BALAJI HOSIERIES TIRUPUR Vs. RADIUM KNITTING COMPANY TIRUPUR

JUDGEMENT

(1.) PLAINTIFF in O.S. No. 941 of 1994 on the file of the District Munsif's Court, Tirupur, who succeeded before the learned trial Judge, but lost before the first Appellate Court, is the Appellant in the above Second Appeal. The suit was filed for recovery of a sum of Rs. 4,752/- with subsequent interest, due on a promissory note dated 27.10.1970 admittedly executed by the defendant-respondent herein, in favour of Uma Investments Private Limited, Coimbatore, with whom the defendant has entered into and was subscribing to a chit of the value of Rs. 10,000/- on and from 9.2.1970. The defendant became a successful bidder in the auction held by the said chit company and while drawing the prized amount has executed the promissory note in question for Rs. 8,250/- to ensure regular payment of the balance of instalments. But, it may be noticed at this stage since the said fact is vital and relevant for determination of what is projected before this Court, the printed promissory note reads that on demand, the defendant jointly and severally promised to pay to Uma Investments Private Limited or their order the sum of Rs. 8,250/- bearing interest at 12% per annum for the value received. It is not clearly specified as to what the sum of Rs. 8,250/- represents; nor is it anywhere found stated in the promissory note that it is connected with the chit transaction or it is with reference to payment of balance of instalments by the subscriber. Be that as it may, since the defendant defaulted, the said Chit Company assigned the promissory note in favour of the plaintiff on 24.5.1974 and the defendant appears to have paid only a sum of Rs. 100/- as against the promissory note towards interest on 26.10.1973 to the Chit Company itself. After exchange of notices, though the defendant has paid a sum of Rs. 500/- by means of two cheques, a sum of Rs. 4,625/- with interest at 12% per annum as agreed was remaining outstanding due and therefore, the suit came to be filed on the said promissory note.

(2.) THE defendant contested the claim of the plaintiff of several grounds and also contending that the plaintiff was not the holder in due course, that there was no valid assignment in favour of the plaintiff of the promissory note and that the suit claim is liable to be dismissed. After trial, and on considering the oral and documentary evidence adduced on both sides, the learned trial Judge decreed the suit as prayed for, overruling the objections of the defendant. Aggrieved, the defendant filed A.S. No. 14 of 1981 before the Sub-Court, Thirupur. THE learned Subordinate Judge also rejected the claim of the defendant in so far as the four payments claimed to have been made to reduce his liability, are concerned. But, at the same time by placing reliance upon the provisions of Section 25 of the Tamil Nadu Chit Funds Act (hereinafter referred to as "THE Act") and the decision of a learned single Judge of this Court in Jannet Chit Funds P. Ltd., Messrs . v. M.N. Ethirajan (94 L.W. 507), chose to dismiss the suit on the view that the suit, which was filed on the basis of the assigned promissory note executed by the defaulting subscriber for his future subscriptions, will be hit by Section 25(2) of the Act, as it does not contain express recitals that the amount due under the promissory note was towards payment of future subscriptions of the chit and consequently, the suit was not maintainable at all and also barred under the said provisions of law. THE learned first Appellate Judge consequently allowed the appeal and set aside the judgment and decree of the learned trial judge, resulting in the filling of the above appeal.

(3.) THE learned counsel for the respondent Mr. V. Nicholas, while placing strong reliance upon the decision in Jennet Chit Funds P. Ltd.'s case (94 L.W. 507 (supra) relied upon by the learned first Appellate Judge, contended that the decision in Angammal's case (1988 I MLJ 467) (supra) is on a different aspect and that the same does not undermine the efficacy of the other judgment relied on by the learned first Appellate Judge and therefore, no interference is called for in this appeal at the instance of the appellant.