ORDER.-The only question in this civil miscellaneous second appeal is whether the decree debt, which arose under a chit transaction is a debt as defined under section 2 (2) of the Tamil Nadu Act XXXVIII of 1972. The judgment-debtor filed an application under section 16 of the said Act for stay of the execution proceedings. The Courts below, holding that the decree amount is not a debt as defined in the abovesaid provision, dismissed the petition. The Courts below relied upon a decision of Suryamurthy, J. in Arunagiri Chit Fund v. Md. Hanafi1for coming to the above conclusion. That was a case under Act XV of 1976 and Act XVI of 1976. The definition of the word ‘debt’ in Act XV of 1976, is not similar to that in Act XXXVIII of 1972. But, the debt in Act XVI of 1976 is almost similar to the definition contained in Act XXXVIII of 1972.

2. The definition in Act XXXVIII of 1972 is as follows:-

“2 (2), ‘debt’ means any liability in cash or kind, whether secured or unsecured, due from a debtor whether payable under a decree or order of a civil or revenue Court or otherwise, but does not include rent as defined in clause (9).”

In Act XVI of 1976 also the definition is more or less the same.

3. Suryamurthy, J., referred to a Bench decision of this Court in P. N. Raghavan v. Arumugham2and held that the liability arising out of a chit transaction is not a debt as defined in Acts XV and XVI of 1976. The Bench decision referred to by the learned Judge only holds that a chit fund transaction is different from a loan transaction and that it is not a case of borrowing. Even this view of the said Bench has been dissented from by another Bench of this Court in Sri Visalam Chit Funds Ltd. v Srinivasa Mudaliar3. Even otherwise, as I said, in the earlier Bench decision, the question was whether under a chit transaction there was a borrowing or not.

4. As far as the definition of the word ‘debt’ in Act XXXVIII of 1972 (which is almost similar to the definition in Act XVI of 1976), one is concerned whether there is a liability in cash or kind or not. If there is a liability, whether it is due to borrowing or otherwise, it would be a debt as defined in section 2 (2) of Act XXXVIII of 1972, unless the liability is rent as defined in clause (9) thereof. The learned Judge has not considered whether under a chit transaction where the successful bidder executed a promissory note for due payment of the future instalments whether there is not a liability — as contemplated in the definition. The Bench decision relied on by the learned Judge does not say anywhere that in a chit transaction there is no liability as contemplated under section 2 (2) of Act XXXVIII of 1972 or any corresponding provision. Further, as already seen, the later Bench decision reported in Sri Visalam Chit Funds Ltd. v. Srinivasa Mudaliar1, has disapproved the view of the earlier Bench even regarding the point that there is no borrowing in a chit transaction.

5. The clear language of the definition of the word ‘debt’ in section 2 (2) of Act XXXVIII of 1972 cannot be overlooked. It is needless to stress that if there is any liability in cash or kind due from a debtor whether it is payable under a decree or otherwise, it is a debt unless the liability is rent as defined in clause (9) thereof. In the present case, the decree is on an equitable mortgage, and I fail to see how it can be said that it is not a debt as per the above definition, merely because the liability arose on, his being the successful bidder in the auction of a chit and he executed the document regarding future instalments due by him.

6. The first appellate Court has wrongly assumed that the Tamil Nadu Debt Relief Laws (Amendment) Act, 1976 (XLVI of 1976) has amended section 2 (2) of Act XXXVIII of 1972 also. The said amending Act amended the definition of the word ‘debt’ contained in Act XV of 1976 and that in Act XVI of 1976. By such amendment, any liability incurred or arising under any chit, the by-laws of which have been re

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