Chit Funds Act: Appellate authority order under Section 70 is final, says HC

The Dharwad bench of the high court has ruled that any order passed by the appellate authority under Section 70 of Chit Funds Act, 1982, is final and there is no further scope for challenging such order.

Justice M I Arun said this while dismissing a petition filed by Margadarshi Chits (K) Pvt Limited, Ballari.

H Srinivas Reddy, a resident of Ballari city, had complained to the deputy registrar of Chits, Ballari, stating that Margadarshi Chits had not repaid the money he had invested.

On June 28, 2011, the joint registrar of chits, Raichur, passed an order directing the company to pay Srinivas Reddy Rs 1,74,325 with costs and interest.

Margadarshi Chits approached the high court after the appellate authority rejected its appeal.

The company argued that the appellate authority had not properly considered the appeal.

The court perused the provisions of the Chit Funds Act and noted that there is only one appeal provided in the statute against the order passed under Section 69 of the Act, which is to move the appellate authority as provided under
Section 70 and any order passed under Section 70 shall be final.

“The petitioner in the instant case is not alleging that any of its fundamental rights is violated nor it is able to show that any of the principle of natural justice has been violated by respondent no.7 (appellate authority), nor is it a case where the order impugned is passed without jurisdiction. Further, it is not the case of the petitioner
that the law has been erroneously interpreted by respondent no.7,” Justice M I Arun said.

The court said, “This court, in exercise of its power under Article 226 of the Constitution of India, cannot sit as an Appellate Authority over the order passed under Section 70 of the Act. It cannot delve into a disputed question of facts.”