Judgment : 1. The plaintiff chit funds represented by its partner is the appellant. The suit O.S.No. 31 of 1977 before the Subordinate Judge’s Court, Coimbatore, was filed by the appellant against the respondent for recovery of Rs. 5252.25 due in respect of a chit transaction alleging as follows: The respondent became a subscriber of a chit in the chit group ‘A’ of Rs. 10,500 for the duration of 700 days under by-law No. 73/71, his member ticket number being 58. The chit commenced on and from 25. 1971. The subscription was at the rate of Rs. 15 per day and the auction was once in ten days. The respondent became the successful bidder in the first auction held on 6. 1971. For the payment of future instalments and by way of collateral security, the respondent executed a promissory note on 6. 197 1 for Rs. 10,350 under Ex.A-1. As per the books of the appellant maintained regularly in the ordinary course of business, a sum of Rs. 3,675 a? on 11. 1973 remained due and payable by the respondent after giving credit to all payments made by the respondent, though irregularly. The chit terminated on 11. 1973. The respondent was liable to pay interest at the rate of 12% per annum as stipulated in the promissory note for 11. 1973. The transaction being a commercial transaction, the respondent was bound to pay interest at the contractual rate till realization. On 30.1.1973. The appellant issued a statutory notice to the respondent under Ex.A-2. The same was received by him on 31. 1973. He sent a cheque for Rs. 150 along with his letter dated 30.1.1973. The appellant encashed the same. The amount due towards principal and interest as on the date of suit was Rs. 5,2525. The appellant bona fide and good faith believed that the liability would not be a debt within the meaning of the moratorium enactments and since the respondent was on any property exceeding annual rental value of Rs. 2,400, the appellant was under the bona fide belief that the respondent was an indebted person. The appellant was advised on 112. 1976 that the liability under the chit transaction would not be a debt and it would be entitled to lay the suit. It was under bona fide and under good faith in the belief that from 11. 1975 to 112. The appellant was advised on 112. 1976 that the liability under the chit transaction would not be a debt and it would be entitled to lay the suit. It was under bona fide and under good faith in the belief that from 11. 1975 to 112. 1976 the institution of the suit was barred by the moratorium enactments. Under section 6 of Tamil Nadu Indebted Persons (Temporary Relief) Act XVI of 1976 the period between 11. 1975 and 112. 1976 was liable to be excluded and thus the suit filed was in time. Under Act 46 of 1976 from 27. 1976 to 112. 1976 the institution of the suit by chit funds was barred. If this period was excluded, the suit would be in time. The respondent was therefore liable to pay the suit claim. 2. The defence raised was as follows: The Respondent received only Rs. 3,600 on 6. 1971 from the appellant and executed the promissory note for Rs. 10,350. The appellant did not maintain proper and correct accounts in the ordinary course of business. The respondent paid all the amounts due under the chit transaction and in fact paid an excess amount of Rs. 1,785. The appellant totally omitted to give credit to Rs. 5,460 paid by the respondent. The appellant did not give credit to Rs. 3,585 which was paid on various dates by the respondent and entered in the first pass book. The respondent misplaced the chit book given to him in the month of September, 1972. Subsequently, he got another pass book from the appellant on 29. 1972 and all the payments made after 19. 1972 were entered in the second book. The various payments on different dates made totalling a sum of Rs. 1,275 from 29. 1972 to 1. 1973 were not given credit to. From 17. 1972 to 112. 1972 five cheques were issued to the extent of Rs. 600. They were also not given credit to . The respondent also made direct payments to the appellant’s Officer and receipts were not issued in respect of such payments. The suit was not in time. The respondent was not an indebted person as defined under Act XVI of 1976. The period from 11. 1975 to 112. 1976 could not be excluded for the purpose of computing the period of limitation. The appellant had not filed the suit in good faith. The suit was not in time. The respondent was not an indebted person as defined under Act XVI of 1976. The period from 11. 1975 to 112. 1976 could not be excluded for the purpose of computing the period of limitation. The appellant had not filed the suit in good faith. Bona fide impression alleged to have and entertained by the appellant in good faith was also not true. 3. The trial court held that the suit filed was in time and that the respondent was liable to pay the suit amount less Rs. 150. Aggrieved the respondent filed appeal A.S.No. 188 of 1981 before the District Judge, Coimbatore. The learned District Judge by his judgment and decree dated 20.10.1982 reversed the decision of the trial court, allowed the appeal and dismissed the suit holding that the suit was barred by time. Aggrieved the present second appeal has been filed by the plaintiff/appellant. .4. At the time of admission the following substantial question of law was framed for consideration in the second appeal: .“Are the provisions of the Tamil Nadu Debt Relief Act XIV of 1976 applicable on the facts and circumstances of this case and the suit is within time?” .5. Mr. M. Kalyanasundaram, learned Senior Counsel appearing for the appellant, submitted that the appellant bona fide believed in good faith that the respondent was entitled to the benefits of the Debt Relief Act and therefore the suit having been filed after the period of limitation, was well within time. The learned Senior Counsel drew my attention to the meaning of the expression “good faith” as occurring in section 42 of the Partnership Act and also the interpretation given by the Supreme Court in Brijendra Singh v. State of U.P. and others , AIR 1981 SC 636 and also the decision of Raju, J. in Kangan v. Kannammal and others , 1996 (II) MLJ 77 in support of his submissions. 6. As against these submissions Mr. S.K. Raghunathan, learned Counsel for the respondent, contended that the transactions under the Chit Funds Act were not debts, that the Debt Relief Act had no application and in support, he relied on the judgment of this Court in M. Gopal and another v. Sri Vetrivel Chit Funds Pvt. Ltd. , 1997 (I) CTC 471 : 1997 (I) L.W. 830 . The learned Counsel also submitted that the appellant knew fully well that the respondent was not entitled to the benefits of the Debt Relief Act and still the appellant chose to let the claim get barred by limitation. The learned Counsel also submitted that the amounts paid by the respondent had not been given credit to by he appellant chit funds and if they were given credit to, nothing would remain to be paid by the respondent. .7. The facts leading to the case and necessary for the disposal of the second appeal are as follows: The chit was terminated on 11. 1973. The last instalment was paid by the respondent on 24. 1973. The suit should have been filed on 24. 1976. But the plaint was presented only on 112. 1976. On facts the suit was clearly barred by limitation. 8. The next question is whether the respondent was the debtor in respect of the chit transaction and entitled to the protection of the Debt Relief Acts 14 of 1975 and 15 of 1976. 9. In M. Gopal and another v. Sri Vetrivel Chit Funds, Pvt. Ltd. . 1997 (I) CTC 471 : 1997 (I) L.W. 830 , a Bench of this Court had occasion to consider whether the chit amount could be termed ‘a debt’. The learned single Judge Raju, J. not having agreed with the view expressed in Sudarsan Chit Fund v. Mrs. Jagadambal , 1982 (II) MLJ 169 , the matters were posted before a Bench. The questions set down for consideration by the Bench were as follows: “(a) Whether the limitation under Article 37 of the Limitation Act for recovery of the amount due under the chit funds as per the provisions of the Tamil Nadu Chit Funds Act, 1961 would commence on the date when default is committed in payment of the instalments or on the date the notice demanding the entire sum is issued as per subsection (2) of section 25 of the Act? .(b) Whether the chit amount can be considered to be a debt? and .(c) Whether the suit is in time? In that case, the plaintiff/respondent in both the appeals filed a suit for recovery of a sum of Rs. 7,712.50 being the principal with interest at 12% per annum. The first defendant in the suit subscribed two chits payable in 20 monthly instalments. and .(c) Whether the suit is in time? In that case, the plaintiff/respondent in both the appeals filed a suit for recovery of a sum of Rs. 7,712.50 being the principal with interest at 12% per annum. The first defendant in the suit subscribed two chits payable in 20 monthly instalments. The payment of instalments commenced in April, 1975. He paid ten instalments. He was declared as the successful bidder in the auction held on 1. 1976. He executed a promissory note on 21. 1976 and paid the first instalment in February, 1976. Thereafter, the instalment fell due on 13. 1976, but he did not pay the second instalment nor did he pay the subsequent instalments. The trial court decreed the suit answering all the issues in favour of the plaintiff except in respect of one chit. There were two appeals and there was a common judgment. The Appellate Judge decreed the suit in entirety by allowing the appeal preferred by the plaintiff and dismissing the appeal preferred by the defendants. 10. As already stated, Raju, J. having expressed a doubt as to the correctness of the decision in Sudarsan Chit Fund cases, 1982 (II) MLJ 169 , the matter was before the Bench. The Bench held on the points raised as follows: (a) From Article 37 of the Limitation Act, it is apparent that when the promissory note or bond provides for payment of the amount by instalments, and further contains a clause that if default is committed in payment of one or more instalments, whole amount becomes due. In the case of promissory note or bond containing such recitals, on commission of such defaults, unless the payee or the obligee waives the benefit of demanding the whole amount, the whole amount becomes payable and the limitation of three y ears commences from the date of such default Article 37 read with section 24 of the Act does not leave any doubt that the limitation commences on the default committed by the chit sub-scriber in payment of the instalment. Of course, it is open to the payee or obligee to waive it.” In so holding, the Bench approved the decision in Sudarsan Chit Fund cases, 1982 (II) MLJ 169 , which accords with the view taken in Thimmal achariar v. S.P. Varadappa Chettiar , 1961 (2) MLJ 502 and also K. Madhavan v. N. Jayadevan , AIR 1975 Kerala 18. “(b) The amount due by the auction purchaser of the chit is not a debt. The plaintiff chit fund was not entitled to avail the benefit of limitation under the provisions of Tamil Nadu Act 14 of 1975 and Tamil Nadu Act 15 of 1976.” The Bench adopted the reasoning of an earlier Division Bench in Raghavan Pattar v. Arumugham , 1933 M.W.N. 70 : 41 L.W. 376 which held that transaction with the auction purchaser was one of sale and not of borrowing, the consideration being the highest discount, and a bond for the future payment of instalments. The same view was expressed in Arunagiri Chit Fund v. Mohammedhanafi 89 L.W. 687. “(c) The Bench held that by virtue of its finding on the question of limitation on point (a), the entire amount having become due on the date the purchaser of the chit, viz. the defendant in that case, committed default in the payment of instalment, the suit not having been filed within three years from the date of default, it was clearly barred by time.” 11. The decision of the Bench will apply on all fours to the facts of the present case. The default was committed by the respondent on 11. 1973. The suit ought to have been filed on or before 11. 1976. The suit was therefore clearly barred by limitation. 12. Havings regard to the discussion above, it is not necessary to deal with the other citations relied on by the learned Senior Counsel. No doubt, the lower Appellate Court had proceeded on the ground that the here in action on the part of the appellant in ascertaining the status of the respondent could not be equated with the alleged bona fide belief on the part of the appellant that the respondent could not have been assessed to the taxes mentioned in the Debt Relief Act. The lower Appellate Court observed that unless the appellant had proved that there was any difficulty in finding out whether the respondent was an assessee or not,he could not say that his inaction would confer him any right to invoke section 6 of Act 16 of 1976. The lower Appellate Court found that the respondent was not an indebted person as defined in Act 16 of 1976 and that the appellant ought to have instituted the suit within time. i.e. Within a period of three years. Thus, viewed from this angle, the suit filed by the appellant was not in time and it was rightly dismissed by the lower Appellate Court. 13. The substantial question framed for consideration is therefore found against the appellant and the second appeal is dismissed. However, there will be no order as to costs.