THE HONOURABLE SMT. JUSTICE K. SUJANA

JUDGMENT:

Challenging the judgment and decree dated 16.08.2007

passed in O.S.No.333 of 2003 by the learned Principal Senior Civil

Judge, Warangal, the present Appeal Suit is filed.

2. The brief facts of the case are that Model Chit Corporation Limited, filed a suit against Mr. P. Shankarachary and four other defendants, seeking recovery of Rs.4,79,950/- based on a chit fund agreement. The plaintiff alleged that defendant No.1 defaulted on payments despite repeated demands and legal notices. The defense, particularly defendant No.1, argued that the plaintiff engaged in fraudulent practices, including withholding prize amounts, coercing blank cheque submissions, and failing to register the chit fund properly. The trial Court examined extensive documentary evidence, including Ex.A9 and Ex.A10, which demonstrated that defendant No.1 had not made cash payments for certain installments. The trial Court found that the plaintiff had complied with prior orders, including depositing Rs.24,400/- as directed by the A.P. State Consumer Disputes Redressal Commission. However, the trial Court ruled in favor of the

plaintiff, decreeing the suit amount with 6% future interest per annum while allowing defendant No.1 to withdraw Rs.24,400/- deposited by the plaintiff. The trial Court dismissed IA.No.1116 of 2007, stating that the plaintiff had failed to serve notice under Order 38, Rule 5 CPC, but permitted further legal action for attachment if necessary. The judgment reinforced the plaintiff’s entitlement to the enhanced claim and rejected the counter arguments of defendant No.1, citing lack of credible evidence to support his claims of fraud or improper adjustments.

3. Aggrieved thereby, the present appeal suit is filed stating that the order of the trial Court is contrary to law and evidence on record and that the trial Court erred in decreeing the suit despite the absence of sufficient evidence and improperly allowing I.A.No.1486/2006, which enhanced the claim from Rs.4,18,350/- to Rs.4,79,950/-, allegedly barred by limitation. The appellant contends that the trial Court wrongly held them estopped from questioning the registration status of the chit fund, despite the issue not being raised before the District Consumer Forum.

4. Further, the appellant stated that the chit fund company was unregistered, making the suit amount unrecoverable by law, and that PW.1 lacked valid authorization to represent the plaintiff.

He also stated that procedural lapses, including the plaintiff’s failure to credit payments made by the appellant, delays in prized bid amount disbursement, and the non-payment of Rs.24,400/- despite consumer forum orders. The appellant claims mental agony and financial loss due to delayed payments and disputes the 12% interest awarded on Rs.24,400/-, asserting that the conduct of the plaintiff caused substantial harm. The appeal seeks dismissal of the suit, emphasizing procedural irregularities, lack of authorization, and financial prejudice suffered by the appellant.

5. Heard Sri A. Prabhakar Rao, learned counsel appearing on behalf of the appellant as well as Sri Dasi Ramesh, learned counsel appearing on behalf of the respondents.

6. Learned counsel for the appellant, while arguing the matter, limited his prayer to the extent of the interest awarded by the trial court. According to the learned counsel, the appellant was a successful bidder on 28.01.2002 but did not receive the prize amount immediately. Instead, the amount was paid in three installments, leaving a balance of Rs.24,000/-. To recover this balance, the appellant initially filed a petition before the consumer forum, which dismissed his claim. Subsequently, he appealed, and the appellate Tribunal directed the respondent-Company to make the payment. Therefore, the appellant contended that interest should not be claimed from 2002, as the amount was not paid on 28.01.2002. He requested the Court to remove the interest portion from 2002, arg