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Judgment
Venuthurumalli Gopala Krishna Rao, J
This Appeal, under Section 96 of the Code of Civil Procedure [for short ‘the C.P.C.’], is filed by the Appellants/defendants challenging the Decree and Judgment, dated 25.09.2002, in O.S. No.397 of 1996 passed by the learned Principal Senior Civil Judge, Guntur [for short ‘the trial Court’]. The Respondent herein is the plaintiff in the said Suit.
The respondent/plaintiff filed a Suit for recovery of a sum of Rs.3,29,882.50 paise being the amount due towards future subscriptions by the defendants on the day when the prized amount was drawn with interest and for costs.
Both the parties in the Appeal will be referred to as they are arrayed before the trial Court.
The brief averments of the plaint, in O.S. No.397 of 1996, are as under:
The plaintiff is a company registered under the Indian Companies Act. On 22.09.1993, one M/s.Madala Lime Industries, represented by its proprietor M.Padmavathi joined as a member of the chit fund scheme of the plaintiff company. As per its rules and regulations, the ticket No.LTIX-34 was allotted to N.Padmavathi. The total value of the chit was Rs.4,00,000/- to be subscribed at Rs.10,000/- in 40 months. In the auction conducted as per the rules of the company in respect of the above chit on 31.01.1994 one M/s.Madala Lime Industries, represented by its proprietor M.Padmavathi, W/o.Satyanarayana has participated and was the successful bidder, having agreed to forego Rs.2,00,000/- out of Rs.4,00,000/- which was duly confirmed by the plaintiff company. But she failed to fulfil the condition by not producing the sureties, then the first defendant requested the company on 07.04.1994 by way of an application to transfer the above said chit and bid in favour of the first defendant with the same terms and conditions. Accordingly, on the same day, the plaintiff accepted the said request and the said chit and bid was transferred in the name of the first defendant. The first defendant paid Rs.60,000/- till the date of payment of the prize amount and future liability for Rs.3,40,000/-. The defendants 2 to 5 stood as guarantors and the defendant Nos.2 to 5 executed guarantee deed. The first defendant was paid Rs.1,83,242.50 paise under a cheque and also paid an amount of Rs.16,757.50 paise under a voucher and subsequently the defendants failed to pay the future instalments.
The first defendant filed a written statement, the same was adopted by the other defendants. The brief averments of the written statement filed by the first defendant are as under:
The plaintiff obtained the signature of the first defendant on printed blank paper, the defendants never executed any pronote nor agreement of the guarantee, the plaintiff claimed interest on the balance amount, but did not give credit of the defendants. The defendants are entitled for dividends as the plaintiff claimed interest and the plaintiff has paid Rs.2,00,000/- only on 29.04.1994, whereas this defendant paid Rs.92,215/- in instalments from 22.09.1993 to 20.06.1995. If the interest is calculated on both the amounts, the amount to be payable by the defendants will never be Rs.3,29,882.50 paise and the account copy is incorrect and prayed the Court to dismiss the suit with costs.
Based on the above pleadings, the trial Court framed the following issues:
(i) Whether the first defendant was entitled to dividends after he committed default in payment of instalments?
(ii) Whether the account copy is correct?
(iii) To what relief?
During the course of trial in the trial Court, on behalf of the Plaintiff, PW1 was examined and Ex.A1 to Ex.A20 were marked. On behalf of the Defendants DW1 was examined and Ex.B1 to Ex.B5 were marked.
After completion of the trial and on hearing the arguments of both sides, the trial Court decreed the suit with costs vide its judgment, dated 25.09.2002, against which the present appeal is preferred by the appellants/defendants in the Suit questioning the Decree and Judgment passed by the trial Court.
Heard Sri N.Sriram Murthy, learned counsel for appellants and Sri P.Durga Prasad, learned counsel for respondent.
Having regard to the pleadings in the suit, the findings recorded by the trial Court and in the light of rival contentions and submissions made on either side before this Court, the following point would arise for determination:
Whether the trial Court is justified in decreeing the suit and whether the decree and judgment passed by the trial court needs any interference of this appellate Court?
Point:
The case of the plaintiff is that the plaintiff is a chit fund company registered under the Indian Companies Act and one Madala Lime Industries, represented by its proprietor M.Padmavathi joined as a member of the plaintiff chit fund company on 22.09.1993 for a value of the chit of Rs.4,00,000/- to be subscribed at the rate of Rs.10,000/- per month for 40 months and she also signed on the agreement of chit. The plaintiff further pleaded that on 31.01.1994 the said Madala Lime Industries become the successful bidder in the auction and agreed to forego Rs.2,00,000/- out of Rs.4,00,000/- and the same was confirmed by the plaintiff. The plaintiff further pleaded that the said Madala Lime Industries could not furnish the sureties as per the bylaws of the plaintiff chit fund company and expressed the inability to furnish sureties and on the request made by Madala Lime Industries and on the application given by the first defendant, the plaintiff chit fund company accepted to transfer the chit to the first defendant and the said chit was transferred to the first defendant and subsequently the first defendant furnished the defendants 2 to 5 as guarantors and all the defendants executed the suit promissory note and the first defendant executed agreement of chit in favour of the plaintiff, subsequently the first defendant committed default in payment of instalments and other defendants also failed to discharge their liability.
In order to prove the case of the plaintiff, the plaintiff examined its foreman-cum-manager as PW1. He deposed in his evidence about the case of the plaintiff. As per the evidence of PW1, one Madala Lime Industries represented by M.Padmavathi joined as a member of the chit fund company on 22.09.1993 and the total value of the chit is Rs.4,00,000/- and the monthly subscription is Rs.10,000/- for 40 months and also signed an agreement of chit. PW1 further deposed that the said Madala Lime Industries participated in the auction, but expressed its inability to produce the sufficient sureties and thereupon on the request made by Madala Lime Industries, the first defendant made an application to transfer the above chit and bid in favour of the first defendant with the same terms and conditions, the same is not at all disputed by the defendants. It is the further case of the plaintiff that the prize amount was paid to the first defendant and the first defendant and other defendants executed a promissory note under Ex.A3 and also executed agreement of guarantee under Ex.A2 and the first defendant also signed on Ex.A1 chit agreement. The signatures on all the documents are not at all disputed by the defendants. It is also further clear that the letter given by Madala Lime Industries is marked as Ex.A7 by the plaintiff and request letter given by the first defendant dated 07.04.1994 is also marked as Ex.A8. Further more, the Ex.A5 cash voucher reveals that prize money was paid to the first defendant. As stated supra, all the defendants executed Ex.A2 agreement of guarantee and Ex.A3 promissory note. It is also further clear that the prize money was paid to the first defendant under Ex.A5 cash voucher and subsequently the first defendant committed default in payment of instalments from 05.09.1994 onwards, furthermore, the plaintiff chit fund company got issued a legal notice under Ex.A9 and the same is received by all the defendants under Ex.A10 to Ex.A14, the same is not at all disputed by the defendants. Therefore, the plaintiff discharged its liability to prove the case of the plaintiff.
The signatures on Ex.A2 agreement of guarantee and Ex.A3 promissory note and Ex.A1 chit agreement is not at all disputed by the defendants. Furthermore, the manager of the first defendant was examined as DW1. He deposed in his evidence that the plaintiff paid Rs.2,00,000/- to the first defendant after the chit was knocked down in favour of first defendant in an auction. The another important circumstance to believe the case of the plaintiff is that DW1, who is working as a manager of the first defendant, produce Ex.B1 to Ex.B5 receipts before the Court and deposed that those amounts were not given credit to the defendant’s account, but in his evidence in cross examination he categorically admitted that all the amounts paid under Ex.B1 to Ex.B5 were credited in Ex.A15 true copy of the account. Therefore, the oral contention of the first defendant in the written statement which was adopted by the defendants 2 to 5 that the plaintiff obtained their signatures on a blank proforma papers is unbelievable. Furthermore, the defendants to discharge their burden fails to adduce any evidence to show that the plaintiff chit fund company officials obtained their signatures on empty papers. The material on record clearly reveals that prior to institution of the suit, the plaintiff got issued a legal notice under Ex.A9 and the same is received by all the defendants under Ex.A10 to Ex.A14. It is also further clear that to deny the contents in Ex.A9 legal notice none of the defendants issued a reply notice, they simple kept quite, which leads to file the suit by the plaintiff.
As stated supra, the plaintiff discharged its burden to prove its case, furthermore, to disprove the evidence placed by the plaintiff, no cogent evidence is adduced by the defendants. Therefore, the material on record clearly proves that the first defendant received the prize amount from the chit fund company and executed a promissory note for future payments of the instalments of the chit and the other defendants also executed agreement of guarantee and the same is supported by Ex.A15 copy of the account of the plaintiff company, therefore, the plaintiff is entitled the suit claim. By giving cogent reasons the learned trial Judge rightly decreed the suit in favour of the plaintiff company, there is no illegality in the decree and judgment passed by the learned trial Judge and the decree and judgment passed by the trial Court is perfectly sustainable under law and it requires no interference. The point is answered accordingly.
In the result, the Appeal Suit is dismissed confirming the decree and Judgment dated 25.09.2002, in O.S.No.397 of 1996 passed by the learned Principal Senior Civil Judge, Guntur. Each party do bear their own costs in the appeal.
As a sequel, miscellaneous petitions, if any, pending in the Appeal shall stand closed.