Lingamaneni Durga Rajya Lakshmi vs Sri Dattapriya Chit Funds Pvt. ...
2023 Latest Caselaw 5214 AP

            THE HON'BLE SRI JUSTICE V.SRINIVAS

                 APPEAL SUIT No.488 of 2008

JUDGMENT:

This regular appeal under Section 96 Code of Civil

Procedure (hereinafter referred to as 'CPC') is directed against

the decree and judgment in O.S.No.203 of 2004 dated

30.07.2007 on the file of the Court of learned Senior Civil

Judge, Bhimavaram.

2. The defendants, before the trial Court, are the

appellants. The respondent herein is the plaintiff.

3. The respondent herein instituted the suit against the

appellants for recovery of an amount of Rs.4,75,200/-

together with interest arising out of a chit fund transaction.

4. Before adverting to the material and evidence on record

and nature of findings in the judgment of the trial Court, it is

necessary to scan through the case pleaded by the parties in

their respective pleadings.

5. The case of the respondent/plaintiff in brief in the

plaint was as follows:

(i) On 26.11.2002, appellant No.1 joined in the Chit

Series SDLF 1-B for Rs.5,00,000/-, payable at the rate

of Rs.10,000/- per month towards subscription for a

period of 50 months, by executing an Agreement of

Chit. On 27.04.2003, in the 6th installment, appellant

No.1 participated in chit auction and agreed to forgo a

sum of Rs.3,05,000/- and the bid was confirmed.

Appellant No.1 was paid the prize amount of

Rs.1,37,000/- through a cheque bearing No.248614,

dated 12.06.2003 drawn on Karur Vysya Bank Limited,

Bhimavaram. Appellant Nos.2 to 5 stood as guarantors

towards future liability of Rs.4,40,000/- by executing

an agreement of guarantee, appellant No.1 also

executed a cash voucher in favour of the respondent

company and all the appellants executed a promissory

note dated 12.06.2003 for a sum of Rs.4,40,000/-

undertake to pay the said amount with interest @ 12%

per annum to the respondent.

(ii) Appellant No.1 in all paid eight installments and

thereafter committed default on further installments.

Despite repeated demands and legal notice, the

appellants failed to repay the amount. All the

appellants are jointly and severally liable to discharge

the suit debt. Hence, the suit for recovery of money.

6. The appellant No.1/defendant No.1 filed written

statement, which was adopted by the other appellants,

denying the suit transaction, and contended as follows:

One K.V.B.R.Kumar agent of the respondent company

introduced appellant No.1 to the respondent; that the

respondent is not entitled to disallow the dividends and

the same is against the rules; that the respondent

company has not paid the prize amount properly to the

appellant No.1; that the appellants are not liable to pay

the incidental charges; that the statement of account is

not properly drawn and filed into the Court; that the

respondent is not entitled to claim any interest on the

suit amount and hence, the suit is liable to be dismissed

with costs.

7. On these pleadings, the trial Court settled the following

issues for trial:

"1. Whether the plaintiff is entitled to the entire suit claim together with statutory interest and costs? and

2.To what relief?"

8. At the trial, on behalf of the respondent/plaintiff, P.W.1

was examined while relying on Exs.A.1 to A.11 in support of

its contentions. On behalf of the appellants/defendants,

appellants No.1 was examined as D.W.1 and no documentary

evidence were adduced.

9. Basing on the material and evidence, the trial Court

came to conclusion that the respondent proved the suit claim

beyond doubt and entitled to recover the same from the

appellants, who are jointly and severally liable to discharge

the suit debt. Thus, decreed the suit for Rs.4,75,200/-

together with costs, pending and future simple interest at

12% per annum on the principal amount.

10. It is against this decree and judgment,

appellants/defendants preferred this appeal.

11. Heard Sri Ch.Ravindra Babu, learned counsel for

appellants/defendants and Sri M.V.Durga Prasad, learned

counsel for the respondent/plaintiff.

12. Sri Ch.Ravindra Babu, learned counsel for appellants

submits that the officials of the respondent company taken

the signatures of 1st appellant and other signatures on blank

papers; that the cause of action arose at Khammam only as

Ex.A.2 voucher issued by the company for Rs.2,70,000/- in

Khammam; that the person in-charge is not at all competent

to file the suit without approval of the Registrar to extend the

business at Bhimavaram; the respondent company ought not

to have filed the suit till the date of termination of the chit;

that the suit is pre-matured; on the dates mentioned in the

chit agreement, the 1st appellant was on duty being an

employee in Z.P. High School, Penumaluru, hamlet of

Vijayawada, which is 110 K.Ms. from Bhimavaram and 130

K.Ms. from Khammam and it is impossible for him to sign on

the chit agreement and there is no privity of contract; that

the trial court ought to have consider the certificate issued by

the Head Mistress of Penamaluru Z.P.High School as it a vital

document to says that the cause of action is not correct; that

the respondent company filed the suit with fabricated and

forged documents; that the prize amount was not received by

the appellants from the respondent; that the payment made

by the 1st appellant i.e., Rs.11,000/- was not deducted by the

trial court and thereby prays to allow the appeal.

13. Per contra, Sri M.V.Durga Prasad, learned counsel for

the respondent/plaintiff submits that the trial Court on

considering the facts and circumstances, material on record

rightly decreed the suit; that there are no grounds to interfere

with the judgment of the trial Court and that the appeal is liable

to be dismissed.

14. For the sake of convenience, the parties hereinafter

referred to as they arrayed before the trial Court.

15. It is against this backdrop, the short point, which

arises for determination need consideration now:

Whether the judgment of the trial Court is liable to be set aside; if so to what extent?

16. POINT:

In order to appreciate the facts in issue, the following

point has to be determined: Whether there is any error of law

in appreciating the evidence i.e., both oral and documentary

by the trial Court while accepting the claim of the plaintiff?

17. On a careful perusal of the record, this Court found

that P.W.1, who is none other than the authorized person of

plaintiff company, stated in his evidence that on 26.11.2002

defendant No.1 joined in a chit, worth of Rs.5,00,000/-

payable @ Rs.10,000/- per month in fifty (50) monthly

installments. On the sixth (6) installment, she participated in

the auction, became highest bidder, and furnished the

security by defendant Nos.2 to 5. The prize amount was paid

to the defendant No.1 through a cheque and while paying the

prize amount, the plaintiff also obtained a cash voucher from

defendant No.1 and an agreement of guarantee from

defendant Nos.2 to 5, besides a promissory note executed by

the defendants for the due amount of Rs.4,40,000/-.

18. On perusal of the cross examination of P.W.1, nothing

was elicited, except suggesting the suit cannot be

maintainable at Bhimavaram and it should be filed at

Khammam alone. The entire material on record goes to show

that there is no fabrication of documents as alleged by the

appellants.

19. May be true, the plaintiff had its registered office at

Khammam, but they conducted chit at Bhimavaram and it is

established from the evidence of P.W.1 that the chit was

registered at Bhimavaram, agreement and other

consequential events had taken place at Bhimavaram. It is

an admitted fact that D.W.1 admitted in her cross

examination that she received the prize amount and while

receiving price amount her cousin sister, who is defendant

No.2 and her tenants defendant Nos.3 and 4 and husband of

defendant No.2 i.e., defendant No.5 singed as guarantors and

their signatures were found on Exs.A.3 and A.4. No evidence

is forthcoming to believe that the signatures of the

defendants were taken on fabricated papers. Except the bare

testimony of D.W.1, nothing was produced by the defendant,

either documentary or oral, to believe her contentions.

20. On the other hand, it is consistent and clear from the

testimony of P.W.1 coupled with documents that defendant

No.1 herself joined as subscriber in the chit raised by the

plaintiff and to receive the price amount furnished the

security by the defendant Nos.2 to 5. All these documents

clearly show the liability of defendant No.1 along with

defendant Nos.2 to 5, who are guarantors to defendant No.1.

When defendant No.1 failed to pay the amount of

Rs.4,20,000/-, which is due towards future liability of

defendants, after sending the notice under Ex.A.5, the

plaintiff filed the suit.

21. This Court, on careful perusal of the record found that

the evidence of P.W.1 coupled with documents in Exs.A.1 to

A.11 consistently proved the case of the plaintiff. Nothing

found from the testimony of D.W.1 to disbelieve the case of

the plaintiff. The trial Court, after perusing the entire

material on record, rightly concluded that the defendants are

due an amount of Rs.4,20,000/- with subsequent interest to

the plaintiff, for which the suit was decreed. Thus, this Court

does not find any merits in the appeal and the same is liable

for dismissal.

22. Accordingly, the appeal suit is dismissed by confirming

the decree and judgment in O.S.No.203 of 2004 dated

30.07.2007 on the file of the Court of learned Senior Civil

Judge, Bhimavaram. There shall be no order as to costs.

23. Interim orders granted earlier if any, stand vacated.

24. Miscellaneous petitions pending if any, stand closed.

____________________ JUSTICE V.SRINIVAS

Date: 31.10.2023 Krs

THE HON'BLE SRI JUSTICE V.SRINIVAS

APPEAL SUIT No.488 of 2008

DATE: 31.10.2023

Krs