The High Court of Karnataka has said that it cannot act as an appellate authority over the orders passed by an appellate officer under Section 70 of the Chit Funds Act, 1972, particularly in the absence of allegations like violation of fundamental rights, principle of natural justice and erroneous application of law.
“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 [High Court] cannot delve into disputed question of facts,” the court said.
Justice M.I. Arun passed the order while dismissing a 13-year-old petition filed by Margadarsi Chits (K) Pvt. Ltd., which had questioned an order passed by Joint Registrar of Chits, Raichur, way back in June 2011.
The Registrar of Chits, Ballari, had passed an order under Section 69 of the Act holding that one H. Srinivasa Reddy is liable to pay ₹1.74 lakh to the petitioner-firm with costs and interest. However, the Joint Registrar of Chits, Raichur, had allowed the appeal under Section 70 and held that Mr. Reddy is not liable to pay any amount to the petitioner-firm as per the Act, and the petitioner-firm had questioned this decision before the High Court.
Noticing that the Act provides for only one appeal under Section 70 against the order passed under Section 69, the High Court said that the petitioner-firm had not alleged that its fundamental rights were violated or principle of natural justice was not followed by the authorities or the orders passed were without the jurisdiction or erroneous interpretation of the law for the High Court to interfere interfere under the Article 226 of the Constitution.
As the petitioner-firm had made an allegation that the facts of the case were not properly appreciated by the Joint Registrar of Chits, the court said that it cannot exercise power under the Article 226 to examine this issue.
