- (1.)IN all these writ petitions a common ground arises for consideration and hence taken up together.
(2.)THE respective writ petitioners in these writ petitions are subscribers of chits with the first respondent, which is a chit company. According to the 1st respondent/chit company, amounts were due from the petitioners towards chit transaction. THE 1st respondent filed claim petition before the 2nd respondent, Registrar of Chits, Madras claiming certain amounts from the respective writ petitioners herein. As against the said claim, the writ petitioners herein claim set off and adjustment of amounts allegedly due from the foreman to the respective petitioners. THE amounts claimed to be set off were in relation to certain other transactions with reference to commission payable for distribution of films. THErefore, the writ petitioners sought for set off of the said amounts before the 2nd respondent. THE 2nd respondent agreed with the claim of the petitioners for set off and directed the adjustment of the amounts allegedly due to the petitioners. Aggrieved by the same, the 1st respondent filed appeal before the Government/3rd respondent. THE third respondent upheld the contentions of the 1st respondent and held that the claim for set off as made by the petitioner cannot be acceded to considering that the claim did not relate to the chit transactions. With the result, in respect of the three claim petitions which were filed by the 1st respondent, three separate orders were passed in the appeal by the Goverment/3rd respondent separately in each of the claim petitions. Hence, the above three writ petitions.
The only question which arises for consideration in these writ petitions is as to whether the amounts due between the parties not in respect of the chit transactions could be the subject matter of set off as provided under Rule 34 of Chit Funds Act.

Mr. N. K. Ramaswamy, learned counsel for the petitioner contends that both the Chit Funds Act, 1982 and the Rules made thereunder do not make any distinction between the money due on the chit transaction and other amounts due as between the parties to the chit transaction. The learned counsel would further refer to Sec. 25 of the Chit Funds Act dealing with the liability of the foreman to the subscribers. While sub-sec. 2 deals with the liability of the foreman to the subscribers in respect of obligations arising out of chit, sub-sec. 1 does not specifically make any such restricted meaning to the expression'liability'to the subscribers. On the other hand, sub-sec. (1) merely states that every foreman shall be liable to account to the subscribers for the amount due to them. Therefore, according to the learned counsel, Sec. 25 (1) entitles the subscribers to recover any amount due from the foreman and the claim need not to be restricted to only the amount due under the chit. He also referred to Rule 34 which permits set off. The rule merely states that when any money is due from the foreman to a subscriber and also from the subscriber to the foreman, the subscriber shall be allowed the benefit of a set off. The learned counsel also refers to Form XII of the said rule which states that any amount due to the foreman from any subscriber on account of chit shall be a first charge on the subscriptions paid by such subscriber.

On the basis of the aforesaid submissions, the attempt on the part of the learned counsel for petitioner is that in claiming set off there are no restrictions either under the Act or in the Rules only to the amount due under the Chit transactions. Therefore, the Registrar, according to the counsel for the petitioner has rightly allowed the claim of set off as made by the petitioner. In the impugned order, the Government has, without any justification set aside the order of the Registrar.

Per contra, Mr. R. Krishnaswamy, learned Senior counsel for the respondent submits that the scope of the Chit Funds Act, 1982 cannot extend to transactions outside the scope of the chit transactions. He referred to the definition of subscriber under Sec. 2 (r) which clearly defines the expression as including a person, who holds a fraction of ticket and also a transferee of a ticket or fraction thereof by assignment in writing or by operation of law. He also referred to Sec. 12 of the Act which specifically prohibits the Chit companies from transacting any other business without the specific permission of the State Government. In the light of such strict application of the provisions of the Act, the interpretation which was sought to be placed by the petitioner is not at all warranted. Reference is also made to Sec. 14 which imposes restriction on the utilisation of the funds. Therefore, the petitioner cannot be heard to say that money was due to him from the foreman/chit company in respect of other transactions. The learned counsel would further submit that if the contention of the petitioner is to be accepted, then it would amount to vesting powers on the Registrar to adjudicate claims beyond the scope of the Chits Act. The Cinema Company from whom the amounts are claimed by the petitioners is not the foreman. The powers and liabilities of the foreman would be restricted only to the chit transaction and therefore the contentions of the petitioner cannot be accepted.

(3.)I have considered the submissions of both sides and I am inclined to agree with the contentions raised on behalf of the 1st respondent and also to uphold the impugned orders passed by the Government.
The very scope and object of the Act 40 of 1982 is only to regulate the chit funds and for matters connected therewith. The very definition of the word'subscriber'will qualify only a person who holds a ticket or a transferee of ticket by assignment in writing or by operation of Law. This would mean that the liability of a subscriber could be restricted only to the amounts due under the ticket and nothing else. The word'ticket' under Sec. 2 (b) means the share of the subscriber in the chit. Therefore the rights and liabilities of the subscriber or foreman or the chit Company cannot go beyond the amounts referrable to chit transaction.

As contended by the learned senior counsel for the respondent if the Registrar could order set off in respect of other transactions, it would amount to vesting on him the jurisdiction of the Civil courts. Even under the Code of Civil Procedure, whenever the Civil Court is confronted with a claim for set off, such claim has to be tried as a regular suit. A claim for set off could be allowed only after the Court is convinced about the liability of the plaintiff in respect of set off claimed by the defendant. Certainly, the Registrar is not vested with such powers to deal with other disputes which do not fall within the scope of the chit transaction.