FA.No.1140/2005 against CD.No.940/2004 District  Forum-I, Hyderabad..

Between:

Sri G.Srinivas,

S/o.G.M.G.K.Murthy, aged 35 years,

Occ:Faculty in M.C.A., Institute,

R/o.10-2-287/1, 306, Vijaya Towers,

Shantinagar, Hyderabad-500 028.                         …Appellant/Complainant

And

1. Margadarsi Chit Fund Limited,

    Rep. by its Managing Director,

   5-10-195, Fathe Maidan Road,

   Opp:Police Control Room,

    Hyderabad-500 004.

2. Margadarsi Chit Fund Limited,

    Rep. by its Manager,

    Lakdi-ka-pul Branch, Hyderabad-4.                                Respondents/opp.parties

For the Appellant                               :  Mr.G.Srinivas, Party in person.

Counsel for the Respondent          :   Smt.N.R.Rao.

QUORUM:SRI K.SATYANAND, HON’BLE MEMBER

AND

SRI R.LAKSHMINARASIMHA RAO, HON’BLE MEMBER.

MONDAY, THE TWENTY NINTH DAY OF JUNE,

TWO THOUSAND NINE.

Oral Order (Per Hon’ble Sri K.SATYANAND, MEMBER)

*******

This is an appeal filed by the unsuccessful complainant before the District Forum-I, Hyderabad in C.D.No.940/2004.

The facts of the case lie within a very narrow compass.

The complainant claimed to have subscribed to a chit floated by the opposite party with a face value of Rs.10,00,000/- bearing No. LT 004 XL/5 which was started in the month of February,2000 and was marked to last for 50 months.  The subscription was agreed to be paid in monthly instalments.  The said chit was put to auction in December, 2002.  The father of the complainant participated in the bid as his proxy.  There was only one more bidder bearing No.35.  The grievance of the complainant was no defaulted subscriber could be allowed to participate in the auction as per the agreement of chit.  Inspite of the said fact, ticket No.35 holder was allowed to participate on the strength of a cheque issued by him towards the subscription although the said cheque was not encashed at the time of auction.  The whole thrust of the complaint is that opposite parties were guilty of deficiency in service in as much as they permitted such a defaulter to participate in the bid who ultimately turned out to be successful bidder elbowing out the complainant or rather damaging his prospects of getting the bid amount.  He further urged that he lost chance and was deprived of making use of the said amount for a better purpose and thereby sustained loss.  He also alleged that the opposite parties were running the chit business contrary to the provisions, agreements and bye laws of the Chit Fund Act.  Finally, he claimed an amount of Rs.2,16,000/- representing the damages for the loss, he allegedly suffered in the bargain.

Opposite parties contested the claim by filing a counter in which the opposite parties mainly relied upon the fact that the ticket holder No.35 was given permission with the consent of the proxy that represented the complainant and even otherwise he had issued a cheque towards the monthly subscription on time though it was not encashed by the company at the time of auction.  The opposite party also took the stand that the foreman has got the discretion of permitting such subscribers to participate in the auction and therefore his participation in the auction was not illegal and on that account no imputation of deficiency in service can be leveled against the opposite parties.

In support of his case, the complainant relied upon Exs.A1 to A4 and the opposite parties on the other hand relied upon Exs.B1 to B6.

On a consideration of the evidence adduced on either side, the District Forum dismissed the complaint holding to the effect that there was no deficiency in service.

Aggrieved by the said order, the complainant filed this appeal reiterating the grounds urged by them and also contended that his father had no authority to give consent to allow ticket No.35 subscriber to participate even if the consent were true.

The respondent counsel filed written arguments and there was no representation for the appellant.

A perusal of the record throws up the following points for consideration 1)Whether the complainant could prove that the opposite parties were guilty of deficiency in service marked by the act of permitting an unauthorized person to participate in the auction in question. 2) Whether there are any good grounds to interfere with the order of the District Forum?

According to the complainant, the act of the opposite parties in permitting the person with ticket No.35 into the auction has marred his chances of getting the amount which he wanted to utilize for purchasing land and thereby the opposite parties rendered defective service in the matter.  The grievance of the complainant can be appreciated as having substance if only the participation of chit No.35 subscriber is capable of being shown as illegal or irregular.  In this regard what all the agreement marked as Ex.B1 stipulates is as follows:

‘Defaulted subscribers will not be allowed to participate

in the auction’

Whether ticket No.35 participant was a defaulter or not has to be decided by the foreman, who will, naturally have the exclusive knowledge about the status of payments.  The opposite parties clearly stated that by the date of auction, the said so called unauthorized participant had paid the instalments by way of cheque and the realization or otherwise of the cheque was not decided by that time in as much as they stated that it was not encashed by them.  The payment of instalment by way of cheque whether it was encashed or not by the recipient cannot be discounted as non payment in order to brand such person as a defaulter.  Even otherwise, the opposite parties categorically stated that they had taken the consent of the proxy, namely, the father of the complainant, for allowing the said person.  It does not lie in the mouth of the complainant to say that his father had no such authority.  We could see Exs.B2 and B3 bear the signature of the father of the prized subscriber.  The complainant made an attempt to take a ‘U’ turn to disown the role of his father, firstly by describing himself  in the complaint  as the one that had participated in the auction and later by saying that he had no authority to give any such consent.  But in his own notice, Ex.B3,  got issued through the counsel, he clearly admitted as follows:

        ‘…………..when recently conducted the auction in the month

          of December, 2002, there were only two members that is

          my client’s father with due authorization and another member

          holding ticket No.35 of the same chit series’.

This prevaricating statements would naturally cast a shadow on his assertion that his father had no power to give consent on his behalf.  There is absolutely nothing in the contract of rules preventing the Chit Fund Company from proceeding with the auction by taking consent from the other participants in respect of compliance with certain rules.  Even otherwise, the subscriber, who tenders cheque cannot be branded as out right defaulter as the cheque is nothing but cash payment marked to be realized the moment the cheque is presented for encashment.  If by any chance the cheque gets bounced it terminates the liability of debt on the foot of the bounced cheque, in such an event it serves the purpose of payment and also generates a cause of action in favour of the chit fund company to deduct the said unrealized amount from the prized amount and in any view of the matter, we do not see any deviation on the part of the opposite parties from the valid practices that are capable of being pronounced as unfair from the terms of the contract and the law behind the contract.  We are unable to disagree with the finding of the District Forum as the order did not suffer from any infirmities.

        Accordingly the appeal is dismissed but without costs in the circumstances of the case.

‘

MEMBER.                                                  

                                                                             MEMBER

                                                                Dated 29-6.2009