Andhra Pradesh High Court - Amravati
Chithapalli Srinivas And Others vs Margardarsi Chits Fund Limited And ... on 9 August, 2024
1
APHC010127202010
IN THE HIGH COURT OF ANDHRA PRADESH
AT AMARAVATI [3369]
(Special Original Jurisdiction)
FRIDAY, THE NINTH DAY OF AUGUST
TWO THOUSAND AND TWENTY FOUR
PRESENT
THE HONOURABLE SRI JUSTICE T MALLIKARJUNA RAO
APPEAL SUIT NO. 7 OF 2010
Between:
Chithapalli Srinivas and Others ...APPELLANT(S)
AND
Margardarsi Chits Fund Limited and Others ...RESPONDENT(S)
Counsel for the Appellant(S):
1. ELEVATED AS JUDGE
2. T V JAGGI REDDY
Counsel for the Respondent(S):
1. P DURGA PRASAD
The Court made the following JUDGMENT:
1. The Appeal, under Section 96 of the Code of the Civil Procedure, 1908
(for short, 'C.P.C.'), is filed by the Appellants/Defendants 1 to 3 challenging
the decree and Judgment, dated 17
2008 passed
by the learned Senior Civil Judge, Kothapet, East Godavari District (for
short, 'trial court').
2. Respondent is the Plaintiff
Plaintiff, who filed the suit in O.S.No.67 of 2008 for
passing of a preliminary decree for recovery of Rs.5,37,422/-
Rs.5,37,422/ with
subsequent interest at 12% p.a., on Rs.4,75,000/
Rs.4,75,000/- from the date of suit till
the date of realization. The Appellants are the Defendants 1 to 3 in the said
suit.
3. The parties will hereinafter be referred to as arrayed before the trial
Court.
4. The facts leading to the present Appeal, in a nutshell, are as under:
The Plaintiff is a company registered under the Indian Companies
Act, with its registered office located in Hyderabad and a branch in
Amalapuram. 1st Defendant joined the chit group FT001Z AM-17 by
executing a chit agreement on 10.01.2006. The chit has a total
value of Rs.10,00,000/-, with monthly subscriptions of Rs.21,000/-
for a period of 40 months. In the fourth auction conducted by the
Plaintiff on 22.01.2006, 1st Defendant emerged as the successful
bidder, agreeing to forego Rs.4,00,000/-. For the future payment of
monthly installments, 1st Defendant provided Defendants 2 to 5 as
guarantors. Defendants 2 to 5 executed guarantee agreements,
and all the Defendants executed a promissory note on 29.05.2006,
for a future liability of Rs.9,00,000/-. On 29.05.2006, 1 st Defendant
offered the plaint schedule property as security by depositing the
title deeds with the Plaintiff, intending to create a mortgage by
deposit of title deeds. 1st Defendant also executed a confirmation
letter on 30.05.2006. 1st Defendant was disbursed a prize amount
of Rs.6,00,000/-, comprising Rs.5,24,690/- paid by cheque
No.174089 and Rs.75,310/- adjusted via receipt No. 835453 on
06.06.2006. 1st Defendant issued a cash voucher acknowledging
these payments. Subsequently, while 1st Defendant made some
installment payments, he defaulted on payments starting from
15.07.2007. The Plaintiff issued a legal notice dated 08.08.2008,
demanding the outstanding amount along with interest from the
Defendants. Although the Defendants received this notice, they
have failed to make any payments to the Plaintiff.
5. 1st Defendant filed a written statement, which was adopted by the
Defendants 2 and 3, they refuted most of the plaint averments, asserting that
1st Defendant never provided guarantors and did not execute any agreement
of guarantee on 29.05.2006 in favour of the Plaintiff. They further contended
that no promissory note was executed on 29.5.2006 in favour of Plaintiff and
that 1st Defendant did not offer the plaint schedule property as security by
depositing his title deeds with the Plaintiff. Instead, the title deeds were
given for the purpose of verifying 1st Defendant's status, not as security.
Additionally, the 1st Defendant did not execute any confirmation letter on
30.05.2006 regarding the deposit of title deeds as security. Plaintiff has
miscalculated the accounts and that, if correctly computed, there would be
no outstanding balance due from the 1st Defendant. The suit is intended
solely to harass the defendants and that the Plaintiff seeks to gain unjustly.
1st Defendant has paid the entire amount due and has not defaulted on any
payments; the suit is barred by limitation, and therefore, lacks merit.
6. Defendants 4 and 5 have remained ex parte.
7. Based on the above pleadings, the trial Court framed the following
issues:
(1) Whether the Plaintiff is entitled to the relief of passing preliminary
decree for recovery of the suit claim with subsequent interest and
costs as prayed for?
(2) Whether the suit is barred by limitation?
(3) To what relief?
8. During the trial, on behalf of the Plaintiff, PW1 was examined and
marked Exs.A.1 to A.14. On behalf of the defendants, D.W.1 was examined,
and no documents were marked.
9. After completion of the trial and hearing the arguments of both sides,
the trial Court preliminarily decreed the suit with costs for Rs.5,37,422/- with
subsequent interest @ 12% per annum on Rs.4,75,000/- from the date of
suit till the date of realization and that three months time is granted for
redemption.
10. I have heard learned counsel appearing on behalf of the respective
parties at length and have gone through the Judgment and findings recorded
by the learned trial Court while decreeing the suit. I have also re-appreciated
all the evidence on record, including the deposition of witnesses examined
by both sides.
11. Sri T.V. Jaggi Reddy, learned counsel for the Appellants/Defendants 1
to 3, asserts that the trial court erred by failing to adequately consider the
DW.1's evidence and by accepting the PW.1's testimony; Exs.A.2, A.3, and
A.6 were not submitted for expert analysis, despite DW1's denial of their
execution; Ex.A.5, a registered settlement deed dated 06.04.2005, was
provided to the Plaintiff solely for verification purposes and not with the
intention of creating an equitable mortgage in favor of the Plaintiff; further,
DW.1 claims to have paid the entire outstanding amount without any default
and denies having provided any guarantors to the Plaintiff as alleged. He
further contends that Ex.A.13, a computerized statement of account
submitted by the Plaintiff, does not accurately reflect the account details.
Since DW1 disputes the execution of the confirmation letter (Ex.A.6), the
question of an equitable mortgage is irrelevant, rendering the suit
unsustainable under the law. DW1 also denies the execution of Ex.A.4, a
cash voucher, alleging it was created by the Plaintiff. Additionally, DW1
notes that no witnesses other than PW1 were presented to authenticate
Ex.A.2, the guarantee agreement.
12. Per contra, Sri P. Durga Prasad, learned counsel representing the
Respondent/Plaintiff, argued that the trial Court appreciated the case facts
and reached a correct conclusion. The reasons given by the trial Court do
not require any interference.
13. With regard to the pleadings in the suit, the findings recorded by the
Trial Court and in light of the rival contentions and submissions made on
either side before this Court, the following points would arise for
determination:
1) Is the Trial Court justified in holding that the Plaintiff is
entitled for recovery of the suit amount as prayed for?
2) Is the Trial Court erred in finding that 1st defendant
executed the letter of confirmation/Ex.A6 dated 30.05.2006
with an intention to create equitable mortgage?
3) Does the trial Court judgment need any interference?
POINT NOs.1 and 2:
st
14. The evidence presented by DW1, the 1 Defendant, asserts that he is a
subscriber to the Plaintiff's chit company and has settled the entire amount
due without defaulting. This claim was also made by the 1 st Defendant in the
written statement. However, the 1st Defendant failed to provide any receipts
or proof to substantiate that additional payments were made, which the
Plaintiff Company allegedly did not account for. Furthermore, the 1st
Defendant did not offer an explanation for his failure to obtain receipts for the
payments he made. In light of this lack of corroborative evidence, the Trial
Court correctly rejected the defence put forth by the 1st Defendant.
st
15. Another contention raised by the 1 Defendant is that the suit is barred
by limitation. However, as previously noted, DW.1 has acknowledged being
a subscriber to the Plaintiff's chit company. The Plaintiff's case is that DW1
joined the chit group FT001ZAM-17 by executing a chit agreement on
January 10, 2006, as evidenced by Ex.A1. The Plaintiff also claims that
DW.1 was a successful bidder in the auction and agreed to forego
Rs.4,00,000/-, a fact that remains uncontested. Furthermore, the Plaintiff
contends that DW1 provided Defendants 2 to 5 as guarantors for the
payment of the amount and executed a guarantee agreement.
16. The Plaintiff relied on Ex.A2, agreement of guarantee dated 29.05.2006,
to support his case. The 1st defendant contends that he neither provided
guarantors nor executed the agreement of guarantee. However, as noted in
the Trial court's judgment, Defendants 4 and 5 have remained ex parte and,
therefore, have not contested the Plaintiff's assertion regarding the
execution of the guarantee agreement by them.
nd
17. It is undisputed that 2 Defendant is the father, 3rd Defendant is the
wife of 1st Defendant. Both Defendants 2 and 3 filed a memo adopting the 1 st
Defendant's written statement. It appears that Defendants 4 and 5, who are
the employees, acted as guarantors and did not contest the Plaintiff's case.
Additionally, DW1 admitted during cross-examination that the signature of
Ex.A.2 is indeed that of his father, 2 nd Defendant.
18. This Court is of the view that Plaintiff lacks any substantial motive to
forge the signature of 1st Defendant's spouse and father. The Plaintiff
contends that 1st Defendant has made only 21 installments, for which he has
provided detailed records. However, it is pertinent to note that the 1st
Defendant has not placed any corroborative evidence for additional
payments he claims to have made.
19. As evidenced by the grounds of appeal and the contentions presented
by the Plaintiff's counsel, the primary contention of the Defendants is that the
suit is barred by limitation, a point also addressed in the issues framed by
the Trial Court. This Court observes that, given that the transaction in
question occurred in 2006, with the chit agreement executed on 10.01.2006,
and the guarantee agreement executed on 29.05.2006, it is implausible to
accept the Defendants' contention that the suit, filed in the year 2008, is
barred by limitation.
st
20. Another contention raised by the Defendants is that the 1 Defendant
did not execute Ex.A6, the memorandum of deposit of title deeds. According
to DW1's testimony, the title deeds were provided to the Plaintiff solely for
the purpose of verifying the 1st Defendant's status, and not as collateral.
Furthermore, 1st Defendant contends that he has not executed Ex.A6, which
would confirm the deposit of title deeds as security. The Trial Court, having
reviewed the contentions, found them to be unsubstantiated and, therefore,
did not accept them.
st
21. This Court is of the view that if the 1 Defendant had, in fact, provided
Ex.A5, the Registered Settlement, solely for the purpose of verifying the
status, it would have been incumbent upon 1st Defendant to have taken
appropriate measures to reclaim the document following the verification
process. The 1st Defendant has not proffered any justification for the lack of
initiative to retrieve the document. This omission substantially undermines
the validity of the 1st Defendant's contention. Apart from this contention, no
further contentions have been advanced.
22. After reviewing the material on record, this Court finds that the Trial
Court appropriately accepted the Plaintiff's case, providing cogent and
convincing reasons supported by the evidence presented. The conclusion
drawn from the discussion is that the Plaintiff has successfully established its
case and is entitled to recover the claim stated in the suit. Additionally, the
suit was filed within the limitation. Defendants 1 to 3 have failed to
substantiate their case. Accordingly, these points are answered in favor of
the Plaintiff, affirming the trial Court's judgment.
POINT NO.3:
23. After careful consideration, the trial Court correctly appreciated the
evidence. There is no reason for this Court to arrive at a different conclusion
than the one arrived at by the trial Court. I hold the findings arrived at by the
trial Court are correct, and no justifiable reasons have been shown by the
appellants/defendants for arriving at different conclusions. I agree with the
conclusion reached by the trial Court.
24. Accordingly, the Point is answered in favour of the Plaintiff. Given the
preceding discussion, the view taken by the trial court does not call for any
interference, and this Appeal fails. The impugned Decree and Judgment
passed by the trial court is upheld.
25. As a result, the Appeal is hereby dismissed without costs by
confirming the Decree and Judgment in O.S.No.67 of 2008, dated
17.08.2009, passed by the learned Senior Civil Judge, Kothapeta, East
Godavari District.
Miscellaneous petitions pending, if any, in this Appeal, shall stand
closed.
_____________________________
JUSTICE T. MALLIKARJUNA RAO
Date: 09.08.2024
GRL / SAK
THE HON'BLE SRI JUSTICE T.MALLIKARJUNA RAO
APPEAL SUIT NO. 07 OF 2010
Date: 09.08.2024
GRL / SAK
