-Corporation is mainly engaged in the sale and purchase of food grains through out the country and for the purpose of storage of food grains, the respondent-Corporation constructed its own Godowns or used to hire Godowns at places where it does not have its own Godowns. For constructing its own Godown at FSD Bhomaiya, Godhra, the competent authority of respondent-Corporation invited Tender for constructing a 25,000 MT capacity convertible plinths with roads, drains and culverts. 3. The appellant-Company filled up the Tender and as the Bid given by it was found to be the lowest, it was selected for the work. Work order dated 16.01.1989 was issued in favour of respondent no. 1 Company. Earlier, the said work was given to one M/s. Sorath Construction Company. However, the said Company left the work midway on account of some dispute. Therefore, fresh Tender was issued to complete the remaining work, at the cost of Rs.39,46,531/- plus rise of 21% on the estimated cost. 4. It is the case of the respondent-Corporation that the appellants did not commence the work as per the contract and therefore, show cause Notice dated 21.03.1989 was issued and served upon the appellants. The appellants replied to the said notice vide reply dated 28.04.1989. Being dissatisfied with the reply, Notice dated 18.08.1989 was served upon the appellants for termination of contract. Subsequently, the contract was terminated and the EMD money was forfeited. 5. Thereafter, the respondent-Corporation published a fresh Tender Notice dated 19.08.1989. In respect of the said Tender Notice, the Bid submitted by one M/s. Akar Construction, Baroda was accepted on 29.12.1989 and work order dated 01.01.1990 was issued in favour of the new Contractor. On account of the new work order, the respondent-Corporation had to incur additional cost of Rs.25,77,084/-. 5. Thereafter, the respondent-Corporation published a fresh Tender Notice dated 19.08.1989. In respect of the said Tender Notice, the Bid submitted by one M/s. Akar Construction, Baroda was accepted on 29.12.1989 and work order dated 01.01.1990 was issued in favour of the new Contractor. On account of the new work order, the respondent-Corporation had to incur additional cost of Rs.25,77,084/-. Hence, the respondent-Corporation filed the suit being Special Civil Suit No.10/1992 claiming Rs.35,89,184/- as damages from the appellants. After appreciating the evidence on record, the Court below decreed the suit in favour of respondent-Corporation, by passing the impugned judgment and decree. Hence, this appeal. 6. Mr. K.G. Sukhwani, learned counsel appearing on behalf of the appellants, drew our attention to the Issues framed by the Court below. He submitted that there was no agreement or for that matter, any contract between the appellants and respondent-Corporation to the effect that damages suffered by one party shall be made good by the other. He, therefore, submitted that the Court below committed serious error in law and on facts in decreeing the suit in favour of the respondent. 6.1 Learned counsel Mr. Sukhwani drew our attention to the Telegram Message (Exh.59) dated 09.01.1989 presumed to be sent to the appellants by the respondent wherein, it is stated that the offer given by the appellants to complete the work, at a cost of 21% above the estimated cost of work as mentioned in the Tender, is acceptable to the respondent. However, the said Telegram Message was never formally despatched to the appellants. Instead, the appellants were served with a Fax copy of the said message only on 12.01.1992 whereas, the suit in question was filed on 10.01.1992, which is, therefore, clearly timebarred. 6.2 Learned counsel Mr. Sukhwani also drew our attention to the Conditions of Contract wherein, it is provided that under no circumstances, the entire amount of compensation to be paid shall exceed 10% of the contract price. It was contended that the rate of interest awarded by the Court below is also on the higher side. Therefore, the Court below seriously erred in decreeing the suit in favour of the respondent. 6.3 In support of his submissions, learned counsel Mr. It was contended that the rate of interest awarded by the Court below is also on the higher side. Therefore, the Court below seriously erred in decreeing the suit in favour of the respondent. 6.3 In support of his submissions, learned counsel Mr. Sukhwani placed reliance upon the decision of Apex Court in the case of Chunilal v. Mehta & Sons Ltd. v. Century Spinning and Manufacturing Company Ltd. reported in AIR 1962 SC 1314 wherein, it has been held that a party is entitled to claim only such amount of liquidated damages stipulated in the contract and not unascertained amount of damages under the general law. The right to claim liquidated damages is enforceable u/s.74 of the Contract Act and where such a right is found to exist, no question of ascertaining damages really arises. 7. Mr. Shakeel Qureshi, learned counsel appearing for respondent-Corporation, submitted that the appellants did not perform their part of the obligation as per the Tender document. In spite of several communications, the appellants did not commence the work and therefore, the respondent-Corporation had no other alternative but, to rescind the contract. Further, the suit is also not barred by limitation since the cause of action arose when the appellants committed breach of the agreement, which made the respondent to issue Notice for cancellation of contract. Hence, the suit filed on 10.01.1992 is not barred by the law of limitation. It was, therefore, prayed that the present appeal deserves to be rejected. 8. We have heard learned counsel for both the sides and perused the documents on record. It transpires from the record that the appellants herein applied for the purchase of Tender invited by the respondent-Corporation through its Managing / Technical Partner - one Chunilal Ambalal Patel. The said application dated 07.10.1988 has been produced on record vide Exh.42. However, as the party failed to submit solvency certificate, as per the tender condition, one P.M. Raval gave an undertaking on the body of the application (Exh.42) that they will submit such certificate at the time of submission of Tender. The appellants denied that said P.M. Raval is the representative of their Company. The Court below did not believe the say of the appellants since the endorsement made on the application (Exh.42) was self-explanatory and proved that it was made by P.M. Raval, in the capacity of being the representative of the appellants. 9. The appellants denied that said P.M. Raval is the representative of their Company. The Court below did not believe the say of the appellants since the endorsement made on the application (Exh.42) was self-explanatory and proved that it was made by P.M. Raval, in the capacity of being the representative of the appellants. 9. It also transpires from the record that the appellants submitted their Bid on 12.10.1988, which is evident from the document at Exh.55. Thereafter, the appellants addressed communication dated 01.01.1989 to the competent authority of the respondent-Corporation at Bombay, which is produced at Exh.58. The competent authority of the respondent-Corporation accepted the offer of the appellants on 09.01.1989, vide Telegram dated 09.01.1989 produced at Exh.59. It is the say of the appellants that they accepted the Tender on 16.01.1989, ie. after 90 days. However, from the Telegram (Exh.59), it is evident that the Tender was accepted by the appellants on 09.01.1989. Thereafter, formal work order was issued by the respondent-Corporation vide order dated 16.01.1989. Considering the aforesaid factual aspects, it is established beyond doubt that the Tender was accepted within 90 days after the date of its opening. 10. It is a matter of fact that said P.M. Raval took over paper possession of the site on behalf of the appellants on 27.02.1989, vide order Exh.60. However, after doing work for some days, said P.M. Raval stopped the work and left the site on 05.03.1989 for reasons best known to the appellants. The respondent-Corporation informed the appellants about the event vide letter dated 28.04.1989 (Exh.64). Thereafter, the respondent addressed several communications dated 21.01.1989, 04.02.1989 and 13.03.1989 to the appellants asking them to commence the work. When the appellants did not resume the work, the respondent-Corporation issued show-cause Notice dated 21.03.1989 (Exh.67) and 12.04.1989 (Exh.63). However, the appellants refused to commence the work, vide communication dated 28.04.1989 (Exh.64). Therefore, the respondent had no other option but, to issue Notice for cancellation of contract, vide Notice dated 18.08.1989 (Exh.68). When it is established from the record that the appellants accepted the Tender on 09.01.1989, as discussed in the foregoing paragraph, it cannot be said that there is no agreement between the parties. Therefore, the respondent had no other option but, to issue Notice for cancellation of contract, vide Notice dated 18.08.1989 (Exh.68). When it is established from the record that the appellants accepted the Tender on 09.01.1989, as discussed in the foregoing paragraph, it cannot be said that there is no agreement between the parties. The fact that the appellants accepted the Tender within 90 days proves that there existed an agreement between the parties and when the appellants did not perform their part of the obligation, the respondent was justified in issuing the Notice for rescinding the contract, by invoking Clauses 3a, 3b and 3c of the Tender Conditions. Therefore, it is established that the appellants committed breach of the agreement by not performing their part of the obligation. 11. Insofar as the contention regarding limitation is concerned, it is a matter of fact that the suit was filed on 10.01.1992. Essentially, the cause of action for filing the suit arose when the appellants committed breach of the agreement by refusing to perform their part of the obligation, which prompted the respondent to issue Notice for cancellation of the contract by invoking relevant Clauses of the Tender. Therefore, though the suit was filed on 10.01.1992, it cannot be said to be barred by limitation since the cause of action arose when the appellants committed breach of the agreement. 12. The respondent addressed several letters to the appellants requesting to commence the work with reference to the Telegram dated 09.01.1989 and work order dated 16.01.1989. However, the appellants did not commence the work. Therefore, the respondent issued Notice dated 18.08.1989 rescinding the contract and forfeited the amount of EMD. Therefore, for the period from 09.01.1989 to 18.08.1989, ie. for a period of more than seven months, the appellants did not perform their part of the obligation. The respondent invited fresh Tender on 19.08.1989 and fresh work order was issued to one M/s. Akar Construction, Baroda. For the nonperformance of the appellants, the respondent had to incur extra expenditure in order to get its work completed. It is also proved that the agreement was breached by the appellants when they refused to perform their part of the obligation. Considering the above aspects of the case, the Court below was completely justified in decreeing the suit in favour of the respondent. It is also proved that the agreement was breached by the appellants when they refused to perform their part of the obligation. Considering the above aspects of the case, the Court below was completely justified in decreeing the suit in favour of the respondent. Hence, the decision relied upon by learned counsel for the appellants shall not be of any help to the appellants. 13. However, insofar as the rate of interest is concerned, we find it to be on the higher side. Considering the fact that dispute arose on account of non-execution of the work order and no actual expenditure had been incurred, in the fitness of things, it would be appropriate to reduce the rate of interest to 06% (six per cent) per annum instead of 12% per annum, as awarded by the Court below. Hence, the impugned judgment and decree is required to be modified to that extent. 14. For the foregoing reasons, the appeal is partly allowed. The impugned judgment and decree dated 31.12.2005 is confirmed insofar as the decree of Rs.35,89,184/- passed against the appellants, original defendants, is concerned. However, on the decretal amount, the respondent, original plaintiff, shall be entitled for interest at the rate of 06 (six) per cent per annum from the date of filing of the suit till its realization; instead of 12% per annum, as awarded by the Court below. The impugned judgment and decree is modified to the aforesaid extent. The appeal stands disposed of accordingly. Appeal disposed of.