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1982 Supreme(AP) 481
Andhra Pradesh High Court
Judges : M.JAGANADHA RAO
Mohd.Ahmad Ali - Appellant
Versus
Annapoorneswari Chits and Trading P.Ltd. - Respondent
C.R.P. No. 3368/82
Decided On : 12-03-82
Advocates Appeared :
Mr. M. Rama Rao, Mr. Y. Vasudeva Rao
Headnote:AP CHIT FUNDS ACT, 1971, Secs 2(15) and The Prime Chits and Money circulation Scheme (Banning) Act of 1971 Secs 2(a) Expl And 3 and Civil Procedure Code, Order 7, Rule 11(d) Suit filed by Foreman General Power of Attorney of a Chit company for recovery of chit money from a subscriber-Maintainable-Suit is not barred under the Prime Chits Banning Act when the Chit is conventional chit
HELD: In this case, the company itself is the foreman under the byelaws and as a juristic person it was entitled to have a General Power of attorney holder who could represent it in courts by way of filing suits The execution of a General Power of attorney only amounts to 2 delegation of the power and creates an agency but it does not amount to a transfer of the rights of a foreman in favour of a third party for which a conveyance or-transfer of the said right is contemplated, Therefore the plaint has been validly signed by the General Power of Attorney holder of the company which is itself a foreman as per the byelaws and the plaint is not liable to be rejected on this ground
A reading of the Explanation to Sec 2(a) of the Central Act and section 2 (15) of the A P Act would show that the word prize amount , used in conventional chits is not the same thing as the prizes or gifts awarded under schemes relating to prize chit Therefore the fact that the plaint discloses that the defendant was entitled to a prize amount under the conventional chit, which is the subject matter of the chit, does not amount to an admission that the scheme is one for which prizes or gifts are awarded as in a Prize chit Reading the plaint in this case the allegations do not show that the transaction was one which falls under Sec 2(e) of the Central Act because no prize or gifts were stipulated under the said scheme by the Plaintiff Company
( 1 ) THIS revision raises a question relating to the Prize Chits and Money Circulation Schemes (Banning) Act of 1978 (Central Act 43 of 1978) and the A. P. Chit Funds Act, 1971 (Act 9 of 1971 ). The petitioner is the defendant in the suit O. S. No. 887 of 1981, field by the respondent, M/s. Annapoorneswari Chits and Trading P. Ltd. , for recovery of a sum of Rs. 21,411. 32 with interest. The petitioner filed I. A. No. 994 of 1982 in the lower court under O. 7, r. 11 read with s. 151, CPC. In the said application, the petitioner contended that the plaint should be rejected on two grounds. He contended that, firstly, the plaint was not signed by the proper person as it is signed by one E. A. Rahim claiming to be the general power of attorney holder. The said E. A. Rahim is the regional manager of the respondent company. It is contended that the said Rahim is not authorised to act as a foreman of the respondent company. Under s. 25 of the A. P. Chit Funds Act, 1971, only a foreman is entitled to demand and file the suit. The second ground urged by the petitioner in the said I. A. was that the prize chits and money circulation schemes have been banned by the Central Act, namely, the Prize Chits and Money Circulation Schemes (Banning) Act of 1978, with effect from 12/12/1978, unless extension of time for winding-up the existing scheme is obtained by the respondent, and as no such extension was obtained in this case, the suit is barred. According to the allegations in the plaint, the suit transaction took place on 10/11/1978, and by then the Central Act had come into force. It is contended, therefore, that the suit chit is illegal and, therefore, the instalments due from the petitioner cannot be recovered. The suit itself is, therefore, barred on these two counts and the plaint should be rejected.
( 2 ) THE respondent-plaintiff field a counter in the lower court contending that according to bye-laws 1 and 2 of the bye-laws of the company, the respondent company itself is the foreman. On behalf of the company, Sri. E. A. Rahim has been authorised to file suits and conduct legal proceedings. It was also contended that the Central Act 43 of 1978 does not apply to the suit transaction as it is a conventional chit.
( 3 ) THE lower court framed two points for consideration, viz. , firstly, whether the suit is filed by a proper person and if not whether the plaint is liable to be rejected and, secondly, whether the suit transaction is hit by the Central Act 43 of 1978. On both these points, the court below held against the petitioner-defendant and dismissed the I. A. It is against the said order that the defendant has preferred this revision.
( 4 ) IN this revision, the said two contentions have once again been reiterated by Sri M. Ramarao, the learned counsel for the petitioner. It is contended by him that Mr. Rahim could not represent the respondent company for the purpose of signing in the plaint. It is also contended by him that the suit transaction amounts to a prize chit and that the suit is barred. He urges that on these two grounds the plaint is liable to be rejected under O. 7, r. 11 (d), CPC.
( 5 ) SO far as the first point is concerned, the bye-laws of the company show that the company itself is a foreman. Mr. Rahim is the regional manager in whose favour a general power of attorney was executed by the managing director of the company. The plaintiff has also filed a xerox copy of the general power of attorney and it is clear from the said document that Mr. Rahim is the regional manager authorised to file suits, sing and verify the plaints. Section 25 of the A. P. Chit Funds Act, 1971, enables a foreman to demand future subscriptions by written notice and also file suits in that regard. The "foremen" is defined in s. 2 (10) as a person who under the chit agreement is responsible for the conduct of the chit and includes any other person discharging the functions of the foreman under s. 30. It is, therefore, cle
