The cause of action for breach of contract arises when the breach occurs, and the suit must be filed within three years from that date as per the Limitation Act.

1. This is suit filed by the plaintiff for compensation for breach of contract. The defendant has contested the suit by filing written statement. Issue have been framed. By consent, arguments are heard on the question of limitation covered by Issue No.1. I have heard both the Counsel.

2. The plaintiff's case is that it had sold 499 bales of cotton to the defendant as per contract dated 23rd July 1973. The goods were ready for being delivered to the defendant. The defendant's agent came and approved the goods after inspection of 199 bales on 1st August 1973. As per the contract, the defendant was to make payment before lifting the goods. But in spite of request of the plaintiff, defendant did not lift the goods by paying the amount. Then plaintiff wrote a letter dated 17th December, 1973 calling upon the defendant to lift the goods and make the payment. But defendant replied by letter dated 20th December, 1973 stating that it has already rejected the goods as per the letter dated 2nd August, 1973. But is alleged that plaintiff has never received the said letter dated 2nd August, 1973. Then plaintiff wrote three more letters dated 26th December, 1973, 8th January, 1994 and 14th January, 1994. The defendant replied by letter dated 21st January, 1974 asserting that it has already rejected the goods. Then plaintiff sent a telegram dated 15th March, 1974 calling upon the defendant to lift the goods within 72 hours, failing which, it would be liable to pay compensation, but there was no response by the defendant. Then it is stated that plaintiff sold the said 199 bales of cotton in open market on 6th August 1974 and as a result incurred a loss of Rs. 73,922/-. Then plaintiff got issued a lawyer's notice dated 3rd February 1975 claiming the said loss with interest. The defendant sent a reply dated 20th February, 1975 denying its liability. Hence the plaintiff has filed the suit praying for a decree for a sum of Rs. 1,11,653.02 P.

3. The defence is that though the contract is admitted, it is stated that the goods were not approved by the defendant's agent on 1st August, 1973. On the other hand, it is asserted that the defendant rejected the goods by writing a letter dated 2nd August, 1973. The various correspondence mentioned in the plaint are admitted. The defendant has denied its liability and has asserted rejection of goods in every one of its letters. It is alleged that the suit is barred by limitation, that the defendant is not liable to pay any compensation to the plaintiff and that the defendant is not liable to any amount as claimed in the plaint. Hence it is prayed that the suit be dismissed with costs.

4. Issue No.1 framed in this case is as follows : -

Whether the present suit is barred by the Law of Limitation?

5. Most of the facts in this case are admitted. Admittedly, there was a contract between the plaintiff and defendant for supply of cotton bales. It is also not disputed that the plaintiff had kept ready 199 bales. The dispute is as to whether the defendant's agent came to plaintiffs regional office, inspected and accepted the goods or not. For the purpose of deciding the question of limitation that point is immaterial. Then there is one more disputed fact whether the defendant rejected the goods by writing a letter dated 2nd August, 1973. According to the plaintiff it has not received any such letter dated 2nd August 1973. We will ignore this disputed fact also since it is not necessary for our present purpose.

The plaintiff issued a letter dated 17th December, 1973 calling upon the defendant to take delivery of the goods.

The defendant sent its reply as per its letter dated 20th December, 1973 informing that it had already rejected the