1 BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED: 24.08.2011 CORAM: THE HONOURABLE MR.JUSTICE R.SUDHAKAR W.P(MD)No.6830 of 2011 and M.P(MD)No.2 of 2011 1.Raja Rathinam 2.Padma 3.Premalatha .. Petitioners Vs. 1.The Secretary to Government, Commercial Taxes and Registration Department, Secretariat, Chennai-09. 2.The Deputy Registrar of Chits, Virudhunagar. 3.M/s.Sri Krishna Chit Funds Pvt. Ltd., Rep. by its Managing Director, R.M.Umayal, No.37, Pillaiyar Kovil Street, Sattur, Virudhunagar District (Cause title amended as per the order of this Court dated 08.07.2011 in M.P.No.3 of 2011) .. Respondents PRAYER: Writ Petition is filed under Article 226 of the Constitution of India, to issue a Writ of Certiorari, to call for the records on the file of the first respondent in the proceedings in Letter No.7776/G/2011, dated 17.06.2011 and quash the same as illegal. For Petitioners : Mr.J.Jeyakumaran For R-1 and R-2 : Mr.M.Govindan, Special Govt. Pleader For R-3 : Mr.B.Prasanna Vinodh for Mr.G.R.Swaminathan O R D E R ********** This Writ Petition has been filed to quash the proceedings of the first respondent in Letter No.7776/G/2011-1, dated 17.06.2011. https://hcservices.ecourts.gov.in/hcservices/ 2 2. Heard Mr.J.Jeyakumaran, learned counsel for the petitioners and Mr.M.Govindan, learned Special Government Pleader, who appears for R-1 and R-2 and Mr.B.Prasanna Vinodh learned counsel, who appears for the third respondent. 3. By consent, the Writ Petition itself is taken up for final hearing. 4. The first petitioner borrowed a sum of Rs.3,50,000/- from the third respondent on certain terms. The second and third petitioners stood as guarantors. On 23.07.2006, the third respondent Chit Fund Company filed an application before the second respondent alleging non-payment of the Chit amount and Chit Fund Case No.147 of 2006 was filed. The petitioners entered appearance in the chit fund case through an advocate. It is stated that the learned counsel for the petitioners prayed for time to file statement refuting the Chit Fund Case. However, the second respondent disposed of the case ex-parte on 04.09.2006. 5. According to the petitioners, the second respondent sent the memorandum to the Sub-Judge, Sivakasi on 04.09.2006 itself to execute the decree in the Chit Fund Case No.147 of 2006. The third respondent filed E.P.No.100 of 2006 on the file of the Sub-Judge, Sivakasi on 13.12.2006. The petitioners entered appearance in the said E.P.No.100 of 2006 and contested the same. The objection raised by the petitioners in the E.P.No.100 of 2006 was considered and the said Execution Petition was dismissed on 29.10.2007. Thereafter, the third respondent filed a Civil Revision Petition in C.R.P(NPD)(MD) No.509 of 2008 before this Court where again the petitioners appeared as party respondents. When the matter was taken up for hearing on 19.10.2010 before this Court, it is stated that the junior counsel omitted to inform the listing of the case. This Court allowed the Civil Revision Petition and the order in E.P.No.100 of 2006 was set aside with a direction to dispose of the Execution Petition, within a period of three months. At this stage, the petitioners wanted to challenge the award passed in Chit Fund Case No.147 of 2006, dated 04.09.2006 by way of an appeal to the first respondent Government. On 07.06.2011, the petitioners filed an application for condonation of delay of 1643 days in filing the appeal before the appellate authority under the Chit Funds Act. The reason given for condonation of delay is contained in Paragraph No.5 of the affidavit of Rajarathinam, which reads as follows: "But in filing the said Appeal U/S 70 of Chit Funds Act before this Hon'ble Court a delay of 1643 days have occurred. I most humbly submit that the said delay is not willful. Because, originally the respondent filed in E.P.No.100 of 2006 before the learned Sub-Judge, Sivakasi to execute the decree in Chit Funds Case No.147 of 2006 and the same was https://hcservices.ecourts.gov.in/hcservices/ 3 dismissed on 29.10.2007. Against the said dismissal order, the respondent herein filed Civil Revision Petition before the Hon'ble High Court of Judicature only in the year 2008 as Civil Revision Petition No.509 of 2008. The Hon'ble High Court passed order to proceed with E.P.No.100 of 2006 only on 19.10.2010. As such the delay was because of proceedings initiated by the respondent only. If the said delay is not condoned by this Hon'ble Court, we will be put into irreparable loss and damage. Therefore it is just and necessary that the Hon'ble Court may be pleased to condone the delay of 1,643 days in filing the accompanying appeal in the interest of justice." 6. After considering the above plea, the impugned order came to be passed by the Secretary to Government the appellate Authority stating that the petitioners' application for condonation of delay is rejected as the petitioners have not adduced any valid reasons or produced documentary evidence to support their plea for not preferring the appeal within the prescribed time limit. Challenging the same, the present Writ Petition has been filed. 7. The three contentions that are raised by the learned counsel for the petitioners, are as follows: (i) As against the award passed in Chit Fund Case No.147 of 2006, the third respondent filed E.P.No.100 of 2006, which was dismissed on 29.10.2007 and the same was challenged in C.R.P (NPD)(MD)No.509 of 2008 and the Civil Revision Petition came to be allowed on 19.10.2010. Till such time, the award was not executed and the therefore, the petitioners did not pursue the appeal remedy. After the disposal of C.R.P(NPD)(MD)No.509 of 2008 on 19.10.2010, the petitioners took steps to pursue the appeal remedy. The delay was caused due to the proceedings initiated by the third respondent and therefore, the authority should have considered the pendency of the proceedings initiated at the behest of the third respondent, as a valid ground to condone the delay of 1643 days. (ii) The application filed for condonation of delay has not been considered in accordance with law and a single line order has been passed. There is no discussion on the reasons set out in the affidavit seeking condonation of delay and to hear the appeal on merits. Therefore, there is total non-application of mind. (iii) No prejudice will be caused to the third respondent if the matter is remitted to the authority for reconsidering the application for condonation of delay and to hear the appeal on merits, as the claim of the third respondent has been sufficiently safeguarded by way of deposit of Rs.2,10,600/- before the Sub-Judge, Sivakasi in E.P.No.100 of 2006. https://hcservices.ecourts.gov.in/hcservices/ 4 8. The learned counsel for the petitioners pleaded for setting aside the order with a direction to the first respondent to rehear the application for condonation of delay. 9. The learned Special Government Pleader appearing for the respondents 1 and 2, justifies the impugned order stating that there is no scope under Section 70 of the Chit Funds Act to entertain an appeal beyond the period of limitation in contrast to Section 65(3) of the Chit Funds Act, which provides for condonation of delay beyond the period of limitation specified. Section 65(3) of the Chit Funds Act reads as follows: "(2) Notwithstanding anything contained in Sub- Sections (1) and (2), the Registrar may admit a dispute after the expiry of the period of limitation specified therein, if the applicant satisfies the Registrar that he had sufficient cause for not referring the dispute within such period." 10. Mr.B.Prasanna Vinoth, learned counsel appearing for the third respondent submitted that the reason given in the affidavit filed in support of the application for condonation of delay, is untenable in law as the delay of 1643 days should be explained with reference to the petitioners' inability to file the appeal. The reason that the third respondent pursued the Civil Revision Petition before this Court challenging the order dismissing the Execution Petition and therefore, the petitioners/defaulters could not file the appeal, is not a reason at all. The petitioners having suffered the award have to challenge the said proceedings in accordance with law before the appropriate forum, if they want to extinguish their liability. The petitioners cannot seek shelter under the recovery proceedings initiated by the third respondent, to state that the delay was caused by the third respondent. The Execution Court held that the proceedings for recovery was not properly pursued. That order was held to be incorrect and rectified by the order of this Court in C.R.P(NPD)(MD)No.509 of 2008. Therefore, the petitioners' plea that the proceedings initiated by the third respondent is the cause for delay is totally untenable and not justified. the petitioners should have taken steps independently to safeguard their interests. Therefore, such an untenable plea should be rejected. 11. Insofar as the second contention that the impugned order is an non-speaking order without application of mind is concerned, he submitted that even assuming that Section 5 of the Limitation Act will apply to the authority, having gone through the application, the authority has clearly come to the conclusion that the petitioners have not produced any valid reasons or produced documentary evidence to support their plea for not preferring the appeal within the prescribed time limit. This finding is a finding of fact as the petitioners have not given any valid reasons tenable in law and failed to produce https://hcservices.ecourts.gov.in/hcservices/ 5 any document in support of the delay. These two reasons given in the order justifies the impugned proceedings. In any event, it is a discretion vested with the authority, to consider if there is any bonafide on the part of the person seeking condonation of delay. In this case, the petitioners' plea lacks bonafide as they have failed to challenge the award that was passed against them, for nearly five long years. 12. Insofar as the third contention that the third respondent decree-holder has been safeguarded on deposit of Rs.2,10,600/- before the Sub-Court, Sivakasi, is concerned, it is submitted that the money was lent to the petitioners in the year 2004 and the award was passed in the year 2006. The third respondent is a Chit Company and is liable to pay third parties from time to time. Therefore, great prejudice is being caused to the third respondent. They are unable to recover the fruits of the award. Financial constraint forces the third respondent to plead that the petitioners who have deliberately and knowingly slept over the matter should not be shown any indulgence by this Court, more so as the delay in this case is 1643 days which is nearly five years. 13. Having considered the above contentions, this Court is not inclined to set aside the order under challenge for the following reasons: (i) The admitted fact is that the award has been passed after the petitioners entered appearance through an advocate. It is not as if that the award was passed behind the back of the petitioners. However, an ex-parte award was passed as the petitioners failed to defend the case, even though they were represented by a counsel. The petitioners should have pursued the matter immediately thereafter to set aside the award and seek for rehearing the matter on merits. The petitioners failed to do so. (ii) After the period of limitation, the third respondent filed execution petition which came to be dismissed on an erroneous ground that the respondent has not chosen the correct forum. However, this Court in C.R.P(NPD)(MD)No.509 of 2008 by order dated 19.10.2010 corrected the error in the order of the Execution Court. In these two proceedings also, the petitioners were noticed and in the execution petition, the petitioners were represented by counsel and before this Court also they entered appearance. However, at the time of disposal, the petitioners were not represented. It only shows the deliberate absentation on the part of the petitioners in defending their case. (iii) In paragraph No.5 of the affidavit filed in support of this Writ Petition, the first petitioner states that after the order passed in C.R.P(NPD)(MD)No.509 of 2008, dated 19.10.2010, the petitioners took steps to prosecute the matter by filing an appeal with an application of condonation of delay. The said affidavit was filed on 07.06.2011 (i.e) only after eight months https://hcservices.ecourts.gov.in/hcservices/ 6 from the date of disposal of C.R.P(NPD)(MD)No.509 of 2008 by this Court. It is therefore clear that the petitioners were not serious in pursuing the matter at any stage. As rightly pointed out by the learned counsel for the third respondent, pendency of the execution petition and its dismissal and the subsequent filing of the Civil Revision Petition by the third respondent to correct the error in the order of the Execution Court, is no ground for the petitioners not to challenge the award on merits. At the least, the petitioners should have got the award set aside on the ground that it was an ex-parte award. But the petitioners failed to do so far almost five long years. The affidavit filed on 07.06.2011 to support the plea for condonation of delay refers to the proceedings of the third respondent in E.P.No.100 of 2006 before the Sub-Judge, Sivakasi and C.R.P(NPD)(MD)No.509 of 2008 on the file of this Court. In those cases, there was no order restraining the petitioners from challenging the award on merits. The petitioners cannot cite the proceedings initiated by the third respondent as a reason for not defending their claim on merits. It appears to be a faint and far-fetched plea. The inordinate and unexplained delay of approximately five long years, has to be properly explained as it affects the right of the third respondent who has a decree/award in their, favour but only in paper. (iv) The contention of the petitioners that the order under challenge is without application of mind and a single line order does not appear to be justified. On the face of the affidavit filed by the petitioners it is clear that the reason given for the delay is totally untenable and unreasonable. The authority was therefore justified in stating that the petitioners have not adduced any valid reasons or produced documentary evidence to support their plea for the delay in filing the appeal. Petitioner cannot expect reasons without material. The authority has refused to exercise its discretion as the tenor of Section 5 of the Limitation Act, 1963 clearly states that an appeal on application may be admitted on showing sufficient cause for delay. It is a discretion vested with the authority and that should be exercised in a case where it is found that it will advance cause of justice to a person who deserves to be treated so. (v) In this case, by the conduct of the petitioners it is clear that the authority was justified in refusing to exercise its discretion in favour of the petitioners, more particularly when no good reasons has been adduced nor materials produced in effect, petitioner has not shown sufficient cause to condone delay. This Court is unable to accept the petitioners' faint plea of non-application of mind on the part of the authority. (vi) The reason that a sum of Rs.2,10,600/- has been deposited before the Sub-Judge, Sivakasi and same will safeguard the decree holder is not a reason to condone the delay. The third respondent has got the benefit of an award, but unable to https://hcservices.ecourts.gov.in/hcservices/ 7 recover any amount. The third respondent is engaged in Chit Fund business and is under obligation to pay third parties. The third respondent cannot be expected to wait for endless years to realise the fruits of the award. In this case, the third respondent has been diligently pursuing the matter. On the contrary, the petitioners have been loathful. Mere deposit of certain amount will not be of any use or solve the liability of the third respondent that it owes to third parties. On the contrary if the petitioners succeed, under any circumstance hereinafter, they can thereafter pursue the matter for recovery of the amount. This will serve both equity and justice. The third respondent has suffered for more than five years already after getting an award and has not realised even a pie out of the amount. Therefore it will be travesty of justice to interfere with the order under challenge which will enable the petitioners to prolong the litigation further. Lack of bonafide on the part of the petitioners at every stage of lis disentitles them from seeking the discretionary or equitable remedy under Article 226 of the Constitution of India. 14. In view of the above, finding no merits, the Writ Petition is dismissed with cost Rs.5,000/-(Rupees Five Thousand Only) payable to the third respondent. Consequently, connected miscellaneous petition is dismissed. Sd/- Assistant Registrar /True Coy/ Sub-Assistant Registrar To 1.The Secretary to Government, Commercial Taxes and Registration Department, Secretariat, Chennai-09. 2.The Deputy Registrar of Chits, Virudhunagar +One cC to Mr.G.R.Swaminathan, Advocate, SR.No.29386 +One Cc to The Spl Govt. Pleader, SR.No.29022 pm rl/5 c- 26.9.2011 W.P.(MD)No.6830 of 2011 24.08.2011 https://hcservices.ecourts.gov.in/hcservices/