S. Nainar Sundaram, J.

1. The defendant company in O.S. No. 103 of 1978 on the file of the First Additional Subordinate Judge, Tirunelveli, is the appellant in this appeal. The respondent is the plaintiff in the suit. Though the controversy raised has got mostly the tinge of legality, yet, the necessary facts of the case have got to be set out. The plaint proceeds as follows:

The plaintiff carries on chit fund business in Tirunelveli Town. The defendant company enrolled as subscriber No. 34 in respect of the chit registered under M.C. No. 625/13. The capital was Rs. 25,000 and the subscription was Rs. 625 per month to be paid in forty instalments. The chit commenced on 15.8.1983 and the date of the termination of the chit was 15.11.1976. The defendant company, at the sixth instalment on 17.1.1974 bid and became the prized subscriber and collected the prize amount on 11.2.1974 and a chit promissory note was executed by the then Managing Director as well as another Director of the defendant company, namely, M. Ramasubramaniam and M. Lakshmanan respectively, on 11.2.1974 by way of collateral security for payment of future subscriptions amounting to Rs. 25,052.37. The defendant c