Subramonian Poti, Ag. C. J. -

In this reference we are called upon to answer the question:

"A prized subscriber in a chitty receives the prize amount executing a security bond to secure payment of future subscriptions which he is bound to pay under the terms of the chitty variola. The payment of future subscriptions are not defaulted. Nevertheless can it be said that a debt due to the foreman arises by reason of the receipt of the prize amount from the foreman on the execution of the security bond for securing future subscriptions?"

This question was referred to a Full Bench and when the matter came up before the Full Bench the correctness of Full Bench decision in Achuthan v. State Bank of Travancore, Calicut,1974 KLT. 806 were canvassed in the case and that is how the matter is now before larger bench of this Court.

2. The background of the reference may be stated in brief. The question referred arises in the Second Appeal filed by the plaintiffs in a suit for setting aside a sales deed executed by their father and elder brother in favour of the first defendant on 2-4-1955. The executants are dead. The plaintiffs sued for partition of 6/8 shares in the properties and also sought setting aside of the sale deed on the ground that it was not supported by consideration and necessity and the debts recited in the deed were not antecedent debts of the father. One of the debts so recited was the obligation to pay future subscriptions by a prized subscriber who had received the prize money and had executed a chitty security bond. Whether the amount of the future instalments could be said to constitute a debt before the instalments bad fallen due is the controversy in the Second Appeal. The decision on the question whether the debt in controversy is an antecedent debt or not will go a long way in resolving the question whether the major portion of the debts could be said to be antecedent debt so as to sustain the document.

3. When a prized subscriber in a chitty receives the prize money and executes a security bond to secure the payment of future subscriptions in accordance with the obligations under the contract embodied in the chitty variola, does the prized subscriber become a debtor to the foreman? A Full Bench of the Travancore High Court had in the decision in Sundaram filial Easwaramyorthiya Filial v. VallithayiNarayana Vadivu, XVI TLT.143 expressed the view that the obligation of the prized subscriber to pay future subscriptions arises under the contract embodied in the bitty variola and consequently the debt could arise only on the date the future instalment falls due and not on the date of the execution of the security bond. A Division Bench of the Kerala High Court expressed the same view in Varkey Thomas v. Travancore Forward Bank Ltd., 1962 KLT. 383. The matter again came up in this Court before a Division Bench in Narayana Prabhu v. Janardhana Mallan, AIR. 1974 Ker.108 when the Division Bench followed the earlier view after noticing the different views held on the subject by the High Court of Madras, all along, though in MarudaKonar v. Veerammal,MR.1936 Mad.985, Varadachariar J had struck a different note. The reference of the question now before us has been occasioned mainly because the Full Bench in Acbuthan's case (1974 KLT. 806) has not noticed the earlier Division Bench decisions of this Court and the earlier Full Bench decision of the Travancore High Court.

4. Chitty, referred to also as Kuri, is an ancient institution in the Malabar Coast. Over the years it has undergone considerable change. At one time it was intended for the benefit of toe foreman "who induced his friends and acquaintances to subscribe to the chitty, promising to pay his own subscription punctually, to collect subscriptions periodically from the subscribers and to pay all collections (save those made at the first instalment which he takes for himself) to such of the subscribers as may be determined by lot to be publicly drawn and to carry