The importance of substantial questions of law in a Second Appeal and the consideration of evidence and legal provisions in reaching a decision.

ORDER :

1. This Second Appeal, under Section 100 of the Code of Civil Procedure, 1908, is filed by the appellants/Defendant Nos. 1 and 4, challenging the decree and judgment, dated 18.04.2019, passed in A.S. No. 256 of 2014, by the XXVI Additional Chief Judge, City Civil Court, Hyderabad, whereby, the decree and judgment, dated 07.04.2014, passed in O.S. No. 1195 of 2005, by the IV Senior Civil Judge, City Civil Court, Hyderabad, was confirmed.

2. Heard the submissions of Sri R.V. Indira Kumari, learned counsel for the appellants/Defendant Nos. 1 and 4 and perused the record.

3. The appellants herein are the defendant Nos. 1 and 4, the 1st respondent herein is the plaintiff and the respondent Nos. 2 to 4 are defendant Nos. 2, 3 and 5 before the trial Court. The parties are hereinafter referred to, as per their array before the trial Court.

4. The plaintiff filed a suit for recovery of a sum of Rs. 1,27,500/- from the defendant Nos. 1 to 5 with costs and interest, basing on a chit agreement under Ex. A.2, guarantee agreement under Ex. A.3 and collateral promissory note under Ex. A.4, before the trial Court, contending as follows:

"The 1st defendant joined as member of a plaintiff's chit fund scheme on 20.06.2001 for a chit amount of Rs. 5,00,000/-, payable @ Rs. 10,000/- per month for 50 months. In the auction conducted on 13.01.2003, the defendant No. 1 stood as successful bidder, having agreed to forego a sum of Rs. 1,19,200/-. Later, the defendant No. 1 lifted the chit amount by furnishing the guarantee of defendant Nos. 2 to 5, who executed Ex. A.3-agreeement of guarantee, dated 20.03.2003, undertaking that they will be held liable, jointly and severally, to repay the chit amount with interest @ 12% per annum on the arrears of the chit amount, in case of default in payment by the defendant No. 1, Later, all the defendants have also executed Ex. A.4-collateral promissory note, dated 20.03.2003, in respect of the balance chit amount. After completion of formalities, the chit amount of Rs. 3,55,486/- was paid to the defendant No. 1 by way of cheque and cash voucher. Thereafter, the defendant No. 1 committed default in paying the monthly installments from 41st installment onwards. In spite of issuance of a legal notice, dated 12.08.2004, by the plaintiff chit fund company, the defendants failed to pay the outstanding arrears of the chit. Hence, the plaintiff chit fund company is constrained to file the suit.

5. The appellant No. 1/defendant No. 1 filed written statement and the same was adopted by the appellant No. 2/defendant No. 4. The suit against defendants 2 and 3 was dismissed on 23.12.2005. Defendant No. 5 remained ex parte.

6. In the written statement, the appellant No. 1/defendant No. 1 contended as follows:-"The plaintiff chit fund company's manager has no authority to file the subject suit. The defendant No. 1 became the subscriber of the subject defaulted chit at the instance of one Mr. Maruthi, an agent of the plaintiff chit fund company, who made her believe that she can get the prize money and meet her daughter's marriage expenses. It is admitted that the auction was conducted on 08.12.2002. The plaintiff chit fund company obtained two blank cheques and one promissory note from the defendant No. 1 and misused the same and filed a suit in O.S. No. 149 of 2004 on the file of the XII Senior Civil Judge, City Civil Court, Secunderabad. Even without any intimation to the defendant No. 1, the cheque was also presented in the bank for payment and after its dishonour, a private complaint was filed against the defendant No. 1 before the I Metropolitan Sessions Judge, Vijayawada. The plaintiff chit fund company has not paid the entire prize money to the defendant No. 1. The defendant No. 1 has also not signed on any cash voucher. The plaintiff chit fund company obtained signatures of the defendant No. 1 on some blank papers at the time of her joining as subscriber to the chit. The plaintiff chit fund company also failed to send