Dismissed

Smt P. Manjula v. M/s. Sri Rampriya Chit Fund Private Limited.

Telangana HC21 Nov 2019SA/329/2019

Case brief

AI extract

What is this about?

A Second Appeal under Section 100 CPC concerning recovery of chit fund dues was filed by defendants challenging the trial and appellate court decrees. The High Court held that the appeal relied on factual disputes rather than substantial legal questions, upheld the evidence of the foreman witness, and dismissed the appeal.

What did the court decide?

Second Appeal dismissed in limine; no costs awarded; miscellaneous petitions closed.

Smt P. Manjula Vs M/s. Sri Rampriya Chit… — Contract and Commercial Disputes | Telangana HC (2019)

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THE HON’BLE Dr . JUSTI CE SHAMEEM AKTHER

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SECOND APPEAL No.3 2 9 of 2 0 1 9

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JUDGMENT:

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This Second Appeal, under Section 100 of the Code of Civil Procedure, 1908, is filed by the appellants/ Defendant Nos.1 & 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.

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

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3 . The appellants herein are the defendant Nos.1 and 4, the 1^st 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.

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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:

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“The 1^st defendant joined as member of a plaintiff’s chit fund scheme on 20.06.2001 for a chit amount of Rs.5,00,000/ -,

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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 instalments from 41^st instalment 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.

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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 .

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6 . In the written statement, the appellant No.1/ defendant No.1 contended as follows: -

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“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 intimation letter from 41^st instalment onwards. Though the defendant No.1 got issued a legal notice to the plaintiff chit fund company demanding to furnish the statement of account, the plaintiff chit fund company neither replied to the said notice nor furnished the statement of account. The subject suit is filed by suppressing the true facts of the case. There is no cause of action to file the suit. Hence, the suit is liable to be dismissed.

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7 . Based on the above pleadings, the trial Court framed the

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following issues for trial:

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1 . W h et h er t h e plain t iff is en t it led t o r ecov er t h e su it claim fr om t h e defen dan t s?

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2 . To w h at r elief?

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Addit ion al issu es on 1 7 .0 1 .2 0 0 8 : -

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1 . W h et h er t h e per son w h o v er ified t h e plain t on beh alf of t h e plain t iff is com pet en t t o do so?

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2 . W h et h er t h e per son w h o ver ified t h e su it is pr oper ly au t h or ised t o in st it u t e t h e su it ?

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Addit ion al issu e on 1 8 .0 4 .2 0 0 8 : -

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1 . W h et h er t h is Cou r t is h avin g t er r it or ial j u r isdict ion t o t r y t h e su it .

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8 . On behalf of the plaintiff, P.W.1 was examined and Ex.A.1

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to Ex.A.14 were marked. On behalf of the defendants, D.W.1 was examined and Ex.B.1 to B.7 were marked.

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9 . On merits, the trial Court decreed the suit for Rs.1,27,500/ - with costs against the defendant Nos.1, 4 & 5 jointly and severally, granting interest @ 6% per annum on the principal amount of Rs.1,00,000/ - from the date of suit till realisation, holding that the positive evidence of P.W.1 coupled with the evidence of D.W.1 and Ex.A.1 to Ex.A.14 goes to prove that the plaintiff has followed the due procedure in respect of the suit claim.

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1 0 . Aggrieved by the said decision of the trial Court, the appellants/ defendant Nos.1 & 4 filed A.S.No.256 of 2014 before the lower appellate Court. The lower appellate Court, after reappreciating the entire evidence on record, dismissed the appeal by confirming the judgment and decree of the trial Court.

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Aggrieved by the same, the appellants/ defendant Nos.1 & 4 preferred this Second Appeal.

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1 1 . The Second Appeal is sought to be admitted on the

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following substantial questions of law:

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( i) Th e appellat e Cou r t failed t o ver ify t h e pr in ciples of ev iden ce act in obser v in g t h e ev iden ce of P.W .1 an d t h e ex h ibit s in t h e su it an d n eglect ed t o t h e m at er ial docu m en t s m ar k ed as ex h ibit s in t h e su it . Th e Ex .A.2 an d B.5 ar e filed by t h e plain t iff com pan y allegin g or igin al ch it agr eem en t in t w o differ en t cou r t s of t h e sam e t r an sact ion . Th e Ex .A.2 h as som e h an dw r it t en m at t er an d t h e Ex .B.5 is blan k in som e places.

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( ii) Th e Appellat e Cou r t failed t o obser v e t h at t h e eviden ce of P.W .1 is n ot cor r obor at in g w it h t h e fact s of t h e case an d h is ch ief an d cr oss ex am in at ion is con t r adict in g w it h each ot h er .

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( iii) Th e fin din gs of t h e cou r t below ar e per v er se as t h ey h av e ign or ed an d ov er look ed t h e ev iden ce of PW 2 an d r elied u pon in adm issible eviden ce.

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( iv) Th e PW 1 adm it t edly left t h e plain t iff com pan y by t h e t im e of filin g of t h e su it as an ex -em ploy ee h e en t er ed w it n ess box as P.W .1 w it h ou t k n ow in g t h e fact s of t h e case. Th e Ex .A.1 2 dat ed 2 0 0 8 did n ot say an y t h in g abou t t h e au t h or it y of t h e PW 1 t o depose on beh alf of t h e plain t iff com pan y w h en t h e PW 1 left t h e com pan y in 2 0 0 5 an d t h e PW 1 cat egor ically adm it t ed in h is cr oss ex am in at ion aft er leavin g t h e plain t iff com pan y fr om 2 0 0 5 h e does n ot h ave an y per son al k n ow ledge abou t t h e affair s of t h e plain t iff com pan y . Th e paym en t of pr ize m on ey t o t h e 1^st defen dan t w as n ot pr ov ed by t h e plain t iff com pan y .

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1 2 . There cannot be any dispute that, under the amended Section 100 of C.P.C., a party aggrieved by the decree passed by the first appellate Court has no absolute right of appeal. He can neither challenge the decree on a question of fact or on a question of law. The second appeal lies only where the High Court is satisfied that the case involves a substantial question of law. The word ‘substantial’ as qualifying ‘question of law’, means and conveys of having substance, essential, real, of

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sound worth, important, considerable, fairly arguable. A substantial question of law should directly and substantially affect the rights of the parties. A question of law can be said to be substantial between the parties, if the decision in appeal turns one way or the other on the particular view of law. But, if the question does not affect the decision, it cannot be said to be substantial question between the parties. Recording a finding without any evidence on record; disregard or non-consideration of relevant or admissible evidence; taking into consideration irrelevant or inadmissible evidence; perverse finding – are some of the questions, which involve substantial questions of law.

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1 3 . The learned counsel for the appellants/ defendant Nos.1 & 4 would contend that there is no documentary evidence to substantiate that the plaintiff chit fund company had paid the prize money to the appellant No.1/ defendant No.1. The plaintiff chit fund company had made a promise to the appellant No.1/ defendant No.1 that the prize amount would be paid at a future date, which was not fulfilled. The plaintiff chit fund company has no permanent address. The documents filed in support of the plaintiff chit fund company do not establish that the appellants/ defendant Nos.1 & 4 are liable to pay the defaulted chit amount to the plaintiff company and ultimately prayed to set aside the judgments and decrees of both the Courts below and allow the Second Appeal as prayed for.

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1 4 . It is the case of the appellant No.1/ defendant No.1 that her signatures were obtained on blank cheques and blank

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promissory notes, but the prize amount is not paid to her. The appellant No.1/ defendant No.1 was examined as D.W.1 before the Court below. Except her self-serving statement, she did not produce any documentary evidence to substantiate the same. If at all the plaintiff chit fund company had obtained the signatures of D.W.1 on blank cheques and blank promissory notes, she would have lodged a complaint with the police or would have addressed a letter to the Registrar of Chits complaining about the same. She did not choose to do so. The appellant No.1/ defendant No.1 also failed to explain the circumstances under which she allegedly signed on the blank cheques and blank promissory note. Under these circumstances, the trial Court had rightly dealt with Section 20 of the Negotiable Instruments Act, 1881, and held that even if the plea of appellant No.1/ defendant No.1 is accepted, still in view of mandate under Section 20 of the Negotiable Instruments Act, 1881, it confers an authority to the holder of the negotiable instrument to complete the instrument. The evidence of P.W.1 coupled with the documentary evidence under Ex.A.2-Agreement of chit, dated 20.06.2001, Ex.A.3-Agreement of Guarantee, dated 20.03.2003, Ex.A.4-Promissory note, dated 20.03.2003, Ex.A.5-Cash Voucher, dated 20.03.2003, had laid a foundation in respect of the suit claim and Ex.A.11-statement of account, dated 10.07.2005, reflects the payment made to the appellant No.1/ defendant No.1 and the default committed by her, as a consequence of which, Ex.A.7 legal notice was issued to all the defendants by the plaintiff chit fund company. The material on

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record amply proves that the appellant No.1/ defendant No.1 committed default in payment of chit instalments.

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1 5 . The appellant No.1/ defendant No.1 further contended that P.W.1 admittedly left the plaintiff chit fund company by the time of filing of the subject suit and that as an ex-employee, he entered witness box as P.W.1 without knowing about the facts of the case and that Ex.A.12-Letter of authorisation, dated 10.02.2008, do not say anything about the authority of P.W.1 to depose on behalf of the plaintiff chit fund company and that when P.W.1 himself admitted in his cross examination that he does not have any personal knowledge about the affairs of the plaintiff chit fund company, both the Courts below erred on relying on the inadmissible evidence of P.W.1. As could be seen from the record, the plaintiff chit fund company gave authorisation to one K.R.Showry Das to file suit on behalf of the plaintiff chit fund company and he is the authorised Foreman and Principal Officer of the company. Ex.A.14 is the certified copy of Resolution of Board of Directors, dated 03.02.2003, wherein, the Board of Directors of the plaintiff chit fund company have authorised the said K.R.Showry Das to file suits, E.P.s etc., by signing the vakalats and to take all other steps effectively for conducting the suits. Thus, institution of subject suit by said K.R.Showry Das has legal sanctity by virtue of resolution of the Board of Directors of the plaintiff chit fund company under Ex.A.14. Admittedly, one P.Raju was examined as P.W.1 on behalf of the plaintiff chit fund company. He worked in the plaintiff chit fund company from the year 2001 to 2004 as Office

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Assistant. The chit transaction and agreement of chit took place on 20.06.2001, Ex.A.3-Agreement of guarantee and Ex.A.4Promissory Note were executed on 20.03.2003. In his crossexamination, P.W.1 deposed that he left the plaintiff chit fund company in the month of November, 2005. Therefore, the chit transaction took place when P.W.1 was working in the chit fund company and he is acquainted with the facts of the case and he has knowledge about the suit transaction. The plaint was presented on 13.07.2005 and consequently, authorisation was given to P.W.1 to give evidence on behalf of the plaintiff chit fund company on 10.02.2008 under Ex.A.12. Hence, no legal infirmity can be attributed to the evidentiary value of P.W.1.

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1 6 . The evidence of P.W.1 coupled with the documentary evidence under Ex.A.1 to A.14 proves that the appellant No.1/ defendant No.1 defaulted in paying the monthly instalments of the subject chit. The documentary evidence led by the appellants/ defendant Nos.1 & 4 under Ex.B.1 to B.7 are the Court proceedings relating to her criminal liability with regard to dishonour of cheque under Section 138 of Negotiable Instruments Act etc., whereas, the instant case pertains to civil liability. Except the self-serving oral evidence of D.W.1, there is absolutely no evidence in support of her case. Moreover, the questions sought to be raised in this appeal as substantial questions of law are pure questions of fact, which cannot be dealt with in this appeal filed under Section 100 of C.P.C. Where the lower appellate court, being the last Court of facts, exercised its discretion in a judicial manner, it cannot be termed to be an

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error, either of law or of procedure, requiring interference in a Second Appeal. The findings of the lower appellate Court are not perverse. There is nothing to take a different view. The lower appellate Court has neither overlooked the admissible evidence nor acted upon inadmissible evidence. After careful examination of the pleadings, evidence and the contentions, this Court finds that no question of law, much less substantial question of law, is involved in this Second Appeal. The appeal is devoid of merit and is liable to be dismissed.

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1 7 . In the result, the Second Appeal is dismissed in limine . No
costs.
Miscellaneous Petitions, if any, pending in this Second
Appeal, shall stand closed.
____________________
Dr . SHAMEEM AKTHER, J
21 st November, 2019
Bvv

Smt P. Manjula v. M/s. Sri Rampriya Chit Fund Private Limited.

Case brief

What is this about?

What did the court decide?

Smt P. Manjula v. M/s. Sri Rampriya Chit Fund Private Limited.

Case brief

What is this about?

What did the court decide?

What the court decided

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