JUDGMENT:

1. The defendants in the suit are the appellants in the present appeal which is filed against the Judgment and Decree dated 26.09.2003 in O.S.No.152 of 1999 on the file of the Principal Senior Civil Judge, Vizayawada.

2. The plaintiff, which is a Chit Fund Company, filed the present suit claiming that appellant No.1, who is the subscriber to Chit Series CCR-4, which was for a value of Rs.3,00,000/-payable @ Rs.7,500/-per month in 40 monthly installments, was the successful bidder in the 8th auction agreeing to forego Rs.1,20,000/-and received Rs.1,80,000/-on 28.05.1997 under a Cash Voucher. 1st defendant having paid only Eight installments by the time he was the successful bidder stopped paying all further installments, due to which, Notice was issued 1st on 24.09.1998 calling upon the defendant to pay a sum of Rs.2,40,000/-along with interest and the 2nd defendant was also called upon to pay the said sum as he was the guarantor for the said amount.

3. The defendants replied to the Legal Notice on 24.09.1998 by way of reply notice dated 21.10.1998 wherein the defendants claimed that they had never subscribed to any chit, nor paid any installments for the said chit nor being