Jurisdiction for winding up a chit fund organization is determined by the proviso to Section 38 of the Madras Chit Funds Act, 1961, and the court may decide a matter on merits without remanding it, as per Order XLI Rule 24 CPC and the Supreme Court judgment in Lisamma Antony's case.

VALMIKI J. MEHTA, J.

CM No.27569/2016 (Exemption)

1. Exemption allowed subject to just exceptions. CM stands disposed of.

CM No. 27570/2016 (Delay of 7 days in re-filing)

2. For the reasons stated in the application delay in re-filing is condoned. CM stands disposed of.

CM No.27568/2016 (delay of 858 days in filing the appeal) & RSA No.201/2016

3. This Regular Second Appeal filed under Section 100 of the Code of Civil Procedure, 1908 (CPC) impugns the concurrent judgments of the courts below whereby the suit filed by the plaintiff, a subscriber of a chit of a chit fund company, has been dismissed as against the Registrar of Chit Funds/defendant no.2/respondent no.2, and against which defendant no.2 directions were sought for winding up the two chits bearing no. PB/VIII and PS/XVII of the Chit Fund Company which was the defendant no.1 in the suit/respondent no.1 herein.

4. This is an application in this RSA for condonation of delay of 858 days in filing of this second appeal. The only facts averred for seeking for condonation of delay are contained in paras 3 and 4 of the application and which paras read as under:-

“3. That the file of the case was misplaced and could not be traced despite efforts of the office of the counsel for the applicant/appellant and now the file has been traced out. The file was tagged with a decided file.

4. That there is delay of 858 days in filing the said appeal due to the reason mentioned above which is bona-fide and neither deliberate nor intentional. It is submitted that if condonation of delay in filing of accompanying appeal is not allowed the appellant/applicant shall suffer irreparable loss and deprived of his legal right but the respondents shall not be prejudiced.”

5. In my opinion, totally vague averments as contained in paras 3 and 4 of the application for condonation of delay reproduced above do not constitute a sufficient cause for condonation of delay.

6. Independently of the fact that delay should not be condoned, I have even examined the merits of the matter and it is found that though not so held by the courts below, it is seen that proviso to Section 38 of the Madras Chit Funds Act, 1961 as applicable to Delhi provides that where a winding up has to be ordered of a chit fund organization which is a company then such winding up of such chit fund company cannot be by a civil court but can only be by the concerned company court having jurisdiction. The provision of Section 38 of the Act reads as under:-

“Section 38- When chit may be wound up- A chit may be wound up by the District Court:

(a) If the chit has terminated under clause (c) of Section 31, or

(b) If the foreman fails to give the security specified in section 12 or if he commits any such act in respect thereto as are calculated to impair materially the nature of the security or the value thereof, or

(c) If he fails to deposit the chit moneys in accordance with the provisions of this Act, or

(d) If it is provided to the satisfaction of the court that the foreman is unable to pay the amount due to the subscribers, or

(e) If execution other process issued on a decree or order of any court in favour any subscriber in respect of amount due to him from the chit is returned unsatisfied in whole or in part; or

(f) If it is proved that these has been fraud or collusion on the part of the foreman in the matter of taking securities from prizes subscribers, or

(g) If the foreman has appropriated the prize amount in his capacity as a subscriber without furnishing sufficient security for future subscriptions, or

(h) It is just and equitable that the chit should be wound up.

Explanation: For the purposes of clause (d) in determining whether the foreman reasonable to pay the amounts due to the subscribers, the court shall take into account contingent and prospective liabilities in respect of the chit:

Provided that a chit conducted by a company within the meaning of the Companies Act, 1956 (Central Act 1 of 1956), shall be would up only by the court hav