T.Srinivasa RAO,SUBEDARI,HANAMKONDAAND4 Vs Prathiphala Chit Fund P.Ltd,Warangal

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[³³⁸⁵ ]

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IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD

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TUESDAY, THE TWENTY SECOND DAY OF APRIL TWO THOUSAND AND TWENTY FIVE

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PRESENT

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THE HONOURABLE SMT JUSTICE K. SUJANA

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APPEAL SUIT NO: 782OF 2002

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Appeal filed under Section 96 of CPC against the^judgment and decree dated 02-01-2002 in OS No.213 of 1998 on the file of the Court 6f the lAdditional Senior Civil Judge at Warangal.

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Between:

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Takkalapally Srinivasa Rao S/o Narasinga Rao, Aged 44 yearc, H.No.2-61201 , Near Kalyani Function Hall, K.L.N. Reddy Colony, Subedari, Hanamkonda.

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Avirneni Madhava Rao S/o Narasinga Rao, Senior Divisional Engineer, The Singareni Collieries Co. Ltd. Yellandu, Khammam Dist.

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Chentalapally Kishan Rao, S/o Rajaiah, Seed Certification Offrcer, Andhra Pradesh State Seed Certification Agency H.No.5-1-9, Naimnagar, Hanamkonda, Warangal

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Theagala Madhusudhana Rao, S/o Chokka Rao, Agricultural Officer Nekkonda, Warangal

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Vadapalli Vijay Kumar, S/o Yadagiri, Co-op, Sub-Registrar O/o The Executive Director, Dist. Backward Classes, S.C.S. Ltd., Warangal

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...APPELLANT/DEF ENDANTS

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AND

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'1 . Prathiphala Chit Fund Private Ltd., Rep- by Foreman G. Nageswara Rao S/o Pullaiah, 42 yea's, Warangal.

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...RESPONDENT/PLAINTIFF

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G. Srinivasa Rao, H.No. 13-2-232, Mattawada, Gopalaswamy Temple, Near S.R.College, Warangal

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...RESPONDENT No. 2

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Respondent N o.2 is impleaded as per Court Order dated 22.04.2025, vide lA No. 6 of 2003^(CM P.No.21742 2003) in AS No 782 ol 2002.

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l.A. NO:5 oF 2003(cM P. NO: 14076 oF 2003)

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Petition under Section 45 0f the Evidence Act R/w 1r; cpc praying that in the circumstances stated in the affidavit fired in support of he petition, the High court may be pleased to send the alleged signature of mir,r on the back side of the cheque bearing No.sg600, dt.24-6-1gg7 and may admil -'d signatures on the deposition in suit No.21 3/9g on the fire of the il Add . senior civir judge, Warangal for Verification and opinion by the hand writing erp ert.

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l.A. NO:4 oF 2003(cMP . NO: 14075 oF 2003)

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Petition under order 41 Rure 2 of cpc praying that i r the circumstances stated in the affidavrt fired in support of the petition, the ligh court may be pleased to permit the appellant herein to raise Additional Gr r rnds 1 to 7

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t.A. NO : 2 OF 2003(CMP NO: 9718 0F 2003

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Petition under section 15r cpc praying that in the ,) -cumstances stated in the affidavit fired in support of the petition, the High cou 1 may be preased to permit the petitioner/Appellant to file additional grounds.

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l.A. NO:1OF 2002(cMP . NO: 8597 OF 20021

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Petition under section 151 cpc praying that in the c i cumstances stated in the affidavit fired in support of the petition, the Hrgh court may be preased to stay all further proceedings in o.s.No.2'1 3/98 on the fire of th: r Addr. senior civir Judge, Warangal, in Decree and Judgment Dt: 2_1-200i per r ing disposal of the main appeal

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Counsel for the Appellants: Sri S. A. V. Ratnam

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Counsel for the Respondents: Sri podila Hari prasad

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The Court delivered the foltowing JUDGMENT:

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,/

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THE HONOURABLE SMT. WSTICE K. SUJANA

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APPEAL SUIT No.782 of 2OO2

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JUDGMENT:

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Challenging the judgment and decree dated 02.01.2002 passed in O.S.No.2l3 of 1998 by the learned I Additional Senior Civil Judge, Warangal, the present appeal suit is frled.

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The brief facts of the case are that the plaintiff, a registered chit fund company, hled a suit against five defendants seeking recovery of Rs. 1,56,066/. The hrst defendant joined the chit fund on 22.12.1996, agreeing to pay Rs.5,0O0/- per month for 40 months. He was declared as the prized subscriber in an auction on 22.06.1997 and agreed to forego Rs.79,50O/- from the chit amount oi Rs.2,0O,000/. He had paid Rs.50,OO0/- before receiving the prize amount of Rs.1,20,5O0/- through a cheque on 24-06-1997. The hrst defendant, along with defendant Nos.2 to S as guarantors, executed agreements of guarantee and a promissory note. However, he defaulted on payments from ll-Og_lgg7, prompting the plaintiff to issue a legal notice demanding

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l

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2

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SKS,J ,. S.No.782 of 2oO2

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repayment. As no payment or response was r€c€ ved, the suit was filed

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However, the hrst defendant, in his writ t : r statement, admitted to joining the chit fund but denied p;r ticipating in the auction or agreeing to forego Rs.79,500/. Hc :laimed that the plaintiff company obtained signatures on t ernk papers and prevented him from participating in furt-r rr bids. He asserted that he had paid Rs.50,0OO/ over ten ..r n-rths belore discontinuing payments and argued that the srr: should be dismissed w.itl-r costs. Defendant Nos.2 to.5 dopted his { ritten statemL.nt.

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Basing on the above pleadings, the trial (r( LrrL framed four issues and on behalf of the plaintiffs i.c , pW. 1 was examined and Ex.A 1 to A 16 are marked. DWs . to 3 are examined and Exs.Xl and, X2 were marked on Ix hall. of the defendants.

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After examining the evidence, the trial Cour t.ide order daLed 02.07.2002, decreed the suit holding th I the hrst defendant had indeed participated in the chit ir I )tron, was declared the prized subscriber, and received Rs. ,20,500/

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::----,--

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SKS,J A.S.No.?EZ of 2OO2

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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.l to 5 to pay Rs.1,55,991/with costs, along with a l2%o per annum interest on Rs. 1,4O,O00/- from the date of the suit until full repayment.

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Heard Sri S.A.V. Ratnam, learned counsel appearing on behalf of the appellants as well as Sri podila Hari prasad, iearned counsel appearing on behalf of the respondent.

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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 1aw 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

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I

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4

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SKS,J I i-No.782 of 2OO2

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participated in the auction as claimed by the 1rJ rintiff. The trial Court also erred in disbelieving the testimonl of DW3, an uninterested u,itness, merely because his preserr e alongside the appellant at the time of the auction was I )t explicitly mentioned in the written statement.

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Learned counsel for the appellants contenc 3d that the lrial Court did not properly appreciate the evid: rce of PWl and DW1. Particular emphasis was laid on the fir :t that PWt deposed th:rt the plaintiff issued an account ptL. ee cheque, and DW 1 categorically stated that the amount c I ,rld only be deposited in an account payee's name. He furthr r contended that the trial Court ought to have examined the eri lence in i[s entirety and considered that, as per DWl's ter I mony, the credited amount was deposited into the account cf one Mr. G. Srinivasa Rao, raising doubts as to how the apprl ants could be held liable for repayment. Therefore, he praye c the Court to set aside the^judgment of the trial Court by a I owing this appeal suit.

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On the other hand, learned counsel for the espondent submitted that the contention of the appellant is tl- at the chit fund company obtained the signatures of defendzr t No.1, as

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w

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5

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sxs,J A,S.l{o.7E2 of2OO2

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well as defendalts Nos.2 to 5, on blank papers. The appellant argues that if the defendant No.1 was not a subscriber to the chit amount, there would be no reason to obtain surety .signatures^{from defendants Nos.2 to 5 at the timeof joining} the chit. It is customary that signatures from sureties are not taken uniess the subscriber is involved. He further submitted that the pleadings of the appellants indicate inconsistencies in their claims. The appellants assert that the cheque was not issued in the name of T. Srinivasa Rao, and therefore, there is no liability to pay the said amount. However, the evidence from D.W. 1 establishes that the cheque was presented by G. Srinivasa Rao and subsequently remitted to his account. D.W. 1 further clarihed that since T. Srinivasa Rao did not have an account wifh the respondentplaintiff company, the cheque was issued as an account payee cheque. Consequently, it was transferred to G. Srinivasa Rao. Further, T. Srinivasa Rao hled the cheque with the bank, after which the amount was transferred to G. Srinivasa Rao. This sequence of events confirms that the cheque was initially given to T. Srinivasa Rao. Therefore, there is no illegality in the trial court's judgment and, therefore, request the court to dismiss the appeal suit.

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d

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6

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SKS,J A.S.No.7B2 of 2OO2

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10 The points that arise for considerati,r 1 i, this appeal

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are

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1_ Whether the plaintiff paid the cheque to th: jefendant for an amount of Rs. l,20,SOO/_?

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It, Whether the defendants received no amou r and did not

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participate in the chit auction?

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llt Whether the judgment of the trial Court r arrants anv interference?

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Point Nos.i and ii:

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In light of the submissions made by br h the learned counsel zrnd upon careful perusal of the materr Ll available on record, it is cvident that the respondent/plaind I -company is a chit fund organization. Appellant/defendant l,r .l joined the chit and emerged as the successful bidder i:r the auction. Defendant No.1 expressed readiness to forego in amount of Rs. 17,500/ , and consequently, the plaintiff_Ccr rpany issued an account payee cheque for Rs. 1,20,500,2Ls the prize amount. The company also obtained the s gnatures of defendant Nos.2 to 5 as guarantors.

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L2 Defendant No. 1, however, asserts that wli e he joined the chit and initiaily pard 2 monthly sut s :ription of

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Rs.5,OOO/ - lor a period of ten months, arl )Unting to

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&---.

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7

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sI{s,J A.S.No.7a2 oI 2OO2

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Rs.50,000/-, he did not participate in the auction ard ceased further payments. Defendant No.l contends that no amount was transferred to his account, thereby disputing any liability to repay the claimed amount.

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The evidence on record establishes otherwise. The testimony of P.W. 1, representing the chit fund company, confirms that defendant No.1 was indeed the successful bidder and the cheque for Rs. 1,20,50O/- was issued to him. However, the evidence further reveals that defendant No.1 transferred the account payee cheque to G. Srinivasa Rao, who subsequently presented the cheque at the bank, leading to the crediting of the amount to his account.

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As seen from the judgment of the trial Court it is evident that DWl, summoned by the Court to .provide documentary evidence, presented pertinent records including the transaction related to cheque No.5860OO dated, 24-06_1997 (Ex.Xl). It was established that the cheque was issued in the name of defendant No. 1, who then transferred it to G. Srinivasa Rao. This transfer is corroborated by Ex.X2, an extract of the plaintiff-company's account detailing transactions between 24-06-1997 and July 1997.

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SKS,J A S.No.782 of 2OO2

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During cross-examination by the plainti ls counsel, DWl confir-med that, at the request of T. Srini,'r sa Rao, the cheque amount u,as credited to the account of i. Srinivasa Rao. Flx.X I further shows the cheque amoun I x,as debited from the plainlilf chit fund company's account or 24-06-7997. This evidencc conclusively disproves the c. rtention of defendanl No. I that he did not participate in il^, chit, bid or receive any t'hcque for Rs.1,20,5O0/-. The evidcr c:e provided by P.W.1 and DWI sufhciently establishes thaL the cheque was issucd to riefendant No. 1 , who subsequentll' t 'ansl'erred it to G. Srinivasa Rao.

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Point No.iii:

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In vicu, o[ the above discussion in point I os.i and ii, there is no illcgality in the judgment of the tria. lourt. The trial Court disr;ussed all the issues and it is a r,'rll reasoned judgment and lhere are no grounds to inter ere in the judgmer-rt.

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In vicu, thereof, this Appeal Suit is dismisscr conl-rrming the juclgmcnt and decree dated 02.Ol.2OO2 passed in

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SNS,J A.S.I{o.782 of 2OO2

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O.S.No.213 of 1998 by the learned I Additional Senior Civil

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Judge, Waralgal. There shall be no order as to costs.

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Miscellaneous applications, if any pending, shall stand

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closed.

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SD/. K. SREE RAMA MURTHY DEPUTY REGIST

//TRUE COPY//

To,

SECTION OFFICER

The I Additional Senior Civil Judge at Warangal.(with

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cords, if any)

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One CC to Sri S. A. V. Ratnam, Advocate tOpUCl

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One CC to Sri Podila Hari prasad, Advocate tOpUCl

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4 Two CD Copies

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JUDGMENT+DECREE

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AS.No.782 of 2002

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DISMISSING THE APPEAL WITHOUT COSTS 6

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IN THE HIGH COURT^{FOR THE STATEOF TELANGANA} AT HYDERABAD

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TUESDAY, THE TWENTY^{SECONDDAY OF APRIL} TWO THOUSAND AND^TWENTYFIVE

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PRESENT

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THE HONOURABLE SMT^{JUSTICE K. SUJANA}

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AP PEAL SUIT NO: 782^{OF 2002}

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Between:

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Takkalapally Srinivasa^{Rao S/o Narasing-a.} Elo,3gp9^{44 years,} I fo ? 9.1201 , i'{ear Kalyani^{Function Hall, K.L.N. Reddy Colony,Subedari,} Hanamkonda.

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Avirneni Madhava^{RaoS/o Narasinga Rao, Senior Divisional Engineer, The} Singareni Collieries^{Co. Ltd. Yellandu, Khammam Dist'}

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Chentalapally Kishan^{Rao, S/o Rajaiah,.seed certificationofficer, Andhra}

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Pradesh' S(ate Seed Certification Agency H No 5-1-9, Naimnagar, Hanamkonda, Warangal

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Theagala Madhusudhana^{Rao, S/o ChokkaRao,Agriculturalofficer} Nekkonda, Warangal

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Vadaoalli Viiav Kumar,^{S/o Yadagiri,co-op, sub-Registrar oio The Executive} Direcior, Didt.'Backward^{Classes;S.C.S.Ltd., Warangal}

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...APPELLANT/DEFENDANTS

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AND

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Prathiphala Chit Fund^{Private Ltd., Rep.by ForemanG Nageswara RaoS/o} Pullaiah, 42^yearc. Warangal.

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...RESPONDENT/PLAINTIFF

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G. Srinivasa Rao, H.No.^{13-2-232, Mattawada, GopalaswamyTemple,Near} S.R.College, Warangal

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...RESPONDENT No.2

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ResoondentNo.2isimpleadedasperCourtOrderdated22042025,vide lA No. 6 of'2003^{(CMP No.21742.2003)in AS-No 782 of 2002}

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Appeal filed under a""r,on 96 of CpC against the judgnr nt and decree dated 02-01_2OO2in OS No. ,, civil Judge at warangar. 3 of 1998 on the file of the court of t r r r Additio;",:"r.,

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This appeal comir for hearing and upon perus i rg the grounds of -,n" appeat, the Judgment "r': ^"' ma "','"' "J"'"'n ;:il:: TjJ";iHJi^{llff:',T ff T^"i''1he} Advocate, ror the ra Hari prasad, Advocate i^-T:l':r, or the Re,; rondents.

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This Court doth Order and Decree as follows:

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