Per Sri M.V.L.Radha Krishna Murthy, Member:

                This complaint is filed under section 12 of the Consumer Protection Act, 1986 by the complainant praying to direct the opposite parties to refund a sum of Rs.28,025/- paid by the complainant by way of monthly subscriptions, with subsequent interest at 24% p.a. from the date of last payment of the chit installment i.e., from 24-06-08 till realization and to award an amount of Rs.25,000/- towards mental agony suffered by complainant and for costs.

The averments of complaint in brief are as follows:

                The complainant joined as subscriber in 1^st opposite party company chit series GRL 03G-35 for chit amount of Rs.2,00,000/- to be subscribed @ Rs.5000/- p.m. for 40 months and executed chit agreement in favour of 1^st opposite party.  Complainant paid seven installments at once i.e., Rs.28,025/- by the date of joining of the chit itself and participated in the auction held on 25-06-08 and he was declared as successful bidder having agreed to forego an amount of Rs.70,000/- and is entitled for the prize amount from 1^st opposite party.  Then complainant offered sureties for due discharge of future installments and for receiving the prize amount, the 1^st opposite party has protracted in accepting the same saying that the sureties were not sufficient.  While the things stood thus, the complainant received two reminder notices dt.01-09-08 demanding him to pay Rs.16,900/- on or before 08-09-08 or otherwise the complainant will be liable to forego the dividend amount and pay the penalties.  Immediately on receipt of notices, complainant turned up to 1^st opposite party and requested to take sureties from him as offered by him and to release the prize amount.  Whereupon the 1^st opposite party stated to him that his chit was cancelled and the auction was struck down in the name of some others and because of shortage of auction loss in the substituted auction held on 25-06-08, the company has to forego Rs.23,000/- and only Rs.5000/- remained in the account of complainant and that the said amount is not sufficient for payment of defaulted installments from July, 2008 and as such 1^st opposite party was reluctant to refund back the installment amount paid by the complainant. Subsequently complainant made correspondence with the Registrar of Chits and with opposite parties, but opposite parties are reluctant to reply to the complainant or even for refunding the installment amount paid by complainant.  Finally on 25-05-10 1^st opposite party communicated to the Registrar of Chits about their unwillingness to refund back the installment amount to the complainant.  Repeated requests made by complainant to opposite parties for refund of installments paid by him were futile.  Hence, the complaint.        

Opposite parties filed their written statement, which is in brief as follows:

                The complainant was a subscriber in chit No.GRL 03G-35 for the chit value of Rs.2,00,000/- payable in 40 installments at Rs.5000/- p.m.  The complainant executed agreement of chit agreeing to abide to the terms and conditions contained therein.  Complainant paid seven installments in all at a time amounting to Rs.28,025/- towards the net amount of contribution. On 25-08-08, the complainant became the highest bidder in the auction having agreed to forego Rs.70,000/- out of the chit value.  For withdrawal of chit amount, the complainant has to furnish sufficient sureties to the satisfaction of the foreman for future liability of the amount.  Since the date of auction 2^nd opposite party was regularly requesting the complainant to furnish the sureties.  Finally on 08-08-08, 1^st opposite party issued a registered letter to complainant to furnish sureties for withdrawal of chit prize amount and to continue to pay the chit installments, in default the bid will be cancelled and re-auction will be conducted, in such event the bid loss is to be born by the complainant apart from the liability to pay 5% on the chit value as damages for breach of contract. But complainant failed to comply with the demand.  Complainant failed to offer sureties.  Subsequently 1^st opposite party issued letter dt.01-09-08 to the complainant requesting him to pay the arrears of chit installments from July, 2008 to September, 2008 amounting to Rs.16,900/- as he failed to pay the same.  Even after receipt of the said letter, complainant failed to pay the dues and also failed to furnish the sureties.  As per the terms of chit agreement, opposite parties have no other alternative except conducting re-auction.  Hence, re-auction was conducted on 28-09-08 and the same was confirmed in the name of M/s.Haritha Agencies for Rs.47,000/- for which there is a bid loss of Rs.23,000/- and the complainant is liable to pay the same as per clause No.20(4) of Chit Agreement, as complainant failed to furnish sureties to the satisfaction of foremen and failed to draw the prize amount.  In all the complainant paid an amount of Rs.28,025/- in the said chit, out of which an amount of Rs.23,000/- has been adjusted towards the bid loss and Rs.10,000/- i.e., 5% on the chit value towards the damages.  The total amount entitled by 1^st opposite party is Rs.33,000/-, whereas the complainant has paid only an amount of Rs.28,025/-.  Therefore, complainant is still due and liable to pay Rs.4,975/- for which opposite parties will take necessary action against the complainant for recovery of said amount.  The complainant suppressed the true facts of the case and filed this complaint with malafide intention.  Hence, the complaint may be dismissed with costs by directing the complainant to pay an amount of Rs.10,000/- to the opposite parties towards damages for mental agony and for filing false complaint.

                In support of their versions complainant and opposite parties are filed their respective affidavits reiterating their versions.

                On behalf of complainant Ex.A1 to A7 are marked and on behalf of opposite party Ex.B1 and B2 are marked.

Now the points for consideration are

1. Whether there is any deficiency of service on the part of opposite parties?
2. To what relief the complainant is entitled to?

POINT No.1

                The case of the complainant is that he joined in a chit run by opposite parties by paying Rs.28,025/- at a time towards seven installments of the chit, that the chit amount is Rs.2,00,000/- to be subscribed @ Rs.5000/- p.m. for 40 months, that he participated in the auction held on 25-06-08 and became successful bidder agreeing to forego an amount of Rs.70,000/-, that when he offered sureties for due discharge of future installments and for receiving prize amount, 1^st opposite party company has protracted in accepting the same saying that the sureties are not sufficient and opposite party issued notices dt.01-09-08 demanding him to pay Rs.16,900/-, that on receipt of the said notices, he requested the opposite party to take sureties offered by him and to release the amount for which 1^st opposite party stated to him that his chit was cancelled and the auction was struck down in the name of some others and failed to refund the amount paid by the complainant on the ground that there is auction loss of Rs.23,000/- and there is only Rs.5000/- remained in the account of complainant and that it is not sufficient for payment of defaulted installments. 

                The case of opposite parties is that the complainant failed to furnish sureties and failed to draw the prize amount and also failed to pay the future installments. Therefore, they have issued letter               dt.08-08-08 bid cancellation letter and also issued letter dt.01-09-08 for payment of future installments and cancelled the bid of the complainant and re-auction was conducted and the same was confirmed in favour of M/s.Haritha Agencies for Rs.47,000/- and that thereby they sustained bid loss of Rs.23,000/- and that the complainant is liable to pay the bid loss of Rs.23,000/- as per the terms of the chit agreement and also liable to pay 5% of the chit value towards the commission of Foreman and that therefore, the complainant is due and liable to pay Rs.4975/-. 

                It is not in dispute that the complainant has joined in the chit of opposite party and paid Rs.28,025/- at once and participated in the auction held on 25-06-08 and became highest bidder agreeing to forego Rs.70,000/- out of the chit value of Rs.2,00,000/-.  A perusal of Ex.A2 letter addressed by the complainant to the Registrar of Chits shows that complainant failed to furnish surety to draw the prize amount. Further as seen from Ex.A7 form relating to furnishing sureties, it was not duly filled in by the complainant and was not furnished to the opposite parties for drawing the prize amount. Therefore, it can be safely concluded that complainant failed to furnish sureties to the satisfaction of the foreman to draw the prize amount.  Therefore, the allegation of the complainant that opposite parties have not accepted the sureties has no legs to stand. The contention of opposite parties is that as per the terms of agreement as the complainant failed to furnish sureties to the satisfaction of foreman and failed to draw the prize amount, they have cancelled the bid of the complainant and conducted re-auction and confirmed the same in favour of some others for Rs.47,000/- and thereby they sustained bid loss of Rs.23,000/- and the complainant is liable to pay the same as per clause 20(4) of the chit agreement.  But opposite parties have not filed any document to prove the said contention that they sustained bid loss of Rs.23,000/-.  As per the terms of the agreement, the complainant has to bear 5% of chit value towards commission of foreman.  Therefore, complainant is liable to pay 5% of the chit value i.e., Rs.10,000/- toward foreman commission.  As the opposite parties failed to prove the bid loss of Rs.23,000/- sustained by them, complainant is entitled for refund of the amount paid by him after deducting the foreman commission of Rs.10,000/-.  It is not in dispute that the complainant has paid Rs.28,025/- towards the chit installments. Out of the said amount, if the foreman commission of Rs.10,000/- is deducted, the complainant is entitled for refund of Rs.18,025/-.  Accordingly this issue is answered.

POINT No.2

                Complainant claimed for refund of Rs.28,025/- paid by him with interest at 24% p.a. from the date of last payment till realization and also claimed Rs.25,000/- towards compensation for the mental agony suffered by him and costs of complaint.  As already stated above, the complainant is entitled for refund of Rs.18,025/-. Since the complainant failed to furnish sureties to draw prize amount and also failed to pay future installments, we are of the opinion that opposite parties are not liable to pay any compensation to the complainant.     

                In view of the facts and circumstances of the case, we are of the opinion that it is just and necessary to direct the opposite parties to pay an amount of Rs.18,025/- to the complainant together with interest thereon at 9% p.a. from the date of re-auction of the bid i.e., 28-09-08 till the date of realization.  Accordingly this issue is answered.

                In the result, the complaint is allowed in part in terms as indicated below:

1. The opposite parties 1 to 3 are hereby directed to pay an amount of Rs.18,025/- to the complainant with interest thereon at 9% p.a. from 28-09-08 (date of re-auction of the bid) till the date of realization.
2. The opposite parties 1 to 3 are further directed to pay an amount of Rs.1000/- towards costs of complaint.
3. The above order shall be complied within a period of six weeks from the date of receipt of copy of this order.   

Typed to my dictation by the Junior Steno, corrected by me and pronounced in the open Forum, this the 13^th day of October, 2011.    

       MEMBER                            MEMBER                            PRESIDENT

 APPENDIX OF EVIDENCE

                                        DOCUMENTS MARKED

For Complainant:        

For opposite parties :         

                                                                                PRESIDENT