The main legal point established is that the Kerala Chitties Act's jurisdiction is limited to chitties within the State of Kerala and does not extend to chit fund schemes started outside the state.

Headnote:
Kerala Chitties Act - Jurisdiction - The court held that the Kerala Chitties Act does not apply to chit fund schemes started outside the State of Kerala, specifically in Karnataka, by a branch office of the plaintiff-firm. The Act's jurisdiction is limited to chitties within the State of Kerala, and the court found that the plaintiff's chitties conducted in Bangalore were not governed by the Kerala Chitties Act.
Fact of the Case:

Plaintiff, a partnership firm, filed a suit to recover defaulted subscriptions in chitties conducted by its Bangalore branch office. Defendants contended that the transactions were illegal under the Kerala Chitties Act and the suit should be dismissed.
Finding of the Court:

The court overruled the defendants' contentions and decreed the suit in favor of the plaintiff-firm, stating that the Kerala Chitties Act did not apply to chit fund schemes started outside Kerala.
Issues: The main issue was whether the transactions conducted in Bangalore were governed by the Kerala Chitties Act, and if the plaintiff was entitled to recover the amount due from the defendants.
Ratio Decidendi: The court held that the Kerala Chitties Act's jurisdiction is limited to chitties within the State of Kerala and does not apply to chit fund schemes started outside the state, specifically in Karnataka.
Final Decision: The appeal was dismissed, and the court upheld the decree in favor of the plaintiff-firm, stating that the plaintiff was entitled to recover the amount due from the defendants.

Judgment :-

Pareed Pillay, Ag. CJ.

Defendants are the appellants. Plaintiff filed the suit 1br realisation of the amount due to the firm Muthoottu Mini Chilly Fund from the defendants (appellants) towards defaulted subscriptions in four chitties conducted by its Bangalore Branch Office in Karnataka State. Overruling the various contentions raised by the defendants, the suit was decreed for Rs. 3,93,000/- with interest at 12% per annum on the principal amount of Rs. 3,10,000/- from the dale of suit till realisation and costs from them.

2. Plaintiff is a partnership firm registered under the Indian Partnership Act. It has its branch office at Bangalore. Chitties are conducted by its Bangalore branch office. First defendant was a subscriber in four chitties conducted by the said branch office. Defendants I to 3 had jointly executed promissory notes in favour of the plaintiff-firm on 6-9-1979 for Rs. 70,000/- and on 12-4-1980 for Rs. 92,500/-. As defendants despite repeated demands and registered notice did not care to close the transaction, the suit was filed.

3. Defendants 1 to 3 in their joint written statement contended inter alia that the entire transaction being illegal as it has violated the provisions of the Kerala Chitties Act the plaintiff-firm is not entitled to recover any amount from them and as such the suit is liable to be dismissed.

4. The learned Sub Judge rejected the contentions of the defendants and decreed the suit in favour of the plaintiff-firm.

5. The sole contention taken by the appellants (defendants) before this Court is that the trial court ought to has found that the chit variolas and the promissory notes were executed at Kozhencherry, a place within the area of operation of the Kerala Chitties Act and as admittedly the plaint chitties were not registered under the Kerala Chitties Act, 1975 plaintiff-firm cannot legally recover any amount from them. Admittedly the chitties on the basis of which the suit was laid against the defendants were not registered under the kerala Chitties Act. Plaintiff's contention is that the Kerala Chitties Act cannot govern chit fund scheme started in Karnataka State by the branch office of .the plaintiff-firm at Bangalore. Plaintiff relied on several documents to show that the entire chit transaction took place in the State of Karnataka in support of its contention that Kerala Chitties Act cannot have any application so far as the plaintiffs chitties are concerned.

6. The Kerala Chitties Act, 1975 (Act 23 of 1975) has been enacted to define, amend and consolidate the law relating to chitties in the State of Kerala. Preamble of the Act makes it clear that it relates to chitties in the State of Kerala. S.1(2) states that the Act extends to the whole State of Kerala. As the transaction arose at the branch office of the plaintiff-firm at Bangalore the Kerala Chitties Act cannot have any application. To hold that the Head Office of the plaintiff firm functions within the State of Kerala and so the Kerala Chitties Act has necessarily to govern chitties started by its Bangalore Office is indeed difficult. This is particularly so in view of the documentary evidence in the case.

7. Managing Partner of the plaintiff-firm was examined as P. W.1. He stated that the chilly thalavariol as were executed by the first defendant in favour of the plaintiff-firm by accepting the fact that the chitties were conducted at the branch office of the firm at Bangalore. In Exts. A-2, A-6, A-10 and A-14 chitty thalavariolas it is specifically stated that the chit transaction has commenced from the Bangalore office. It is in evidence that after prizing the chitties by the first defendant and on receipt of the amount defendants 1 to 3 have jointly executed promissory notes and consent letters in favour of the branch office of the plaintiff-firm at Bangalore. Exts. A-3, A-4, A-5, A-8, A-9, A-11, A-12, A-13, A-15, A-16 and A-17 shed sufficient light with regard to the above matter. As there is cogent evidence th

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