Karnataka High Court
M/S Chitlor Chits Pvt Ltd vs G.V. Sathesha Reddy on 2 December, 2025
-1-
NC: 2025:KHC:50187
WP No. 30566 of 2011
HC-KAR
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 2ND DAY OF DECEMBER, 2025
BEFORE
THE HON'BLE MR. JUSTICE E.S.INDIRESH
WRIT PETITION NO. 30566 OF 2011 (GM-CFA)
BETWEEN:
M/S CHITLOR CHITS PVT LTD
NO. B-102,
BRIGADE MAJESTIC,
GANDHINAGAR BRANCH,
BANGALORE- 560 009
REP BY ITS MANAGING DIRECTOR
SRI C.S. J. NARASIMHALU
...PETITIONER
(BY SRI. V SUBHASH REDDY.,ADVOCATE)
AND:
Digitally signed by
1. G.V. SATHESHA REDDY
JUANITA S/O G T VENKATASWAMY REDDY
THEJESWINI
Location: HIGH SRI VINAYAKA SILKS,
COURT OF
KARNATAKA GUNJUR POST,
BANGALORE-87560087
2. THE ASSISTANT REGISTRAR OF CHITS
CIRCLE-II,
MALLESHWARAM,
BANGALORE.
3. THE JOINT REGISTRAR OF
CO-OPERATIVE SOCIETIES AND CHITS,
-2-
NC: 2025:KHC:50187
WP No. 30566 of 2011
HC-KAR
BANGALORE REGION,
BANGALORE.
...RESPONDENTS
(BY SRI. VISHWAS GOWDA G.M., ADVOCATE FOR R1
SRI. MAHANTESH SHETTAR., AGA FOR R2 & R3)
THIS W.P. IS FILED UNDER ARTICLES 226 & 227
OF THE CONSTITUTION OF INDIA PRAYING TO CALL
FOR THE RECORDS ON THE FILE OF 3RD RESPONDENT
IN RESPECT OF VIDE ANNEX.E.QUASH THE ORDER
DATED 29.04.2011 PASSED BY THE 3RD RESPONDENT
VIDE ANNEX.E.GRANT AN INTERIM ORDER TO STAY THE
ORDER DATED 29.04.2011 PASSED BY THE 3RD
RESPONDENT VIDE ANNEX.E.
THIS PETITION, COMING ON FOR FINAL HEARING,
THIS DAY, ORDER WAS MADE THEREIN AS UNDER:
CORAM: HON'BLE MR. JUSTICE E.S.INDIRESH
ORAL ORDER
In this writ petition, the petitioner is assailing the order dated 29.04.2011 (Annexure 'E') passed by respondent No.3.
2. Heard Sri V.Subhash Reddy, learned Counsel for the petitioner, Sri Viswas Gowda G.M., learned Counsel for -3- NC: 2025:KHC:50187 WP No. 30566 of 2011 HC-KAR respondent No.1 and Sri Mahantesh Shettar, learned Additional Government Advocate for respondents No.2 and
3.
3. It is argued by the learned counsel appearing for the petitioner as to the fact that respondent No.1, based on Exhibit R9, (Annexure-G in present Writ Petition) arrived at a conclusion that the petitioner has received the amount. However, the aforementioned Exhibit R-9 does not clarify as to which account/chit the amount has been credited and therefore, sought for interference of this Court.
4. Per contra, learned counsel Sri Viswas Gowda G.M., appearing for respondent No.1 invited the attention of the Court to Section 65(1)(b) of The Chit Funds Act, 1982 (hereinafter referred to as 'the Act' for short) and by referring to paragraph-16 of the claim petition filed by the petitioner herein before the competent authority under Section 64 of the Act and submitted that the claim made -4- NC: 2025:KHC:50187 WP No. 30566 of 2011 HC-KAR by the petitioner is barred by limitation and therefore, sought for dismissal of the petition.
5. Sri. Mahantesh Shettar, learned Additional Government Advocate sought to justify the action of the respondent No.3.
6. In the light of the submissions made by the learned counsel appearing for the parties and taking into consideration the factual aspects on record, paragraph No.16 of the dispute filed by the petitioner under Section 64 of the Act reads as under:
"16. The cause of action for the dispute arose on 06-12-1999 when the opponent executed stamped receipt and on the day of all the subsequent installments fell due, till termination of the group on 05-09-2002, on 21-04-2006 when the last payment was made. Hence this dispute is well within the jurisdiction of this Hon'ble Court."
(Emphasis supplied by me)
7. Taking into consideration the fact that as alleged by the petitioner the cause of action arose on 06.12.1999 -5- NC: 2025:KHC:50187 WP No. 30566 of 2011 HC-KAR and the termination of the group was on 05.09.2002 as well as the last payment was made on 21.04.2006 and therefore, as the proceedings have been initiated before the competent authority on 26.12.2008, I am of the view that, the claim made by the petitioner is beyond 3 years as specified under Section 65 of the Act. In this regard, it is relevant to extract the declaration of law made by the Division Bench of the High Court of Judicature at Madras in W.A.No.1927/2001 dated 03.08.2010, wherein paragraph No.12 reads as under:
12. Section 65(1)(b) squarely covers the dispute between a foreman and a subscriber stipulating three years period from the date on which the act or omission with reference to which the dispute arose took place. In the instant case, the default in payment of 27th instalment was on 10.12.1988 and the claim filed on 24.8.1992 was beyond the period of three years. Placing reliance upon Shriram Chits and Investments (P) Ltd. v. M. Krishnan, 1999 (1) CTC 238, the learned Counsel for the Appellant contended that the First Bench of this Court had taken the view that the limitation period has to be computed from the date of last instalment payable -6- NC: 2025:KHC:50187 WP No. 30566 of 2011 HC-KAR and not only on the defaulted instalment. It was further submitted that the Limitation has to be reckoned from 40th instalment/termination of chit i.e., on 10.9.1990 and not from 10.12.1988 on which date the subscriber has defaulted 27th instalment. In support of the contention, reliance was placed upon paragraph No. 21, which reads as under:
"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."
8. In that view of the matter, taking into consideration the declaration of law referred to above, I -7- NC: 2025:KHC:50187 WP No. 30566 of 2011 HC-KAR am of the opinion that, the claim made by the petitioner is not maintainable as it is barred by limitation and therefore no interference is called for in this writ petition.
9. Accordingly, the writ petition is dismissed.
Sd/-
(E.S.INDIRESH) JUDGE JT/-
CT: JL