THE HONOURABLE SMT. JUSTICE K. SUJANA APPEAL SUIT No.782 of 2002

JUDGMENT:

Challenging the judgment and decree dated 02.01.2002 passed in O.S.No.213 of 1998 by the learned I Additional Senior Civil Judge, Warangal, the present appeal suit is filed.

2. The brief facts of the case are that the plaintiff, a registered chit fund company, filed a suit against five defendants seeking recovery of Rs.1,56,066/-. The first defendant joined the chit fund on 22.12.1996, agreeing to pay Rs.5,000/- per month for 40 months. He was declared as the prized subscriber in an auction on 22.06.1997 and agreed to forego Rs.79,500/- from the chit amount of Rs.2,00,000/-. He had paid Rs.50,000/- before receiving the prize amount of Rs.1,20,500/- through a cheque on 24-06-1997. The first defendant, along with defendant Nos.2 to 5 as guarantors, executed agreements of guarantee and a promissory note. However, he defaulted on payments from 11-09-1997, prompting the plaintiff to issue a legal notice demanding repayment. As no payment or response was received, the suit was filed.

3. However, the first defendant, in his written statement, admitted to joining the chit fund but denied participating in the auction or