Madras High Court
Senthil Gnanavel Chit Fund vs M. Ravi on 27 July, 2021
S.A.No.654 of 2009
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 27.07.2021
CORAM
THE HONOURABLE Ms. JUSTICE P.T. ASHA
S.A.No.654 of 2009
Senthil Gnanavel Chit Fund,
Firm, by Managing Partner,
Mr.K.Srinivasan,
18 - 739/1A, Muthu Maistry Street,
Chittor,
Andhra Pradesh State. ...Plaintiff/Appellant/Appellant
Vs.
1.M. Ravi
2.N.Santhabai ...Defendants/Respondents/Respondents
PRAYER: Second Appeal filed under Section 100 of the Code of
Civil Procedure against the Judgment and Decree passed in A.S.No.15
of 2007 dated 27.08.2008 on the file of the learned Subordinate Judge,
Chidambaram confirming the Judgment and decree passed in
O.S.No.436 of 2004 dated 01.08.2005 on the file of the learned
Additional District Munsif, Chidambaram.
1/9
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S.A.No.654 of 2009
For Appellant : Mr.A. Muthukumar
For Respondents : R1 and R2 - Served
No appearance
JUDGMENT
The plaintiff before the learned Additional District Munsif,
Chidambaram in O.S.No.436 of 2004 is the appellant before this Court.
2.The only short point for consideration in the above Second
Appeal which forms the Substantial Questions of Law is as follows:
"When the Chit Fund Act, Central Act of 1982, was
not at all extended to the State of Andhra Pradesh, where
the suit Chit Agreement as admittedly registered, whether
the Courts below erred in Law in dismissing the suit on
the ground of jurisdiction of Civil Court is ousted under
Section 64 (3) of the said Act?".
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S.A.No.654 of 2009
3.The plaintiff had filed a suit for recovery of a sum of
Rs.18,655.25 against the defendants and had sought for Personal
Decree against the 1st defendant and a Charge Decree on the property of
the 2nd defendant.
4.The case of the plaintiff is that the 1st defendant had subscribed
to one of the Chits and had obtained a sum of Rs.1 lakhs which was re-
payable in 40 monthly installments. The 2nd defendant was the surety
for the said amount. The 1st defendant was required to re-pay the said
amount in monthly installments of Rs.2,500/-. After paying a few
installments, the 1st defendant had failed to make the payment.
Therefore, the suit.
5.The 2nd defendant alone had contested the suit in which she has
admitted that there has been a default of five installments amounting to
a sum of Rs.13,137/-. The 2nd defendant had also taken a plea that the
application had to be moved before the Registrar of Chit Funds and
hence, the suit was not maintainable. Both the Courts below have
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S.A.No.654 of 2009
dismissed the suit on the ground of lack of jurisdiction. The Courts
below held that as per Section 64(3) of the Chit Funds Act, 1982, the
jurisdiction of the Civil Court has been ousted in respect of disputes
relating to a Chit business. It is challenging this concurrent Judgment
and Decree, the plaintiff is before this Court. Though the respondents
were served they have not entered appearance through counsel or in
person.
6.Mr.A.Muthukumar, learned counsel for the appellant would
contend that the Judgment and Decree of both the Courts below are
erroneous since the Chit in question had its registered office at Andhra
Pradesh and the Act had been extended to Andhra Pradesh only on
15.09.2008, although the Chit Funds Act had been enacted in the year
1982. He would draw the attention of this Court to Section 1(3) of the
Chit Funds Act, 1982 which would read as follows:
"1. Short title, extent and commencement.—
(1) This Act may be called the Chit Funds Act, 1982.
(2) It extends to the whole of India except the State
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S.A.No.654 of 2009
of Jammu and Kashmir. (3) It shall come into force
on such date as the Central Government may, by
notification in the Official Gazette, appoint, and
different dates may be appointed for different
States."
Therefore, though the Central Act had been enacted on 19.08.1982 it
was come into force on various dates as the Centre by Notification in
the Official Gazette would appoint. He would therefore contend that
on the date of filing of the suit, the Act had not been extended to the
State of Andhra Pradesh. It was only at the time of filing of the Second
Appeal that the Act had been extended to the State of Andhra Pradesh.
He would rely on the Judgment of this Court in 1996 (II) CTC 170
[The Mayavaram Financial Chit Corporationn Limited,
Mayiladuthurai v. R. Narayanan and two others] where this issue has
been considered and the Court had held that in the light of Section 85
of the Chit Funds Act, the Act would not apply to a Chit which had
been started before the commencement of the Act.
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S.A.No.654 of 2009
7.Heard the learned counsel for the appellant and perused the
papers.
8.The entire argument rests on a very limited campus, “Whether
Section 64(3) of the Chit Funds Act, would oust the jurisdiction of the
Civil Court?. The Act had been extend to the State of Andhra Pradesh
only in the year 2008. The Chit which is the subject matter of the
above suit is dated 13.10.1999. On the date, when the Chit had been
registered the Act had not been extended to the State of Andhra
Pradesh. Likewise, the suit had been instituted on 19.10.2004 even on
that date, the Act has not been extended to the State of Andhra Pradesh.
Section 64(3) of the Act would come into play only when the Act is
applicable to the transaction in dispute. Section 85 of the Act clearly
provides that the Act would not apply to a Chit which has been started
before the commencement of the Act. Therefore, in the light of this
factual position, the Courts below have erred in dismissing the suit on
the ground that the Chit Funds Act has ousted the jurisdiction of the
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S.A.No.654 of 2009
Civil Court. The Judgment relied upon by the learned counsel for the
appellant dealt with a similar issue where the learned Judge after
considering the provisions of Sections 64 and 85 clearly held that since
the provisions of the Act in that case had come into force on
01.01.1990 and the transactions commenced prior to that date it would
squarely fall within the provisions of Sections 64(3) and 85 of the Chit
Funds Act and the suit is maintainable. In the instant case, the Chit
Funds Act had not been extended to Andhra Pradesh when the suit was
filed.
In the above circumstances, this Second Appeal is allowed and
the matter is remitted back to the trial Court for considering the suit on
merits, however, there shall be no order as to costs.
27.07.2021
Index : Yes/No
Internet : Yes/No
mps
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S.A.No.654 of 2009
To
1.The Subordinate Judge,
Chidambaram.
2.The Additional District Munsif,
Chidambaram.
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S.A.No.654 of 2009
P.T. ASHA, J,
mps
S.A.No.654 of 2009
27.07.2021
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