1. By an order of the Hon'ble the Chief Justice dated 5-2-1988 the matter was referred to the Division Bench. It reads as follows:
"Prima facie there appears to be conflict between the two judgments in (1) ILR 1984 (2) Karnataka 914; and (2) Unreported decision in CRP 3750/1981 decided on 16-2-1984 : (AIR 1986 Kant 211). Admitted. Referred to be decided by a Division Bench. "

2. In Economic Chit Funds Private Limited v. P. S. Krishnoji Rao, C. R. P. 3750/1981 D/-16-2-1984 : AIR 1986 Kant 211. Nesargi, J. (as he then was) had an occasion to consider as to whether the Chit transactions is a transaction of creditor and debtor and whether the decretal amount does not amount to 'debt' within the meaning of the word 'debt' as defined in S. 2(5) of the Karnataka Debt Relief Act, 1980 ('Act' for short). The learned Judge, relying on the decision of the Full Bench of Kerala High Court in P. K. Achuthan v. State Bank of Travancore, AIR 1975 Kerala 47 has held that chit fund transaction is also a debt and brings about the relationship of a creditor and debtor and as such the person who takes advance from the fund was a debtor within the meaning of the Act.

3. In Shivakumar v. M/s. Sudarshan T