IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 02.02.2010 CORAM: THE HONOURABLE MR. JUSTICE M. VENUGOPAL W.P.Nos.6813 to 6817 of 2003 K.P.Jimla ....Petitioner in W.P.No.6813,6814 and 6817/2003 Pushpam ....Petitioner in W.P.No.6815 and 6816/2003 Vs. 1. The Government of Tamil Nadu represented by its Secretary Commercial Taxes(G) Department Secretariat, Chennai-600 009 2. The Deputy Registrar of Chits Kanyakumari at Nagercoil-629 001 3. Palliyadi Retna Chit Fund (P) Ltd rep. by its Managing Director S.Kanakaraj Palliyadi P.O.Kanyakumari District .... Respondents in all writ petitions These Writ Petitions filed under Article 226 of the Constitution of India praying for the issuance of the writ of Certiorarified Mandamus as stated therein. For Petitioners : Mr.Venkatesh Mahadevan For Respondents : Mr.N.Senthilkumar AGP(W)-RR1 and 2 Mr.V.Bhiman-R3 https://hcservices.ecourts.gov.in/hcservices/ C O M M O N O R D E R The petitioners have filed these writ petitions praying for issuance of a writ of certiorarified mandamus, to call for the records connected with the impugned order in ARC Nos.73/2000, 77/2000, 78/2000, 79/2000, and 75/2000 respectively dated 30.3.2001 by the Deputy Registrar of Chits, Kanyakumari at Nagercoil and the appeal made thereon in Appeal G.O.(D) Nos.204 dated 15.7.2002,198 dated 15.7.2002,203 dated 15.7.2002,159 dated 1.7.2002 and,232 dated 24.7.2002 respectively by the Secretary, Commercial Taxes(G) Department and to quash the same and to direct the second respondent herein to conduct a proper trial by affording an opportunity of being heard to the petitioners. 2. According to the petitioner in each case, due to exigency of funds, the husband of each one of them borrowed a sum of Rs.3,50,000/- from the third respondent company under CJK small Savings Scheme. The said scheme was operated by the third respondent between October 1998 and January 2002. From 30th instalment to 40th instalment, the amount has not been paid and hence the third respondent filed O.P.Nos.73/2000, 77/2000, 78/2000,79/2000 and 75/2000 respectively before the second respondent and the same was posted on 19.3.2001 for the first hearing. When the matters came up for hearing on 19.3.2001, the second respondent had not followed the procedure enshrined under Section 67 of the Chit Funds Act and on the first hearing itself, an exparte award was passed and at this stage, it is to be noted that the petitioner in each case filed vakalath through their counsel. They had also projected a petition seeking permission of the second respondent to peruse the documents and also to get copies of the same,which was sent through post and as a matter of fact, as per Section 7(2) of the Chit Funds Act, an appropriate direction was sought for, to permit the petitioner in each case to represent them through their legal practitioners and more over, as per Section 68(4) of the Chit Funds Act, the second respondent was empowered to pass necessary orders to prevent the ends of justice being defeated. But in the present case on hand, the second respondent had not passed any orders in regard to the grant or otherwise of permission required under Section 67(2) of the said Act and further he also hurriedly passed the order in the matter in issue and there was a violation of principles of natural justice and therefore, prays for allowing these writ petitions. 3. It is the contention of the petitioner in each case that their counsel on the date when the award was passed by the second respondent on 19.3.2001, but the appearance of the counsel was not taken note of by the second respondent and therefore, there was an apparent error committed by the second respondent. https://hcservices.ecourts.gov.in/hcservices/ 4. However, this Court, on going through the order passed by the second respondent, finds that on 19.3.2001, no one appeared as witness on behalf of the petitioners and their authorised representatives were also not present. Since, it is the factual aspect recorded by the second respondent/competent authority, this Court accepts the same and is not inclined to set aside the said finding made by the second respondent in its award. 5. It is to be noted that even though, the petitioner in each case, had sent a petition through post praying permission of the second respondent to permit their counsel to appear and also to peruse the records, it appears that on that date, when the matter came up for hearing on the date, when the award was passed, there was no appearance on the side of the petitioner either in person or through their authorised representative notwithstanding the above, the said petitions were not assigned the necessary numbers thereto and necessary orders were not been passed on merits, of course, after hearing the parties or their advocates. It is true that principles of natural justice are not an embodiment of straight jacket cast iron formula, but equally, it is the prime responsibility of the petitioners to take part in the proceedings by their physical presence or through their authorised representative or the counsel as the case may be. But in the present case on hand, the party or the counsel had not appeared , when an exparte award was passed on 19.3.2001. 6. At this juncture, the learned counsel for the third respondent submits that mere filing of the application to peruse the documents or to obtain necessary certified copies of the documents or seeking permission of the second respondent permitting the petitioner in each case to represent by lawyer will not suffice and on 19.3.2001, admittedly, there was no representation on behalf of the petitioner in each case in person or through her counsel and therefore the second respondent rightly recorded the non appearance of the petitioner or her counsel and more over, as per Section 32 of the Chit Funds Act,1982, a prized subscriber was bound to pay subscription regularly on the dates and times and at the place mentioned in the chit agreement and on his failure to do so, was bound to make a consolidated payment of all the future subscriptions forthwith and therefore, there was no force in the contention of the learned counsel for the petitioners that 40th instalment only falls on January 2002 and before that an award was passed and the said award was of futile one. 7. It is relevant to note that the ingredients under Section 33 of the Chit Funds Act which speaks of the foreman to demand future subscriptions by written notice and in the present case on hand, the third respondent/chit fund Company sent a notice to the petitioners on 13.10.2001 which was not received and the same was returned as 'unserved' for which the third respondent could not found fault with. https://hcservices.ecourts.gov.in/hcservices/ 8. In this connection, this Court pertinently points out that a reading of Section 32 of Chit Funds Act clearly shows that the prize subscriber was to pay subscription regularly on the dates and times mentioned in the Chit agreement and since the subscription being a monthly one, the prize subscriber was liable to pay subscription on the due date of subscription of every month and in case of failure to pay the same, the right conferred on the Foreman was to demand not only the defaulted subscribed amount;but also the entire arrears of chit, as a consolidated payment. To put it in precisely term, the consolidated payment, in case of default arising on the default committed by the prize subscriber. 9. The learned counsel for the third respondent cites the decision of this Court in Vijayapuram Chit Fund,Vijayapuram by its Foreman-v- M.M.Farook(2002(1)CTC 174)wherein it is among other things held that ' when the consolidated payment of entire chit amount is demanded prized subscriber is deprived of privilege of paying monthly instalments and hence notice of demand is necessary and however, when once chit period has come to an end by efflux of time, there is no need for foreman of chit company to issue any notice of demand to defaulting subscriber under Section 33(1) of the Chit Funds Act etc.' 10.It is to be borne in mind that the term 'natural justice' is not defined anywhere. But it stands for justice according to conscience. The requirement of hearing both sides before arriving at a decision in a particular matter is applicable to judicial and other forums. 11.In regard to the petition filed before the second respondent/competent authority seeking permission under Section 67(2) of the Chit Funds Act to permit the petitioner's lawyer to appear on her behalf and also an application has been filed seeking permission to peruse the documents and also to get certified copies of the same and even though, the same was sent by post along with the vakalat dated 15.3.2001 and the same was received by the office of the second respondent, admittedly referred to in the order, this Court opines that the second respondent ought to have passed the necessary order thereto on the said petitions in the manner known to law by means of a reasoned and speaking order and therefore, this Court concludes that to subserve the ends of justice that the petitioner must be given an opportunity to contest the case before the second respondent and to defend their case in the manner known to law. 12. That apart, the learned counsel for the petitioners informs this Court that except W.P.No.6816 of 2003, in regard to the other writ petitions, the petitioners had tendered the decree amount in full and what remains to be paid is only the interest and in all, the https://hcservices.ecourts.gov.in/hcservices/ interest comes to Rs.4,30,830/-. However, a sum of Rs.4,30,830/- which is said to be the due, according to the learned counsel for the petitioners towards interest in all the writ petitions, is stoutly denied by the learned counsel for the third respondent and according to him, the interest alone comes to Rs.4,78,902 as on 30.1.2003. 13. It is not in dispute that the petitioners, after an exparte award being passed against them by the second respondent on 19.3.2001, had preferred an appeals and they were dismissed by the first respondent and only thereafter, they approached this Court by means of writ petitions . 14. On a careful consideration of the respective contentions, this Court without going into the merits and demerits of the case and also taking note of the fact that the execution proceedings are all pending before the second respondent authority and bearing in mind of another fact that a sum of Rs.5,95,795/- was paid subsequent to the passing of the exparte awards in execution proceedings before the second respondent authority( as informed by the learned counsel for the petitioners), this Court , by applying the principles of natural justice, opines that the petitioner in all the writ petitions must be given an opportunity to contest the case viz. ARC Nos.73/2000, 77/2000, 78/2000, 79/2000, and 75/2000 respectively on merits and in that view of the matter, this Court allows these writ petitions by setting aside the orders passed by the authority by directing the petitioner in each of the petition to deposit a sum of Rs.20,000/- each(totalling a sum of Rs.1,00,000/-) to the credit of ARC Nos.73/2000, 77/2000, 78/2000, 79/2000, and 75/2000 respectively on the file of second respondent, within a period of five weeks from the date of receipt of a copy of this order and on such deposit, the third respondent is entitled to project necessary payment out petition in the manner known to law, after providing a formal notice to the petitioners herein in that petition and to pass orders. The second respondent is also directed to dispose of ARC.Nos. 73/2000, 77/2000, 78/2000, 79/2000, and 75/2000,after providing an opportunity to the parties to let in both oral and documentary evidence and also to pass appropriate orders in regard to the applications filed by the petitioners seeking permission to engage a lawyer and also to peruse the documents etc., within a period of two months therefrom and to report compliance before this Court without fail. Sd/ Asst.Registrar /true copy/ Sub Asst.Registrar sg https://hcservices.ecourts.gov.in/hcservices/ To 1. The Secretary The Government of Tamil Nadu Commercial Taxes(G) Department Secretariat, Chennai-600 009 2. The Deputy Registrar of Chits Kanyakumari at Nagercoil-629 001 + 1 CC TO Mr.P.R.Selvaraj, Advocate SR 6340 + 1 cc to Mr.V.Bhiman, Advocate, SR 6389 + 1 cc to Govt., Pleader Advocate SR 6355 W.P.Nos. 6813 to 6817 of 2003 GS (CO) RH (11.2.10) https://hcservices.ecourts.gov.in/hcservices/