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Documents citing Narayana Prabhu And Ors. vs Janardhana Mallan And Ors. on 10 July, 1973

Margadarsi Chit Fund Private Ltd. vs Jogi Krishna Murthy on 19 September, 1980

10. I am inclined to agree with Sri P. Raja Rao, the learned counsel for the petitioner, that the amount due from a subscriber to a stake-holder or a foreman, as the case may be, in respect of a chit fund transaction, cannot be called a "debt" as defined by the Act. The expression " debt" has been denned by the Act as including " any liability owing to a creditor in cash or in kind......" Now, the expression " creditor" is defined in Clause (h) to mean "a person from or in respect of whom the debtor has borrowed or incurred a debt......" The expression "debtor" is defined in Clause (j) to mean " an agricultural labourer, a rural artisan or a small farmer, who has borrowed or incurred any debt before the commencement of this Act". The definition of the word " debt" is an inclusive one. The object, therefore, was to expand its meaning and field, but, certainly, the expression does not lose its original and natural meaning. In other words, there must be, broadly speaking, the relationship of creditor and debtor. Now, can it be said that in the case of a chit fund transaction, the relationship between the stake-holder/foreman and the subscriber is that of a creditor and debtor ? In my opinion, it is not. The essential nature of a chit fund transaction has already been adverted to by me with reference to the decisions in Dhoosa Narasimloo v. Yalala Rajanna [1958] 2 An WR 5, and Narayana Prabhu v. Janardhana Mallan, , and I have also pointed out that the Andhra Pradesh Chit Funds Act does not alter or change the essential nature of the transaction. The stake-holder/foreman merely organises the transaction. The money lent is not his money. It is really an organisation run on a co-operative basis for the benefit of subscribers, and the foreman is only an organiser collecting his remuneration in the shape of commission.
Andhra HC (Pre-Telangana) Cites 13 - Cited by 4 - Full Document

V. Venkatamuniyappa vs M/S. Sudarshan Trading Co. Ltd. And ... on 11 April, 1991

14. From the chit fund, subscribed by subscribers, a subscriber could take the fund amount by mutal understanding of the subscribers on the date of 'Kuri' or on auction date, it is a sort of mutual benefit scheme. Subscriber also is a giver as well as a taker and the foreman acts for and on behalf of all subscribers including the taking subscriber. Therefore, the transaction cannot be considered as loan. It does not partake the character of a 'debt' advanced by a money lender to a loan taker. Function of foreman or stake holder by whatever name he is called, in the chit fund scheme is only to organise chit fund transaction. The money taken in the chit held by the subscriber is not the foreman's money. The relationship that exists between the foreman and the subscriber is not of a creditor and debtor. The decision of Kulkarni, J. in Sudarshan Chit Fund was rendered following the decision of the High Court of Kerala in in Narayan Prabhu v. Janardhana Mallan; and of this Court reported in (1982) 2 Kar LJ 88 Navajeevan Enterprises Mysore (P) Ltd., v. T. N. Ramalingaiah; (1972) 2 Kar LJ 476 Ganesh Rao Bisto Desai v. Nagesh Bisto and (1980) 1 Kar LJ 345. He held that the chit fund transaction does not partake the character of debt as defined in Sec. 3(b) of the Act, and said that the definition could be attracted if at the time the amount was given it was given only as a debt.
Karnataka High Court Cites 12 - Cited by 0 - Full Document

C.A. Venkatesh vs Azad Commercial Chit Fund on 23 August, 1988

25. The decision in C. R. P. No 3750 of 1981 (Economic Chit Funds P. Ltd. v. P. S. Krishnoji [1985] 58 Comp Cas 838 (Kar) proceeds on the premises that the principles enunciated in Narayana Prabhu's case, , extracted above, have been overruled by the Kerala High Court in Achuthan's case, [FB] when, in fact, the decision of the same court in K. S. Raghavan v. Iswara Pattar Gramom viz., that such a clause was penal in nature, was overruled and the enunciation in Narayana Prabhu's case, , remained unaltered.
Karnataka High Court Cites 19 - Cited by 1 - Full Document

V. Venkatamuniyappa vs Sudarshan Trading Co. Ltd. And Others on 11 April, 1991

The function of the foreman or stake-holder by whatever name he is called, in the chit fund scheme, is only to organise the chit fund transactions. The money taken in the chit held by the subscriber is not the foreman's money. The relationship that exist between the foreman and the subscriber is not of a creditor and debtor. The decision of Kulkarni J. in Sudarshan Chit Fund [1984] ILR 2 Kar 914 was rendered following the decision of the High Court of Kerala in Narayana Prabhu v. Janardhana Mallan, and of this court in Navjeevan Enterprises (Mysore) Pvt. Ltd. v. T. N. Ramalingaiah [1982] 2 Kar LJ 88 : [1985] 58 Comp Cas 217; Ganesh Rao Bisto Desai v. Nagesh Bisto [1977] 2 Kar LJ 476 and Rame Gowda v. Sarojamma [1980] 1 Kar LJ 345. He held that the chit fund transactions do not partake of the character of debt as defined in section 3(b) of the Act, and said that the definition could be attracted if, at the time the amount was given, it was given only as a debt.
Karnataka High Court Cites 13 - Cited by 0 - Full Document

Nellai Metal Rolling Mills (P) Ltd., ... vs The Southern India Central Benefit Fund ... on 19 April, 1985

13. The second pronouncement relied on by the learned Counsel for the defendant company is the one reported in Narayana Prabhu v. Janardhana Mallan A.F.R 1974 Kerala 108. There, the question arose this way. A security bond was executed by a Hindu father for payment of all future kurichit subscriptions. There was no default of the subscriptions on the relevant date. While so, he effected an alienation of the properties, directing discharge of the future subscriptions. The question arose as to whether the transaction can be supported on the ground of antecedent debt of the father. The incidence of a kurichit transaction was traced by Subramanian Poti, J. as he then was, who constituted the Bench along with Bhaskaran, J. as he then was, and it was held that a security bond executed for the payment of future instalments cannot be said to be for an antecedent debt. Here again, I do not feel obliged to adopt the reasoning of the Bench of the Kerala High Court, because the question arose in a different context and to solve a different controversy. The Bench of the Kerala High Court was not concerned with the question as to the powers of the company to borrow or riase money as such. The present question never arose before the Bench of the Kerala High Court. The present question is more concerned with the power of the company to borrow or raise money and as to whether entering into a chit transaction could be a means for borrowing or raising money.
Madras High Court Cites 15 - Cited by 5 - Full Document
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