The court emphasized that the failure of the Arbitrator to properly communicate the order to the parties should be considered in determining the timeliness of filing an appeal.

1. The matter arises under the Chit Funds Act, 1982. The petitioners have come forward to challenge the order dated 02.07.2010 passed by the first respondent and seeks to set aside the same, with a further direction to take the petitioners appeal filed against the order dated 08.04.2009 passed by the second respondent Arbitrator in ARC.No.409 of 2006 and dispose of the same on merits. By the impugned order, the first respondent dismissed the appeal filed by the petitioners stating that since the appeal was filed with a delay of four months and 12 days, it was barred by limitation under Section 70 of the Chit Funds Act, 1982.

2. When the writ petition came up on 28.09.2010, private notice was directed to be issued to the respondents. Pending the writ petition, an interim stay was granted. Though the respondents 1 to 3 were served, in respect of the fourth respondent, the service was not completed and hence, a paper publication was ordered by this Court on 12.04.2011. Accordingly, the same was effected.

3. The petitioners are Partners of M/s.Bharathi Finance and Investments. An arbitration proceeding was initiated by the third respondent Chit Fund before the second respondent Arbitrator. The Arbitrator, by order dated 08.04.2009 in ARC.No.409 of 2006, imposed liability on the petitioners a sum of Rs.3,09,150/- as principal amount and the interest of Rs.1,11,294/- and thus, passed award for a sum of Rs.4,20,444/-. Aggrieved by the same, the petitioners preferred an appeal under Section 70 of the Chit Funds Act. In that provision, an appeal has been provided against any order passed by the Registrar or the nominee to the State Government and that the appeal should be filed within two months from the date of the order or award.

4. It is the case of the petitioners that they have filed appeal along with condonation of delay application, which was to condone the delay of 108 days in filing the appeal. It was stated by them that ARC proceedings were initiated and after filing counter, the Arbitrator heard the arguments on 18.12.2006 and it was only after two years, the impugned order came to be passed. The counsel for the petitioners was following the case and the matter was being adjourned from time to time. On 29.08.2008 when the counsel went to the Arbitrator, the case was not called and the staff of the office informed that they had misplaced the records and therefore, further date of hearing will be informed to them later. The counsel for the petitioners approached the Arbitrator's office several times to note down the date, for which, the staff of the Arbitrator's office informed him that they were still in search of the records. It was only on 08.06.2009, the counsel was informed that order had been passed by the Arbitrator on 08.04.2009 itself. Therefore, a copy application was filed on 09.06.2009 and the order was received on 03.09.2009. Since the petitioners were not in station from 03.09.2009 to 01.10.2009, they could not inform their counsel to file the appeal. But however, the first respondent, by referring to Section 70 of the Chit Funds Act, refused to condone the delay.

5. The learned counsel for the third respondent relied upon the unreported judgment of this Court in A.K.VELAYUTHAM VS. THE GOVERNMENT OF TAMIL NADU REPRESENTED BY ITS SECRETARY, COMMERCIAL TAXES AND REGISTRATION DEPARTMENT AND OTHERS in W.P.Nos.17943 and 17944 of 2009 (decided on 03.09.2009) and stated that the order rejecting the appeal, by refusing to condone the delay, cannot be interfered with.

6. In the present case, it is not as if the reason adduced by the petitioner was rejected, but only the limitation found under Section 70 of the Chit Funds Act was rejected. Section 70 of the Chit Funds Act uses a term that an appeal should be filed within two months from the date of the order or award to the State Government. If an order is written by an Arbitrator and never communicated to the parties, this easily the right of the appeal can be nu