Sri N.Vijaya Babu

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IN THE COURT OF THE PRINCIPAL JUNIOR CIVIL JUDGE: PRODDATUR

Present:- Sri N. Vijaya Babu,

Principal Junior Civil Judge, Proddatur.

Friday, this the 28th day of April, 2017

O.S.No.162 of 2015

1. M/s. Krishna Kishore Traders, Represented by its Partners D.No.13/462, Vengalareddy Peta, Proddatur town, Kadapa District.

2. Araveti Navaneethamma, w/o.A. Krishna Murthy, Aged 72 Years, Hindu, Business, Residing at D.No.5/497, Sambaiah Gari street, Proddatur town – 516 360, Kadapa District.

3. Araveti Prathap Kumar, s/o.Krishna Murthy, Aged 52 years, Hindu, Business, Resident of D.No.5/497, Sambaiahgari Street, Proddatur – 516 360, Kadapa District.

4. Araveti Kishore Kumar, s/o.Krishna Murthy, Aged 50 years, Hindu, Business, Residing at D.No.6/85, Vinayaka Nagar, Proddatur – 516 360, Kadapa District.

5. S. Subbarayudu, son of Papaiah, Aged 50 years, Business, Hindu, Resident of D.No.13/462, Vengalareddypeta, Proddatur town, Kadapa District. ….Plaintiffs

Vs.

1. M/s. Sri Maruthi Agro Agencies, Proddatur, Represented by its Partners, office at D.No.13/470, Vengalreddypeta, Proddatur – 516 360, Kadapa District.

2. Singam Nagi Reddy, son of Gangi Reddy, Aged 42 years, Hindu, Partner of M/s. Sri Maruthi Agro Agencies, Proddatur, Residing at YMR Colony, Proddatur – 516 360, Kadapa dt.

3. Sunkireddy Gangi Reddy, son of Pedda Muni Reddy, Aged 55 years, Hindu, Partner of M/s. Sri Maruthi Agro Agencies, Proddatur, residing at D.No.3/552-A, YMR colony, Proddatur, 516 360, Kadapa district.

4. Singam Gangadhar Reddy, s/o.Gangi Reddy, Aged 55 years, Hindu, Partner of M/s. Sri Maruthi Agro Agencies, Proddatur, Residing at D.No.3/532, YMR Colony, Proddatur – 516 360, Kadapa District. ….Defendants

This suit is coming on this day for final hearing before me in the Presence of the Sri C. Syama Sundar Reddy, Advocate for the plaintiffs and of Sri J. Ravi,

Advocate for the defendants and having heard and considered the material on record, this court delivered the following;-

J U D G M E N T

This is a suit filed by the plaintiffs seeking for recovery of amount of

Rs.1,91,454/- basing on the promissory note with subsequent interest and costs.

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2. The brief facts of the plaint are that the plaintiff No.1 is the partnership firm and plaintiff Nos.2 to 5 are the partners of the plaintiff No.1. The defendant

No.1 is partnership firm and defendant Nos.2 to 4 are the partners of the defendant No.1. Hence, this suit is filed against defendant Nos.2 to 4. On 09.7.2014, defendant Nos.2 to 4 on behalf of the defendant No.1 in the capacity of partners borrowed a sum of Rs.1,53,000/- from the plaintiff No.1 for business purpose and defendant No.2 executed the suit promissory note on behalf of the remaining defendants agreeing to repay the same with interest @24% per annum. Subsequently, inspite of repeated demands of the plaintiffs, the defendants did not pay anything and used to postpone the same. Having waited all these days, the plaintiffs have no other way except filing of this suit. The defendants are partnership firm and doing business and do not have agricultural lands. As such interest is claimed as per contract rate i.e., @ 24% per annum.

Hence, this suit.

3. The defendant Nos.1, 2 and 4 did not appear inspite of receipt of summons, as such this Court was constrained to set them exparte. The defendant No.3 entered his appearance and filed written statement. The brief facts of the written statement of the defendant No.3 is that the suit basing on the unregistered partnership deed is not maintainable. The plaintiffs ought to have file original partnership deed duly registered before the competent authority and then only the plaintiffs are entitled to file the suit. He do not know whether the first plaintiff is partnership firm and the other plaintiffs are partners of the plaintiff

No.1. He never borrowed any amount from the plaintiff either individually or through his partnership firm. As on the alleged date of borrowing, he got separated from the partnership, as such he do not know anything about the suit transaction. He do not know whether the defendant No.2 executed the suit promissory note in favour of the plaintiff No.1 on behalf of all the partners. The plaintiff never demanded him at any point of time. No legal notice sent to him by 3 the plaintiffs. There is no cause of action to this suit. The defendant Nos.2 and 4 are own brothers and defendant No.1 firm has been started in the year 2005 and defendant No.2 is having 50% share, defendant No.4 is having 20% share and he is having remaining share in the defendant No.1 firm. There was written agreement in between them. They are also having Tin number, VAT Registration, etc., for running of the firm and the firm is dealing with Pesticide business. From the right beginning the defendant Nos.2 and 4 are looking after the entire business and he has nothing to do with the same. Taking undue advantage of the same, the defendant Nos.2 and 4 used to borrow amounts from the public by executing pronotes individually keeping the name of the firm. For the amount borrowed by the defendant Nos.2 and 4, he is not responsible and it is the bounden duty of defendant Nos.2 and 4 to pay the same individually. Every year the firm accounted the entire transactions and has shown each and every entry in the books of accounts and the present alleged amount is not shown in the account books showing that the amount has been borrowed for the welfare of the firm. As such, whatever the amount borrowed individually, the individual person is responsible to pay the same and the other partners of the firm are no way responsible for the amount. Immediately after receipt of the summons, he has verified the accounts and came to know that there is no entry in the books of accounts relating to the alleged transaction. Then, he demanded the other defendants to settle the accounts of the firm and realizing his willingness to withdraw from the partnership firm. But the other partners of the firm did not come forward to settle the accounts of the firm and as such, he did not attend to the shop. As the present transaction is not shown in the book of accounts, he is no way concerned to the alleged suit amount. The alleged promissory note does not contain any firm seal and not contained his signatures. Hence, this suit is not maintainable against him. Hence, prayed to dismiss the suit with costs.

4. Basing on the above material, the following issues are framed for trial;-

1.Whether this suit is not maintainable on the ground that the plaintiff 4 No.1 is an unregistered partnership firm?

2.Whether the defendant No.3 could prove that he is not a partner of the defendant No.1 firm as on the date of suit promissory note as alleged by him?

3.Whether the plaintiffs could prove that they are entitled to recover the suit amount from the defendants?

4.To what result?

5. In order to prove the contentions, the plaintiffs examined plaintiff No.3 as PW.1 and PW.2 Vankadhara Ramesh Babu and got marked Exs.A.1 to A.4. The defendant No.3 examined himself as DW.1, DW.2 Mullu Venkata Siva Reddy, DW.3

I. Sesha Reddy and got marked Ex.X.1.

6. Heard both sides. Perused the record.

7. P.W.1 in his chief affidavit filed in lieu of chief examination reiterated the averments of the plaint.

PW.2 who is the attestor of Ex.A.1 in his chief affidavit supported th suit transaction in toto.

b) DW.1 in his chief affidavit filed in lieu of chief examination reiterated the averments of the written statement.

DW.2 in his evidence stated that defendant No.3 is one of the sleeping partner of the firm i.e., DW.1, but he know the other defendants are also partners and defendant Nos.2 and 4 are looking after the entire transactions of the firm who are own brothers and used to borrow from the public by showing defendant

No.1 firm for individual purpose. On coming to know the same, DW.1 requested defendant Nos.2 and 4 to cancel the partnership in the business and defendant

No.3 is nothing in the present transaction. After receipt of the suit summons, the defendant No.3 and he went to the Auditor of the firm and came to know that the suit amount borrowed by defendant No.2 for own purpose, but not for the 5 business of the firm, that now several suits filed against defendant No.2 and he has nothing to do with own transaction of defendant Nos.2 and 4 and facing several cases in Proddatur Courts. As the defendant No.3 is no way concerned to the suit transaction, the defendant No.3 is not liable to pay the suit amount as prayed by the plaintiffs.

DW.3 in his evidence stated that he brought the true copies of Financial

Statement and IT return acknowledgement for the year 2014-2015 i.e., from 01.4.2014 to 31.3.2015 i.e., Ex.X.1. He is working as Auditor from the year 2015-2016. He is working as Auditor from the year 2002, that he do not have

Chartered Accountant Degree, but he is qualified to practice as an Auditor up to

Turnover of one crore as he possess B.Com degree. For preparing financial statement of a year the firm will give sales accounts, purchase account, unsecured debts and trade creditors, trade debtors etc., and as the accounts furnished to him, there is no transaction of borrowing of any amount by the firm on 09.7.2014.

c) The contention of the plaintiff is that, the plaintiff firm and defendant firms are admittedly in existence. As per the cross examination of D.W.3 D.3 is also partner of D.1 firm as on the date of suit transaction and till date. Though there is no seal of the D.1 firm in Ex.A.1, but, the contents of Ex.A.1 proves that

D.2 obtained said loan from plaintiff firm on behalf of D.1 firm. The only plea taken by the defendant No.3 is that he was not partner of the D.1 firm as on the date of Ex.A.1 which is found to be false as per the D.Ws.1 to 3. D.W.1 admitted that he was a partner of D.1 firm, but, failed to show when he came out of the firm and the record in proof of the same. Once D.W.1 admitted that he was partner of D.1 firm the burden lies on D.W.1 to prove that he was not partner as on the date of Ex.A.1. The evidence of P.W.1, P.W.2 and Ex.A.1 to A.3 proves the case of the plaintiff. As per Section 58 of Indian Evidence Act once a fact is admitted there is no need to prove the same. D.W.1 in his cross examination admitted that plaintiff No.1 is a registered firm and is in existence to the 6 knowledge of several persons. The said admission proves Ex.A.2 & A.3 beyond reasonable doubt, that the plaintiff No.1 firm is a registered firm. D.Ws.2 & 3 also admitted Plaintiff No.1 firm is a registered firm. Even if the plaintiffs firm didn't give the amount through cheque the same doesn't preclude this Court in passing decree basing on the true facts of the Ex.A.1 transaction. Hence, prayed to decree the suit.

d) The contention of defendant No.3 is that, the plaintiff failed to prove it is a registered firm as it didn't examine any official to prove Ex.A.2 & A.3.

Unregistered firm can't maintain a suit as per Order XXXII of CPC. As per the contents of Ex.A.1 there is no seal in Ex.A.1 with regard to D.1 firm. If really the

D.1 firm has borrowed amount for its purpose it would have certainly contain the seal and also it would be mentioned in the accounts. Neither in Ex.X.1 or as admitted by P.W.1 in the accounts of plaintiff firm the Ex.A.1 transaction is not shown. Any transaction whose value exceeds Rs.20,000/- it shall be done through cheque or online, but, even though the consideration Ex.A.1 is

Rs.1,53,000/- it is not done so. Ex.A.1 is not executed on the letter head of defendant No.1 firm. Even assuming that D.2 executed the same, D.2 alone liable to pay the same, but, not D.1 firm or D.3. The plaintiffs didn't file the registered deed of partnership which will show the functions of partners and firm whether the same can lend or not. As such, the plaintiffs can't say that the admission of D.Ws.1 to 3 proves that it is a registered firm. The cross examination of P.W.1 with regard to non mentioning of Ex.A.1 transaction in the accounts, income tax statement etc., creates a lot of doubt in Ex.A.1 transaction.

Hence, prayed to dismiss the suit with costs.

8. Issue No.1: Whether this suit is not maintainable on the ground that the plaintiff No.1 is an unregistered partnership firm?

As can be seen from the record, as per Ex.A.3 the plaintiff is a registered 7 partnership firm, but as it is very old one, the seal is not much visible. However,

D.Ws.1 & 2 in their cross examination admitted that the plaintiff No.1 is a registered firm. Even though in the written statement, the defendant No.3 denied that the plaintiff No.1 is not a registered firm, but, in his cross examination admitted that the plaintiff No.1 is a registered firm. D.W.2 in his cross examination admitted that plaintiff No.1 is a registered firm and plaintiffs No.2 to 5 are partners of the same. It is very well settled law that admitted facts need not be proved. As such, this Court is of the opinion that the plaintiffs proved that plaintiff No.1 is a registered firm and therefore, this suit is filed by the plaintiffs is maintainable.

In view of the aforementioned discussion, this issue is decided in favor of the plaintiffs.

9. Issue No.2: Whether the defendant No.3 could prove that he is not a partner of the defendant No.1 firm as on the date of suit promissory note as alleged by him?

The defendant No.3 even though in his written statement stated that as on the date of suit transaction he is not a partner of the defendant No.1 firm, but in his cross examination admitted that he is one of the partner in defendant No.1 firm and there is no evidence to show that he retired from defendant No.1 firm.

DW.3 who was Auditor of Defendant No.1’s firm and who is summoned by DW.3 in cross examination stated that as per Ex.X.1, the partners of Defendant No.1’s firm are defendant No.2, 3 and 4. Admittedly, Ex.X.1 is the I.T. return acknowledgment for the year 2014-15 i.e., from 01.4.2014 to 31.3.2015, whereas the suit transaction i.e., Ex.A.1 is dated 09.7.2014. Therefore, by considering Ex.X.1 and evidence and cross examination of DW.3, it is crystal clear that DW.3 is partner of defendant No.1’s firm as on the date of Ex.A.1 transaction. Under these circumstances, this Court is of the opinion that the defendant No.3 utterly failed to prove that he is not the partner of defendant 8 No.1’s firm as on the date of suit transaction.

10. Issue No.3: Whether the plaintiffs could prove that they are entitled to recover the suit amount from the defendants?

It is the another contention of the D.3 that the suit transaction was not reflects in the accounts of the defendant No.1’s firm, that he is a sleeping partner and defendant No.1 firm is actually managed by defendant Nos.2 and 4 who are own brothers, that he has no knowledge about the suit transaction and further, there is no seal and signature of the defendant No.1 firm in Ex.A.1 promissory note, except mere mentioning of the defendant No.1 firm name in the body and as such, he is not personally liable to pay the suit amount. It is true in Ex.A.1 even though the name of the defendant No.1 firm is mentioned in the borrower's column, there is no seal or signature of the defendant No.1 firm at the place of signature of defendant No.2. As per the evidence of DW.1, the suit transaction is not shown in Ex.X.1 income tax returns. There is nothing brought on record by the plaintiffs to show that D.3 is incharge of day to day activities of the defendant

No.1 firm. No suggestion was also given to D.3 to that effect in cross examination. Defendant Nos.2 and 4 did not contest the suit either to deny the plaintiff’s claim or defendant No.3’s claim. Defendant No.3 in his written statement categorically stated that D.2 & D.4 are running D.1 firm. There is nothing brought on record by the plaintiffs to show that D.3 has personal knowledge about Ex.A.1 transaction. The plaintiffs are not disputing Ex.X.1.

When the accounts of defendant No.1's firm doesn't reflect the suit transaction then it can't be said that all the partners except those have personal knowledge about the same are personally liable.

ii) With regard to not lending the amount vide cheque is concerned it is true as per Section 269SS of Income Tax Act no loans or deposit in excess of

Rs.20,000/- shall be given only by way of account payee cheque. The contravention of the same results in imposing penalty equivalent to the amount thus deposited or lent. But, there is nothing in law to show that a suit can't be 9 filed or amount can't be recovered by the lender if he gives the loan or made the deposit in excess of Rs.20,000/- by way of cash. It is between Income Tax

Department and plaintiffs for the consequences and it can't preclude the plaintiffs from filing this suit or this Court from passing the decree.

Under these circumstances, this Court is of the opinion that the plaintiffs are entitled to recover the suit amount from defendant Nos.1, 2 and 4 alone, but not from defendant No.3 personally.

In view of the aforementioned discussion, this issue is decided in part in favour of the plaintiffs and in part in favour of the defendant No.3 as stated above.

11. Issue No.4: To what relief?

In the result, this suit is decreed partly in favor of plaintiffs against defendants No.1, 2 & 4 with costs. The principal sum adjudged is Rs.1,53,000/-.

The defendant No.1 to the extent of shares of defendants No.2 & 4 and defendants No.2 & 4 are severally and jointly directed to pay an amount of

Rs.1,91,454/- to the plaintiff along with interest on the principal sum adjudged @12% per annum from the date of suit to the date of decree and @6% per annum from the date of decree till realization. With regard to defendant No.3 is concerned this suit is dismissed against D.3. D.3 shall bear his own costs in the circumstances of the case.

Typed to my dictation, corrected and pronounced by me in the open court, on this the 28th day of April, 2017.

Sd/- N. Vijaya Babu,

Principal Junior Civil Judge,

Proddatur.

Appendix of Evidence

Witnesses examined for Plaintiff:

PW.1: Sri Araveti Prathap Kumar – plaintiff No.3 PW.2: Sri Vankadhara Ramesh Babu – Attestor

For defendant:

DW.1: Sri Sunkireddy Gangi Reddy – defendant No.3 DW.2: Sri Mullu Venkata Siva Reddy DW.3: Sri I. Sesha Reddy – Auditor 10 Exhibits marked for Plaintiff:

Ex.A.1: Suit promissory note for Rs.1,53,000/- dt.9.7.2014 Ex.A.2: Firm Registration Extract Ex.A.3: Form D.1 Certificate of Registration

For Defendant: Ex.X.1: True copy of Financial Statement and IT Return Acknowledgment for the year 2014-15.

Id/- N.V.B., P.J.C.J. Proddatur.

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IN THE COURT OF THE PRINCIPAL JUNIOR CIVIL JUDGE: PRODDATUR

Present:- Sri N. Vijaya Babu,

Principal Junior Civil Judge, Proddatur.

Friday, this the 28th day of April, 2017

O.S.No.69 of 2016

Mogili Chinna Baduraiah, son of Mogili Rama Krishna, Aged 32 years, Hindu, Business, Residing at D.No.15/569, Second Floor, Kota Street, Proddatur – 516 360, Kadapa District. ….Plaintiff

Vs.

Nemalladinne Kumar, son of Nemalladinne Mohan, Aged 45 years, Hindu, Business, Residing at D.No.12/562, Second Floor, Kota Street, Proddatur – 516 360, Kadapa District. ….Defendant

This suit is coming on 20.4.2017 for final hearing before me in the Presence of the Kum. E. Annapurna, Advocate for the plaintiff and of Sri G. Srinivasulu,

Advocate for the defendant and having heard and considered the material on record, this court delivered the following;-

J U D G M E N T

This is a suit filed by the plaintiff seeking for recovery of amount of

Rs.1,71,900/- from the defendant basing on the promissory note with subsequent interest and costs.

2. The brief facts of the plaint are that on 10.2.2013 at Proddatur Town, the defendant borrowed a sum of Rs.1,00,000/- for own family necessities from the plaintiff and executed the suit promissory note in favour of the plaintiff agreeing to repay the same with interest @ 24% per annum either to the plaintiff or order of the plaintiff on demand. Inspite of repeated demands, the defendant postponed the payment of same on some pretext or other and inspite of issuance of legal notice dt.28.12.2015, received by the defendant on 30.12.2015, the defendant neither gave reply nor choose to repay the amount. The defendant is doing business and as such, the interest is calculated as per contract rate i.e., 24% per annum. Hence, this suit.

3. The defendant entered his appearance and filed written statement. The brief facts of the written statement are that the defendant denied the borrowing 2 of amount and execution of suit promissory note and also the alleged demands of the plaintiff. There is no cause of action in the suit as he never borrowed any amount from the plaintiff on the alleged date of promissory note. He further stated that the plaintiff brought up the suit promissory note by forging his signature and hand writing with the help of attester and filed this suit for wrongful gain as he is regular beneficiary of the plaintiff. The plaintiff is well aware of his signatures and hand writing and thus forged his signatures and filed this suit. The plaintiff is doing finance business and running chit business also. He is regular subscriber and beneficiary to the plaintiff for few years. During the said transactions, he participated in a chit for Rs.3 lakhs and became successful bidder and received price amount. After receiving price amount, he continued the said chit, paid totally an amount of Rs.2,25,000/- towards balance installments and became defaulter for balance of amount of Rs.75,000/-. While at the time of receiving price amount, on the insisting of plaintiff he executed 3 promissory notes each for Rs.1 lakh. Apart from the said chit transactions, he borrowed an amount of Rs.3,00,000/- from the plaintiff and executed two suit promissory notes for Rs.2 lakhs and for Rs.1 lakh respectively. He paid an amount of Rs.2,34,500/- towards the above promissory notes on various dates and remaining balance is

Rs.65,500/- which is to be paid by him towards the above two promissory notes.

All the said promissory notes are executed in the year 2012 and are time barred.

He sustained loss in his business due to ill-health and competition. His creditors including the plaintiff after coming to know the same, started mounting pressure upon him and insisted him and his family for repayment of debts. Unable to withstand the said pressures, he filed IP No.21/2016 on the file of Hon’ble Senior

Civil Judge’s Court, Proddatur and the plaintiff herein is the respondent No.1. The

plaintiff approached elders after knowing the fact about the filing of Insolvency petition for negotiation and the elders settled the matter for Rs.30,000/- in the month of February, 2016 and in the mediation, the plaintiff also claimed interest for the finance amount of Rs.3 lakhs, but, the elders warned the plaintiff and settled the matter for Rs.30,000/-. He discharged the settled amount in the 3 presence of elders in the month of February, 2016 and received five promissory notes from the plaintiffs i.e., 4 promissory notes for Rs.1 lakh each and one promissory note for Rs.2 lakh. The said promissory notes are at his house and he is scared of his creditors and thus, he will file them at the time of his evidence.

Having not satisfied with the said settlement, the plaintiff started proclaiming in the town that the plaintiff will create some documents and will certainly filed suit for false gain. On coming to know about the same, he warned the plaintiff. As the plaintiff is well aware of his signature and hand writing, forged and fabricated the above suit promissory note and filed this false suit for unlawful gain. Hence, prayed to dismiss the suit with costs.

4. Basing on the above material, the following issues are framed for trial;-

1. Whether the suit promissory note is true, valid and binding on the defendant?

2. Whether the plaintiff is entitled to recover the suit amount?

3. To what result?

5. In order to prove the contentions, the plaintiff himself examined as PW.1,

PW.2 N. Sai Lakshmi Nathaiah and got marked Exs.A.1 to A.4. The defendant examined himself as DW.1, DW.2 Nukala Venkata Narayana and got marked

Exs.B.1 to B.3 on his behalf.

6. Heard both sides. Perused the record.

7. Issue Nos.1 and 2:

a) P.W.1 in his chief affidavit filed in lieu of chief examination reiterated the averments of the plaint. He further stated that the defendant filed written statement with false allegations and filed IP No.21/2016 on the file of Hon’ble

Senior Civil Judge’s Court, Proddatur against him and others and in the said I.P. his

name was shown as respondent with malafide intention to evade the suit debt.

PW.2 who is the attestor of Ex.A.1 in his chief filed in lieu of chief examination supported the suit transaction.

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b) DW.1 in his chief affidavit filed in lieu of chief examination reiterated the averments of the written statement.

DW.2 who is one of the elder in the panchayat in his chief affidavit supported the chit transaction and money transactions between plaintiff and defendant and stated that the defendant is due an amount of Rs.75,000/- towards chit transaction and Rs.65,500/- towards money transaction. He also supported that the defendant sustaining loss in the business, filing I.P. and also the mediation held between the plaintiff and defendant which was settled for

Rs.30,000/- in the month of February, 2016 and after paying the amount of

Rs.30,000/-, the defendant received five promissory notes from the plaintiff. After filing of the suit, the defendant approached him and informed about the present suit, as such he warned the plaintiff to withdraw the suit, but the plaintiff did not withdraw the suit and continued the suit for false gain. Infact, there is no amount due pending between the plaintiff and defendant pertaining to any transaction.

He came to know that the present suit promissory note is forged one along with collusion of the attester.

e) The contention of the plaintiff is that the evidence of PWs.1, 2 and

Exs.A.1 to A.3 proves that the suit promissory note is true, valid and binding on the defendant and Ex.A.4 shows that the defendant is due an amount of

Rs.1,40,500/-. There are contradictions in the evidence of DWs.1 and 2 with regard to mediation. As such, the evidence of DWs.1 and 2 cannot be believed.

Hence, prayed to decree the suit.

f) The contention of the defendant is that the plaintiff utterly failed to answer the allegations raised by him in the written statement. PW.1 in his cross examination admitted the chit transaction and money transactions mentioned in the written statement. Ex.A.2 legal notice also issued for three promissory notes, but for the reasons best known, the plaintiff filed suit only basing on one promissory note. The cross examination of PW.1 is quite contrary to the evidence of PW.2. As such the plaintiff utterly failed to prove the suit promissory note is true, valid and binding on him. Hence, prayed to dismiss the suit with costs.

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8. As can be seen from the record, as per the evidence of PWs.1, 2 and

Exs.A.1 to A.3 on 10.2.2013, at Proddatur town, the defendant borrowed a sum of

Rs.1,00,000/- from the plaintiff for own family necessities and executed suit promissory note agreeing to repay the same with interest @ Rs.2/- per hundred per month, but failed to repay the same with interest inspite of repeated demands and issuance of Ex.A.2 legal notice served on 30.12.2015. PW.1 in his cross examination admitted that the defendant also one of his chit member, that initially they will obtain promissory note for future liability from the highest bidders for the chit amount, that the defendant also executed promissory note towards future liability when defendant declared as highest bidder, that the amount of the chit in which the defendant is member is Rs.3 lakhs, that other than chit transaction, the defendant also borrowed amount from him. Therefore, the plaintiff is admitting the chit transaction and money transaction between him and the defendant. The plaintiff also admitting that for the future liability, the defendant executed the promissory notes. As per Ex.A.2 legal notice the same was issued for the amount due under 3 promissory notes i.e., for Rs.1 lakh dt.10.2.2013, for Rs.2 lakhs and Rs.1 lakh, dt.2.7.2013. But for the reasons best known, the plaintiff filed suit basing on the Ex.A.1 alone i.e., dated.10.2.2013.

There is nothing brought on record by the plaintiff what happened to the remaining two promissory notes mentioned in Ex.A.2. In the cross examination at one time, the plaintiff stated that except these suit transactions, no transactions between him and defendant is pending. But again plaintiff stated that he issued legal notice for the suit transaction and also with regard to chit transaction i.e., for two promissory notes. But, as per the written statement of the defendant, for chit transaction he executed three promissory notes each for Rs.1 lakh and for money transaction, he executed two promissory notes one for Rs.2 lakhs and one for Rs.1 lakh and all the promissory notes are of the year, 2012. The said averments of written statement are not contraverted by the plaintiff by filing any rejoinder.

Therefore, the said promissory notes cannot be stated to be pertaining to chit transaction and further as per Ex.A.4, the defendant shown the plaintiff as 6 Respondent No.1 and the amount due to the plaintiff is shown as Rs.1,40,500/-.

For the reasons best known, the plaintiff did not dispute the amount shown to be due in his favour and infact, relied on Ex.A.4 which is contrary to his Ex.A.2 legal notice and also cross examination. But as per Ex.A.2 the other two promissory notes are dt.2.7.2013. When there is severe contradictions in the evidence of

PW.1 itself, the evidence of PW.2 is not of much use to clarify those contradictions.

DWs.1 and 2 supported the mediation and other facts in toto. DW.2 even though stated that Ex.B.1 to B.3 are for Rs.1 lakh only, even though Ex.B.2 is for Rs.2 lakhs, it is the contention of the defendant, that D.W.2 thought Ex.B.1 to B.3 are three promissory notes pertaining to chit transaction each for Rs.1,00,000/-.

Nothing contrary was elicited in the cross examination of DWs.1 and 2. Infact, not even a suggestion was given to DW.1 that Exs.B.1 to B.3 are created by the defendant and does not pertains to the transactions between plaintiff and defendant. The said suggestion was given to DW.2, but the same was denied by

DW.2. As already stated supra, the contradictions in the evidence of PW.1 and

Exs.A.2 and A.4 creates a lot of doubt in the case of the plaintiff and does not inspire the confidence of this Court in the evidence on behalf of the plaintiff.

Under these circumstances, this Court is of the opinion that the plaintiff failed to prove that the suit promissory note is true, valid and binding on the defendant and he is entitled to recover the suit amount.

In view of the aforementioned discussion, issue Nos.1 and 2 are decided against the plaintiff.

Issue No.3:

In view of the findings on issue Nos.1 and 2 against the plaintiff, the plaintiff is not entitled for decree.

In the result, this suit is dismissed with costs.

Typed to my dictation, corrected and pronounced by me in the open court, on this the 28th day of April, 2017.

Sd/- N. Vijaya Babu,

Principal Junior Civil Judge,

Proddatur.

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Appendix of Evidence

Witnesses examined for Plaintiff: PW.1: Sri Mogili Chinna Baduraiah – plaintiff PW.2: Sri N. Sai Lakshmi Nathaiah – Atestor

For defendant: DW.1: Sri Nemalladinne Kumar – defendant DW.2: Sri Nukala Venkata Narayana – Mediator/Elder

Exhibits marked for Plaintiff: Ex.A.1: Original promissory note dt.10.2.2013 for Rs.1,00,000/- Ex.A.2: office copy of legal notice dt.28.12.2015 Ex.A.3: Served acknowledgment Ex.A.4: C.C. of IP No.21/2016 on the file of Hon’ble Senior

Civil Judge’s Court, Proddatur.

For Defendant: Ex.B.1: Three torned original promissory notes executed by the defendant in favour of the plaintiff on 8.12.2012 for Rs.1 lakh each pertaining to the chit transaction.

Ex.B.2: Original Torned promissory note executed by the defendant in favour of plaintiff on 5.9.2012 for Rs.2 lakhs pertaining to finance transaction.

Ex.B.3: Original torned promissory note executed by the defendant in favour of the plaintiff on 5.9.2012 for Rs.1 lakh pertaining to the finance transaction.

Id/- N.V.B., P.J.C.J. Proddatur.

1

IN THE COURT OF THE PRINCIPAL JUNIOR CIVIL JUDGE: PRODDATUR

Present:- Sri N. Vijaya Babu,

Principal Junior Civil Judge, Proddatur.

Friday, this the 28th day of April, 2017

O.S.No.175 of 2016

Pothula Rajya Lakshmi, wife of Rama Subba Reddy, Aged 45 years, House wife, Resident of D.No.26/913, Nagendra Nagar, Proddatur town and Mandal, Kadapa District. ….Plaintiff

Vs.

1.Marthala Nagamma, s/o.Marthala Narayana Reddy, Aged 55 years, Prop. Vijaya Lakshmi Agri Tech Farm, Proddatur, Resident of D.No.26/235, Vasanthapeta, Proddatur town, Kadapa District.

2. The Manager, Indian bank, Proddatur. ….Defendants

This suit is coming on 24.4.2017 for final hearing before me in the Presence of the Sri S. Krishna Reddy, Advocate for the plaintiff and of Sri A.S. Vijaya

Kumar, Advocate for the defendant No.2 and defendant No.1 remained exparte and having heard and considered the material on record, this court delivered the following;-

J U D G M E N T

This is a suit filed by the plaintiff against the defendants seeking for recovery of amount of Rs.95,401/- basing on reimbursement with regard to contract of guarantee with subsequent interest and costs.

2. The brief facts of the plaint are that defendant No.1 who has been carrying on business as Proprietor, M/s. Sri Vijaya Lakshmi Agri Tech Farms availed a loan facility from defendant No.2 for an amount of Rs.24,80,000/- about 7 years back. She is related to defendant No.1 gave immovable property security as well as fixed deposit receipts to a tune of R.2,00,000/-. The defendant No.1 did not clear the entire outstanding amount to the defendant No.2 inspite of several demands from defendant No.2. The defendant No.2 deducted an amount of Rs.65,794/- due to it by the defendant No.1 out of the F.D. receipts payable to her. The defendant No.2 returned the registered deeds executed in favour of her 2 which are offered as security and the passbook bearing S.B.

A/c.No.51505056936. She being the guarantor has paid the amount due by the defendant No.1 and discharged the same. As such, the defendants are bound to compensate the amount to her as the amount has been deducted from her F.D.

receipts. She demanded the defendant No.1 to discharge the amount deducted and adjusted by defendant No.2 to the account of defendant No.1, but the defendant No.1 did not pay the same and as such she issued legal notice dt.4.5.2013 demanding amount due to her. The defendant No.1 issued reply notice dt.30.10.2014 with false and untenable pleas. Therefore, it became inevitable to file the suit for realization of the amount due to her. The defendant

No.2 is added as party as he has deducted the amount from that of the plaintiff and credited to the account of defendant No.1. The burden of proving the same is on the defendant No.2 and in the event of failure of the same, she is entitled for reimbursement from the defendant No.2. Hence, this suit.

3. The defendant No.1 did not appear inspite of receipt of summons, as such and as there was no representation on behalf of the defendant No.1, this

Court was constrained to set her exparte. The defendant No.2 entered his appearance and filed written statement. The brief facts of the written statement are that he admitted the loan taken by defendant No.1 from it and also the guarantee given by the plaintiff i.e., mortgaged immovable property and fixed deposits. As the defendant No.1 failed to pay the loan amount, he admitted the deduction of F.D. amount of the plaintiff. As per the instructions of the plaintiff, the plaintiff gave an undertaking letter addressing it dt.03.5.2013 to deduct the balance loan amount of defendant No.1 from F.D. deposit of plaintiff and return all the documents deposited as security for loan amount of defendant No.1. After clearing the entire loan amount to it, it returned all the documents of the plaintiff.

As per the norms and guidelines of it, if the borrower failed to pay the loan amount the guarantor should pay the entire loan amount of the borrower. As 3 such, it is no way liable to reimburse the amount and any claim to the plaintiff.

As such, this suit is not maintainable against it and prayed to dismiss the suit against it.

4. Basing on the above material, the following issues are framed for trial;-

1.Whether the cause of action against defendant No.2 to file this suit?

2.Whether the plaintiff is entitled to recover the suit amount?

3.To what relief?

5. In order to prove the contentions, the plaintiff examined herself as PW.1, and got marked Exs.A.1 to A.4. Defendant No.2 reported no evidence on its behalf and no documentary evidence are marked on behalf of it.

6. Heard both sides. Perused the record.

7. Issue Nos.1 and 2:

P.W.1 in her chief affidavit filed in lieu of chief examination reiterated the averments of the plaint.

b) As the defendant reported no evidence its behalf, there is no evidence on behalf of the defendant No.2.

c) The contention of the plaintiff is that admittedly an amount of

Rs.65,794/- due to the defendant No.2 from defendant No.1 was deducted out of her fixed deposits lying with the defendant No.2. Ex.A.1 is the certificate issued by the defendant No.2 that OCC Account (Ind SME) account No.515083880

M/s.Sri Vijaya Lakshmi Agri Tech Farms, Propritor Smt Marthala Nagamma has been closed by transferring the amount of Rs.65,794/- from the proceeds of RIP through SB account of Smt P. Rajya Lakshmi, wife of P. Rama Subba Reddy,

Proddatur and Rs.65,795/- from the proceeds of RIP through SB account of Sri P.

Ravi Chandra Reddy, son of P. Rama Subba Reddy, Proddatur on 04.5.2013.

Ex.A.2 is the letter given by the plaintiff in favour of defendant No.2 wherein she agreed that she and P. Ravi Chandra Reddy has got fixed deposits each for Rs.2 lakhs with the defendant No.2 bank that they also mortgage Ac.0.24 cents of land 4 pertaining to Kothapalle Panchayat and Ac.0.02 cents of site belonging to P. Ravi

Chandra Reddy towards loan of defendant No.1. But, the defendant No.1 is not paying due amount inspite of repeated requests, as such she is requesting defendant No.2 to take amounts from both the fixed deposits belonging to her and P. Ravi Chandra Reddy by dividing the due amount equally and return the documents pertaining to immovable properties respectively to them. Ex.A.3 is the office copy of legal notice dt.15.10.2014 and Ex.A.4 is the reply notice stating that defendant No.1 paid all the installments regularly and there is no due to defendant No.2 and defendant No.1 do not know why the Indian Bank, Proddatur has deducted an amunt of Rs.65,974/- from the F.D. receipts of the plaintiff. The said M/s. Vijaya Lakshmi Agri Tech Form, Proddatur was already closed and there is no firm styled as M/s. Vijaya Lakshmi Agri Tech Firm existing now, that she is not bound to compensate the amount of Rs.65,794/-.

ii) The defendant No.1 did not contest the suit even though she gave reply notice to the plaintiff. As per the plaintiff and Defendant No.2, an amount of

Rs.65,794/- was deducted from the F.D.s of plaintiff and discharged the loan amount taken by the defendant No.1. Admittedly, the plaintiff is only a guarantor to defendant No.1.

As per Sec.140 of Indian Contract Act, “Where a guaranteed debt has become due, or default of the principal debtor to perform a guaranteed duty has taken place, the surety, upon payment or performance of all that he is liable for, is invested with all the rights which the creditor had against the principal debtor”

Therefore, the security of guarantor after paying the due amount to creditor comes into shoes of the creditor and he quite recover the paid amount which would have been recovered by the original creditor from the borrower.

iii) The defendant No.2 is only proforma party and no relief is claimed against the defendant No.2. There was contract of guarantee by the plaintiff in favor of D.2 for the loan taken by D.1 and in view of the said guarantee D.2 is 5 also a necessary party. As admitted by defendant No.2, there is a loan transaction between defendant Nos.1 and 2 in which the plaintiff stood as guarantor for defendant No.1. As such, it cannot be said that there is no cause of action against the defendant No.2 to file this suit. Under these circumstances, this Court is of the opinion that the plaintiff proved that there is cause of action and he is entitled to recover the suit amount from D.1.

In view of the aforementioned discussion, the issues No.1 & 2 are decided in favour of the plaintiff.

8. Issue No.3: To what relief?

In view of the findings on issue No.2 in favour of the plaintiff, the plaintiff is entitled for decree.

In the result, this suit is decreed with costs in favour of the plaintiff. The

principal sum is adjudged as Rs.65,794/-. The defendant No.1 is directed to pay

an amount of Rs.95,401/- to the plaintiff along with interest on the principal sum adjudged at the rate of 12% per annum from the date of suit to the date of decree and at the rate of 6% per annum from the date of decree till realization.

Typed to my dictation, corrected and pronounced by me in the open court, on this the 28th day of March, 2017.

Sd/- N. Vijaya Babu,

Principal Junior Civil Judge,

Proddatur.

Appendix of Evidence

Witnesses examined for Plaintiff: For defendant: Nil PW.1: Smt Pothula Rajya Lakshmi – plaintiff

Exhibits marked for Plaintiff: For Defendant: Nil Ex.A.1: certificate dt.7.5.2013 Ex.A.2: Application dt.3.5.2013 given by Rajya Lakshmi to the Bank Ex.A.3: Legal notice dt.15.10.2014 issued on behalf of the plaintiff Ex.A.4: Reply notice dt.30.10.2014 by defendant No.1.

Id/- N.V.B., P.J.C.J. Proddatur.

In the Court of :Principal Junior Civil Judge, Proddatur

Case No. :EP/0000086/2016 Komireddy Chenna Krishnamma Vs Rajupalem Bala Veera Reddy

Date : 28-04-2017

Business: JDR is produced a execution of arrest warrant on 28.04.2017 at 1.00 P.M. suo-motu advanced from 01.06.2017. to 28.04.2017. F/s memo filed by counsel for DHR. FS recorded. E.P. terminated. JDR is released forthwith. Nature of Disposal: TERMINATED Disposal Date: 28-04-2017

Principal Junior Civil Judge, Proddatur

In the Court of :Principal Junior Civil Judge, Proddatur

Case No. :EP/0000110/2016 Mutukuru Sreekanth Reddy Vs Yerragudi Ramakrishna Reddy

Date : 01-05-2017

Business: DHR called absent. No representation. Batta not paid, even though waited till 4.00 P.M. Hence, this E.P. is dismissed for default. Nature of Disposal: DISMISSED FOR DEFAULT Disposal Date: 01-05-2017

Principal Junior Civil Judge, Proddatur