“Where a party to the suit does not appear in the witness box and states his own case on oath and does not offer himself to be cross-examined by the other side, a presumption would arise that the case set up by him is not correct.

HIGH COURT OF ANDHRA PRADESH

TUESDAY ,THE SECOND DAY OF JANUARY

TWO THOUSAND AND TWENTY FOUR

PRSENT

THE HONOURABLE SRI JUSTICE VENUTHURUMALLI GOPALA KRISHNA RAO

FIRST APPEAL NO: 148 OF 2004

Between:

1. N.Neelakanteswara Rao S/o.Venkata Ratnam

D.NO.24C-10/3,

R.R.Pet,

Eluru.

2. N.Savitri W/o.Neelakanteswara Rao

D.NO.24C-10/3,

R.R.Pet,

Eluru.

...PETITIONER(S)

AND:

1. M/s.Sri Navodaya Chits and finance By Foreman:

M.Nagi Reddy

Punyamurthulavari Street,

Powerpet,

...RESPONDENTS

Counsel for the Petitioner(s): M V S SURESH KUMAR

Counsel for the Respondents: M ADINARAYANA RAJU

The Court made the following: ORDER

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HONOURABLE SRI JUSTICE V. GOPALA KRISHNA RAO

Appeal Suit No.148 of 2004

Judgment:

The appeal is filed by the defendants in O.S.No.93 of 1997 on the

file of Additional Senior Civil Judge’s Court, Eluru, West Godavari

District. The respondent herein is the plaintiff in the said suit.

2. The parties will hereinafter be referred to as arrayed before the

trial Court.

3. The brief averments in the plaint are as follows:

The 1st defendant joined as a subscriber in the plaintiff chit fund

firm in 3 chits worth of Rs.50,000/- each payable in 25 instalments at

the rate of Rs.2,000/- per month with Ticket No.6 in Group D.1 and

Ticket Nos.3 and 4 in Group D.2. The 1st defendant became the highest

bidder in the auction conducted on 31-12-1995 with respect to

one chit out of the above 3 chits before withdrawing the chit amount.

The 1st defendant requested the plaintiff to arrange a loan keeping the

other two chits as a security and promising to repay the same in regular

instalments. Accordingly, the plaintiff paid an amount of Rs.97,500/-

on 06-01-1996 to the 1st defendant with respect to the above 3 chits.

The 2nd defendant, who is none other than the wife of 1st defendant,

stood as a guarantor and both the defendants executed a demand

promissory note and when the plaintiff insisted the defendants to

furnish security for the aforesaid amount, the 2nd defendant deposited

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her title deeds before the plaintiff and executed a memorandum of

deposit of title deeds and subsequently the defendants failed to

discharge their liability and that the plaintiff is constrained to file the

suit.

4. The defendants filed a common written statement. The brief

averments in the written statement are as follows:

The 1st defendant admitted about the joining as a subscriber in

the plaintiff chit fund firm with respect to 5 chits of Rs.50,000/- each

and also admitted about the receipt of Rs.97,500/- for the 3 chits

agreeing to forego Rs.52,500/- and the 1st defendant was paid

Rs.97,500/- on 06-01-1996. The 1st defendant pleaded that the plaintiff

chit fund company obtained his signatures and his wife’s signatures on

blank stamp papers. The 2nd defendant denied about the execution of

memorandum of deposit of title deeds. They prayed to dismiss the suit

with costs.

5. Based on the above pleadings, the following issues are settled

for trial by the trial Court:

(1) Whether the plaintiff firm is entitled for recovery of the suit

amount as prayed for ?

(2) Whether the suit promissory note was executed by the

defendants towards the payment of subscriptions to the chits as

contemplated under Section 25(2) of A.P. Chit Funds Act ?

(3) Whether the discharge pleaded by the defendants is true and

valid ?

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(4) Whether the plaintiff is entitled to claim interest as claimed

by it ? and

(5) To what relief ?

6. During the course of trial, on behalf of the plaintiff chit fund

firm, its Managing Partner is examined as P.W.1 and marked Ex.A-1 to

A-11. On behalf of the defendants, the 1st defendant is examined as

D.W.1 and marked Exs.B-1 to B-23.

7. After completion of trial and hearing arguments of both sides,

the trial Court decreed the suit in part with proportionate costs for

Rs.1,11,000/- only granting subsequent interest over the same at

12% per annum from 01-10-1997 till the date when the redemption

period is over and thereafter at 6% per annum till realization and

a preliminary decree was passed against the plaint schedule property,

granting time for redemption as 3 months and dismissed the claim for

remaining amount without costs.

8. Aggrieved against the said judgment and decree, the

defendants filed the present appeal questioning the finding given by the

trial Court.

9. Heard Sri Aravala Sreenivasa Rao, on behalf of counsel for the

appellants/defendants. None appeared for the respondent/plaintiff.

10. Now, the points for determination are:

(1) Whether the judgment and decree passed by the trial Court

needs any interference ? and

(2) To what extent ?

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11. Point No.1: Whether the judgment and decree passed by the

trial Court needs any interference ?

The case of the plaintiff is that the 1st defendant joined as

a subscriber of the plaintiff chit fund firm in 3 chits worth of

Rs.50,000/- each payable in 25 instalments at the rate of Rs.2,000/-

per month with Ticket No.6 in Group D.1 and Ticket Nos.3 and 4 in

Group D.2 and the 1st defendant became the highest bidder in the

auction conducted with respect to one chit out of the above 3 chits on

31-12-1995 and the 1st defendant requested the plaintiff to arrange

a loan keeping the other two chits as a security and promising to repay

the same in regular instalments. The plaintiff further pleaded that in

pursuance of the request made by the 1st defendant, the plaintiff

advanced an amount of Rs.97,500/- on 06-01-1996 to the

1st defendant.

12. In order to prove the case of the plaintiff, the plaintiff

examined its Managing Partner as P.W.1. As per the evidence of P.W.1,

the 1st defendant joined as a subscriber in 3 chits and so also executed

chit agreements for the respective chit transactions under Exs.A-1 to

A-3, Ex.A-1 is dated 27-9-1995 and Exs.A-2 and A-3 are dated

18-10-1995. P.W.1 further deposed in his evidence that a promissory

note was jointly executed by both the defendants, who are none other

than the husband and wife under Ex.A-4 on 06-01-1996 and guarantee

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letter was also executed by the defendants under Ex.A-5 and the

2nd defendant also deposited her title deeds by mortgaging the same

with the plaintiff for the loan borrowed by the 1st defendant. It was

specifically admitted by P.W.1 in his evidence that the 1st defendant

became the highest bidder for the 3 chits. The 1st defendant as D.W.1

also admitted in his evidence that the signatures shown to him in

Ex.A-4 promissory note belongs to him and his wife. He further admits

that himself and his wife have executed personal guarantee letter under

Ex.A-5. It is not in dispute by both the defendants that the

1st defendant joined as a subscriber in 3 chits and so also executed

separate chit agreements under Exs.A-1 to A-3.

13. The evidence on record clearly goes to show that the

1st defendant was granted a loan of Rs.97,500/- and the he also

admitted in his evidence in cross-examination about the receipt of

Rs.97,500/- from the plaintiff in respect of Exs.A-1 to A-3 chit

transactions. It was pleaded by both the defendants in the written

statement that the plaintiff chit fund firm obtained their signatures on

blank stamped papers and blank promissory note at the time of giving

the said amount. Admittedly, the transactions took place in the year

1996. The defendants have not taken any legal action against the

plaintiff and so also not issued any legal notice to the plaintiff

questioning the conduct of the officials of the plaintiff chit fund firm in

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obtaining the signatures of defendants 1 and 2 on blank stamped

papers and blank promissory note Ex.A-4 and so also guarantee letter

Ex.A-5 and memorandum of deposit of title deeds Ex.A-6.

14. The evidence of P.W.1 and Exs.A-1 to A-11 clearly supports

the case of the plaintiff. It was specifically admitted by the 1st defendant

in his evidence that the 1st defendant received an amount of

Rs.97,500/- from the plaintiff in respect of 3 chits under Exs.A-1 to

A-3. It is not the case of defendants that the 1st defendant discharged

the said amount with interest as per the terms of chit agreements

Exs.A-1 to A-3. It was severely contended by the defendants that the

2nd defendant has not executed any memorandum of deposit of title

deeds Ex.A-6 and her signatures were obtained on blank stamped

papers. In order to prove the same, the 2nd defendant did not enter into

the witness-box and the 2nd defendant failed to examine herself to prove

that the official of plaintiff chit fund firm obtained her signature on

a white paper that was fabricated as Ex.A-6 memorandum of deposit of

title deeds. The legal position in this regard is no more res integra and

the same is well settled by the apex Court in the case of Mohinder Kaur

v. Sant Paul Singh1, wherein it is held as follows:

“Where a party to the suit does not appear in the witness box and states

his own case on oath and does not offer himself to be cross-examined

1 AIR 2019 SC 4780

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by the other side, a presumption would arise that the case set up by

him is not correct.”

15. Therefore, in the instant case also, even though the

2nd defendant filed a memo adopting the written statement filed by the

1st defendant, to prove her specific plea that the officials of the plaintiff

chit fund firm obtained her signatures on blank papers, she failed to

prove the same. As stated supra, in fact no notice was issued to the

plaintiff by questioning his conduct in obtaining her signatures on

blank papers. Therefore, an adverse inference has to be drawn against

the 2nd defendant.

16. The evidence on record clearly proves that the 1st defendant

joined as a subscriber in plaintiff chit fund firm under 3 chit groups

and so also the plaintiff advanced an amount of Rs.97,500/- to the

1st defendant and the same is admitted by the 1st defendant. Ex.B-1

coupled with the evidence of D.W.1 clearly goes to show that the

1st defendant paid Rs.15,000/- on 28-01-1997 under Ex.B-1 and

Ex.B-2 is the details of amount under letter head of the plaintiff firm.

The plaintiff clearly stated that the 1st defendant has to pay an amount

of Rs.89,452/-. By giving cogent reasons, the trial Court awarded

interest at the rate of 12% per annum and decreed the suit in part with

proportionate costs for Rs.1,11,000/- and a preliminary decree was

passed against the plaint schedule property. I do not find any illegality

in the judgment passed by the trial Court and the judgment and decree

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passed by the trial Court is perfectly sustainable under law and

requires no interference.

17. Point No.2:- To what extent ?

Resultantly, the appeal suit is dismissed confirming the judgment

and decree, dated 03-10-2001, in O.S.No.93 of 1997 passed by the

learned Additional Senior Civil Judge, Eluru, West Godavari District.

Pending applications, if any, shall stand closed. No costs.

_____________________________

V. GOPALA KRISHNA RAO, J.

02nd January, 2024.

Ak

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as_148_2004

HONOURABLE SRI JUSTICE V. GOPALA KRISHNA RAO

Appeal Suit No.148 of 2004

02nd January, 2024.

(Ak)

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