IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) TUESDAY, THE TWENTY FOURTH DAY OF NOVEMBER TWO THOUSAND AND NINE PRESENT HON’BLE SRI JUSTICE K.C.BHANU SECOND APPEAL No.747 OF 2009 Between: Scion Info Tech ..... Appellant/Defendant No.1 AND 1. Sannihitha Chit Funds Pvt. Ltd. ..... Respondent/Plaintiff 2. Chakinala Parthasarathi & 2 others ..... Respondents/Defendants 2 to 4 The Court made the following: JUDGMENT: The Second Appeal, under Section 100 of the Civil Procedure Code, 1908 (for short, "C.P.C."), is directed against the judgment and decree, dated 02.02.2009, in A.S.No.39 of 2007, on the file of the learned V Additional District Judge, Karimnagar, whereunder and whereby the judgment and decree, dated 31.01.2007, passed in O.S.No.224 of 2004, on the file of the learned Senior Civil Judge, Karimnagar, were confirmed. 2. For better appreciation of facts, the parties hereinafter will be referred to as they are arrayed in the trial Court. 3. Brief facts, that are necessary for disposal of the present Second Appeal, may be stated as follows: The plaintiff is a company registered under the Companies Act, 1956, and has been doing chit fund business having registered office near Civil Hospital, Karimnagar. On 10.07.1997, at Karimnagar, the first defendant joined as a member in the chit fund scheme conducted by the plaintiff and he was allotted a Ticket No.LT 2-A and was allotted with ticket No.45 in his name. The total value of the chit amount is Rs.5,00,000/- and the first defendant has agreed to subscribe the amount of Rs.10,000/- per month for 50 months and signed the agreement of chit on 10.07.1997. In an auction conducted by the plaintiff company in respect of the above chit on 08.03.1998, the first defendant participated in the auction and became successful bidder agreeing to forego an amount of Rs.2,25,000/- out of Rs.5,00,000/- which was confirmed by the plaintiff company. After deducting the plaintiff company’s commission from the foregone amount, the balance amount was distributed to all the members as per the rules and regulations of the company. As per the rules and regulations of the company, in order to draw the amount, the successful bidder had to furnish independent guarantors to the satisfaction of the plaintiff company who can stand surety for the entire future installments of the successful bidder. The first defendant paid only a part amount by the date of payment and he furnished D.Ws.2 to 4 as guaranters who executed an agreement of guarantee dated 17.04.1998 jointly in favour of the plaintiff company agreeing to guarantee the due payment of the amount due to the company by the first defendant. All the defendants also executed a promissory note in favour of the plaintiff company on 17.04.1998 towards collateral security. The first defendant was paid Rs.2,75,000/- by way of a cheque on 17.04.1998. The first defendant has passed cash voucher acknowledging the receipt of the prize bid amount. The first defendant paid only some installments and thereafter, he committed default in payment of installments from 26.02.2002. Inspite of repeated demands made by the plaintiff company, the defendants failed to pay that amount. The plaintiff after finally got issued a legal notice on 18.03.2004, filed the suit for recovery of an amount of Rs.3,73,959/-. 4. Defendant Nos.3 and 4 remained ex parte. 5. The first defendant filed a written statement denying the material allegations in the plaint and admitted that he had joined as a member in the chit fund company of the plaintiff for a chit value of Rs.5,00,000/- and also executed an agreement of chit. It is denied that the first defendant participated in the chit auction held on 08.03.1998 and became the successful bidder and the plaintiff company has paid the prize amount of Rs.2,75,000/- to the first defendant. The defendant denied that he became defaulter from 26.02.2002 onwards and the personnel of plaintiff company approached and demanded the payments of installments and the plaintiff company got issued legal notice. It is stated that the plaintiff has no right to file the suit and that the plaintiff created the last installment, dated 26.02.2002, for the purpose of filing the present suit. As a matter of fact, the first defendant has not paid any amount to the plaintiff during the years 2000 to 2002. Therefore, the suit of the plaintiff company is barred by limitation. It is further stated that during the year 1999, first defendant sustained loss in his business and he fell ill and he was forced to leave Karimnagar and since last five years, he is residing at Hyderabad and he never received any notice from the plaintiff company about the chit amount as claimed in the plaint. The plaintiff company has created a false statement of account for the purpose of filing the present suit by showing that the first defendant has paid the 26th, 27th and 28th installments of the chit through Receipt No.67936 on 26.02.2002. In fact the first defendant never paid the amount as alleged by the plaintiff. Hence, the first defendant prays to dismiss the suit. 6. Basing on the above pleadings, the following issues were settled by the lower Court. 1. Whether the plaintiff is entitled to recover the suit amount as prayed for? 2. To what relief? 7. On behalf of the plaintiff, P.Ws.1 to 3 were examined and Exs.A1 to A14 were marked. On behalf of the defendant, no evidence either oral or documentary was adduced. 8. The trial Court, after considering the evidence on record, decreed the suit as prayed for. Challenging the same, the Appeal was filed and the Appellate Court vide impugned judgment confirmed the judgment and decree of the trial Court. Aggrieved by the same, the Second Appeal is filed. 9. Unless a substantial question of law is involved in the Second Appeal, the question of admitting the Second Appeal does not arise. If both the Courts gave a perverse finding, or the findings which are not based upon any admissible evidence, or inadmissible evidence was taken into consideration, are some of the aspects which come within the meaning of substantial question of law. To know whether the findings are correct or not, it is necessary to refer to the evidence. 10. The substantial questions of law urged in the grounds of Appeal are: (a) Whether the Courts below are justified in allowing P.W.1 to prosecute the suit proceedings when he failed to submit any document to prove his capacity to file the suit? (b) Whether the findings of the trial Court are justified when the appellant herein pleaded that the appellant has not paid any amount on 26.02.2002 as mentioned under Ex.A13 and when the appellant contended that it has created for the purpose to bring the suit within limitation, when the said crucial aspect is relevant to decide whether the suit was filed within limitation or not? (c) Whether the trial Court is justified in decreeing the suit without considering the specific pleadings of the appellant in the Written Statement relying on the evidence of the plaintiff on the ground that the appellant failed to lead any evidence to disprove the payment of last installment the date on which saved the limitation for filing the suit? 11. The initial burden is on the plaintiff company to establish that the first defendant was the member of a chit fund scheme started and that he participated in one of the chits and became the successful bidder. It is not in dispute that when the first defendant became a successful bidder, he received the prize amount of Rs.2,75,000/-. The only contention raised by the first defendant is that the suit is barred by limitation as the suit is filed beyond three years from the date of last payment made by the first defendant. The evidence of P.Ws.1 to 3 is very clear that the first defendant executed an agreement of chit on 21.02.2002, which is marked as Ex.A2, Defendant Nos.1 to 4 executed a promissory note, dated 10.07.1997, which is marked as Ex.A3, and all the defendants executed an agreement of guarantee, dated 11.04.1998, which is marked as Ex.A4. Ex.A11-Statement of Account coupled with the evidence of P.Ws.1 and 2 would clearly disclose that the first defendant received Rs.2,75,000/- by way of cheque on 17.04.1998 from the plaintiff company. To substantiate the contention of the first defendant that he has not paid any amount on 26.02.2002, he has not come to the witness box to contend that he has not paid any amount. 12. P.W.2, who is the cashier of the plaintiff company, has categorically stated that the first defendant came to their office along with the agent Mr.Aitha Praveen for payment of the part amount towards chit fund transaction and when P.W.2 demanded for total outstanding installments due, the first defendant paid only Rs.15,000/- towards payment of installments, and that P.W.2 received the said amount and issued a receipt bearing No.67936, dated 26.02.2002, which is marked as Ex.A5. Except giving a suggestion that the first defendant never paid any amount to P.W.2, nothing has been elicited to discredit the testimony of P.Ws.2 and 3. Ex.A13 is the duplicate copy of the receipt which clearly go to show that the first defendant paid Rs.15,000/- on 26.02.2002. 13. The evidence of P.W.3, who is working as agent in the plaintiff company, would go to show that he introduced the first defendant as a chit subscriber of the plaintiff company and also about first defendant paying Rs.15,000/- under the original of Ex.A13. 14. The oral evidence of P.Ws.1 to 3 coupled with Exs.A2, A3, A5 and A13 remained unchallenged. Therefore, from the evidence on record, it is clear that the first defendant paid the last installment of Rs.15,000/- on 26.02.2002. A perusal of Ex.A11, which is also the Statement of Account, would clearly go to show that the first defendant paid Rs.15,000/- on that date. Therefore, the suit is within three years from the date of last payment. So, basing on the evidence available on record, the trial Court rightly decreed the suit and the same was confirmed by the Appellate Court. None of the findings is shown to be perverse, or contrary to law, or not based upon any admissible evidence. There is no substantial question of law involved in this Second Appeal so as to admit the same. The findings are arrived at purely basing on the factual aspects. Hence, the Second Appeal is devoid of merit and is liable to be dismissed. 15. Accordingly, the Second Appeal is dismissed at the stage of admission confirming the judgment and decree, dated 02.02.2009, in A.S.No.39 of 2007, on the file of the learned V Additional District Judge, Karimnagar. There shall be no order as to costs. _______________ (K.C. BHANU, J) Date: 24th November, 2009 KL