R VENKIDUSWAMY CHIT FUNDS REGD PARTNERSHIP FIRM 710/70 HAVING ITS OFFICE AT 13 DHARAPURAM ROAD TIRUPPUR COIMBATORE Vs. P T AVANASHILINGAM

JUDGEMENT

(1.) THE plaintiff chit funds represented by its partner is the appellant. THE suit O. S. No. 31 of 1977 before the Subordinate Judge's Court , Coimbatore, was filed by the appellant against the respondent for recovery of Rs. 5252. 25 due in respect of a chit transaction alleging as follows: THE respondent became a subscriber of a chit in the chit group'A' of Rs. 10,500 for the duration of 700 days under by-law No. 73/71, his member ticket number being 58. THE chit commenced on and from 28. 5. 1971. THE subscription was at the rate of rs. 15 per day and the auction was once in ten days. THE respondent became the successful bidder in the first auction held on 6. 6. 1971. For the payment of future instalments and by way of collateral security, the respondent executed a promissory note on 6. 6. 197 1 for Rs. 10,350 under Ex. A-1. As per the books of the appellant maintained regularly in the ordinary course of business, a sum of rs. 3,675 a" on 16. 1. 1973 remained due and payable by the respondent after giving credit to all payments made by the respondent, though irregularly. THE chit terminated on 16. 1. 1973. THE respondent was liable to pay interest at the rate of 12% per annum as stipulated in the promissory note for 16. 1. 1973. THE transaction being a commercial transaction, the respondent was bound to pay interest at the contractual rate till realization. On 30. 1. 1973. THE appellant issued a statutory notice to the respondent under Ex. A-2. THE same was received by him on 31. 1. 1973. He sent a cheque for Rs. 150 along with his letter dated 30. 1. 1973. THE appellant encashed the same. THE amount due towards principal and interest as on the date of suit was Rs. 5,252. 25. THE appellant bona fide and good faith believed that the liability would not be a debt within the meaning of the moratorium enactments and since the respondent was on any property exceeding annual rental value of Rs. 2,400, the appellant was under the bona fide belief that the respondent was an indebted person. THE appellant was advised on 14. 12. 1976 that the liability under the chit transaction would not be a debt and it would be entitled to lay the suit. It was under bona fide and under good faith in the belief that from 16. 1. 1975 to 14. 12. 1976 the institution of the suit was barred by the moratorium enactments. Under section 6 of Tamil Nadu Indebted Persons (Temporary Relief) Act XVI of 1976 the period between 16. 1. 1975 and 14. 12. 1976 was liable to be excluded and thus the suit filed was in time. Under Act 46 of 1976 from 22. 7. 1976 to 17. 12. 1976 the institution of the suit by chit funds was barred. If this period was excluded, the suit would be in time. THE respondent was therefore liable to pay the suit claim.

(2.) THE defence raised was as follows: THE Respondent received only Rs. 3,600 on 6. 6. 1971 from the appellant and executed the promissory note for Rs. 10,350. THE appellant did not maintain proper and correct accounts in the ordinary course of business. THE respondent paid all the amounts due under the chit transaction and in fact paid an excess amount of Rs. 1,785. THE appellant totally omitted to give credit to Rs. 5,460 paid by the respondent. THE appellant did not give credit to Rs. 3,585 which was paid on various dates by the respondent and entered in the first pass book. THE respondent misplaced the chit book given to him in the month of September, 1972. Subsequently, he got another pass book from the appellant on 25. 9. 1972 and all the payments made after 16. 9. 1972 were entered in the second book. THE various payments on different dates made totalling a sum of Rs. 1,275 from 28. 9. 1972 to 6. 1. 1973 were not given credit to. From 19. 7. 1972 to 14. 12. 1972 five cheques were issued to the extent of Rs. 600. THEy were also not given credit to. THE respondent also made direct ayments to the appellant's officer and receipts were not issued in respect of such payments. THE suit was not in time. THE respondent was not an indebted person as defined under Act XVI of 1976. THE period from 16. 1. 1975 to 16. 12. 1976 could not be excluded for the purpose of computing the period of limitation. THE appellant had not filed the suit in good faith. Bona fide impression alleged to have and entertained by the appellant in good faith was also not true.

(3.) THE facts leading to the case and necessary for the disposal of the second appeal are as follows: THE chit was terminated on 16. 1. 1973. THE last instalment was paid by the respondent on 29. 4. 1973. THE suit should have been filed on 29. 4. 1976. But the plaint was presented only on 17. 12. 1976. On facts the suit was clearly barred by limitation.