SUDARSAN TRADING COMPANY LIMITED Vs. JAYANTILAL MOHANLAL MODI

JUDGEMENT

(1.) THIS appeal is directed against the judgement and order dated 22nd December 1978 passed by City Civil Court, Ahmedabad in Summary Suit No.3191 of 1973 whereby the said suit has been dismissed against defendant nos.2 and 3.

(2.) THE appellant is conducting chit fund in the name and style of Sudarsan Chit Funds. The respondent no.1 applied for two chits of Rs.5000/ - each and presented an application along with Rs.200/ - being the amount of first monthly installment in the two chits. The said chits were of group No.L -I of 50 members and the duration was of 50 months. Respondent no.1 was allotted chit nos.1 and 2 of that group and necessary passbooks were issued to him. Respondent no.1 agreed to abide by the rules and regulations and as such he was accepted as member of subscriber by the appellant. The respondent no.1 agreed to pay Rs.100/ - inclusive of dividend per month for 50 months regularly under his chit account and thereby to complete the payment of full chit value by the end of the group period of 50 months. The respondent no.1 was paying the amount of monthly installments regularly and was earning dividend. The 12th month auction of the group was held on 31.12.1971 where respondent no.1 bid the chit amount at maximum discount of Rs.1250/ - and as per the rules he was declared as successful bidder at that auction. The total credit on that day under the said account was Rs.1200/ -. Under the rules the respondent no.1 being the successful bidder was entitled to receive from the appellant the chit value less bid amount and contingency charges on furnishing to the appellant the security for the payment of future installments or the remaining amount payable under the account in question. The amount of future installments, as on that day was Rs.3800/ - and that was payable by regular monthly installments of Rs.100/ - inclusive of dividend, if any, earned under the scheme. In case of default in payment of such monthly installments, appellant was entitled to recover the remaining whole amount of future installments at a time with interest at the rate of 12% per annum. Respondent nos.2 and 3 proposed themselves as sureties for securing to the appellant the payment of the said future dues and its payments and the appellant company accepted the said proposal. The respondent nos.2 and 3 have guaranteed to the appellant the payment of the said future dues by executing letter of continuing guarantee in favour of the appellant and binding themselves jointly and severally along with respondent no.1 for the payment of the said future dues. Accordingly the appellant made payment of Rs.3735/ - to the respondent no.1. However, the respondent defaulted in repayment and therefore after serving notice the aforesaid suit came to be filed.

(3.) HEARD the learned Advocate and perused the relevant documents. It would be relevant to quote para 21 of the judgement as under: