S. MANIAM AND CO. CHIT FUNDS, REP. BY ITS MANGING DIRECTOR, S. PARAMASIVAM, 41, NATTUKOTTAI CHETTY STREET, TUTICORIN, V.O.C. DISTRICT Vs. STATE OF TAMIL NADU, REP. BY THE SECRETARY AND COMMISSIONER OF COMMERCIAL TAXES DEPARTMENT, FORT ST. GEORGE, MADRAS

JUDGEMENT

(1.) The above Writ Petition has been filed under Art. 226 of the Constitution of India praying to issue a Writ of Certiorarified Mandamus to call for the records of the first respondent relating to Ra. Mu. No. 531 on their file and to quash the order dated 16.11.1995 made therein and to direct the third respondent to take on file the Arbitration Case No. 17/93 filed by the petitioner and to dispose of the same on merits and in accordance with law.

(2.) In the affidavit filed in support of the above writ petition, the petitioner would submit that they are carrying on business in conducting chits at Tuticorin, subject to the provisions of the Chit Funds Act and Rules; that in respect of a chit group bearing No. DC/E1 (Chit Agreement No. 41/87), one of the prised subscribers committed default in payment of the instalments; that the said prised subscriber had executed a promissory note and also created an equitable mortgage in respect of certain immovable properties as security for the due repayment of the amounts and hence the petitioner filed an Arbitration Case before the third respondent under Sec. 64 of the Chit Funds Act seeking for a decree on the mortgage, against the defaulted subscriber and sureties.

(3.) The petitioner would further submit that in the plaint, the petitioner has alleged that the cause of action arose on 30.4.1989 when the first defendant therein, the subscriber, became the successful bidder and when all the defendants executed the promissory note and created the mortgage and on 2.5.1989 when they committed default; that the Arbitration case was filed on 30.7.1993 and numbered as 17/93; that on 13.9.1993, the third respondent addressed the petitioner stating that since no proof has been filed under Sec. 65(3) of the Act for the delay in filing the case, the Arbitration Case is rejected as per Sec. 65(1) for which the petitioner replied on 21.9.1993 stating that since the Arbitration Case is on an equitable mortgage, Sec. 65(1) has no application and that the relevant provision applicable to a mortgage claim is Sec. 65(2) and hence the claim is within the period of limitation but since they did not get any communication from the third respondent, the petitioner addressed the second respondent on 28.9.1993 seeking his instructions to the third respondent; that the petitioner was asked to file two original title deeds deposited with them by the subscriber before the third respondent and they had filed the same; that since there was no reply, the petitioner filed a detailed Memorandum of Appeal before the second respondent on 27.10.1993 thereby extracting various provisions of the Act and pointing out the applicability of Sec. 65(2) to the facts of their claim and on 9.2.1994, the petitioner received a communication from the second respondent stating that if the petitioner is not satisfied with the order of Deputy Registrar, they could seek remedy under Sec. 70 of the Act and accordingly, the petitioner filed an appeal before the first respondent Government under Sec. 70 of the Act and since the first respondent has rejected the said appeal by the order dated 16.11.1995 made in P. M. No. 531, the petitioner has come forward to file the above writ petition.