JUDGMENT:

Unsuccessful defendants filed the above appeal, assailing the judgment and decree dated 31.10.2006 passed in O.S.No.279 of 2005 on the file of II Additional Senior Civil Judge (Fast Track Court), Guntur.

2. For the sake of convenience, parties to this appeal are referred to as they were arrayed in suit.

3. Plaintiff filed the Suit O.S.No.279 of 2005 for recovery of an amount of Rs.6,82,089/-.

4. The averments in the plaint, in brief, are that the plaintiff is a company registered under the Indian Partnership Act and doing chit fund business; that defendant No.1 joined as member in chit scheme series JCC-A on 21.04.1997; that defendant No.1 was allotted ticket No.40; that each subscriber has to pay an amount of Rs.10,000/- per month for 50 months and the chit value is Rs.5,00,000/-; that in the auction conducted on 04.07.1997, defendant No.1 became successful bidder and agreed to forego Rs.2,00,000/-; that defendant No.1 paid Rs.50,000/- and his future liability is Rs.4,50,000/-; that the defendants executed agreement of guarantee on 15.09.1997 and defendants 2 to 6 stood as guarantors; that all the defendants executed promissory note on 15.09.1997; that defendant No.1 committed default in payment of installments from 04.04.1998;

that the defendants failed to pay the amount in-spite of repeated demands of the plaintiff; that defendants paid Rs.5,000/- against receipt dated 29.04.2002 i.e. before expiry of limitation period and prayed the Court to decree the suit.

5. Defendants 1 to 4 and 6 jointly filed written statement and admitted that defendant No.1 was successful auction bidder for the chit amount; that defendant No.1 paid installments regularly; that the plaintiff did not mention dividend amount; that the receipt dated 29.04.2002 is forged for the purpose of saving limitation; that chit commenced in the year 1997 and it was terminated in 2001, however, the suit was filed in the year 2005, hence it is barred by limitation and eventually prayed Court to dismiss the suit.

6. Defendant No.5 filed separate written statement reiterating the stand taken by the other defendants.

7. Basing on the above pleadings, the trial Court framed the following issues for trial:

1. Whether the plaintiff is entitled to recover the suit amount as prayed for?

2. Whether receipt dated 29.04.2002 is valid, genuine and binding on defendants?

3. Whether 1st defendant paid entire amount as contended by

1st defendant is true, valid, binding on plaintiff?

4. To what relief?

8. During the trial, Managing Partner of plaintiff firm was examined as P.W.1 and Exs.A-1 to A-17 were marked. None were examined on behalf of defendants and no documents were marked.

9. The Trial Court decreed the suit by judgment dated 31.10.2006 for an amount of Rs.6,82,089/-. Defendants were directed to pay interest @12% p.a. on Rs.3,69,000/- from the date of suit till the date of decree and were also directed to pay interest @6% p.a. from the date of decree till the date of realization. Defendants were also directed to pay Rs.25,661/- towards costs of the suit. Against the said judgment and decree, the above appeal is filed.

10. Heard Sri Atchutuni Rama Mohan Rao, learned counsel for appellants/defendants and Sri N. Sriram Murthy, learned counsel for respondent/plaintiff.

11. Learned counsel for appellants would contend that suit debt is barred by limitation and hence suit is liable to be dismissed. He further contended that Ex.A-9 payment receipt dated 29.04.2002 is forged and the Lower Court ought not to have relied upon the receipt. He further contended that even if Ex.A-9 is a valid receipt, it being an acknowledgement of time barred debt, without separate agreement, it cannot be enforced and thus, the suit claim is barred by time. Hence, prayed the Court to allow the appeal by dismissing the suit.

12. Learned counsel for the respondent would contend that 1st defendant on emerging as the highest bidder in chit auction, received the amount, but failed to pay the instalment thereby