INDERMEET KAUR

1. This appeal is directed against the impugned judgment dated 12.10.2000 which had confirmed the finding of the Trial Judge dated 22.10.1990 whereby the award was made a Rule of Court.

2. The factual matrix of the case is as follows:

i. Smt.Shakuntala Devi had approached the plaintiff company for becoming a member of their chit fund. She was made a member subject to the condition of her producing two sureties i.e. defendant no.2 and defendant no.3. The advance amount required for membership was deposited by respondent no.1; instalments were to be paid by her. There was default; matter was referred to arbitration. The Sole Arbitrator pronounced the Award.

ii. Plaintiff M/s Madadgar Chit Fund Pvt. Ltd. filed an application under Section 14/17 of the Indian Arbitration Act 1940 for making the Award dated 16.2.1988 pronounced by Mr.I.S Bakshi, the Sole Arbitrator as a Rule of the Court. Objections to the said award were filed by the respondents. They were rejected. The Award was made a Rule of Court on 22.10.1990.

3. On 12.10.2000 the first Appellate Court confirmed this finding.

4. This is a second appeal. After its admission, on 2.11.2004 the following substantial question of law was formulated. It reads as follows: “Whether the Civil Court had jurisdiction to entertain the petition under Section 14 and 17 of the Arbitration Act, 1940 in view of Section 64(3) of the Chit Fund Act, 1982?”

5. On behalf of the appellant, it has been urged that the Madras Chit Fund Act 1961 (same as Tamil Nadu Chit Fund Act, 1961) had stood repealed by the Central Legislation i.e. the Chit Fund Act 1982 and this is clear from a reading of Section 90 of the said Act. It is pointed out that this chit agreement had been entered into between the parties in May 1985 wherein the parties had agreed to be governed by the Madras Chit Fund Act 1961 but in the year 1985 the Madras Chit Fund Act was not in existence; the entire proceedings are nonest. It is further pointed out that under Section 64(3) of the Chit Funds Act 1982, the jurisdiction of the Civil Court is ousted; this Section starts with a non-obstante clause; the Award could not have been made into a Rule of Court by the Civil Judge.

6. None has appeared for the respondent.

7. The Chit Funds Act 1982 is a Central Legislation which has been enacted to provide for regulation of chits and for matters connected therewith. Under Section 90(1) the Tamil Nadu Act 1961 (as applicable in the State of Tamil Nadu and in the Union Territory of Chandigarh and Delhi) stood repealed; further the provisions of Section 6 of the General Clauses Act 1897 would apply to such a repeal. The Chit Fund Act 1982 was notified in the official gazette and was made applicable to the State of Tamil Nadu as also to the Union Territory of Delhi w.e.f. 13.4.1984. The date of the present transaction i.e. the chit agreement between the parties is of May 1985. Admittedly on that date the Madras Chit Fund Act, 1961 was not in operation; it was the Chit Funds Act 1982 which was the applicable provision.

8. It is, however, relevant to state that this argument had never been advanced before both the Courts below i.e. either in the objections which had been filed by the appellant in the proceedings where the Award was made a Rule of Court or before the first appeal Court. It was only for the first time in these proceedings that these objections have been raised. The points not urged before, before the two Courts below could not now be raised for the first time before this second appeal Court. In AIR 2000 SC 831 Union of India Vs. E.I.D. Parry (India) Ltd, Rule 1-A of the Goods Tariff Rules was struck down by the High Court on the ground that it was not in consonance with the provisions of Railways Act 1890; it was held ultra vires. This was in a second appeal. In this context the observations of the Supreme Court are relevant and read as follows:

“The High Court of its own proceeded to