THE HONOURABLE SMT. JUSTICE K. SUJANA

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 agreeing to forego Rs.79,500/-. He claimed that the plaintiff company obtained signatures on blank papers and prevented him from participating in further bids. He asserted that he had paid Rs.50,000/- over ten months before discontinuing payments and argued that the suit should be dismissed with costs. Defendant Nos.2 to 5 adopted his written statement.

4. Basing on the above pleadings, the trial Court framed four issues and on behalf of the plaintiffs i.e., PW.1 was examined and Ex.A1 to A16 are marked. DWs.1 to 3 are examined and Exs.X1 and X2 were marked on behalf of the defendants.

5. After examining the evidence, the trial Court, vide order dated 02.01.2002, decreed the suit holding that the first defendant had indeed participated in the chit auction, was declared the prized subscriber, and received Rs.1,20,500/-

through a cheque, which he encashed. Additionally, the trial Court determined that defendant Nos.2 to 5 had acted as guarantors, making them jointly liable for repayment. The defense’s claims regarding blank signatures and non- participation in the auction were not substantiated. Consequently, the trial Court decreed the suit in favor of the plaintiff, ordering defendant Nos.1 to 5 to pay Rs.1,55,991/- with costs, along with a 12% per annum interest on Rs.1,40,000/- from the date of the suit until full repayment.

6. Heard Sri S.A.V. Ratnam, learned counsel appearing on behalf of the appellants as well as Sri Podila Hari Prasad, learned counsel appearing on behalf of the respondent.

7. Learned counsel for the appellants submitted that the decree and judgment of the trial Court are contrary to law, the weight of evidence, and the probabilities of the case. He further submitted that the suit ought to have been dismissed on the sole ground that the appellant did not participate in the auction nor receive the prize amount and that the trial Court committed errors both in law and on facts in decreeing the suit in favor of the plaintiff. He further submitted that the trial Court failed to consider that the appellant never participated in the auction as claimed by the plaintiff. The trial Court also erred in disbelieving the testimony of DW3, an uninterested witness, merely because his presence alongside the appellant at the time of the auction was not explicitly mentioned in the written statement.

8. Learned counsel for the appellants contended that the trial Court did not properly appreciate the evidence of PW1 and DW1. Particular emphasis was laid on the fact that PW1 deposed that the plaintiff issued an account payee cheque, and DW1 categorically stated that the amount could only be deposited in an account payee's name. He further contended that the trial Court ought to have examined the evidence in its entirety and considered that, as per DW1’s testimony, the credited