G K NAIDU Vs. OFFICIAL RECEIVER HYDERABAD

JUDGEMENT

(1.) C. C. C. A. No. 8 of 1958 arises out of O.S. No. 142/1 of 1956 filed in forma pauperis by the Official Receiver on behalf of the insolvent, Lakhanlal. The plaint allegation was that the said Lakhanlal was conducting Chit Fund business at Sultan Bazaar, Hyderabad City, of which the defendant was a member, and that in respect of eight chits drawn by the defendant, the defendant fell due in various amounts as shown in Exhibit P-i for which he executed a promissory note as collateral security. The plaintiff therefore claimed Rs. 9,100 O. S. towards the principal plus interest at 6 per cent, per annum, totalling Rs. 10,100 O. S. The defendant denied that Lakhanlal was an insolvent and the Receiver had the right to bring a suit against him. He however admitted that Lakhanlal was conducting the Chit Fund business and he was also its member, but denied the correctness of the accounts and the amounts due as shown in Exhibit P-1. He further stated that Lakhanlal had misappropriated the Chit Fund amounts and there was no question of the liability of the defendant. Legal objections were also raised that the other members of the Chit Fund were necessary parties to the suit, that the suit was barred by limitation, that it was bad for non-registration of the Chit Fund concern, that the suit promissory notes were inadmissible in evidence, that the suit was bad for misjoinder of pleas and parties, and that Lakhanlal was a money-lender but he did not possess the required licence and did not comply with the provisions of the Hyderabad Money-lenders Act.

(2.) As the written statement was found to be vague, the learned Judge examined him under Order 10, rule 1, Civil Procedure Code, wherein the defendant denied that he had drawn chits but admitted the execution of the promissory notes. He also denied the consideration in full. He admitted that he had no accounts to prove how much amount he has received under each of them. The plaintiff filed a rejoinder denying the allegations made in the written statement.

(3.) On these averments in the pleading, twelve issues were framed. On behalf of the plaintiff, Lakhanlal, the insolvent, was examined. In rebuttal, the defendant gave his evidence. On the evidence, the learned trial Judge found that the defendant had drawn eight chits amounting to O. S. Rs. 11,000 between 1st June, 1951 and 10th December, 1951. He also found that defendant was liable to the plaintiff to the extent of O. S. Rs. 5,200. As regards the other questions, whether Lakhanlal misappropriated the chit funds, whether the other members of the Chit Fund were necessary parties, whether the suit was barred by limitation, whether the suit was bad for want of registration of the Chit Fund concern and whether Lakhanlal was a money-lender, the trial Court found that Lakhanlal did not misappropriate the Chit Fund amounts, that the other members of the Chit Fund were not necessary parties, that the suit was not barred by limitation, that there was no question of the registration of the Chit Fund concern, and that Lakhanlal was not a moneylender. In the result, the trial Court decreed the suit to the extent of O. S. Rs. 5,200 with costs. Hence this appeal on behalf of the defendant.