Kerala High Court
Nidhin Mon vs Sreegokulam Chits And Finance Company ... on 9 September, 2025
Author: Sathish Ninan
Bench: Sathish Ninan
RFA No.274/2020
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2025:KER:67031
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE SATHISH NINAN
&
THE HONOURABLE MR.JUSTICE P. KRISHNA KUMAR
TUESDAY, THE 9TH DAY OF SEPTEMBER 2025 / 18TH BHADRA, 1947
RFA NO. 274 OF 2020
AGAINST THE JUDGMENT DATED 28.02.2020 IN OS NO.13 OF 2017
OF SUB COURT AT PUNALUR, KOLLAM.
APPELLANT/DEFENDANTS 1 & 2:
1 NIDHIN MON
AGED 45 YEARS
S/O. THANKACHEN, SOBHA SADANAM, IMMANVEL HOUSE,
NEDIYARA P.O., ANCHAL, YEROOR VILLAGE, PUNALUR TALUK
2 PUSHPAVALLY
AGED 60 YEARS
D/O. SUBHASHINI, VEDANPACHAYIL VEEDU, NEDIYARA P.O.,
ANCHAL, YEROOR VILLAGE, PUNALUR TALUK
BY ADV SHRI.M.S.RADHAKRISHNAN NAIR
RESPONDENT/PLAINTIFF:
SREEGOKULAM CHITS AND FINANCE COMPANY (PVT) LTD
HAVING ITS CORPORATE OFFICE AT SREEGOKULAM, TOWERS
NO.66, ARCOT ROAD, CHENNAI AND HAVING ITS BRANCHES
AT PATHANAPURAM, PUNALUR, ANCHAL, KOTTARAKKARA, ETC,
AND ALL OVER INDIA REPRESENTED BY ITS ASSISTANT
BUSINESS MANAGER, MR.A OMANAKUTTAN, PIN-691 306
THIS REGULAR FIRST APPEAL HAVING COME UP FOR HEARING ON
09.09.2025, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
RFA No.274/2020
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2025:KER:67031
SATHISH NINAN & P. KRISHNA KUMAR, JJ.
= = = = = = = = = = = = = = = = = =
R.F.A.274 OF 2020
= = = = = = = = = = = = = = = = = =
Dated this the 9th day of September, 2025
JUDGMENT
P.Krishna Kumar, J.
The appellants are the defendants in a suit for
money. In this appeal they challenge the decree of the Sub
Court, Punalur wherein it is held that the respondent is
entitled to recover Rs.33,56,848.75/- with interest from
the appellants.
2. The respondent is a chit and financing company.
According to the respondent, the first appellant subscribed
to two chits having a sala of Rs.25 lakhs each and thereby
received Rs.37.5 lakhs on 23.06.2014. The second appellant
stood as guarantor for the chit amount and deposited her
title deed bearing No.3437/91 of SRO Anchal in respect of
five cents of land, creating an equitable mortgage to
secure repayment. The respondent further contended that the
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first appellant failed to pay the instalments and that
Rs.31,22,650/- thus became the outstanding balance. Towards
repayment of this amount, the first appellant issued a
cheque dated 15.12.2016, but it was dishonoured on
presentation due to insufficiency of funds. Hence the
appellants are bound to pay the said amount with agreed
interest @ 18% per annum, it is contented.
3. The appellants denied the above contentions. The
first appellant pleaded that he had issued three signed
blank cheque leaves to the respondent as security for a
chit transaction of Rs.25,000/-. According to him, the
second appellant was never made a guarantor for his chit
transaction.
4. The second appellant contended that she had
availed a loan of Rs.50,000/- from the respondent on
16.06.2014 and, at that time, she handed over the title
deed as security and created an equitable mortgage, but she
never stood as guarantor for the first appellant's
transaction. It was further contended that the loan amount
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was repaid through the collection agent of the respondent,
though no receipt was issued by him.
5. During the trial, the respondent examined PW1
and PW2, officials of the chit firm, and produced Exts.A1
to A16 documents. The appellants examined themselves as DW1
and DW2 respectively and produced Ext.B1. After considering
the oral and documentary evidence, the trial court
concluded that the defence version was unbelievable, that
the respondent satisfactorily established their
contentions, and accordingly decreed the suit.
6. We have heard Sri. M.S. Radhakrishnan Nair, the
learned counsel appearing for the appellants.
7. The claim of the respondent rests mainly on
Ext.A2 cheque issued by the first appellant and Exts.A12
and A13 agreements jointly executed by both appellants.
According to the respondent, the first appellant bid two
chits and received Rs.18.75 lakhs each on 23.06.2014, and
the second appellant stood as guarantor ensuring repayment.
She further created an equitable mortgage over her property
by depositing Ext.A7 title deed. It is pertinent to note
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that when Ext.A2 cheque was dishonoured on presentation,
the respondent issued Ext.A4 notice to both appellants.
Ext.A5 series postal receipts and Ext.A6 series
acknowledgment cards show that the notices were served on
the appellants. Admittedly, they did not send any reply. If
the case advanced by the appellants is genuine, they should
have been able to explain why they did not respond to such
a crucial notice where their liability was specifically
mentioned. According to the appellants, their liability to
the respondent is less than Rs.75,000/-. In such
circumstances, as rightly observed by the trial court, the
appellants would have resorted to legal recourse, on
receiving a notice for such a false claim. This too was not
done.
8. We have examined the documents produced by the
respondent to prove their contentions. The agreement
jointly executed by the appellants together with Ext.A9
monthly ledger extract, Exts.A10 and A11 payment vouchers,
and Exts.A14 and A15 receipts prima facie establish the
contentions raised by the respondent. Exts.A10 and A11
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specifically mention the details of the cheques through
which the amounts were disbursed to the first appellant.
The appellants have no explanation about these documents.
It is true that, during her examination, DW2, the second
appellant, denied her signature in Exts.A12 and A13, joint
agreements. However, the trial court, having the advantage
of observing the demeanour of the witness, concluded that
her testimony was unbelievable. Thus, we find no reason to
accept the oral testimony of the appellants as DW1 and DW2,
in preference to the above documents.
9. The oral evidence adduced by the respondent and
the documents produced sufficiently prove that the first
appellant received Rs.37.5 lakhs on 23.06.2014 and that the
second appellant stood as guarantor for repayment of the
said amount. Further, Ext.A2 cheque was issued by the first
appellant towards repayment of the due amount. Therefore,
the respondent is entitled to recover the amount claimed in
the plaint from the appellants. The transaction being
commercial in nature, the interest awarded on the basis of
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the agreed terms, is only just and reasonable. The appeal
is thus liable to be dismissed.
10. Faced with this situation, the learned counsel
appearing for the appellants submitted that this Court may
permit the appellants to pay the decree amount in
installments. We are of the view that this submission can
be accepted, considering that the decree is for a huge sum.
It is only reasonable to allow 24 monthly installments.
In the result, the appeal is dismissed, upholding
the decree and judgment of the trial court. However, the
appellants are permitted to pay the decree amount together
with interest in 24 equal monthly installments starting
from 10/10/2025. If the appellants fail to pay any of the
instalments, the respondent shall be entitled to execute
the decree for the entire remaining amount.
Sd/-
SATHISH NINAN
JUDGE
Sd/-
P. KRISHNA KUMAR
sv JUDGE
