Date of Filing: 18.06.2008<br /> Date of Order:30.09.2008<br /> <br /> <br /> <br /> BEFORE THE II ADDITIONAL DISTRICT CONSUMER DISPUTES REDRESSAL FORUM SESHADRIPURAM BANGALORE-20<br /> <br /> Dated: 30TH DAY OF SEPTEMBER 2008<br /> PRESENT<br /> Sri. S.S. NAGARALE, B.A, LL.B. (SPL.), President.<br /> Smt. D. LEELAVATHI, M.A.LL.B, Member.<br /> Sri. BALAKRISHNA. V. MASALI, B.A, LL.B. (SPL.), Member.<br /> <br /> COMPLAINT NO: 1356 OF 2008<br /> <br /> R. Meenakshi<br /> C/o. Srikantaiah<br /> No. 34, H.P. Gas Office Road<br /> Vivekananda Nagar<br /> Ramnagar 571 511 Complainant<br /> <br /> V/S<br /> <br /> Manager<br /> Sriram Chits Pvt. Ltd.<br /> NO. 2904, 2nd Floor, 11th Main Road<br /> 4th Block, Jayanagar<br /> Bangalore 560 011 Opposite Party<br /> <br /> ORDER<br /> By the President Sri. S.S. Nagarale<br /> <br /> This is a complaint filed by the complainant for giving direction to the opposite party chit fund to pay Rs. 1,85,000/-. <br /> The facts of the case are that on 15.01.2007 the complainant had applied for chit amount of Rs. 5,00,000/-. On 15.01.2008 draw was held for Rs. 3,88,000/-. Opposite party demanded security deposit amount. The complainant states that a site measuring 30’X40’ which was in her husband’s name, the documents were given to opposite party in respect of the site. The opposite party informed that documents will be verified and looked into and thereafter, amount will be released. The complainant enquired the matter with the opposite party. The opposite party informed that the property offered as security is not proper and they cannot accept their property as security and chit amount will not be given to complainant. The opposite party informed that they will refund the amount deposited by the complainant with interest. The complainant states that she has spent lot of amount for getting documents and for approval and to meet other expenses since she was in need of finance and she has taken lot of trouble in getting the amount and they obtained loan and paying interest on that loan. Therefore, she has sought refund of the amount with compensation.<br /> 2. Notice issued to opposite party. Opposite party has put in appearance through his advocate. Defence version filed stating that complainant is subscriber of chit fund on monthly subscription of Rs. 12,500/- and chit value amount is Rs. 5,00,000/-. As per the records complainant has paid monthly installment amount totally Rs. 1,30,222/- as on 15.01.2008. It is also admitted that complainant was the successful bidder in the auction which was held on 15.01.2007. As per the chit agreement complainant has failed to furnish solvent surety for the future liability. The documents furnished by the complainant were not legally correct. On 16.04.2008 husband of complainant taken back original documents of site. The legal notice was suitably replied. As per the agreement complainant lose dividend. Opposite party has right to deduct 5% as foreman commission. Opposite party submitted that there is no deficiency of service.<br /> 3. Complainant has filed her affidavit evidence. Arguments are heard on both sides.<br /> 4. The point for consideration is:<br /> “Whether the opposite party could be directed to refund amount deposited by the complainant with interest and dividend?”<br /> 5. I have gone through the documents. The opposite party has filed memo of calculation. As per memo of calculation the total paid up capital including dividend is Rs. 1,62,500/-. The amount paid by the complainant to opposite party has been at Rs. 1,30,222/-. The opposite party has shown foreman commission as per Section 21 of the Chit Funds Act 1982 at Rs. 25,000/-. The opposite party submitted that complainant is entitled for Rs. 1,05,222/-. As per memo opposite party submitted that complainant will lose dividend. The Installment-wise Payment Details has been produced by the opposite party. As per this account statement Rs. 1,30,222/- was the amount received by the opposite party from the complainant right from 28.12.2006 to 15.01.2008 in 13 instalments. The account statement also shows the amount deposited by the complainant earned dividend of Rs. 32,278/-. The complainant has produced pass book issued by the opposite party. In the pass book also the total amount in the account of complainant has been shown at Rs. 1,62,500/-. The amount paid by the complainant is 1,30,222/- as per the account statement and the dividend is stated at Rs. 32,278/-. Then, the total paid up amount with dividend comes to Rs. 1,62,500/-. The opposite party here in has to pay this amount to the complainant with future interest. The learned advocate for the opposite party referred Section 21 of Chit Funds Act and submitted that opposite party is entitled for 5% of the chit amount by way of commission, remuneration or for meeting the expenses of running the chit. Section 21 speaks up rights of foreman. It is better to quote the said section for better appreciation of the facts of the case.<br /> “Rights of foreman: (1) The foreman shall be entitled.-<br /> (a) in the absence of any provision in the chit agreement to the contrary, to obtain the chit amount at the first installment without deduction of the discount specified in the chit agreement, subject to the condition that he shall subscribe to a ticket in the chit:<br /> Provided that in a case where the foreman has subscribed to more than one ticket, he shall not be eligible to obtain more than one chit amount in a chit without discount;<br /> (b) to such amount not exceeding five per cent of the chit amount as may be fixed in the chit agreement, by way of commission, remuneration or for meeting the expenses of running the chit;<br /> (c) to interest and penalty, if any, payable on any default in the payment of installments and to such other amounts as may be payable to him under the provisions of the chit agreement;<br /> (d) to receive and realize all subscriptions from the subscribers and to distribute the prize amounts o the prized subscribers;<br /> (e) to demand sufficient security from any prized subscriber for the due payment of future subscriptions payable by him.<br /> Explanation.- A security shall be deemed to be sufficient for the purposes of this clause if its value exceeds by one-third, or if it consists of immovable properties, the value of which exceeds by one-half, of the amount due from the prized subscriber;<br /> (f) to substitute subscribers in place of defaulting subscribers; and <br /> (g) to do all other acts that may be necessary for the due and proper conduct of the chit.<br /> (2) Where any dispute arises with regard to the value of the property offered as security under clause (c) of sub-section (1), it shall be referred to the Registrar for arbitration under Section 64.”<br /> 6. So by reading above provision very carefully the argument of the learned counsel for the opposite party that opposite party is entitled to receive 5% of the chit amount by way of commission cannot be accepted in this case. The opposite party is not permitted under Section 21 of the Act to take or deduct 5% of the chit amount as commission because the opposite party has not at all given auction amount to the subscriber / complainant. No doubt the complainant had participated in the chit held on 15.01.2008. But the opposite party insists for production of sufficient security for due payment of future subscriptions payable by the complainant. The complainant no doubt submitted documents in respect of plot measuring 30’X40’ standing in her husband’s name. Opposite party submits that the said documents were not legally correct. Therefore, the husband of the complainant took all the original documents back and ultimately, the chit amount Rs. 3,88,000/- was not at all paid to the complainant. So under these circumstances the question of taking 5% of the chit amount by way of commission for foreman does not arise at all. It is wholly unreasonable and unjustified without any authority of law on the part of the opposite party to insist payment of 5% amount by way of commission. The chit amount was not at all given to the complainant how can opposite party will be justified in demanding 5% of the chit amount as commission. The argument advanced by the learned advocate of opposite party has no legal basis and same has got no merit at all. Section 21 of the Chit Funds Act 1982 does not authorise the opposite party to receive or deduct 5% of the chit amount in this case. The demand put up by the opposite party that it is entitled to receive 5% of the chit amount by way of commission or remuneration is wholly unwarranted and without any authority of law. The second point of argument advanced by the learned advocate for the opposite party is that the complainant is not entitled for dividend on the amount deposited by her on the ground that the complainant is a defaulter, the learned counsel referred Section 28 of the Chit Funds Act in support of his argument. I have gone through Section 28 of the Act very carefully and minutely. By reading this section there is no any authority or power as mentioned that complainant in not entitled for any dividend. Section 28 speaks of non-prized subscriber who defaults in paying his subscription in accordance with the terms of chit agreement. As per this section the name of such subscriber will be removed from the list of subscribers and a written notice of such removal shall be given by the foreman to the defaulting subscriber within 14 days of the date of such removal. This section does not speak of dividend at all. There is no any authority or provision in the Chit Funds Act to show that the complainant / subscriber is not entitled for the dividend earned on the deposits. Even it is not the case of the opposite party that the name of the complainant removed from list of subscribers and a written notice was given to her within 14 days of such removal. The argument submitted by the learned advocate of opposite party that complainant is not entitled for dividend is wholly unacceptable. Therefore, there is absolutely no substance or merit in the argument advanced by the advocate for opposite party. Taking into consideration of all the facts and circumstances of the case and provision of Chit Funds Act 1982 I am of the opinion that the complainant herein entitled to receive Rs. 1,62,500/- from the opposite party with future interest from 15.01.2008 till payment / realisation. The Consumer Protection Act is a social and benevolent legislation. It has been enacted to protect better interests of the consumers. The financial institution cannot exploit the public by denying the reasonable claim. In this case the complainant being a woman a weaker section of the society not able to engage advocate to prosecute her case she personally had filed complaint and also argued her case in person and submitted that she was put to lot of financial trouble and harassment. She had taken money from others on payment of interest and paid the same to the opposite party with a hope to get lumpsum chit amount for her financial difficulty and argued that the opposite party instead of giving the auction chit amount harassed her and the documents furnished by her for security was not accepted without any justifiable reasons and therefore, she sought justice from the hands of this forum. Taking into consideration all the submissions made by the complainant and also the learned advocate for the opposite party and looking into the facts of the case it is just, proper and reasonable to direct the opposite party to pay Rs. 1,62,500/- with future interest on that amount at 12% p.a. from 15.01.2008 till payment / realisation. In the result I proceed to pass the following:<br /> ORDER<br /> <br /> 7. The complaint is allowed. The opposite party is directed to pay Rs. 1,62,500/- to the complainant within 30 days from the date of this order. The complainant is also entitled to 12% interest on the amount from 15.01.2008 till payment / realisation. <br /> 8. The complainant is also entitled for Rs. 3,000/- towards costs of the present proceedings from the opposite party. <br /> 9. Send the copy of this Order to both the parties free of costs immediately. <br /> 10. Pronounced in the Open Forum on this 30TH DAY OF SEPTEMBER 2008. <br /> Order accordingly,<br /> <br /> <br /> PRESIDENT<br /> We concur the above findings. <br /> <br /> MEMBER MEMBER <br />