Limitation Act Doesn't Apply To Appeals Preferred Before Collector Under Section 70 Of Chit Funds Act: Andhra Pradesh High Court

Andhra Pradesh High Court has clarified that the Limitation Act does not apply to Section 70 of the Chit Funds Act, 1982 which stipulates that an appeal against the order passed by the Deputy Registrar of Chits should be filed with 2 months.

The Court concluded the above on the basis of a two prong reasoning. Firstly, the court noted, that other sections of the Chits Funds Act, had specifically called for the inclusion of the provisions of the Limitation Act, however, no such provision found place in section 70.

"Under Section 65, with respect to the disputes, there is provision for the period of limitation and for condonation of delay. Under sub-section (1) and (2), the power has been given to the Registrar to condone the delay on being satisfied on sufficient cause. But, any specific power has not been conferred to the appellate authority under Section 70 of the Chit Funds Act or any other provision to condone the delay in filing appeal. Consequently, the exclusion of power of condonation of delay, with respect to the appeals under Section 70 of the Chit Funds Act, is implied. If no provision of the Limitation Act was expressly adopted, it might have been possible to hold by virtue of Section 29 (2) of the Limitation Act, subject to fulfillment of its conditions, that the power of condonation of delay in filing appeal was available to the appellate authority. The legislative intent is very clear from the Chit Funds Act, that where the legislature intended to apply provision of the Limitation Act, i.e., the disputes under Section 65 of Chit Funds Act, it applied, and where it did not, as under Section 70, it did not provide for that."

The second explanation given by the Bench was to counter the argument of the counsel, which was: since prerequisites prescribed in section 29(2) of the Limitation Act were fulfilled, the Limitation Act should apply to the proceedings under section 70.

As per section 29(2) the Limitation Act would apply to any statute which did not specifically bar the Act and if, a cut off period was given that was different from the one prescribed in the Schedule of the Limitation Act. The counsel argued that since there was no absolute bar and since the cut off was set at 2 months, the provisions of the Limitation Act would apply.

The court noted, that although section 29(2) is an inclusive section, it is only applicable to 'Courts'. Placing reliance on Officer on Special Duty (Land Acquisition) v. Shah Manilal Chandulal, Sushila Devi v. Ramanandan Prasad and Shah Manilal Chandulal the bench concluded that a 'collector' cannot be deemed a 'court' under law.

Similarly in the present case, statute prescribed for filing an appeal before the State and a 'State' cannot be synonyms of 'Court'.

"In the present case also, the appeal lies to the State. In exercise of appellate powers, the State Government shall have to follow the procedure under the Chit Funds Act read with Rules with respect to the appeals, but that does not make the State Government as a Court or Civil Court for the purposes of the Limitation Act. Consequently, I am of the considered view that the appeal under Section 70 of the Chit Funds Act before the State Government is not before the Court so as to attract the applicability of the Limitation Act of its own or by virtue of Section 29 (2) of the Limitation Act. As considered supra, the Chit Funds Act or/and the Rules do not make application of the provisions of Section 5 of the Limitation Act. Neither the provisions of the Limitation Act are applicable under Section 70 of the Chit Funds Act nor it specifically provides the power for condonation of delay under Section 70 of the Chit Funds Act by the appellate authority. The Limitation Act does not apply to the proceeding under Section 70 of the Chit Funds Act."

Background:

The dispute originated when the petitioner opted to be a surety for a lady who purchased chits from the respondent company. The lady (A. Pratyusha) defaulted on paying the installments, following which a case was initiated before the Deputy Registrar of Chits against the petitioner herein and A. Pratyusha.

The petitioner and the lady remained absent and the Registrar passed a decree in the favour of the respondent company. The Company filed an execution petition. When notices were served in the execution petition, the petitioner herein sought to challenge the same.

An arbitration was initiated, initially, which was held to be not maintainable. The petitioner then sought an appeal before the State (Department of Revenue) along with an application to condone delay, which was dismissed by the State.

Challenging the same, the present writ was filed.

The petitioner contended that the provisions of the Limitation Act apply to the impugned proceedings and the State was wrong in dismissing the appeal without considering the application for condonation. The petitioner further contended that as per Rule 59 of the AP Chit Fund Rule, 2008 a preliminary enquiry was to be made by the presiding officer to ascertain the validity of the appeal, but no such enquiry was made.

While dismissing the appeal and holding that sections of the Limitation Act would not apply to the appeal at hand, the bench also clarified that Rule 59 is set into motion, only when the appeal is filed within the stipulated time.

Thus the writ was dismissed.

Atmakuru Nirmalamma vs. State of AP

Counsel for petitioner: Mutuala Sobhanadri Naidu

Counsel for respondents: Dilip Nayak, AGP

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