( 1 ) THIS appeal is by the 2nd defendant in O. S. No. 240 of 1950 on the file of the Subordinate Judge, Nellore. That was a suit instituted by the 1st respondent for recovery of a sum of Rs. 10,234-10-8 from the appellant and two others. The suit was decreed both against the 1st and 2nd defendants and dismissed against the 3rd defendant. The 1st defendant has not filed any appeal nor is there any appeal filed by the plaintiff seeking relief against the 3rd defendant.

( 2 ) BEFORE we consider the arguments, it is necessary to state a few facts and give a resume of the pleadings. The plaintiff is a Bank with its Head Office at Madras and a branch office at Nellore. Apart from conducting other kinds of banking business, it runs what are known as chit fund transactions. Every person who subscribes to such a fund pays for a fixed number of months a monthly subscription whereof the amount varies according to what is fixed as the prize amount. Once every month there will be an auction at which the person who-offers to pay the largest discount is declared the successful bidder and he is awarded the prize amount. But even after receiving it, he will still be liable for the subscription for

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