VENKATESH Vs. AZAD COMMERCIAL CHIT FUND MANDYA

JUDGEMENT

(1.) 1. Divergent views expressed in Navjeevan Enterprises (Mys ) P. Ltd. In Liqn. v T. N. Ramalingaiah and another (1982(2) Kar.L J. 88); N. Shivakumar Deceased (By L.R.) v M/s Sudarshan Trading Co. Ltd. and another (I.L.R. 1984(2) Kar. 914) and Economic Chit Funds Pvt. Ltd. v P. S. Krishnoji Rao and another (CRP 3750 of 1981. on and other connected cases, disposed of on 18-2-1984) regarding scope and ambit of the definition of 'debt' as defined in Karnataka Debt Relief Act and their applicability to chit transactions, has led to this reference.

(2.) Both Karnataka Debt Reiief Act, 1976 (Act No. 25 of 1976) (1976 Act for short) and Karnataka Debt Relief Act, 1980 (Act No. 29 of 1980) (1980 Act for short) are in operation in the State of Karnataka.

(3.) 'Debt', 'Debtor' and 'Exemption' clauses in the said two Acts read thus : - K D. R. Act, 1976 3(b) 'Debt' means any liability in cash or in kind, whether decreed or not and includes any amount which is in substance a debt ; but does not include arrears of taxes due to the Central or the State Government or a local authority. 3(c) 'Debtor' means,- (i) a small farmer ; or (ii) a landless agricultural labourer ; or (iii) a person belonging to the weaker sections of the people ;