ORDER
Judgement pronounced by E. Padmanabhan, J.
1. In this writ appeal notice of motion was ordered on 24.6.1998. The respondents have entered appearance. With the consent of the counsel appearing for either side the writ appeal itself is taken up for final disposal.
2. This writ appeal is directed against the order of the Hon'ble Single Judge dated 9.7.1997 made in W.P.No.17029 of 1994, filed by the respondents 1 to 3 herein. For convenience the parties will be referred as arrayed in the writ petition.
3. The writ petitioners in all three in numbers have joined together and filed W.P.No. 17029 of 1994 praying for the issue of certiorarified mandamuscalling for the proceedings of the first respondent in ARC. No.825 of 1991 dated 5.7.1993 and Lr. No. 36627/CL/94-1 dated 7.9.1994 of the third respondent quash the same and forbear the respondents from proceeding further.
4. Admittedly, the second respondent in the writ petition is the Foreman and a registered Chit Company. One Sivasubramaniam subscribed himself to chit Group No.MDH.5 in Chit No.55 of 1985 in T.Nagar branch for the value of Rs.30,000. He was the successful bidder in the auction held on 14.8.1985 and prized the chit at Rs.15,890. The subscriber received the prize money of Rs.13,110 for which the writ petitioners and one Alfred were the guarantors for the due payment of the money and executed promissory note on 19.9.1985 promising to pay Rs.27,000. The said subscriber after receiving the prize money did not pay the subscription from the 7th instalment and therefore the Chit Fund Company instituted proceedings before the Arbitrator for recovery of Rs,21,000 being the future instalments and Rs.18,630 towards interest aggregating Rs.40630 with interest at 12% from the date of petition and till date of realization.
5. The said dispute was taken on file by the Registar of Chits on 22.7.1991 under Sections 66 and 67 of Chits Funds Act 1982. The arbitration petition was heard on various dates. Before the arbitrator, the foreman had examined the witnesses and none of the respondents have chosen to let in evidence. But their counter statements were taken into consideration. The objection that has been raised by the subscriber as well as the guarantors is that the claim is barred by limitation and therefore the petition is not maintainable. It was pointed out by the foreman that before framing of the rules and notifying the authority a suit has been presented before the City Civil court and that the claim is not barred by limitation.
6. The Arbitrator disallowed a portion of the interest and held that the subscriber and the guarantors are liable to pay Rs.27,000 towards principal and Rs.9,720 towards interest and in all aggregating to Rs.36,720. Accordingly an award was passed on 5.7.1983. Being aggrieved the writ petitioners have filed an appeal before the State Government which rejected the appeal as time barred on 7.9.1994. In fact originally, the State Government, the appellate authority was not made a party at all and subsequently the writ petitioners have prayed for impleading and also prayed for quashing the orders of the appellate authority, the State Government. In fact, the award was sought to be executed by filing execution proceedings before the City Civil Court.
7. Before the Hon'ble Judge the writ petitioners contended that the claim is barred by limitation. The Hon'ble Single Judge by order dated 9th July 1997 allowed the writ petition along with another connected writ petition and remitted the matter to the State Government, the appellate authority for fresh disposal according to law. Being aggrieved, the foreman had preferred the writ appeal.
8. Mr.R.Krishnaswamy, the learned counsel appearing for the appellant contended that the Learned Judge having held that the suit claim is not barred, ought not to have set aside the proceedings and remanded the matter for fresh disposal to the appellate authority and the suit claim is at any rate well within the time and it is not barred by jurisdiction.
9. Per contra, Mr.P.Meenakshisundaram, learned counsel appearing for the writ petitioners 1 to 3 contended that the suit claim is barred by limitation and relied upon the decision of the Apex Court reported in Smt.Sandhya Rani Sarkar v. Smt. Sudha Rani Debi, : [1978]2SCR839 and G. Ramegowda v. Special Land Acquisition Officer, Bangalore, : [1988]3SCR198 .
10. The only question that arises for consideration in this appeal is whether the claim of the foreman is barred by limitation? and whether the foreman is entitled to recover the amount claimed?
11. Admittedly, the Chit commenced in February, 1985 and the subscriber was the successful bidder in the auction held on 14.8.1985, i.e., on 7th month. The chit is for a period of sixty months and the chit terminates only on 16th March, 1990. As the subscriber had committed default from 8th month onwards, the foreman had initially filed a suit on the file of the City Civil Court which was entertained and it was pending till it came to be returned as not maintainable in view of sub section (3) of Section 64. Thereafter, after making a demand the Foreman instituted proceedings under Section 64 which was presented on 22.7.1991.
12. It is to be pointed out that the Chit Funds Act; 1982 (Central Act 40 of 1982) by which The Tamil Nadu Chit Funds Act, 1961 which was in force in the State was repealed. The rules under Section 89 of the Chit Funds Act 1982 was framed by the State Government on 12th april, 1984 and it was published in the Gazette on 13th April, 1984. In the interregnum, the Foreman had filed the suit and consequent to the coming into force of the Chit Funds Act, 1982, the suit had been returned as not maintainable before the Civil Court. Thereafter on 22.7.1991, the arbitration petition was presented.
13. It is relevant to refer to the provisions of the Chit Funds Act, 1982 with respect to disputes and the arbitration. Chapter XII relates to disputes and arbitration. In terms of Section 64 notwithstanding anything contained in any other law in force, a foreman, a prized subscriber or a non prized subscriber including a defaulting subscriber and a surety of a subscriber, has to raise a dispute by way of arbitration. Section 65 prescribes the period of limitation. It would be proper to set out the very provision itself, which reads thus:-
PERIOD OF LIMITATION:- (1) Notwithstanding anything contained in the Limitation Act, 1963, but subject to the specific provision contained in this Act, the period of limitation in the dispute referred to the Registrar under section 64, shall--
(a) if the dispute relates to the recovery of any sum, including interest thereon, due to a Foreman from a deceased subscriber be three years , computed from the date on which such subscriber dies or ceases to bea subscriber; or
(b) if the dispute is between a Foreman and a subscriber or a past subscriber. or the nominee, heir or legal representative of a deceased subscriber, and the dispute relates to any act of omission on the part of either party to the dispute, be three years from the date on which the act or omission with reference to which the dispute arose, took place.
(2) The period of limitation in the case of any dispute other than those referred to sub section(1) which are required to be referred to the Registrar under section 64 shall be regulated by the provisions of the Limitation Act, 1963, as if the dispute were a suit, and the Registrar, a Civil Court.
(3) Notwithstanding anything contained in Sub-sections (1) (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.'
14. Sub section (3) of Section 65 is being heavily relied upon by the counsel appearing for either side. The learned counsel for the appellant contends notwithstanding anything contained in sub sections (1) and (2) of Section 65, the Registrar may admit a dispute after the expiry of the period of limitation, if the applicant satisfies the Registrar that he had sufficient cause for not referring the dispute within such period. According to the learned counsel for the appellant, the suit claim is not barred as the Registrar was satisfied and that the Registrar has the authority to entertain to admit a dispute even after the expiry of a period of limitation if the Foreman satisfies the Registrar that he had sufficient cause for not raising the dispute within the period prescribed.
15. The learned counsel for the appellant points out that the chit Funds Act came to be repealed by the Central Act 40 of 1982 and no rules have been framed for two years and no authority has been constituted for a considerable period. In the interregnum; period and when there was no bar for institution of the suit, the Foreman had filed a suit which was pending till 31.7.1990. In view of the bar of jurisdiction, the Civil Court while holding that the suit is not maintainable, returned this claim and thereafter, the claim was presented on 22.7.1991. As such, the period during which the suit has been pending and the period during which the rules were not framed and an authority was not constituted have to be excluded as the Foreman had been prosecuting a remedy before a wrong forum.
16. The learned counsel for the appellant also relied upon section 14 of the Limitation Act and contended that as the period spent before the civil court and thereafter the return of the claim has to be excluded. There is force in the submissions of the learned counsel for the appellant. The time taken by the Foreman by prosecuting a suit before the civil court has to be excluded by applying the principles of Section 14 of the The Limitation Act though the said provision of the said Limitation Act may not strictly apply. In S. Venkatachalam v. Secretary to Govt., C.T. & R.E. Department, AIR 1998 Mad. 232 one of us sitting in single E. Padmanabhan, J held that the salutary principle adumbrated in section 12 of the Limitation Act has to be appliedeven though there is no similar provision in the Chit Funds Act or the Rules to exclude the time taken in obtaining certified copy of the Award.
17. Sub section (3) of Section 65 provides that the Registrar may admit a dispute after the expiry of the prescribed period if sufficient cause is shown.
18. The learned counsel for the writ petitioners/contesting respondents contends that while admitting that the Registrar has the authority to admit a dispute even after the expiry of period of limitation contended that there was no sufficient cause. In this respect the learned counsel relied upon the decision reported in Sri Sandhya Rani Sarkar v. Smt. Sudha Rani Debi, : [1978]2SCR839 and contended that cause shown is not sufficient . The learned counsel relied upon the following passage:-
'It is undoubtedly true that in dealing with the question of condoning the delay under Section 5 of the Limitation Act the party seeking relief has to satisfy the Court that he had sufficient cause for not preferring the appeal or making the application within the prescribed time and this has always been understood to mean that the explanation has to cover the whole period of delay, vide Sitaram Ramcharan v. M.N. Nagarshana. However, it is not possible to lay down precisely as to what facts or matters would constitute sufficient cause under section 5 of the Limitation Act. But those words should be liberally construed so as to advance substantial justice when no negligence or any inaction or want of bona fides is imputable to a party, i.e., the delay in filing an appeal should not have been for reasons which indicate the party's negligence in not taking unnecessary steps which he would have or should have taken. What would be such necessary steps will again depend upon the circumstances of a particular case vide State of W.B. v. Administrator Howrah Municipality: discretion is conferred on the Court before which an application for condoning delay is made and if the court after keeping in view relevant principles exercises its discretion granting relief unless it is shown to be manifestly unjust or perverse, this court would be loathe to interfere with it.'
19. The learned counsel for the writ petitioners also relied upon the decision reported in G. Ramegowda v. Special Land Acquisition Officer, Bangalore, : [1988]3SCR198 wherein it has been held thus:-
'Therefore, in assessing what, in a particular case, constitutes sufficient cause for purposes of section 5 it might, perhaps, be somewhat unrealistic to exclude from the considerations that go into the judicial verdict, these factors which are peculiar to and characteristic of the functioning of the Government. Governmental decisions are proverbially slow encumbered, as they are, by a considerable degree of procedural red tape in the process of their making. A certain amount of latitude is, therefore, not impermissible. It is rightly said that those who bear responsibility of Government must have a little play at the joints. Due recognition of these limitations on Governmental functioning of course, within a reasonable limit-is necessary if the judicial approach is not rendered unrealistic.'
20. There is no quarrel over the proposition of law that as to what is sufficient cause in the context of each case has to be decided on the merits of that case. In the present case, on facts, the original authority namely the Registrar was satisfied that there has been a sufficient cause falling with themeaning of Section 64(3) of the Chit Funds Act. It is proper to refer to the recent pronouncement of the Apex Court reported in Balakrishnan, N. v. M. Krishnamurthy, : 2008(228)ELT162(SC) where K.T. Thomas, J. speaking for the Bench while considering what is sufficient cause under section 5 of the Limitation Act held that the said expression should receive a liberal construction so as to advance substantial justice. In this respect K.T. Thomas, J. relied upon the earlier pronouncements reported in Shakunthala Devi Jain v. Kuntal Kumari, : [1969]1SCR1006 and State of West Bengal v. The Administrator, Howrah Municipality, : [1972]2SCR874a . The Apex Court ultimately held thus:-
'It must be remembered that in every case of delay there can be some lapse on the part of the litigant concerned. That alone is not enough to turn down his plea and to shut the door against him. If the explanation does not smack of mala fides or it is put-forth as part of a dilatory strategy the court must show almost consideration to the suitor. But when there is reasonable ground to think that the delay was occasioned by the party deliberately to gain time then the court should lean against acceptance of the explanation. While condoning delay the court should not forget the opposite altogether. It must be borne in mind that he is a looser and he too would have incurred quite a large litigation expenses. It would be a salutary guideline that when courts condone the delay due to laches on the part of the applicant the court shall compensate the opposite party of his loss.'
In the light of this pronouncement, there is every justification to confirm the decision of the Arbitrator who had held that there was sufficient cause and the contention raised by the learned counsel for the respondents in this Writ Appeal has to be rejected.
21. That apart, as already pointed out the chit for a period of sixty months commenced in February 1984, and it terminated only on 10.3.1990. What was sought to be recovered is not only the defaulted instalment but also the future instalment which is payable up to March, 1990. Admittedly, the claim has been presented before the Registrar on 22.7.1991. Reckoned from the last of the chit instalments payable, namely, the 60th instalment, it has to be held that it was well open to the Foreman to wait till the end of the last instalment and thereafter institute the Arbitration proceedings. Reckoned from 60th instalment which fell due on 10.3.1990, the Arbitration Petition having been presented on 22.7.1991 is not barred by limitation.
22. Thus the sole contention of limitation has to be decided on both the counts in favour of the Foreman/ the appellant in this writ appeal. It is to be pointed out that the subscriber to the chit had not challenged the award and he had allowed the Award to become final. So also another surety. In the light of the conclusion that the claim is not barred by limitation, we allow the writ appeal, set aside the order passed by the Hon'ble Single Judge in W.P.No.17029 of 1994 and confirm the Award of the Registrar. Consequently, C.M.P.No.7222 of 1998 is dismissed.