Issuance of notice of demand not required.

The Judgment was delivered by :

The unscussful plaintiff in O.S. No. 137 of 1988 on the file of the District Munsif, Tiruvarur is the appellant herein. The appellant is running a Chit company. The first respondent herein joined as a subscriber in the chit value of Rupees 10, 000/- and the monthly subscription is Rs. 1, 000/-. The first respondent paid the first instalment of Rs. 1, 000/- and became the successful prized subscriber. He executed a pronote for the balance of Rs. 9, 000/- on 29-4-1985. Thereafter till 11-9-1987 the first respondent paid a sum of Rs. 3, 600/- and failed to pay the subscription arrears subsequently. Hence the suit was laid for recovery of a sum of Rs. 5, 400/- with interest. The second respondent herein is the guarantor and as such he has been impleaded as defendant in the suit.

2. The respondent disputed the claim of the appellant on the ground that the suit is not maintainable in view of Section 4 of the Chit Funds Act, 1982. Further the appellant did not issue any notice demanding the money and hence the suit is liable to be dismissed.

3. The trial Court, after considering the evidence let in by both the parties, by its judgment and decree dated 14-10-1988 dismissed the suit, finding that the appellant failed to comply with the statutory provision of Section 33(1) of the Chit Funds Act which requires previous notice to the subscriber demanding the arrears . As the appellant failed to sent the notices, as contemplated under Section 33(1) of the said Act, the suit is liable to be dismissed. So far as the plea of the respondent that the suit is not maintainable pursuant to Section 64 of the Act is concerned, the trial Court held against the respondents.

4. Aggrieved by the said judgment and decree of the trial Court, the appellant herein filed an appeal A.S. 24/89 on the file of the District Court, East Thanjavur at Naga-ppattinam. The lower appellate Court concurred with the finding fo the trial Court that the appellant is not entitled to recover the amount, as they failed to issue the notice demanding the arrears, as contemplated under Section 33(1) of the Chit Funds Act, which is a condition precedent to file the suit, and ultimately dismissed the appeal by its judgment and decree dated 20-6-1989. Hence the present second appeal.

5. At the time of admission, the following substantial questions of law were formulated :

(1) Whether in a case filed for enforcement of the chit agreement and recovery of unpaid instalments by a prized subscriber after the termination of the chit , a notice under Section 33 is necessary?

(2) Is not finding of the Courts below that Section 33 of the Chit Funds Act would be applicable to the facts of the case is against the express provisions of Section 33 of the Chit Funds Act as the same provides only in respect of cases filed during the currency of the chit and not after all the future subscriptions had fallen due.

6. The only contention of the learned counsel for the appellant is that the period of subscription towards the chit was over by the time the suit was filed. The compliance of Section 33(1) of the said Act is necessary only if the period of subscription was not expired or the total chit period did not come to an end. In this case, the chit period being 10 months, the total period of subscription came to an end by Feb. or March, 1986. Hence the Courts below were not correct in dismissing the suit for non compliance of Section 33(1) of the Chit Funds Act.

7. None appeared for the respondents.

8. To appreciate the contention of the learned counsel for the appellant, it is worthwhile to look into the provision. Section 33 of the Chief Funds Act reads as follows :

"33. Foreman to demand furture subscriptions by written notice - (1) A foreman shall not be entitled to claim a consolidated payment from a defaulting prized subscriber under Section 32 unless he makes a demand to that effect in writing.

(2) Where a dispute is raised under this Act by a foreman for a con