IN THE HIGH COURT OF JUDICATURE OF ANDHRA PRADESH AT HYDERABAD FRIDAY, THE TWENTY FIFTH DAY OF FEBRUARY, TWO THOUSAND AND ELEVEN PRESENT THE HON’BLE SRI JUSTICE N.R.L.NAGESWARA RAO APPEAL SUIT No. 1043 OF 2001 BETWEEN: V.Venkateswara Rao …APPELLANT AND Margadarsi Chit Fund Ltd., and others. …RESPONDENTS The Court made the following: THE HON’BLE SRI JUSTICE N.R.L. NAGESWARA RAO APPEAL SUIT No. 1043 OF 2001 JUDGMENT: The 5th defendant in O.S.No. 116 of 1996 on the file of Additional Senior Civil Judge, Rajahmundry, is the appellant herein. 2. The plaintiff has filed suit for recovery of a sum of Rs.3,98,151/- with interest on a principal sum of Rs.3,70,000/-, which is said to have been borrowed by the 1st defendant under chit transaction. 3. The appellant and the other defendants are said to be the guarantors and the 6th defendant in the suit is the official receiver with whom the properties of the 1st defendant have vested consequent on the filing of the Insolvency Petition by him. The appellant herein along with other defendants contended that he is not a member of the chit and he did not execute any document and that he is not liable to pay the suit amount. The claim for amount is excessive. 4. On the basis of the above pleadings, the following issues have been framed by the trial Court, for trial: 1) Whether plaintiff is entitled to suit amount? 2) To what relief? 5. On behalf of the plaintiff, PWs.1 and 2 were examined and marked Exs.A-1 to A-40. On behalf of the defendants, the appellant was examined as DW-1 and defendant No.2 was examined as DW.2 and marked Ex.B-1. 6. After considering the evidence on record, the learned Additional Senior Civil Judge, Rajahmundry, decreed the suit of the plaintiff. Aggrieved by the said judgment and decree, the present appeal is filed. 7. The points that arise for consideration are: 1) Whether the appellant is not liable to pay the suit amount? 2) Whether the decree granted by the lower Court for the suit amount is correct? 8. POINTS: Initially, the appellant has taken a plea that he did not have any transactions with the 1st defendant and he was not a guarantor. But, in his evidence, he has specifically stated that at the instance of one Vemuri Venkata Rao, he agreed to be a guarantor for 1st defendant and signatures on Ex.A-4 and A-5 were taken on chit guarantee agreement and blank promissory note without filling the contents. From his evidence, it is disclosed that he himself was a member of the chit of the plaintiff and has participated in the auction. Therefore, from the above circumstances, it is quite clear that the plea taken by the appellant that he was not a guarantor is not correct and there is no reason for him to subscribe his signatures on the guarantee bond and the promissory note Exs.A-4 and A-5 without knowing the contents. He being a member of the chit, is expected to be aware of the need for taking of the promissory note and the guarantee bond. Therefore, the lower Court has rightly rejected the claim of the appellant. 9. The learned counsel for the appellant contends that in pursuance of the interim directions of this Court, a sum of Rs.2,00,000/- has been deposited and thereafter, further sum has already been paid and therefore, substantial amount is paid by the appellant/defendant No.5 alone as the other defendants could not pay the money. According to him, the lower Court has granted decree granting interest at 12% per annum from the date of suit till the date of realisation and it causes hardship to him. Evidently, the transaction between the plaintiff and the defendant is not a commercial transaction, it is only a loan transaction and there are no special reasons for granting of interest at 12% per annum from the date of suit till the date of realisation against the provisions of Section 34 of Civil Procedure Code. 10. Therefore, taking into consideration the above submission of the appellant, I feel the ends of justice would meet if interest is granted at 6% per annum from the date of suit till the date of realisation instead of 12% per annum. 11. The counsel for the appellant also pleaded that some provision for instalments may be given for payment of the balance. Taking into consideration the substantial payment made by the appellant, the appellant is given six months time to discharge the entire amount. 12. In the result, the appeal is allowed in part and the suit of the plaintiff is decreed with interest at 6% P.A., from the date of suit till the date of realisation instead of 12% per annum granted by the lower Court. The appellant is given six months time for payment of the balance of the decretal amount. Each party should bear their own costs. ________________________ N.R.L.NAGESWARA RAO, J Date: 25-02-2011. INL