JUDGMENT :

The appeal is filed by the defendants in O.S.No.93 of 1997 on the file of Additional Senior Civil Judge’s Court, Eluru, West Godavari District. The respondent herein is the plaintiff 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 1st defendant joined as a subscriber in the plaintiff chit fund firm in 3 chits worth of Rs.50,000/- each payable in 25 instalments at the rate of Rs.2,000/- per month with Ticket No.6 in Group D.1 and Ticket Nos.3 and 4 in Group D.2. The 1st defendant became the highest bidder in the auction conducted on 31-12-1995 with respect to one chit out of the above 3 chits before withdrawing the chit amount. The 1st defendant requested the plaintiff to arrange a loan keeping the other two chits as a security and promising to repay the same in regular instalments. Accordingly, the plaintiff paid an amount of Rs.97,500/- on 06-01-1996 to the 1st defendant with respect to the above 3 chits. The 2nd defendant, who is none other than the wife of 1st defendant, stood as a guarantor and both the defendants executed a demand promissory note and when the pla