Andhra Pradesh High Court - Amravati

M/S. Margadarsi Chit Fund Ltd., vs S. Satyanarayana on 27 April, 2022

      THE HON'BLE SRI JUSTICE SUBBA REDDY SATTI

                 APPEAL SUIT No.267 of 2006

JUDGMENT:

Aggrieved by the judgment and decree dated 20.02.2006

in O.S.No.25 of 1999 on the file of III Additional District Judge,

Kakinada, insofar as dismissing the suit with costs against the

2nd defendant, the above appeal is filed.

2. For the sake of convenience, parties to this appeal are

referred to as they were arrayed in suit.

3. Plaintiff filed the suit for recovery of an amount of

Rs.6,39,860/- from the defendants.

4. The brief averments in the plaint are that the plaintiff is a

company registered under the Indian Companies Act with

registration No.927/1962-63 and has been doing chit fund

business; that 1st defendant joined as member in chit scheme

on 30.04.1997 and he was allotted ticket No.LT2XK-49; that

total value of chit is Rs.10,00,000/- and 1st defendant has to

pay Rs.20,000/- per month in 50 equal installments; that 1st

defendant was successful bidder in the auction conducted on

15.06.1997 and agreed to forego Rs.4,00,000/-; that after

deducting commission etc., balance amount was paid; that 1st

defendant paid an amount of Rs.1,00,000/- till payment of prize

amount and his future liability is Rs.9,00,000/-; that 1st

defendant furnished guarantors, who executed agreement dated

03.09.1997 and also executed promissory note jointly on

03.09.1997 for Rs.9,00,000/-; that 1st defendant paid an

amount of Rs.6,00,000/- on 10.09.1997; that 1st defendant

committed default in payment of installments from 10.12.1998;

that legal notice dated 21.04.1999 was issued directing the

defendants to pay balance of Rs.6,00,000/- and hence, filed the

suit.

5. Defendants 4 and 5 remained exparte.

6. 3rd defendant filed memo adopting the written statement

filed by 1st defendant. The averments in the written statement

of 1st defendant are that 3rd defendant Saripella Satyanarayana

Raju alone stood as surety for the 1st defendant; that defendants

2, 4 and 5 did not sign or stand as sureties; that 1st defendant

made payment of Rs.26,000/- to N.Saibabu, the then

Development Officer and the said amount was not deducted;

that 1st defendant joined as member of chit group in

Mummidivaram and the Court at Kakinada had no jurisdiction

to entertain the suit and thus, prayed to dismiss the suit.

7. 2nd defendant filed written statement and contended

interalia that signature of 2nd defendant on documents dated

03.09.1997 is forged; that immediately after receipt of notice

from the plaintiff company, he got issued reply and also issued

detailed reply; that 2nd defendant received notice from the

plaintiff's office at Hyderabad on 28.08.1998; that 2nd defendant

is nothing to do with the transaction and had no acquaintance

with other defendants and prayed to dismiss the suit.

8. The trial Court framed the following issues:

(1) Whether the plaintiff is entitled to the suit amount as prayed for against all the defendants? (2) Whether the payment made by 1st defendant as alleged by him in his written statement is true and correct?

(3) To what relief?

9. During the course of trial, P.Ws.1 to 3 were examined and

Exs.A-1 to A-14 were marked. No oral or documentary evidence

was adduced on behalf of defendants 1 and 3. On behalf of 2nd

defendant, he examined himself as D.W.1 and got examined

D.W.2. Exs.B-1 to B-5 and Ex.X-1 were marked.

10. The trial Court decreed the suit vide judgment dated

20.02.2006 against D1, D3 to D5. However, the trial Court

dismissed the suit against the 2nd defendant with costs.

Aggrieved by the same, the above appeal was filed.

11. Heard Sri P.Durga Prasad, learned counsel for appellant

and Sri T.V.S.Prabhakara Rao, learned counsel for the 2nd

respondent.

12. Learned counsel for the appellant would contend that the

trial Court ought to have decreed the suit in its entirety. He

would also contend that trial Court did not appreciate the oral

and documentary evidence against 2nd defendant in its proper

perspective. He would further contend that trial Court ought to

have considered the evidence of P.Ws.1 to 3 in proper

perspective and eventually prayed to allow the appeal.

13. Learned counsel for 2nd respondent supported the

judgment of the trial Court.

14. The following points arise for consideration in this appeal:

      (1)   Whether     the      appellant        proved    that    2nd
            defendant    signed           on     Exs.A-4    and     A-5
            agreement      of     guarantee        and     promissory
            note?
      (2)   Whether     the       appellant        is    entitled   for
            recovery of amount against 2nd defendant
            also basing on Exs.A-4 and A-5?
      (3)   To what relief?

15. Since the above points are inter-connected, this Court

deems it appropriate to deal with the same together.

16. There is no dispute with regard to 1st defendant joining a

member in chit scheme of Plaintiff Company and allotment of

ticket No.LT2XK-49. There is also no dispute with regard to

value of chit being Rs.10,00,000/- and 1st defendant has to pay

Rs.20,000/- per month in 50 equal installments. It is also

undisputed fact that in the auction conducted on 15.06.1997,

1st defendant became successful bidder and agreed to forego

Rs.4,00,000/- and the plaintiff company paid Rs.6,00,000/- on

10.09.1997.

17. According to the plaintiff, all the defendants executed

Ex.A-4 agreement of guarantee dated 03.09.1997 and Ex.A-5

promissory note dated 03.09.1997. After that plaintiff paid total

amount of Rs.6,00,000/- and 1st defendant committed default in

payment of installments from 10.02.1998 and hence, suit was

filed.

18. 2nd defendant by filing written statement denied his

signatures on Exs.A-4 and A-5, pleaded forgery and also

pleaded that he has no acquaintance with other defendants.

19. Before filing of the suit, 2nd defendant addressed letter

dated 24.07.1998 to the Manager of Kakinada branch. A perusal

of the said letter indicates that he received registered letter in

respect of Chit No.LT2XK-49 of S.Satyanarayana, being surety

on 22.07.1998; that he never stood as surety to him and also

pleaded that his signature was forged and he had no connection

with the said person. Again 2nd defendant addressed letter to

Branch Officer at Kakinada and also Main Branch at Hyderabad

on 29.07.1998, reiterating the stand that he never stood as

guarantor to S.Satyanarayana, 1st defendant and his signature

was forged and he had no acquaintance with any of defendants.

He also requested the concerned to send papers containing his

signatures and also expressed his inclination to bear the

expenses. The said letters were marked as Exs.B-2 and B-3.

After Exs.B-2 and B-3, 2nd defendant received Ex.B-4 from the

plaintiff denying the averments therein. No document, as

requested by 2nd defendant was sent at his expense. Thereafter

legal notices dated 16.04.1999 and 19.11.1998 were issued to

all the defendants including 2nd defendant. Legal notice dated

16.04.1999 was marked as Ex.A-7 and legal notice dated

19.11.1998 was marked as Ex.B-5.

20. The stand of 2nd defendant from the beginning is

consistent that he never signed Exs.A-4 and A-5. Even before

institution of suit itself, when he received notices under Ex.B-1,

he replied to those notice under Exs.B-2 and B-3 and denied his

signatures. Though the plaintiff issued Ex.B-4, 2nd defendant

against under Ex.B-5 requested the plaintiff to send copies of

Exs.A-4 and A-5. However, without any further communication,

plaintiff issued legal notice under Ex.A-7 and instituted the suit.

21. In the suit, 2nd defendant filed I.A.No.1045 of 2005 to send

the document for handwriting expert to compare the signatures

appearing on Exs.A-4 and A-5 with his admitted signatures.

Report of the handwriting expert was marked as Ex.X-1 and the

handwriting expert, Assistant Director of A.P. Forensic Science

Laboratory, Hyderabad was examined as D.W.2.

22. The handwriting expert opined that admitted writings

signatures of 2nd defendant are not tallying with the disputed

signatures on Exs.A-4 and A-5. In fact, signatures appearing on

Income Tax Returns for assessment years 1996-97; 1997-98,

1998-99 of 2nd defendant were compared with Exs.A-4 and A-5

dated 03.09.1997.

23. The handwriting expert, who was examined as D.W.2

deposed that there is possibility of disguising signatures of a

person when he is asked to give specimen signatures. However,

in the case on hand, disputed signatures 2nd defendant are

compared with his admitted signatures on Income Tax Returns

for assessment years 1996-97; 1997-98, 1998-99. In the cross

examination of D.W.2, nothing is elicited to shake his testimony

insofar as vital aspects are concerned.

24. Though it was contended by learned counsel for appellant

that the Court below ought not have relied upon the evidence of

handwriting expert to dismiss the suit against 2nd defendant, in

fact, the trial Court did not rely upon the hand writing expert

evidence alone in dismissing the suit against 2nd defendant. The

handwriting expert opinion is not substantial piece of evidence.

However, it can be relied upon, if other supporting or

corroborating evidence is available. In the instant case, as

narrated supra, the 2nd defendant had taken plea that Exs.A-4

and A-5 did not contain his signatures much before filing of suit

and also requested the plaintiff to send the copies of Exs.A-4

and A-5. If really 2nd defendant subscribed his signatures on

Exs.A-4 and A-5, he might not have ventured to issue Ex.B-5

and also sent the document for handwriting expert for

comparison. In view of the same, taking aid of handwriting

expert opinion, cannot be find fault with.

25. Though learned counsel for appellant would contend that

the trial Court without framing a specific issue, proceeded and

dismissed the suit against the 2nd defendant. It is settled

principle of law that when the pleadings of both parties are

available and each party knows about the case of other and let

in evidence in support of the same, non-framing of an issue, is

of no consequence. The very purpose of framing the issue is to

know in advance as to what lis involved in the suit. The parties

went to trial knowing fully well what they were required to

prove.

26. In Kunju Kesavan Vs. M.M. Philip & Others1, the

Hon'ble Apex Court held that

"The parties went to trial, fully understanding the central fact whether the succession as laid down in the Ezhava Act applied to Bhagavathi Valli or not. The absence of an issue, therefore, did not lead to a material sufficient to vitiate the decision. The plea was hardly needed in view of the fact that the plaintiff stated in his replication that the "suit property was obtained as makkathayam property, by Bhagavathi Valli under the Ezhava Act".

27. Thus, The position of law is well settled that where parties

adduce evidence in respect of a matter for which an issue has

not been framed and both sides are well aware of the dispute

which relates to the issue, the defect of non-framing of the issue

is cured. There will be no inherent lack of jurisdiction in the

Court to go into that question and decide that aspect of the

matter. In fact in the case on hand parties let in evidence and

issue No.1 framed by the trial Court is comprehensive.

28. Plaintiff failed to prove the execution of Exs.A-4 and A-5

by 2nd defendant and hence, the plaintiff is not entitled to claim

suit amount from the 2nd defendant. Since the plaintiff failed to

prove execution of any document by 2nd defendant, shifting of