Complaint is filed on 21-4-2009

                                                                           Compliant disposed on 2-7-2010           

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM

::AT:: KARIMNAGAR

PRESENT: HON’BLE SRI K. DEVI PRASAD, B.Sc., LL.B., PRESIDENT

HON’BLE SMT. E. LAXMI, M.A.LL.M.,PGDCA (Consumer Awareness), MEMBER

FRIDAY, THE SECOND DAY OF JULY, TWO THOUSAND TEN

CONSUMER COMPLAINT  NO.  76 OF  2009

Between: 

Naseeruddin Mohammad, S/o. Raj Mohammed, Age 30 years, Occ: Private Teacher, R/o. Ellandakunta village, Jammikunta mandal of Karimnagar district.

                                                                                                                    … Complainant

     AND

1. The Branch Manager, M/s. Kapil Chit Funds (P) Ltd., Jagtial branch, H.No.3-6-92/1, 1^ST floor, Karimnagar Road, Jagtial proper and town, Karimnagar district.
2. B. Manjulatha, W/o. Ravinder Reddy, H.No.10-2-915/1, Beside Sagar Memorial T/M Medium School, Vidyanagar, Karimnagar.

                                                                                     …Opposite Parties

          This complaint is coming up before us for final hearing on 1-6-2010, in the presence of Sri M. Srinivas, Advocate for complainant, and Sri       P. Lachi Reddy and V. Venkateshwar Rao, Advocates for opposite parties, and on perusing the material papers on record, and having stood over for consideration this day, the Forum passed the following:

:: ORDER::

1.         This complaint is filed under Section 12 of C.P. Act, 1986 seeking direction to opposite party no.1 and no.2 to pay Rs.1,10,000/- towards the refund of the amount paid by him with compensation and costs.

2.         The brief averments of the complaint are that the opposite party no.1 is running Chit Fund business and the opposite party no.2 is an agent of opposite party no.1. The complainant joined as a member in the Chit group run by opposite party no.1 on 31.1.2008 having chit value of Rs.5 lakhs. He was allotted ticket no.50. As per the chit agreement the complainant has to pay Rs.10,000/- per month towards monthly subscription. Originally the said chit group commenced from November, 2009 and at the time of joining the complainant paid the previous installments i.e. from November 2007 and subsequently paid the monthly subscriptions regularly till September 2008. He further submits that upto September 2008 he paid an amount of Rs.1,10,000/- including dividend. In the auction conducted by opposite party no.1 on 25.10.2008, the complainant was the successful bidder. As per the said auction the complainant has agreed to forego an amount of Rs.2,00,000/- out of Rs.5,00,000/- and on furnishing the required sureties opposite party no.1 agreed to release the amount to him. The complainant further submits that even after furnishing sureties opposite party no.1 failed to pay the prize amount. Therefore, the complainant got issued a Legal Notice on 23.3.2009 calling upon the opposite party no.1 to pay the prized amount or to refund the monthly subscription paid by him, but the opposite party no.1 sent a reply with false allegations. Therefore, the complainant prayed for an order for refund of the amount paid by him with compensation and costs.

3.         The opposite party no.1 filed counter admitting the complainant joined in the Chit group run by opposite party no.1 having chit value of Rs.5,00,000/-. It is also admitted that the complainant paid monthly subscriptions upto September 2008 excluding the dividend given to the members. The complainant was the successful bidder in the auction held on 25.10.2008. Wherein he agreed to forego Rs.2,00,000/- out of Rs.5,00,000/- and on furnishing required sureties the remaining amount of Rs.3,00,000/- will be paid to the complainant. But the complainant failed to furnish the sureties, therefore the opposite party no.1 sent letter on 11.11.2008 and 27.11.2008 informing him to withdraw the prized amount by producing (furnishing) sureties. Inspite of the said letters, the complainant failed to respond, hence a registered notice Dt: 26.12.2008 was sent to the complainant informing him to furnish sureties failing which the bid will be cancelled and the prized amount will be kept in Bank. Inspite of service of said notice the complainant failed to furnish the sureties. Therefore, the chit was re-auctioned on 25.2.2009 in which one K.Laxman was the successful bidder who had to forego an amount of Rs.1,36,300/- out of Rs.5,00,000/-. It is submitted that on account of the cancellation of the auction the opposite party no.1 sustained loss of Rs.63,700/- on account of the re-auction of the chit and as per the chit rules the complainant is liable to bear the said loss. The complainant committed default in paying the monthly installments. Therefore another notice was issued on 18.4.2009 calling upon him to pay the arrears failing which his membership will be cancelled. When there was no response from him the opposite party no.1 cancelled his membership on 30.4.2009 and re-allotted the chit to one G.Hari Prasad. The complainant paid a total sum of Rs.88,485/- excluding dividend. As the chit was re-auctioned in which there was loss of Rs.63,700/- which shall be deducted from the amount of Rs.88,485/- paid by him. The balance remains is Rs.21,370/-. As per the chit rules the complainant has to pay 5% towards commission to the opposite party no.1 which comes to Rs.25,000/-. After adjusting the said amount no amount is payable to the complainant. There is no deficiency of service on the part of opposite party no.1, hence, prayed for the dismissal of the complaint.

4.         Opposite party no.2 did not choose to file any counter.

5.         The complainant filed his Proof Affidavit reiterating the averments made in the complaint and filed documents which are marked as Ex.A1 to A5. Ex.A1 is the copy of Legal Notice issued by counsel for complainant Dt: 23.3.2009. Ex.A2 is the postal receipt Dt: 23.3.2009. Ex.A3 is the Postal acknowledgment card Dt: 23.3.2009. Ex.A4 is the copy of reply notice Dt: 3.4.3009. Ex.A5 is the paper publication of Saakshi Daily News Paper Dt: 31.3.2009. 

6.         The opposite party no.1 filed Proof Affidavit of it’s Branch Manager reiterating the averments made in the counter and filed documents which are marked as Ex.B1 to B8. Ex.B1 is the original copy of Agreement of Chit Dt: 13.2.2008. Ex.B2 is the intimation letter Dt: 11.11.2008 addressed to complainant. Ex.B3 is another intimation letter Dt; 27.11.2008 addressed to complainant. Ex.B4 is the bid cancellation letter Dt: 26.12.2008. Ex.B5 is the acknowledgement served on the complainant Ex.B6 is the Chit re-auction intimation letter Dt: 27.01.2009. Ex.B7 is the acknowledgment card addressed to complainant. Ex.B8 is the Membership Removal letter along with acknowledgement served on the complainant Dt: 18.4.2009

7.         The points for consideration are:

1. Whether there is any deficiency of service on the part of opposite party?
2. If so, to what relief the complainant is entitled?

8.         It is contended by the complainant that he was the successful bidder in the auction conducted by opposite party no.1 and inspite of furnishing sureties they failed to pay the prized amount. Therefore, he sent a Legal Notice under Ex.A1 Dt: 23.3.2009 calling upon the opposite party no.1 to pay the total amount of Rs.1,10,000/- paid by him towards monthly subscriptions. Inspite of service of notice the opposite party failed to pay the said amount. The complainant relied on a judgment rendered by the Hon’ble A.P. State Commission reported in 2005(2) CPR page 13, to the effect that when a subscriber is removed from the chit group he is entitled for refund of the amount after deducting 5% of it under chit rules. Hence, prayed for an order to refund the amount with compensation and costs. 

9.         It is contended by opposite party no.1 that the complainant failed to furnish sufficient sureties for payment of the prized amount. Therefore intimation under Ex.B2 to B4 was issued calling upon him to furnish the sureties, failing which the bid will be cancelled and it will be re-auctioned. Inspite of the said letters complainant failed to furnish the sureties. Subsequently the name of the complainant was removed from the membership of the chit group as the complainant failed to pay the monthly subscriptions from October 2008. A notice of termination under Ex.B8 was issued to the complainant on 18.4.2009 informing that the amount paid by him towards monthly subscription was adjusted towards bid loss amount and chit commission. As there is no deficiency of service on their part opposite party no.1 prayed for dismissal of the complaint.

10.       A perusal of the chit agreement under Ex.B1 discloses that the complainant joined as a chit member in the chit group of Rs.5,00,000/- run by the opposite party no.1. As per the chit agreement complainant has to pay monthly subscription of Rs.10,000/- including dividend. It is admitted fact that the complainant paid monthly subscriptions for a period of 11 months totaling to Rs.1,10,000/- which is inclusive of dividend. The net amount paid by him is Rs.88,485/-. The complainant was the successful bidder in the auction conducted by opposite party no.1 on 25.10.2008 agreeing to forego Rs.2,00,000/-. Thereafter he failed to furnish the sureties before opposite party no.1 to pay the prized amount inspite of service of notices under Ex.B2 to B4.

11.       The opposite party no.1 re-auctioned the chit and allotted to K.Laxman who had to forego only Rs.1,36,300/- instead of Rs.2,00,000/-. In this case the complainant claimed an order for refund of the amount paid by him but the same was refused on the ground that on account of re-auction the opposite party no.1 sustained bid loss of Rs.63,700/- and the complainant is liable to pay Rs.25,000/- towards 5% of the chit value towards commission. The opposite party no.1 admitted that the complainant paid net amount of Rs.88,485/-. As per the decision rendered by the Hon’ble A.P.State Commission reported in 2005 (2) CPR at page 13 it is held that “ A defaulter chit holder, who is removed from membership, is entitled to refund of net amount of chit less 5% of it under Chit Rules”

12.       It is an admitted fact that the opposite party no.1 re-allotted the chit to another person after terminating the complainant, as such there is no loss sustained by the opposite party no.1. The complainant is also at fault as he failed to furnish the required sureties inspite of repeated letters sent by opposite party no.1. In the complaint he made a false claim that he furnished sureties to the opposite party no.1, but he has not furnished particulars of the sureties. As the opposite party no.1 re-allotted the chit to another member there is no loss sustained by opposite party no.1. Having received Rs.88,485/- from the complainant towards net amount of monthly subscriptions, the opposite party no.1 ought to have returned the amount after deducting 5% commission. To meet the ends of justice it is just and proper to order for refund of Rs.88,485/- after deducting Rs.25,000/- towards chit commission. As the opposite party no.1 failed to refund the amount it constitutes deficiency of service. Therefore, we hold, that the complainant is entitled to receive a sum of Rs.63,485/- (88,485 - 25,000) from the opposite party no.1 along with costs of Rs.500/-. In the circumstances of the case the complainant is not entitled to compensation and interest.

13.       In the result the complaint is partly allowed directing the opposite party no.1 & no.2 to pay an amount of Rs.63,485/- to the complainant towards refund of the amount paid by him together with Rs.500/- towards costs of the complaint within one month from the date of receipt of this order.

Typed to my dictation by Stenographer, after correction the orders pronounced by us in the open court this the 2^nd day of July, 2010.

Sd/-                                                                                              Sd/-

MEMBER                                                                              PRESIDENT

             NO ORAL EVIDENCE HAS BEEN ADDUCED ON EITHER SIDE

FOR COMPLAINANT:

Ex.A1 is the copy of Legal Notice issued by counsel for complainant Dt: 23.3.2009.

Ex.A2 is the postal receipt Dt: 23.3.2009.

Ex.A3 is the Postal acknowledgment card Dt: 23.3.2009.

Ex.A4 is the copy of reply notice Dt: 3.4.3009.

Ex.A5 is the paper publication of Saakshi Daily News Paper Dt: 31.3.2009. 

FOR OPPOSITE PARTY:                              

Ex.B1 is the original copy of Agreement of Chit Dt: 13.2.2008.

Ex.B2 is the intimation letter Dt: 11.11.2008 addressed to complainant.

Ex.B3 is another intimation letter Dt; 27.11.2008 addressed to complainant.

Ex.B4 is the bid cancellation letter Dt: 26.12.2008.

Ex.B5 is the acknowledgement served on the complainant

Ex.B6 is the Chit re-auction intimation letter Dt: 27.01.2009.

Ex.B7 is the acknowledgment card addressed to complainant.

Ex.B8 is the Membership Removal letter along with acknowledgement served on the complainant Dt: 18.4.2009

Sd/-                                                                                              Sd/-

MEMBER                                                                              PRESIDENT