TaxTMI 
TaxTMI 
1981 (3) TMI 266
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....out of an application filed by a defendant in a suit before the trial Court to try a particular issue as a preliminary issue. The application is filed in the following circumstances. The petitioner was sued on a liability which he had incurred in a chit transaction conducted by the plaintiff which is a banking company. The petitioner resisted the suit on various grounds, chief amongst which was th....
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....n "nothing in the Act would affect a debt or liability of an indebted person in respect of any sum due to any banking company to which the Banking Regulation Act 1949 applies." Learned counsel for the plaintiff-Bank urged that this provision saved the present suit from Act 16 of 1976. 3. I think the reliance placed by the learned counsel for the plaintiff-Bank on s. 3 (h) (B) of the Act....
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....s of S. 3 (h) (B) of the Act 16 of 1976 do not require that the liability should have arisen in a banking transaction properly so-called. All that it says is, that the debt sued on should be a liability in respect of any sum due to a banking Regulation Act 1949 must apply. It may be that this banking company has a separate department, that department is in addition to being governed by the Banking....
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....inition of "banking" in the banking Regulation Act, 1949 would leave no doubt in any one's mind that chit fund transaction indulged in by a banking company at any rate partakes the character of a banking activity. Indeed a chit fund or kuri reflects the genius of the southern peoples of this country. A chit combines in itself two economic urges commonly appearing in people, namely, t....