Chit Funds Act | Appellate Authority's Order U/S 70 Is Final, High Court Can't Sit In Appeal: Karnataka HC

The Karnataka High Court has held that there is only one statutory appeal against an order passed under Section 69 of the Chit Funds Act and an order passed by the Appellate Authority under Section 70 of the Act is final and no appeal lies against it before the High Court.

A single judge bench of Justice M.I. Arun dismissed the petition filed by M/s Margadarsi Chits (K) Pvt. Ltd which had challenged the order passed by the Joint Registrar of Chits.

It was the petitioner's case that H Srinivas Reddy had subscribed to a chit issued by the petitioner. On him defaulting in payments proceedings were initiated against him by the petitioner before respondent the Deputy Registrar of Chits who passed an order in favour of the petitioner herein holding that respondent No.1 is liable to pay the amount of Rs.1,74,325 with costs and interest.

Aggrieved by the same, Reddy preferred an appeal under Section 70 of the Act, before respondent No.7. The first appeal was allowed and it has been held that respondent No.1 is not liable to pay any amounts to the petitioner.

The bench referring to Section 70, said “There is only one appeal provided in the statute against the order passed under Section 69 of the Act. Any order passed under Section 70 of the Act shall be final.”

Then it held “The petitioner in the instant case is not alleging that any of its fundamental rights is violated nor it is able to show that any of the principles of natural justice have been violated by respondent No.7, nor is it a case where the order impugned is passed without jurisdiction.”

It added “Further, it is not the case of the petitioner that the law has been erroneously interpreted by the respondent No.7. This Court in exercise of its power under Article 226 of the Constitution of India, cannot sit as an Appellate Authority over the order passed under Section 70 of the Act. It cannot delve into a disputed question of facts.”

Dismissing the petition it said “It is the case of the petitioner that the facts have not been properly appreciated by the Appellate Authority (respondent No.7) and that respondent No.1 is liable to pay amounts to the petitioner as alleged. The said allegation has reached finality by the order passed by respondents No.7 and this Court in exercise of its powers under Article 226 of the Constitution of India cannot examine the same.”

Appearance: Advocate S N Banakar for Petitioner.

Advocate K.L. Patil FOR R1.

Advocate V.S. Kalasuramath HCGP FOR R6 & R7.

Citation No: 2024 LiveLaw (Kar) 131

Case Title: M/S MARGADARSI CHITS (K) PVT. LTD AND H SRINIVAS REDDY & Others

Case NO: WRIT PETITION NO. 66982 OF 2011

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