PASCHAL NAZERETH Vs. DENIS LOBO

JUDGEMENT

(1.) The petitioner is the plaintiff in Small Cause Suit No. 2 of 1955 on the file of the Court of the District Munsiff, Mangalore, South Kanara. His suit has been dismissed and he has come up in revision to this Court. This revision petition raises some interesting questions of law. In order to properly appreciate the questions of law that arise for consideration it is necessary to state the facts of the case briefly.

(2.) In the Town of Mangalore a Chit Fund was being run which was known as the New Kerala Daily Auction Chit Fund which will be hereinafter called the "Fund". The defendant was a member of the said "Fund". He executed a demand promissory note on 28-1-1952 in favour of the "Fund" for a sum of Rs. 500/- security for the due payment of the future instalments of the chit purchased by him. The practice of this 'Fund' seems to have been that whenever a member was a successful bidder in any of the chit auctions, he will have to execute a pro-note as security for the payment of future instalments of the chits purchased by him.

(3.) The proprietor of the said 'Fund' seems to have disappeared and the transactions of the "Fund" came to a sudden end sometime in 1953. On the application of the creditors, insolvency proceedings started and the Official Receiver took charge of the assets of the 'Fund'. The Official Receiver assigned the suit pronote in favour of the plaintiff as per endorsement dated 13-8-1954 and the plaintiff filed the present suit on the basis of the said demand promissory note. Prior to the filing of the suit, the plaintiff had issued a registered notice demanding a sum of Rs. 440/- as balance due under the pronote. The defendant in his reply notice stated that only 11 instalments are due from him under the chit in question. Hence his liability under the chit was only Rs. 55/- He claimed certain bonus deductions. He also Claimed a set off of Rs. 185/-in respect of the 37 instalments paid by him to the same 'Fund' under a separate chit. The plaintiff confined his suit only to a sum of Rs. 66-9-3 i. e., Rs. 55/- as admitted arrears of 11 instalments of Rs. 5/- each, Rs. 8-9-3 as interest thereon from 28-1-1952 at 6 per cent, per annum upto date and Rs. 3/- as the cost of demand. The learned District Munsiff dismissed the suit holding that the defendant was entitled for set off of Rs. 185 due to him under Section 46 of the Provincial Insolvency Act as mutual dealings between the insolvent and the creditor. The learned counsel for the petitioner challenges the correctness of the decision of the trial Court.