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Judgment
Vinod K. Sharma, J.—The Petitioner has prayed for issuance of a Writ in the nature of Certiorari, for quashing the order passed by the Chit
Fund Arbitrator and that of the appellate authority, dismissing the appeal.
The admitted facts are that one Thiru. Gnanavel joined as subscriber of Palai Matha Chit Fund as subscriber No. 19, for a value of Rs.
3,00,000/- (Rupees three lakhs only). Thiru. Gnanavel was required to pay at the rate of Rs. 15,000/- p.m.(Rupees fifteen thousand only) for a
period of 20 months. He participated in the auction held on 01.08.1997. Being successful bidder was paid the price money of Rs. 2,10,000/-
Rupees two lakhs and ten thousand only) on 30.08.1997. The price money was paid to Petitioner. It executed a promissory note through Thiru.
Gnanavel along with one surety, namely, Thiru. Sundarsingh, for a sum of Rs. 2,25,000/- (Rupees two lakhs and twenty five thousand only) to
secure the future instalments i.e., 7th to 20th instalments. The Petitioner failed to pay the instalments. Consequently, the Chit Fund Company
referred the matter for arbitration. The Chit Arbitrator passed an award dated 27.08.2001, directing the Petitioner and surety to pay the principal
sum of Rs. 1,95,160/- (Rupees one lakh ninety five thousand one hundred and sixty only) along with interest of Rs. 1,203/- (Rupees one thousand
two hundred and three only) and expenses of Rs. 1,000/- (Rupees one thousand only). The total award passed against the Petitioner was Rs.
1,97,363/- (Rupees one lakh ninety seven thousand three hundred and sixty three only).
The award was passed against the Petitioner and Surety Sundarsingh, who did not file any appeal. The appeal filed by the Petitioner was initially
dismissed as barred by limitation. This Court allowed W.P. No. 23094 of 2002 by condoning the delay, remitted back the appeal to the appellate
authority, for deciding it on merits.
The award was challenged by the Petitioner only on the ground that John Traders, a partnership firm was not a member of the chit, as it was
Thiru. Gnanavel, who has subscribed to chit in his individual capacity therefore, the award could not be sustained. It was also submitted by the
Appellant that the partnership deed was not placed on record nor an expert was examined to prove the signatures, which renders the award as
illegal.
The appellate authority rejected the contentions raised by the Appellant, by recording a finding that it was proved on record that Thiru.
Gnanavel, had initially joined in his individual capacity, but later requested the Chit Fund Company to change the chit subscription in the name of
John Traders. The pro-note also showed that the money were received by Thiru. Gnanavel, in his capacity as the partner of the firm. The appellate
authority accordingly rejects the appeal filed by the Petitioner.
The appellate authority while exercising the jurisdiction under the Act was performing the quasi-judicial authority, the order is shown to have
been issued as a Government order in G.O. No. 77, dated 16.03.2005.
It may be observed that the Officers exercising the quasi-judicial authority are to pass orders as the authority under the Act, and not as
Government Order, as recorded in this case. The jurisdiction exercised was a statutory jurisdiction under the Act and not as Government.
The learned Counsel for the Petitioner challenged the impugned order by contending that the order is against facts and law, as the appellate
authority failed to consider the evidence and documents placed before it.
That the appellate authority failed to consider that the impugned award was ex-parte award passed without notice to the Appellant.
This contention, on the face of it cannot be accepted. It was for the Petitioner to have moved the statutory Arbitrator for setting aside the ex-
parte proceedings, in case, the Appellant was aggrieved by exparte proceedings. This plea certainly is not relevant in appeal as in appeal, the
appellate authority was to decide the claim only on merits. The Appellant had failed to prove that No. notice was issued, as are of the partner had
contested the case before the learned Chit Arbitrator.
A reading of the order of the appellate authority shows that the only point raised by the Petitioner was that the liability could not be fastened on
the firm, as the Chit was subscribed by Thiru. Gnanavel in his individual capacity. This contention was found to be wrong, on facts brought on
record.
The next contention raised by the learned Counsel for the Petitioner was that the partnership deed did not authorize Thiru. Gnanavel, to enter
into any transaction of Chit on behalf of the partnership firm. This contention again is misconceived, as the partnership firm is registered firm. A
partner can act on behalf of the other partner, and in case there is any violation of the terms of the partnership, the remedy is inter se between the
partners which does not affect the right of the third party. The Petitioner cannot avoid liability to the third parties. No. other point was urged.
In view of the fact that the evidence on record showed that the fund was subscribed by the partnership and the promissory note was also
executed on behalf of the firm, No. fault can be found with the judgment of the appellate authority and that of the Chit Fund Arbitrator.
There being No. merit in the Writ petition it is ordered to be dismissed.
Consequently, connected Miscellaneous Petition is dismissed. No. costs.