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A. Nabisa Beevi Vs. Indian Chit Fund (P.) Ltd. by the Managing Director, K. Damodara Pillai - Court Judgment

LegalCrystal Citation
SubjectProperty;Civil
CourtChennai High Court
Decided On
Reported in(1980)1MLJ33
AppellantA. Nabisa Beevi
RespondentIndian Chit Fund (P.) Ltd. by the Managing Director, K. Damodara Pillai
Cases ReferredIn Sri Visalam Chit Funds v. P.N. Srinivasa Mudaliar
Excerpt:
- .....however say that as the amount decreed against the petitioner arises out of a liability under a chit transaction, it will not come within the definition of 'debt' as defined in act iv of 1938. the learned counsel refers to the decision of suryamurthy, j., in arunagiri chit fund v. mohamed hanafi (1976) 89 l.w 687. in that case the learned judge has taken the view that the liability arising out of a chit transaction will not be a debt as defined in tamil nadu indebted agriculturists (temporary relief) act (xv of 1976) and tamil nadu indebted persons (temporary relief) act (xvi of 1976). according to the learned judge the purchase of a chit in auction gives rise to a liability which is not a debt as defined in those acts and in support of that view reference has been made by the learned.....
Judgment:
ORDER

G. Ramanujam, J.

1. The petitioner herein is a judgment-debtor in O.S. No. 21 of 1964 on the file of the Sub-Court, Padmanabhapuram, which was one on a hypothecation bond. She filed an application, E.A. No. 86 of 1977, under Section 20 of the Tamil Nadu Agriculturists Relief Act (IV of 1938), hereinafter referred to as the Act as amended by Act VIII of 1973 for stay to enable her to apply for scaling down the preliminary decree, dated 21st September, 1965, passed in the said suit. She also filed later, on 22nd June, 1977, an application under Section 19 for scaling down the decree. However, before the application under Section 19 could be numbered the application under Section 20, E.A. No. 86 of 1977, was disposed of by the Court below on 8th July, 1977. In the order passed therein, the Court held that the petitioner judgment-debtor is not a person entitled to the benefits of the said Act, and therefore, the application under Section 20 cannot be maintained. Based on the said order, the application under Section 19 was rejected by the Court on 18th August, 1977 without even numbering the same. The petitioner did not challenge the said order passed on the application under Section 19. However, she had challenged in C.R.P. No. 2277 of 1977, the order, dated 8th July, 1977, passed by the lower Court in her application under Section 20.

2. The petitioner later filed another application under Section 19 and required the lower Court to give a decision on merits. The lower Court rejected the application without numbering on the ground that the order passed on 10th August, 1977, in the earlier application under Section 19 had become final and therefore, the second application cannot be entertained. Against the said order, dated 1st December, 1977, C.R.P. No. 736 of 1978 has been filed.

3. It is not in dispute that the earlier order, dated 10th August, 1977, passed by the lower Court, had become final, the same not having been challenged in revision before this Court. The learned Counsel for the petitioner would urge that the petitioner could not take that order in revision as it was made in an unnumbered application. I do not see why an order of the lower Court passed in an unnumbered application cannot be taken in revision before this Court. Any order of the lower Court could be taken to this Court in revision. The learned Counsel would then say that the earlier rejection was not on merits. I cannot agree. The rejection was on the basis of its considered decision rendered in I.A. No. 86 of 1977 and therefore, the rejection order, dated 10th August, 1977, should be taken to be a decision on merits. In view of the fact that the earlier order, dated 10th August, 1977, has been allowed to become final, that will clearly operate as res judicata for the second application. The order of the lower Court, dated 1st December, 1977, is therefore, correct. Civil Revision Petition No. 736 of 1978 is, therefore, dismissed.

4. Coming to C.R.P. No. 2277 of 1977, it is seen that the lower Court dismissed the petitioner's application under Section 20 on the ground that there was no satisfactory proof that she was an agriculturist as defined in Section 3(ii) of the Act and that she had been described in the preliminary decree as house-wife and not an agriculturist. The learned Counsel for the petitioner contends that the said two reasons given by the lower Court are not sustainable, that as the decree which is sought to be scaled down is itself a mortgage decree in respect of the agricultural properties owned by the petitioner, no independent proof is necessary, that according to the definition in Section 3(ii) the ownership of an agricultural land is sufficient to bring the petitioner within the definition of agriculturist, and that in these circumstances the lower Court was not justified in saying that there is no proof that the petitioner was an agriculturist. The learned Counsel for the respondent does not dispute the fact that the petitioner is the owner of the agricultural land which is the subject-matter of the decree. Ownership of agricultural lands by the petitioner having been thus admitted, there is no question of any independent proof being let in to show that the petitioner is an agriculturist. The other reason given by the lower Court that the petitioner having been described as a house-wife in the preliminary decree she cannot be taken to be an agriculturist is, to say the least, preposterous. There is no presumption that a house-wife will not own agricultural properties. The fact that the plaintiff has chosen to describe the petitioner as a house-wife in the cause title cannot be taken to show that the petitioner is not owner of agricultural lands. Thus the reasons given by the lower Court for rejecting the petitioner's application under Section 20 cannot legally be sustained.

5. The learned Counsel for the respondent would however say that as the amount decreed against the petitioner arises out of a liability under a chit transaction, it will not come within the definition of 'debt' as defined in Act IV of 1938. The learned Counsel refers to the decision of Suryamurthy, J., in Arunagiri Chit Fund v. Mohamed Hanafi (1976) 89 L.W 687. In that case the learned Judge has taken the view that the liability arising out of a chit transaction will not be a debt as defined in Tamil Nadu Indebted Agriculturists (Temporary Relief) Act (XV of 1976) and Tamil Nadu Indebted Persons (Temporary Relief) Act (XVI of 1976). According to the learned Judge the purchase of a chit in auction gives rise to a liability which is not a debt as defined in those Acts and in support of that view reference has been made by the learned Judge to a decision of a Division Bench of this Court in Raghavan Pattar v. Arumugham : AIR1935Mad385 , wherein the Bench had expressed the view that the relationship between a stake-holder of a chit and the auction-purchaser is one of seller and not of borrower and that the chit transaction is entirely different from a loan transaction.

6. The learned Counsel for the petitioner however draws, my attention to a decision of N.S. Ramaswami, J., reported in Abdul Aziz v. Yasodammal (1978) 2 M.L.J. 69 : 91 L.W. 223, wherein a contrary view has been taken that a decree debt arising under a chit transaction will be a debt as defined in Section 2(2) of Act XXXVIII of 1972. Referring to the decision of Suryamurthy, J., in Arunagiri Chit Fund v. Mohammed Hanafi (1976) 89 L.W. 687 and the earlier decision of the Bench in Raghavan Pattar v. Arumugam : AIR1935Mad385 , the learned Judge has observed that once there is a liability in cash or kind due from the debtor whether it is payable under a decree or otherwise, that will be a debt as defined in Section 2(2) of Act XXXVIII of 1972, whether it is due to borrowing or otherwise unless the same comes in any of the specified exclusions, and that the Bench decision in Raghavan Pattar v. Arumugham : AIR1935Mad385 , does not say anywhere that in a chit transaction wherein the auction-purchaser who takes the money from the stake-holder is a purchaser and not a borrower. The learned Judge was also of the view that the view taken by, the Bench in Raghavan Pattar v. Arumugham : AIR1935Mad385 , has been disapproved by a subsequent Bench of this Court in Sri Visalam Chit Funds v. P.N. Srinivasa Mudaliar (1975) 88 L.W. 415 and therefore, the view taken in the former Bench which has been followed by Suryamurthy, J., cannot be taken to lay down the correct legal position.

7. In Sri Visalam Chit Funds v. P.N. Srinivasa Mudaliar (1975) 88 L.W. 415, Ramaprasada Rao, J. (as he then was), speaking for the Bench had considered the legal incidence of a chit transaction in an elaborate manner, if I may say so with respect, with reference to almost all the relevant decisions on the point and ultimately held that the bargain between the stake-holder and the auction-purchaser is one of borrowing.

8. In this case we are concerned with the definition of 'debt' as defined in Section 3(iii) of Act IV of 1938 as amended by Act VIII of 1973 which is similar to the definition considered and dealt with by N.S. Ramaswami, J. 'Debt' is defined in Section 3(iii) as follows:

'Debt' means any liability in cash or kind whether secured or unsecured, due from an agriculturist whether payable under a decree or order of a civil Court or otherwise but does not include rent as defined in Clause (iv) or....

This definition attracts any liability whether in cash or kind, whether secured or unsecured. It is no doubt true here the liability has arisen out of a chit transaction. But, the liability arose out of a transaction of borrowing by the highest bidder from the stake-holder. I have to therefore hold that the debt in this case, though arose out of a chit transaction, will come within the definition of 'debt'.

9. The learned Counsel for the respondent would further say that the liability arising out of chit transaction, even if treated as debt, will stand excluded from the Act as it is a liability arising out of a breach of trust which stands excluded under Section 4. I do not see how a borrower in a chit transaction can be considered to be a trustee and his liability should be taken to arise out of the breach of trust. Though the stake-holder is interested in seeing to the punctual and prompt payment of installments by the subscribers including the persons who have taken the chit amount earlier and the whole chit transaction is carried on by the stake holder on the faith he has, on the subscribers, the transaction by which the stake-holder secures the future payment of installments by the prized subscribers cannot be said to be a transaction in the nature of a trust. I am, therefore, of the view that the liability which has culminated in the decree of the lower Court does not arise out of a breach of trust. In this view of the matter, I hold that the petitioner is entitled to the benefits of Act IV of 1938 as amended by Act VIII of 1973.

10. The learned Counsel for the respondent then submits that since the petitioner's two successive applications under Section 19 having been dismissed, the civil revision petition had become infructuous. I cannot agree. The original application under Section 19 was dismissed following the decision of the lower Court in I.A. No. 86 of 1977 and no other separate or independent reasons are given for dismissal. Now that the order which is the basis for the dismissal of Section 19 application has been set aside, it is open to the petitioner to seek a review of the order under Section 19 if it is legally possible. Therefore, this civil revision petition cannot be dismissed as infructuous.

11. In the result, Civil Revision Petition No. 2277 of 1977 is allowed. However, there will be no order as to costs in either of those revision petitions.


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