JUDGMENT

Subba Reddy Satti, J. - aggrieved by the judgment and decree dated 20.02.2006 in O.S.No.25 of 1999 on the file of III additional District Judge, Kakinada, insofar as dismissing the suit with costs against the 2nd defendant, the above appeal is filed.

2. For the sake of convenience, parties to this appeal are referred to as they were arrayed in suit.

3. Plaintiff filed the suit for recovery of an amount of Rs.6,39,860/- from the defendants.

4. The brief averments in the plaint are that the plaintiff is a company registered under the Indian Companies act with registration No.927/1962-63 and has been doing chit fund business; that 1st defendant joined as member in chit scheme on 30.04.1997 and he was allotted ticket No.LT2XK-49; that total value of chit is Rs.10,00,000/- and 1st defendant has to pay Rs.20,000/- per month in 50 equal installments; that 1st defendant was successful bidder in the auction conducted on 15.06.1997 and agreed to forego Rs.4,00,000/-; that after deducting commission etc., balance amount was paid; that 1st defendant paid an amount of Rs.1,00,000/- till payment of prize amount and his future liability is Rs.9,00,000/-; that 1st defendant furnished guaranto