ORDER
P.R. Raman, J.
1. This civil revision petition is directed against the judgment in A. S. 66 of 1996 rendered by the Subordinate Judge, Cherthala, confirming the judgment of the Munsiff's Court, dismissing O.S. 436/1992 - a suit for return of non priced subscription paid under a chit.
2. The petitioner is the plaintiff in the suit. The allegation contained in the plaint is that he was a subscriber in two chitties which were conducted by the respondent/defendant. One of the terms and conditions of the chitty was that if any subscriber who has not bid the chitty commits any default, the amount already remitted by him with 3% interest deducting the dividend will have to be given after six months from the date of termination of the chitty and if the foreman commits default and the chitty could not be conducted due to his default, the amount due to the subscriber who has not bid the chitty is to be given within three months from the date of default with 5% interest. Because of the default of the defendant the chitty could not be conducted and according to the plaintiff, he is entitled to the amount he has already remitted with 12% interest from the defendant. Petitioner - plaintiff has paid up to and inclusive of 15th installments - the last payment being on 23.4.1986 on which day he paid Rs. 1,0007- and obtained a receipt. Therefore he prayed for a decree for the amount already paid by him with 12% interest including dividend and other benefits.
3. In the written statement filed by the defendant, it is contended inter alia that the suit is not maintainable and is barred by limitation. The averment that the plaintiff has paid the 15th instalment is also denied.
4. The trial court formulated an issue regarding the maintainability of the suit and additional issue No. 4 regarding limitation.
5. As per the bye-law governing the terms and conditions of the chitty between the plaintiff and the defendant, if the subscriber who has not bid the chitty commits any default, the amount already remitted, by him is to be given with 3% interest after deducting the dividend, after the expiry of six months from the date of termination of the chitty. On the other hand, if the chitty could not be conducted due to the fault of the foreman, the subscriber is entitled to recover the amount after the expiry of three months including the dividend with 5% interest. According to the plaintiff, he could not remit the installments since the chitty had not been properly conducted by the foreman.
6. But according to the defendant, the plaintiff has not paid up to the 15th instalment and whatever amount he has paid are entered in the pass book which is still in the possession of the plaintiff and he has not paid any amount by receipt. The father of the defendant filed O.S. 278/1988 before the Alappuzha Munsiff's Court and in that case, the defendant claimed set off with regard to the transaction in this suit and hence he is not entitled to recover any amount. The Court below found that as per Clause 10 of the udampady if the foreman committed default, the amount already paid by the subscriber is to be returned after three months from the date of default with 5% interest and if so, the amount sought to be recovered became due as on 5th May, 1985 and since the period of limitation for the recovery of that amount is three years, the plaintiff had to file the suit before 5th May, 1988, but he has filed the suit only in 1992 and it is hopelessly barred by limitation. It was on that account, the suit was dismissed.
7. On appeal, the appellate court also considered the matter at length and it was found that the suit is barred by limitation. The appellate court found that there is absolutely no evidence to prove that the foreman discontinued the chitty transaction. But the chitty foreman did not bring any records which is in the custody of the appellant and in Ext. A1 chitty bye-law the conditions show that if the chitty discontinued by the subscriber due to non deposit of the amount, he can realise that amount from the Foreman within six months after the termination of the chitty. That means he could file the suit within six months from 5th April 1989. But the appellate court found that even according to the appellant, the chitty transaction discontinued on 6.1.1985 but he did not institute the suit on or before 6.1.1988 or even six months of discontinuation of the chitty. The appellate court found that in the circumstances, the appellant ought to have filed the suit within three years of the last payment.
8. Though an argument was raised based on Article 22 of the Limitation Act, that the period would run only from the date of payment and that the appellant had deposited the amount under the agreement that it shall be payable on demand, including money of a customer in the hands of his banker so payable, it was found that the transaction in the present case is totally different because it is a chitty transaction and wherein the appellant is to subscribe his installments up to the termination of the chitty that the amount deposited by the appellant will be payable on demand. According to the appellate court, in chitty transaction there are only two options to get the money i.e. (i) to auction the chitty and the another to give by way of prize and the question of demanding the amount at any time does not arise. Hence the arguments based on Article 22 of the Limitation Act also was repelled and ultimately the appeal was dismissed against which this civil revision petition is filed.
9. Learned counsel for the petitioner placed reliance on Section 39 of the Kerala Chitties Act and contended that there is a statutory charge on the debt due from the foreman of a chitty and there is a first charge on the chitty assets and as such the period of limitation is 12 years as prescribed under Article 62 of the Limitation Act. According to him, the other charges referred to under Article 62 is therefore, attracted to the present case.
10. Though there is prima facie force in the argument, on a careful consideration of the provisions contained in Section 39 of the Chitties Act, it can be seen that no such charge has been created on the chitty. Section 39 of the Chitties Act deals with preference on subscribers over chitty assets which reads thus:
'Preference of subscribers over chitty assets:-
Where there are debts due from the foreman of chitty in relation thereto and also other debtsdue from such foreman, the chitty assets shall be a first charge for payment of the chitty debtsdue to the subscribers'.
11. In other words, among the chitty debt and other debts of the foreman, there is priority for the chitty debts over the assets against the other debts of the foreman. If the intention of the legislature was to create a charge by itself without anything more, then the word 'and also other debts due from such foreman' will be reduntant.
12. In this connection, the provisions of Section 55(6) of the Transfer of Property Act was relied on by the learned counsel for the petitioner to support his contention. Section 55(6) of the Transfer of Property Act reads as follows :
The buyer is entitled-
(a) where the ownership of the property has passed to him, to the benefit of any improvement in, or increase in value of, the property, and to the rents and profits thereof;
(b) unless he has improperly declined to accept delivery of the property, to a charge on -the property, as against the seller and all persons claiming under him to the extent of the seller's interest in the property for the amount of any purchase-money properly paid by the buyer in anticipation of the delivery and for interest on such amount, and when he properly declines to accept the delivery, also for the interest (if awarded to him of a suit to compel specific performance of the contract or to obtain a decree for its recession.
Thus it can be seen that Section 55(6) itself creates a charge. In Chit Funds Act, 1982 (Central Act) there is a similar provision in Section 43 which reads as hereunder:
'43. Subscribers' dues to be first charge on chit assets-,
Any amount due to the subscriber from a foreman in relation to the chit business shall be a first charge on the chit assets'.
13. The above provision would show that the section does not deal with any priority of charge over other debts of the foreman. The provision itself creates a charge on the chitty assets for the amount due to the subscriber. Therefore, whenever the legislature wanted to create charge as could be seen from Section 43 of The Chit Funds Act, 1982 as well as from the Transfer of Property Act, the wording of the Section is in such a manner that the charge itself is created by the statutory provision whereas under Section 39 of the Kerala Chitties Act it only deals with priority of charge over the other debts of the foreman and does not by itself create any charge. Therefore, the contention of the learned counsel for the petitioner that there is a statutory charge under Section 39 of The Kerala Chitties Act and therefore, the period of limitation is 12 years is not tenable. At any rate, no such argument was also been raised before the court below.
14. The next contention advanced on behalf of the petitioner is that even as per the 'variyola' there is a charge created on the property and therefore, even without the aid of Section 39 of the Kerala Chitties Act, he contends that there is a charge on the property and there is no period of limitation. Para 2 of the plaint in so far as they are relevant is extracted hereunder:
15. From the above, it can be seen that only when there is a default on the part of the foreman the amount becomes due after three months and in such circumstances the amount could be recovered from out of the chitty assets. In this case, the appellate court has clearly found that there is no evidence to prove that the foreman discontinued the chitty transaction. As such the contention based on the clause contained in the bye-law of the chitty and as averred in para 2 of the plaint is also without any merit.
For the foregoing reasons, the Civil Revision Petition is dismissed. In the circumstances, there will be no order as to costs.