1. This revision petition arises out of an application filed by a defendant in a suit before the trial Court to try a particular issue as a preliminary issue. The application is filed in the following circumstances. The petitioner was sued on a liability which he had incurred in a chit transaction conducted by the plaintiff which is a banking company. The petitioner resisted the suit on various grounds, chief amongst which was that he was a debtor entitled to the benefits of Act, 16 of 1976. The trail court however rejected that claim. In the course of its order, The court made an observation that since that debt in the question was due to a Banking company such as the plaintiff -Bank here, the petitioner was not entitled to a decision in his favour even if issue were tried.
2. Inevitably, the learned counsel for the petitioner in this revision has had to canvass before me the merits of the contention that the debt which was sought to be enforced by the plaintiff -Bank in this suit was of a kind which would not be enforced in a Court of Law having regard to the provisions of Act, 16 of 1976. Learned counsel for the Bank however referred to the saving provision contained in S.3(h) (B) of the Act. Under this provision "nothing in the Act would affect a debt or liability of an indebted person in respect of any sum due to any banking company to which the Banking Regulation Act 1949 applies." Learned counsel for the plaintiff -Bank urged that this provision saved the present suit from Act 16 of 1976.
3. I think the reliance placed by the learned counsel for the plaintiff-Bank on s.3 (h) (B) of the Act is complete answer to the contention put forward by the petitioner's learned counsel in this revision. There is no dispute that the plaintiff is a banking company to which the provisions of the Tamil Nadu Banking Regulation Act, 1949 apply. What the petitioner 's learned counsel urges is that this chit fund transaction was undertaken by this banking company through a separate department annexed to its main office, called Chit Fund Department , and that department was governed in particular by the provisions of the Tamil Nadu Chit Funds Act, 1961 and hence the liability sought to be enforced against the petitioner in this suit cannot strictly fall within the ambit of the saving clause in section 3 of the Act. This argument cannot be accepted, because, in the first place the provisions of S 3 (h) (B) of the Act 16 of 1976 do not require that the liability should have arisen in a banking transaction properly so-called. All that it says is, that the debt sued on should be a liability in respect of any sum due to a banking Regulation Act 1949 must apply. It may be that this banking company has a separate department, that department is in addition to being governed by the Banking Regulation Act 1949, also subjected to the chit funds Act. But the Bank chit Funds transaction, being subjected to the chit Funds Act, does not derogate from the bank being a banking company to which the banking regulation Act, 1949 applies. Furthermore, it is difficult for me to accept the position that a liability in a chit fund transaction cannot be a banking transaction. While the Banking transaction Act 1949 defines banking to consist of accepting the deposit of moneys from the public for the purpose of lending or investing which are repayable on demand or otherwise and withdrawals by cheque, draft or otherwise 6 of section that Act provides elaborately for a wide variety of business which a banking company may engage itself in. A fair consideration of this section as well as the definition of "banking" in the banking Regulation Act, 1949 would leave no doubt in any one's mind that chit fund transaction indulged in by a banking company at any rate partakes the character of a banking activity. Indeed a chit fund or kuri reflects the genius of the southern peoples of this country. A chit combines in itself two economic urges commonly appearing in people, namely, the urge to save and to urge to borrow. The mechanism of chit funds combines and taps both the urges in an individual with a commendable economy of costs in the process. I am satisfied that the chit fund transaction is in, its essence a transaction of a kind which a banking company can legitimately undertake within the governing provisions of the Banking Regulation Act 1949. The petitioner, cannot, therefore, seek to take his liability in the chit fund transaction out of saving of S3(h)(B) 0f Act, 16 of 1976.
4. For the reasons stated above the order of the court below is confirmed and this civil revision petition is dismissed.
5. In a way the dismissal of this revision in this manner really forecloses the determination of the issues which have been raised by the petitioner in his written statement in the suit, to such an extent that the trail of the suit is going to be very tame fair. But this kind of disposal of this application has been fairly invited by the petitioner himself. He alone is to be blamed for it. With this observation , the civil revision petition is dismissed. There will be no order as to costs.