F.A.No.417/2012 against C.C.No.27/2010, Dist. Forum, Nalgonda.

Between:                                      

 M/s. Kapil Chit  Fund  (P) Ltd.,

Rep. by its  Branch Manager,

D.No.6-2-8/1, Second Floor,

HDR Complex, Tirumala Theatre,

Nalgonda District .                                     … Appellant/

                                                                   Opp.party no.1

       And

1.Mr.Sabavath Somla, S/o. Beechya,

   Aged about 31 years, Occ:Agriculture,

   R/o.Mannevaripally Village of

   Achampet Mandal,

   Mahabubnagar.                                         … Respondent/

                                                                   Complainant

2. Mr.Nenavath Babu, S/o.Hanya,

    Aged  about 29 years, Occ:MCA Student,

    R/o.Bollaram, H/o.Teldevarpally village,

    Chandampet Mandal, Nalgonda Dist.

3. Mr.Korra Surya Naik, S/o.Sakru

    Aged about 34 years, Occ:Agriculture,

    R/o.B.K.Laxmapur Village

    of Amrabad  Mandal,

    Mahabubnagar District.                            .. Respondents /

                                                                  O.P.Nos.2 & 3  

Counsel for the  Appellant         :       Mr. N.Amarnath

Counsel for the Respondents     :        R1- party in person.

QUORUM:THE HON’BLE JUSTICE SRI D.APPA RAO,PRESIDENT,  

SMT.M.SHREESHA,HON’BLE MEMBER                                                                      AND

      SRI S.BHUJANGA RAO, HON’BLE MEMBER. 

                MONDAY, THE TENTH DAY OF SEPTEMBER,

                              TWO THOUSAND TWELVE

Oral Order:(Per Sri S.Bhujanga Rao, Hon’ble Member)

                                                                ***

This appeal is directed against the order dt.27.2.2012 of the District Forum, Nalgonda District made in C.C.No.27/2010 filed by the complainant seeking direction to opp.party no.1  to pay to the complainant Rs.2,52,500/- towards the prize amount, Rs.50,000/- towards damages for mental and physical agony with interest at 24% p.a. from the date of auction  and costs of the litigation. 

The appellant is opp.party no.1 and the respondents are the complainant and opp.parties 2 and 3 respectively in the complaint. 

For the sake of convenience, the parties may be described as they arrayed in the complaint. 

        The case of the complainant as set out in the complaint is as follows:

The opp.party no.1 is a  registered Chit Fund Company.  The complainant joined  in a chit group NATO 6H with ticket no.11 in the Chit Fund company of opp.party no.1. The value of chit is Rs.3 lakhs   with duration of 50 months.  The instalment is being Rs.6000/- per month and the payment commenced from 26.4.2007.

 While so, the complainant participated in the auction held on 25.5.2009 and agreed to forego a sum of Rs.47,500/-. Thus opp.party no.1  was liable to pay a sum of Rs.2,52,500/-. Inspite of the complainant furnishing  sureties, the opp.party no.1 had not paid the prized amount and forced the complainant to make a fixed deposit of Rs.50,000/- with opp.party no.1.

        The opp.party no.1 also took copy of  pattadar pass book  and  R.C.Book of his tractor and trailer and the signatures of the complainant were also obtained on  a blank cheque bearing no.987880 of State Bank of Hyderabad, Hyderabad and also on many printed proformas and white papers.   Inspite of the complainant’s continuous demands, due to urgent needs, the opp.party no.1 did not pay the prized money.  On 19.3.2010, the complainant got issued a legal notice. The said notice was received by opp.party no.1. Instead of issuing reply notice, the opp.party no.1 simply sent a statement of account showing insufficient information and also sent a cheque for Rs.970/- to the complainant without furnishing the details of the said payment.  As such, the  complainant again issued another legal notice dt.31.3.2010 demanding the full particulars of payments made by the opp.party no.1 in respect of the prized amount. Opp.party no.1 issued reply notice with all false and fictitious allegations.  The complainant never made any request to adjust the prize money to the dues of the opposite party nos. 2 and 3. The opp.parties 2 and 3 are no way concerned to the complainant.      The opp.party no.1 intentionally failed to pay the prized amount to the complainant.  The complainant was subjected to both physical and mental agony.  The conduct of opp.party no.1 amounts to deficiency in service and unfair trade practice hence the complaint.

        Resisting the complaint, the opp.party filed written  version contending that    inspite of producing  the sureties to  receive the prized amount, the complainant  requested the chit fund company,  months together, not to  proceed as per law.  So the complainant   was not in a position to furnish  sureties. He made a proposal of adjustment of chit amount  with his  relatives’ liability.  Upon that, the opp.party agreed, then the complainant has given a written undertaking  on 19.11.2009 to keep Rs.50,000/- with chit fund company with a promise  that if he failed to pay the  future instalments,  the deposited amount may   be adjusted for due instalments.  Further, the complainant along with  one Surya Naik, who is the chit fund agent  came and requested to adjust the prized amount to his dues  and as well as the chit dues of his relatives  i.e. N.Babu and K.Surya Naik to avoid sufficient sureties. To that effect, he executed the document  dt. 24.11.2009  and informed that he would collect those amounts from them.  Accordingly  an amount of Rs.12,178/-  was adjusted towards  his  chit due inslatments, Rs.11,014/-  was adjusted in respect of due of his relative N.Babu and  Rs.1,76,358/-  was adjusted towards the due of Sri Surya  Naik. Rs.50,000/-  was kept in fixed deposit.  After  adjusting and depositing the amount,  for remaining   bid amount   of  Rs.1000/-  the opposite party prepared  a cheque, but for  the reasons best known to the complainant, he did not collect the said cheque .  Upon that, the opp.parties drew a demand draft for Rs.970/-  on 4.1.2010 and sent the same to him.  There is no fault or deficiency in service on the part of the chit fund company. The complaint  is not maintainable before the District Consumer Forum. Therefore, it is  just and necessary to dismiss the above complaint with exemplary costs.    

Opp.parties 2 and 3 remained exparte .

During the course of enquiry, the complainant filed his chief  evidence affidavit as PW.1 and was cross examined and he got marked Exs.A1 to A7.The Manager of opp.party no.1 was  examined  himself as RW.1 and got  marked Exs.B1 to B6. 

Upon hearing the  counsel for both the parties and on consideration of the material on record, the  District Forum allowed the complaint, in part, directing the opp.party no.1  to pay  a sum of Rs.2,52,500/-   to the complainant after  excluding the  chit amounts payable  by the complainant  from chit instalments 35 to 50 after  allowing dividend/commission  fetched during the said period.  The District Forum further ordered that net amount payable shall carry interest at 9% p.a. from the date of the complaint till realisation. The District Forum has also directed the opp.party no.1  to pay a sum of Rs.5000/- towards deficiency in service  and a sum of Rs.2000/- towards costs.   No order has been passed against opp.partis 2 and 3.

Aggrieved by the said order, the opp.party no.1 preferred the above appeal questioning the legality and validity of the order.

 We heard  respondent no.1/complainant and counsel for the appellant/opp.party no.1.

Now the point for consideration is whether the impugned order of the District Forum is liable to be set aside? If so, on what grounds?   

 It is not in dispute that the complainant is a chit member in chit group no. NATO6H  with ticket no.11   for the chit value of Rs.3,00,000/- payable in 50 monthly chit instalments at Rs.6000/- per month and that the complainant became the highest bidder in the chit auction held on 25.5.2009 having agreed to forego Rs.47,500/- out of chit value of Rs.3,00,000/-

        The case of the complainant is that he submitted sufficient sureties.  In addition to that, the opp.party no.1 took copy of pattadar pass book, R.C.Book of his  tractor and trailor  and also taken signatures on blank papers as well as blank cheque bearing No.987880  drawn on State Bank of Hyderabad  and also on many printed forms.  Even  after receipt of the above, the opp.party no.1 failed to pay chit prized money, despite of several requests made by the  complainant, as he is in need of money. 

        On the other hand, the contention of the opp.party no.1 is that after execution of necessary  documents, the complainant gave Ext.B2 letter dt.24.11.2009 and also Ex.B4 letter for adjustment of chit prized amount of Rs.2,52,500/-.  Accordingly opp.party no.1 has adjusted the chit prize amount i.e. an amount of Rs.12,178/- towards his chit dues, Rs.11,014/- to the credit of chit no.NATO6H-20 held by Mr.N.Babu,  who is opp.party no.2 and Rs.1,76,358/-  to the credit of chit no.NATO 3J – 28 held by K.Surya Naik, who is opp.party no.3, Rs.50,000/- kept in F.D.R. , R.1,100/- towards  health insurance of the complainant and the balance of Rs.1000/- only entitled by the complainant, for which, opp.party no.1 prepared a cheque, but the complainant did not  collect the same. Upon that, the opp.party no.1 has drawn a demand draft for Rs.970/- on  4.1.2010 and sent the same( after deduction of  maker charges) to the  complainant.  As such, there  is no deficiency in service on  their part. 

The complainant as PW.1 reiterating  his case as set out in the complaint  and denied the above case of the opp.party no.1, though admitted his signatures on Exs.B2 to  B4. In order to prove their case, as stated above, on behalf of opposite party no.1, it’s Manager is examined as R.W.1.

        Ex.B2 is the letter dt.24.11.2009 said to have been given by the complainant to opp.party no. 1. There is much unusual gap between the body of the letter and the signature of the complainant thereon . There is no reason as to why the complainant  should put three signatures  on the left side of  Ex.B2, even after signing  on the right side of the letter. Nobody signs four times in a letter.  It is clear to the naked eye that  Ex.B2 is written on the blank paper containing the signature of the complainant. 

   Now coming to Ex.B4 letter, it is dated nil .  A glance at Ex.B4  made it clear that the  letter which is in printed form, is not filled  at a time, first part of the letter is filled at one time  with pen and the second  part of the letter is filled  at a later time, with  pencil.  Neither the cheque number, nor the D.D. number is filled in the last lines of the letter. There is no explanation for filling the first part of the letter with pen and latter part with pencil.  All these  circumstances caste cloud over the genuineness of the Ex.B4.

Ext.B3 is also filled printed form.  In Ex.B3 there is only one signature under the column ‘signature of the transferee’ against Rs.12,178/-  which   is mentioned  as the amount  towards adjustment of chit due instalments pertaining to the chit amount of the complainant and  there is no signature of the complainant under  the same column ‘ signature of the transferee’  against  the amount of Rs.11,014/- and Rs.1,76,358/-,  which are shown as amounts to be  adjusted toward amounts  due by N.Babu  and K.Surya Naik  opp.parties 2 and 3  respectively.    The signatures of the complainant would have been there under the column ‘signature of the transferee’   even against the names and amounts shown as due by opp.parties 2 and 3, if Ex.B3 printed form is filled at a time on  24.11.2009. It is therefore obvious that the form, on which the signature  of the complainant obtained earlier was  converted into  Ex.B3, subsequently.

The  contention of opp.party no.1  is that opp.parties 2 and 3 are the  relatives of the complainant.  The complainant denied the same.  Except bald contention, opp.party no.1 did not place any material on record to prove that there is relationship or friendship or any type of relationship between the complainant  and opp.parties 2 and 3.   Admittedly, the complainant has nothing to do with the chits of opp.parties 2 and 3. It is not the case of the opp.party no.1 that the complainant is indebted to opp.parties 2 and 3 or he stood as guarantor for opposite parties 2 and 3 in their respective chits. .  In these circumstances, there is no reason as to why the complainant should ask the opp.party to adjust his prized amount towards amounts due to opp.party no.1, by opp.parties 2 and 3 in their respective chits.

It is an admitted fact that the complainant participated in the chit auction and became highest bidder, having agreeing to forego Rs.47,500/-  out of chit value of Rs.3 lakhs. It is the case of the complainant that as he was in need of money he participated in the chit auction. In such a situation, no prudent man  would ask the chit fund company to adjust the entire prized amount as in the this case, opting to receive meagre amount of Rs.1000/- and depositing of Rs.50,000/- with the chit fund company.  There  is no cogent and convincing evidence  to show that the sureties offered by the complainant to receive the prized amount are    insufficient.  Admittedly, out of the  sureties, furnished by complainant  two of them  are of  govt employees. Ext.B6 does not  show  that the  sureties offered by the complainant  are insufficient.  

It is significant to  note that opposite parties 2 and 3 did not  appear and contest the complaint though they were served with notice   in this complaint.  If really,  the  complainant  owed  any amount to opp.parties 2 and 3  and in discharge  of the same, he asked opp.party no.1 to adjust  his prized amount, they would have contested the case, supporting the case of opp.party no.1 but they remained exparte.  This is also one of the circumstance, which disproves the contention of opp.party no.1. It appears that the opp.party no.1 with the intention to recover dues of opp.parties 2 and 3 resorted to unfair trade practice of adjusting of prized money  as in this case. 

Further, the opposite party no.1 made  all efforts  to evade the payment  of the prized amount to the complainant and even  attempted  to introduce one  Gantala Sevya Naik, the agent of opp.party no.1 company who  said to have enrolled the complainant  and filed I.A.No.38/11 under  Order I ,Rule 10 of CPC before the District Forum to implead him    as opposite party no.4 alleging that the complainant borrowed the amounts from  him and that at the instance of the complainant, the opposite party no.1 adjusted amount of Rs.1,76,358/- payable   to the opp.party no.3  and the said petition was dismissed by the District Forum on  11.1.2012 and the  same  was confirmed by this Commission vide order dt.19.1.2012 in R.P.No.4/2012.      

The Manager of opp.party no.1, who is examined as RW.1 stated in the cross examination  that within  one month, a successful bidder  should furnish sureties, if not, they (chit fund company) have to issue notice.  In this case according to him, four months after the chit  was knocked down, the complainant furnished sureties and they rejected the sureties.  The opposite party no.1 did not issue any notice to the complainant  even after expiry of one month after auction for not furnishing sureties. Though RW.1 denied   the suggestion that they did not issue notice of rejection of sureties  to the complainant, the opposite party no.1 has not placed any evidence in proof of  issuing of such notice to the complainant.  RW.1  admitted that it is not mentioned in Ex.B2 letter that the amount relating  to N.Babu i.e. opp.party no.2 should be adjusted.    

        It is an admitted fact that Exs.B2 to B4  are not  in the hand writing of the complainant. The complainant denied the contents of Exs.B2 to B4.  The contents of Exs B2 to B4 are not proved by the opp.party no.1. That,  apart, the circumstances discussed above throws  doubt in the genuineness of Exs.B2 to B4. In view of the above facts and circumstances, the contention of the complainant that his signatures are obtained on blank paper and printed  forms and later converted them into Exs.B2 to B4  appears to be true. Therefore, we are not inclined to consider Exs.B2 to B4. Consequently, the opp.party no.1 failed to prove that the complainant has given consent to opp.party no.1 to adjust the prized amount as contended by the opp.party no.1.

Even if it is assumed that the complainant gave Exs.B2 to B4  letters to the opp.party no.1, knowing their  contents, giving consent to the opp.party no.1 to adjust the prized amount as contended by the opp.party no.1,  the opposite party no.1 has not shown  any authority, under which, the chit fund company is competent to adjust  the amounts towards the amounts due to it by some other chit  holders and  deduct the future instalments payable by the complainant from the prized amount.  The total circumstance of the case reveal that the opposite party no.1 adopted unfair trade practice to evade  the payment of chit prized amount to the complainant.

In a recent decision  in KAPIL CHIT FUNDS PVT. LTD. vs. G.SURYANARAYANA  reported  in (III) 2012  CPJ page 64 (NC),  the Hon’ble National Commission  did not accept the contention of the Chit Fund company that “the chit fund company had lien over the amount  of chit to which the complainant became entitled after bidding in auction,  therefore the company did no wrong   in realising the amounts from the complainant as the complainant had stood guarantor for other members who failed to pay the amount” and held that the above practice amounts to “unfair trade practice”  within the meaning of the Consumer Protection Act,1986.    

For the facts and circumstances discussed above, we have no hesitation to hold that there is not only deficiency in service but also unfair trade practice on the part of the opp.party. We do not find any  illegality and irregularity  in the impugned order of the District Forum, to interfere with  well reasoned order. 

In the result, the appeal is dismissed confirming the order of the District Consumer Forum with costs of Rs.5000/-. 

                                                           PRESIDENT

                                                          MEMBER

                                                          MEMBER

Pm*                                                    Dt. 10.9.2012