The central legal point established in the judgment is the application of Section 12 of Chit Funds Act, 1982, which prohibits chit companies from conducting any business other than chit business without the necessary permission.

This appeal has been directed against the Judgment and Decree, dated 29.3.1996 made in O.S. No. 156 of 1994 on the file of the District Judge, Uthagamandalam.

2. The appellant herein was the plaintiff before the trial Court. The suit was filed against the respondent herein, directing him to pay a sum of Rs. 70,100/- with subsequent interest and costs.

3. According to the appellant/plaintiff, on 10.11.1991, the respondent herein had borrowed a sum of Rs. 44,000/- from the appellant at Uthagamandalam and executed the suit promissory note, marked as Exhibit A-3, promising to repay the amount with 24% interest. According to the appellant, subsequently, no amount was paid by the respondent and hence, the appellant filed the suit, seeking decree against the respondent herein.

4. According to the respondent, he had not borrowed any amount from the appellant and executed the promissory note, as alleged by the appellant. He has further contended that the respondent was a subscriber in the chit transaction run by the appellant, nearly 7 or 8 years prior to the date of filing of the suit, for which signed blank promissory notes were obtained from the respondent, since he had been the successful bidder, as security for regular payment of subscription towards the chit. The respondent has further contended that the entire chit amount was repaid by him, however, the signed blank promissory notes entrusted by him were not returned to him by the appellant. According to him, the aforesaid blank promissory note is misused by the appellant for filing the suit. With the above averments, the respondent pleaded for dismissal of the suit.

5. It is seen from the impugned Judgment that the foreman of the plaintiff company was examined as P.W.1, apart from marking the documents Exhibits A-1 to A-6. On the side of the respondent, the respondent himself was examined as D.W.1 and Exhibits B-1 to B-7 were marked. The trial Court, considering the oral and documentary evidence, held that the claim of the appellant/plaintiff was not established and accordingly, dismissed the suit. Aggrieved by which, the appeal has been preferred by the plaintiff in the suit.

6. G. Anbumani, learned senior counsel appearing for the appellant submitted that the respondent had obtained loan for a sum of Rs. 44,000/-, as per Exhibit A-3, promissory note and it being a negotiable instrument, the transaction need not be supported by any other documents.

7. It is not in dispute that in the voucher, Exhibit A-6, it has been printed above the signature made on the revenue stamps as signature of subscriber. As contended by the learned counsel for the respondent, had the amount received by the respondent was independent to that of chit transaction, there could be no necessity for the printed words “signature of subscriber”.

8. The point for determination in this appeal are as follows:

1) Whether the suit is not maintainable, as held by the trial Courte

2) Whether the appellant/plaintiff is entitled to a decree as prayed fore

9. It is seen that Exhibit A-6 is a payment voucher, dated 10.11.1991 for a sum of Rs. 44,000/-, said to have been received by the respondent. Exhibit A-3 is the promissory note, dated 10.11.1991 for the aforesaid sum of Rs. 44,000/-. Exhibit A-3 is in printed form, wherein everything is written by typewriter, except the signature available on the revenue stamp. Witness column is available for two witnesses, but admittedly, nobody has signed as witness. The respondent, who was examined as D.W.1 has stated that he was a subscriber in the chit transaction run by the appellant herein and for being a successful bidder for prompt payment of subscription amount, he was asked to execute promissory note, accordingly, he had entrusted blank signed promissory note to the appellant, which was misused for filing the suit.

10. According to P.W.1, he does not know anything in person about the execution of Exhibit A-3. In the cross-examination, he has stated that the