PRADEEP NANDRAJOG, J.

1. Vide order dated 13.8.2004, on the pleadings of the parties, following issues were framed:-

"1. Whether the suit has been filed within the period of limitation?

2. Whether the Plaint is signed, verified and the suit instituted by a duly authorised and competent person?

3. What amount, if any, is due to the plaintiff?

4. Whether the plaintiff is entitled to interest? If so, at what rate and for what period?

5. Relief."

2. Parties led evidence by way of affidavit. One witness was tendered by each party. The witnesses were cross-examined.

3. In a nutshell, case of the plaintiff is that it is a public sector enterprise wholly owned by the Government of India. Shri B.R.Raghunandan, the Secretary of the plaintiff is competent to institute the suit by virtue of powers delegated to him to institute the suit.

4. That on 11.3.1985 a Commission Agency Agreement was entered into between plaintiff and defendant as per which defendant was appointed as a commission agent upto 31.3.1986. The agreement envisaged that monthly indent would be placed by the defendant for material which it required and based on the indent, material was to be supplied. That on year to year basis agreement was extended. Last extension was when defendant acknowledged extension of the Commission Agency Agreement on 7.5.1990. Therefore, defendant functioned as an agent for the financial year 1990-91. That as per the original agreement, a sum of Rs.3 lacs was deposited by the defendant as security deposit which was to carry interest @ 12% p.a. Bank guarantee in sum of Rs.4 lacs was furnished by defendant to secure payment to the plaintiff. That defendant was entitled to receive goods on credit upto Rs.25 lacs. That defendant was entitled to discount between 2.5% to 3.5% on extrusion, 2% to 3% on rolled products and 2% on foils. In addition thereto, if payment was made for the goods dispatched by road, within 10 days of dispatch additional 2% discount was to be granted by the plaintiff to the defendant. In case of goods sent by road, if payment was made within 20 days of dispatch, 2% discount was to be given by the plaintiff to the defendant. That payment had to be made within 40 days of dispatch of goods by road and 50 days if dispatched by train. That from year to year, plaintiff was taking policy decisions pertaining to the terms and conditions under which business was to be transacted. That in the year 1990 a policy decision was taken wherein plaintiff decided that for the years 1984-85 to 1986-87, if commission agent made payments due and payable till 31st March, 1989, it would get a discount on the accumulated interest, i.e. only 25% of the accumulated interest to be paid. It is stated that defendant paid 25% of the interest but not by the stipulated date. Thus, full interest was payable.

5. That defendant did not pay for the goods lifted and ran an over draft. That last transaction was transacted in the month of November 1990. That in respect of the dues, after adjusting the security deposit and recovering sum of Rs.4 lacs under the bank guarantee, a sum of Rs.39,34,884/- remained due and payable to the plaintiff. Amount not being paid, suit was filed.

6. It may be noted at the outset that the sum of Rs.39,34,884/- is the suit amount together with interest. Amount payable by close of financial year 31.3.1991 is stated to be Rs.18,90,844/-. This sum of Rs.18,90,844/- has three components. The first is amount due towards price of goods, the second is the discount not given for timely payment and the third is interest.

7. Defence is that the suit is barred by limitation for the reason agency agreement came to an end on 31.3.1990. That on 22.8.1991 full and final payment was made by the defendant. That after November, 1990 no consignment was received by the defendant. Authority of Shri B.R.Raghunandan to institute the suit, sign and verify the pleadings has been denied.

8. Further defence is that many times goods