STATE CONSUMER DISPUTES REDRESSAL COMMISSION OF TELANGANA :

                                           At  HYDERABAD

                                                     FA 1226 of 2013

                                                   AGAINST

                 CC No. 236 of 2012, DISTRICT FORUM, WARANGAL

Between :

M/s. Rao Brothers Chit Fund Pvt. Ltd

Rep. by its Branch Manager,

Sri Thota Raji Reddy, S/o Sai Reddy

Age : 35 years, Occ : Branch Manager

O/o Rao Brothers Chit Fund Pvt. Ltd.,

R/o H.No.2-5-291, II Floor, J.M.J. Plaza

Nakkalagutta, Hanamkonda, Warangal      ..        Appellant/1^st opposite party

And

1. Bura Gopala Krishna

S/o Sri Balaraju, aged 49 years,

Occ :LIC Employee

R/oH.No.1-216, Bheemavaram (V)

Hasnaparthy (M),

Warangal District                          …Respondent/complainant

2. The Registrar of Chits,

Dist. Warangal, Office ;of Registrar of Assurances

Subedari, Hanamkonda,

Warangal                                       .. Respondent/opposite party no.2

Counsel for the Appellant                            :         Sri N. Amarnath

Counsel for the Respondents                       :         R1- served

                                                                                R2 – G.P.

Coram                :

                 Honble Sri Justice B. N. Rao Nalla         …      President

                                           And

                          Sri Patil Vithal Rao              …      Member

                          Friday, the Eighth Day of December  

                                  Two Thousand Seventeen

Oral order : ( per Hon’ ble Sri Justice B.N.Rao Nalla, Hon’ble President )

                                                            ***

1)       This is an appeal  filed under Section 15 of the Consumer Protection Act by the first opposite party   praying this Commission  to set aside the  impugned order dated 14.08.2013  made in CC 236 of 2012    on the file of the  DISTRICT FORUM, Warangal and dismiss the complaint.

2)       For the sake of convenience, the parties are described as arrayed in the complaint before the District Forum.

3).      The case of the complainant,   in brief, is that he is the subscriber of Chit series No. 6HTO3M and chit no. 25 for an amount of Rs.10,00,000/- for paying monthly subscriptions @ Rs.20,000/- in 50 months started from December, 2010. He paid all the subscriptions till December, 2011. He is the prize winner in the auction held by the first opposite party in the month of January, 2012 by agreeing to forego Rs.3,50,000/-  and accepted to receive  Rs.6,50,000/-.  He furnished five sureties. But the first opposite party demanded his wife’s surety who is the bank employee. The first opposite party dodged the matter on one pretext or the other.  For his legal notice dated 08.06.2012, OP.1 replied vide letter dated 14.06.2012 with false allegations and OP.2 did not give any reply. The acts of opposite parties amount to deficiency in service. Hence the complaint to direct the opposite parties to pay the chit prize amount of Rs.6,50,000/-, to pay Rs.42,000/- towards interest, Rs.50,000/- towards damages, totaling Rs.7,42,000/- with interest @ 18% pa from the date of filing of the complaint till realization and costs.

4)       The first opposite party opposed the above complaint contending that the complaint itself is not tenable as the alleged grievance is the outside the scope of the Consumer Protection Act.  The complainant did not furnish required sufficient sureties apart from showing his personal solvency as per the terms and conditions of the chit agreement and hence prayed to dismiss the complaint.

5).      The second opposite party in his written version contended that the complainant has participated in the auction after payment of 13 installments and became the successful bidder in the said auction and further the complainant has not furnished sufficient sureties to the satisfaction of the foreman for payment of future subscriptions  as per the  provisions laid under the Chit Fund Act. Hence prayed to dismiss the complaint.

6)       During the course of enquiry before the District Forum, in order to prove his  case, the complainant   filed his evidence affidavit and got marked Ex.A1 to A-14 and the opposite parties filed evidence affidavit and got marked Ex.B1 to B-23. Heard   both sides.

7)       The District Forum, after considering the material available on record,   directed the opposite parties jointly and severally to pay an amount of Rs.6,50,000/-towards the bid amount to the complainant along with interest @ 7.5% pa from the date of filing of the complaint, i.e., 31.08.2012 till the date of realization and Rs.10,000/- towards damages within one month.

8)       Aggrieved by the said order, the 1^st opposite party   preferred this appeal before this Commission.

9).      Except R-1, both sides have advanced their arguments reiterating the contents in the appeal grounds, rebuttal thereof along with written arguments.   Heard both sides except R-1 who did not contest the matter.

10)     The points that arise for consideration are,

(i)       Whether the impugned order as passed by the District Forum suffers from any error or irregularity or whether it is liable to be set aside, modified or interfered with, in any manner?

(ii)      To what relief ?

11).   Point No.1 :

There is no dispute that the first respondent/complainant  is the subscriber of Chit series No. 6HTO3M and chit no. 25 for an amount of Rs.10,00,000/- for payment of  monthly subscriptions @ Rs.20,000/- in 50 months started from December, 2010. He paid all the subscriptions till December, 2011. He is the successful bidder in the auction held by the appellant/first opposite party in the month of January, 2012 by agreeing to forego Rs.3,50,000/-  and accepted to receive  Rs.6,50,000/-. 

12)     The contention of the first respondent/complainant is that he furnished five sureties and despite the fact that the first opposite party insisted him to furnish the surety of his wife, who is a bank employee, to release the prize amount and hence the appellant/1^st opposite party did not pay the prize amount. On the other hand, counsel for the appellant/1^st opposite party argued that the first respondent/complainant did not furnish sufficient sureties to the satisfaction of the Foreman, hence they deposited the prize amount of Rs.6,50,000/- at South Indian Bank under Ex. B-19 as per the terms of the Chit agreement and the provisions of the Chit Fund Act. He further argued that the appellant got issued Ex.B-20 , Ex.B-21 and Ex.B-23 bid cancellation letters, but, due to filing of the complaint, it did not cancel the bid and the appellant admitted that they have insisted for guarantee of the wife of first respondent/ complainant. Admittedly, the first respondent/complainant furnished sureties of five employees and the monthly chit subscription payable is Rs.20,000/-. But the contention of the appellant/1^st opposite party is that they have not satisfied with three sureties out of five sureties since their salaries are meagre.  But the salary certificate of M. Sambaiah who  is working as S.G. Lecturer in Chanda Kanthaiah Memorial Arts and Science College, Warangal vide Ex. B-17,  and who is the one of the sureties,   shows that his net salary was Rs.61,978/- which will meet the demand of the appellant/first opposite party. Hence the contention of the appellant/1^st opposite party that the monthly liability of the prizes subscriber cannot be  met does not stand the ground. When sufficient sureties were furnished, insisting the surety of his wife tantamount to harassment and denial of the prize amount to the first respondent/complainant and the same amounts to deficiency in service. For not taking necessary steps to foil the dispute,  the second opposite party  is also fastened with vicarious liability.  The appellant  /1^st opposite party is liable to  comply with the impugned order after deducting the  defaulted chit instalments, i.e., the actual amount that has to be paid by the first respondent/complainant after deducting the dividend.

13).              After considering the foregoing facts and circumstances and also having regard to the contentions raised on both sides,   this Commission is of the view that there is deficiency in service on the part of the appellant/1st opposite party and it is directed to comply with the impugned order after deducting the defaulted chit instalments, i.e., the actual amount that has to be paid by the first respondent/complainant after deducting the dividend.

14).    Point No. 2 :

In the result, the appeal is allowed in part and the  impugned order dated 14.08.2013 in CC  236 of 2012  passed by the District Forum, Warangal is modified and the opposite parties jointly and severally are  liable to pay an amount of Rs.6,50,000/- towards the bid amount to the first respondent/complainant along with interest @ 7.5% pa from the date of filing of the complaint i.e, 31.08.2012 till the date of realization while deducting the defaulted chit instalments, i.e., the actual amount that has to be paid by the first respondent/complainant after deducting the dividend and to pay Rs.10,000/- towards compensation.  There shall be no order as to costs. Time for  compliance four weeks.

                                                            PRESIDENT                     MEMBER                                                                           Dated :  08. 12.2017.