The case of the petitioner is as below:-
Pursuant to the order passed in the execution petition in E.P.No.896 of 2016 filed by the 3rd respondent, his salary was attached through the Garnishee. On verification of records, the petitioner came to know that the Execution Petition was filed pursuant to the award passed by the second respondent in the Arbitration Proceedings in A.R.C.No.1255 of 2013 dated 23/02/2015 filed by the third respondent against one Venkat and 4 others.
The petitioner being one of the guarantor of the chit transactions, he was arrayed as 2nd respondent / disputant.
2.Being an exparte award without proper notice, the petitioner filed appeal before the first respondent with delay of 525 days explaining the cause for delay. The first respondent, without proper application of mind, had dismissed the appeal citing delay. Hence, this writ petition is filed challenging the order passed by the first respondent dated 09/01/2017 2/10 http://www.judis.nic.in W.P.No.6218 of 2018 dismissing the appeal filed by the petitioner against the exparte award passed by the second respondent in ARC No. 1255/2013 dated 23/02/2015.
3.According to the petitioner, he was not a guarantor for the chit transaction of Venkat. He has not signed any document or pronote in favour of the 3rd respondent. No notice was served to him in the ARC proceedings.
His address shown in the ARC petition is wrong. The 3rd respondent by giving incomplete address has obtained exparte award against him. Instead of proceeding against the debtor who borrowed money from the 3rd respondent, wantonly proceeded against the guarantor in the execution proceedings by furnishing his official address and discreetly got attachment of his salary. Only after the attachment of his salary by the garnishee, he come to know about the award and obtained the certificate copy of the award to proceeded with the appeal. In the said process, there was delay of 525 days. The first respondent should have given an opportunity to defend his case by condoning the delay. Instead, he had dismissed the appeal on the ground of limitation against the principles of natural justice.
4.The said contention of the petitioner is refuted by the 3rd respondent. In the counter filed by the 3rd respondent it is stated that, 3/10 http://www.judis.nic.in W.P.No.6218 of 2018 “8.1.It is respectfully submitted that Mr.Venkat, son of Late P.Subramanian, Chennai – 600 018 joined as a subscriber with the 3rd respondent herein in Chit Group NO.TT005TDR, Ticket No.2, registered as Chit No.598/2011 with the 2nd respondent herein. The value of the chit is Rs.3,00,000/-. The monthly subscription is Rs.10,000/- and the period of chit is 30 months. In the 3rd auction held on 22.05.2010, the said Venkat was a successful bidder and he received the prized money of Rs.2,10,000/-. Asa pre-requisite, the successful bidder has to execute a promissory note for payment of future subscriptions and to ensure the same, he had to give sufficient securities to the 3rd respondent. In this connection the chit subscriber offered 4 securities, which includes the writ petitioner also. The chit subscriber and his 4 surieties, including the writ petitioner, signed a promissory note dated 16.08.2011 assuring to pay the furture subscriptions viz., Rs.2,20,000/- and the judgment debtors 2 to 5 have executed guarantee letters besides executing other necessary documents.
8.2.The chit subscription was paid till 23rd monthly installment (in part). Consequent upon the 4/10 http://www.judis.nic.in W.P.No.6218 of 2018 default in payment of the chit subscription, the 3 rd respondent issued notice under Section 33(1) of Tamil Nadu Chit Funds Act calling upon the defaulting prized prescriber and his sureties to settle the entire arrears of future subcriptions forthwith. In spite of such notice, the writ petitioner and others did not pay the arrears of subscription.
8.3.Hence, the 3rd respondent iniated arbitration proceedings under Section 64 of the Tamil Nadu Chit Funds Act against the defaulting prized subscriber and his sureties. As stated above, since the respondents in the arbitration proceedings have not chosen to contest the case, being satisfies with the documentary proof available with the 2nd respondent viz., the chit arbitrator, the Chit Arbitrator passed an award dated 23.02.2015.
Assistant City Civil Court, Chennai to attach the salaryof the writ petitioner i.e, Judgement Debtor No.2 and E.P.No.898/2016 was filed for attachment and sale of the movables belonging to the judgment debtor Nos.1,4 and 5. As the Judgemebt Debtor No.1 had vacated, the said E.P., was dismissed on 30.08.2018 as against the Judgement Debtor 1 and 5/10 http://www.judis.nic.in W.P.No.6218 of 2018 the E.P.is pending as against the other two Judgement Debtors and stands posted to 08.11.2018. The allegation that the 3rd respondent filed another E.P.No.3128 of 2013 is not correct and hence denied. This respondent has not filed E.P.No.3128 of 2013.”
5.The case of the petitioner is that the appeal preferred by him on the ground that no proper notice was served to him. The address for service as shown in the ARC proceedings is the incomplete address of the petitioner.
Hence, the notice was returned as “left” or “ Unknown”. So, the exparte award has to be set aside and he must be given an opportunity to defend his case.
6.Per contra, the 3rd respondent would state that the notice was sent to the address as furnished by the petitioner while signing the guarantee document. While executing documents, he has furnished improper address.
Later, the petitioner cannot deny the execution and take advantage of his own mistake. Before passing the award, substituted service by paper publication of the notice in one issued of “Malai Sudar“ was effected and it is a sufficient service as per law. In the appeal preferred by the petitioner with delay of 525 days, the above said submission of the 3 rd respondent was accepted by the first respondent, resulting in passing the impugned order.
http://www.judis.nic.in W.P.No.6218 of 2018
7.The petitioner claims that he is not the principal borrower from the 3rd respondent. He stood as Guarantor for the principal and for the default of the principal, the petitioner and other 3 guarantors along with the principal were proceeded before the arbitrator (2nd respondent). He futher claims that he did not execute any documents more particularly pro-note.
8.This Court, on scrutiny of documents submitted by the 3rd respondent find that the said contention is not true. The photo copy of the petitioner’s identity card, the Register pertaining to the chit transaction in which the petitioner has provided details about him and signed, the pronote executed by the petitioner and four others and the agreement of guarantee dated 16/08/2011 indicates that in the chit register, the petitioner has furnished his residential address as No.14, Turnbuls Road, Nandanam, Chennai and affixed his signature. The Arbitration notice has been sent to the said address only. The petitioner now in the affidavit states that he resides in the said address at ’Y’ Block, Turnbulls Road, Nandanam, Chennai. Since, in the notice, the block not mentioned, it was returned 'unserved'. If that is so, it is only due to the fault of the petitioner. He should have given his full and proper address while signing the guarantee deed and other documents.
http://www.judis.nic.in W.P.No.6218 of 2018
9.Further, the petitioner states that he did not execute a pronote. But, there is pronote signed by the petitioner along with others in favour of the 3rd respondent. Hence, he was not a stranger to the chit transaction.
10.The first respondent has dismissed the appeal of the petitioner only after ascertaining from the records that the reasons assigned by the petitioner to condone delay are not genuine. For the reasons discussed above, this Court concurs the view of the first respondent.
11.The petitioner herein has not come with clean hands. He has pleaded falsely that he did not sign documents and he has nothing to do with the borrowing of S.Venkat. Whereas, the records shows something contrary to his averments on oath in the affidavit.
12.In the result, the writ petition is dismissed. No costs. Consequently, connected miscellaneous petition is closed.
21.11.2019 jbm Index: Yes/No Speaking order/non speaking order 8/10 http://www.judis.nic.in W.P.No.6218 of 2018 To
1.The State of Tamil Nadu, The Additional Chief Secretary to Government, Commercial and Registration Department, Fort St. George, Chennai – 600 009.
2.The Arbitrator of Chits, North and South Chennai, Chennai – 600 001.
3.Margadarsi Chits Private Limited, Adyar Sakthi Squire, No.24, Sardar Patel Road, Adyar, Chennai – 600 020.
http://www.judis.nic.in W.P.No.6218 of 2018 G.JAYACHANDRAN.J., jbm Pre Delivery Order made in W.P.No.6218 of 2018 21.11.2019 10/10 http://www.judis.nic.in