MARGADARSI CHIT FUND PRIVET LIMITED Vs. JOGU KRISHNA MURTHI

JUDGEMENT

(1.) Margadarsi Chit Fund Private Ltd., the decree-holder (revision petitioner) herein,obtained a decree against the respondent for a sum of money due in respect of chit-fund transaction. In execution procee dings therespon dent filed E.A.No.596 of 1977 submitting that the decree debt has abated and extinguished by virtue of the provisions contained in the Andhra Pradesh Agricultural Indebtedness (Relief) Act, 1977, being Act VII of 1977. The decree holder submitted, on the basis of an unreported decision of the Madras High Court that the provisions of the Act do not apply to chit-fund transactions, since the amount due in respect of such a transaction is not a 'debt' as defined by the Act. The executing Court, however, agreed with the judgment-debtor and held that the decree debt has become extinguished and discharged by virtue of the said Act. The executing Court was of the opinion that the definition of the expression 'debt' in the Andhra Pradesh Act is wider than the definition contained in the Madras Act and, therefore, the decision of the Madras High Court has no application.

(2.) The question in this Civil Revision Petition is, whether the amount due in respect of a chit-fund transaction is a 'debt' and whether the Chit Fund Company and the subscriber can be called 'creditor' and 'debtor' respsctively as defined by the Act. In order to answer this question it is necessary to examine the provisions of the Act, as well as the provisions of the Andhra Pradesh Chit Funds Act, 1971. I will first refer to the provisions of the Andhra Pradesh Chit Funds Act VII of 1977. The expressions 'creditor', 'debt' and 'debtor' are defined in clauses (A), (i) and (j) in section 3. They read as follows: -

(3.) This Act has come into force on 29th December, 1976. Section 4 declares that on and from the commencement of the Act, every debt including interest if any owing to any creditor by an agricultural labourer, a rural artisan or a small farmer shall be deemed to be wholly discharged. All proceedings relating to such debt including execution proceedings, are declared to abate on such commencement.