The liability of sureties is co-extensive with that of the principal borrower, and the execution of the agreement of guarantee and pronote by the defendants establishes their joint liability to pay the suit claim.

JUDGMENT :

VENUTHURUMALLI GOPALA KRISHNA RAO, J.

1. The appellant is the 6th defendant in O.S. No. 22 of 2004 on the file of the VII Additional District Judge (Fast Track Court), Vijayawada, Krishna District. The 1st respondent herein is plaintiff and respondents 2 to 6 are defendants 1 to 5 in the said suit.

2. The parties will hereinafter be referred to as arrayed before the trial Court.

3. The brief averments in the plaint are as follows:

The plaintiff is a registered company under the Companies Act, 1956 and running chit fund business. On 27-5-2001, the 1st defendant joined as a member of the chit and he was allotted Ticket No. 24. The monthly subscription is Rs.50,000/- and the total period of chit is 40 months and the total value is Rs.20,00,000/-. In an auction conducted on 15-7-2001, the 1st defendant became the highest bidder foregoing Rs.8,00,000/-. At the time of payment of prize amount, the defendants 2 to 6 stood as guarantors to the 1st defendant. All the defendants executed a pronote agreeing to repay the amount due by the 1st defendant. Subsequently, the 1st defendant paid in all Rs.10,50,000/- by way of 21 instalments and the 1st defendant committed default in payment of instalments from the 22nd instalment onwards and that the plaintiff issued a legal notice to all the defendants and all the defendants except the 5th defendant received notices and registered notice of the 5th defendant is returned un-served and that the plaintiff is constrained to file the suit.

4. The defendants 1 to 5 are remained set ex-parte before the trial Court.

5. The 6th defendant filed a written statement. The brief averments in the written statement filed by the 6th defendant are as follows:

The present suit was filed with the collusion of plaintiff and the 1st defendant. The 1st defendant has more properties and business premises for the satisfaction of alleged suit amount. Therefore, the plaintiff has to recover the suit claim from the 1st defendant. Due to the disputes in the field of 1st defendant, the present suit was got filed against all the defendants. The 6th defendant further pleaded that the other directors of the 1st defendant company are not made as parties to the suit and therefore, the suit has to be dismissed in limine.

6. After completion of the trial and hearing the arguments of both sides, the trial Court decreed the suit with costs for Rs.10,83,527/- with interest, against which the present appeal is preferred by the appellant/ 6th defendant in the suit, questioning the judgment and decree passed by the trial Court.

7. Heard Sri P.A. Seshu, learned counsel for the appellant/ 6th defendant and Sri P. Durga Prasad, learned counsel for the 1st respondent/plaintiff.

8. Now, the points for determination are:

1. Whether the trial Court is justified in decreeing the suit in favour of the plaintiff? and

2. To what extent?

9. Point No. 1: Whether the trial Court is justified in decreeing the suit in favour of the plaintiff?

The case of the plaintiff is that the 1st defendant joined as a subscriber in the plaintiff chit fund company under Chit series No. FT001DP and he was allotted Ticket No. 24, monthly subscription is Rs.50,000/-, total value of the chit is Rs.20,00,000/- and an auction was conducted by the plaintiff chit fund company on 15-7-2001, the 1st defendant participated in the said auction and declared as a prized subscriber. The plaintiff further pleaded that the defendants 2 to 6 stood as guarantors for the 1st defendant in respect of the aforesaid chit transaction and all the defendants executed a pronote promising to repay the amount due with interest and the 6th defendant also executed a guarantee agreement along with the defendants 2 to 5.

10. To discharge its liability, the plaintiff relied on the evidence of P.W.1. The evidence of P.W.1 goes to show that the 1st defendant joined as a subscriber in a monthly chit of Rs.50,000/- and total value of the chit is Rs.20,00,000/-. The evidence of P.W.1 further goes to show tha