Andhra Pradesh

East Godwari-II at Rajahmundry

CC/12/2015

Kambala Venkata Mutya Satyanarayana Rao - Complainant(s)

Versus

Margadarsi Chit Fund Private Ltd., - Opp.Party(s)

Ch.V. Prasad

04 Mar 2016

ORDER

                                                                                    Date of filing:   11.02.2015

                                                                                                Date of Order: 04.03.2016

 

BEFORE THE DISTRICT CONSUMER FORUM-II, EAST GODAVARI

DISTRICT AT RAJAHMUNDRY

 

          PRESENT:   Smt H.V. Ramana, B.Com., L.L.M.,   PRESIDENT(FAC)

                             Sri A. Madhusudana Rao, M.Com., B.L., MEMBER        

                       

                                               Friday, the 4^th day of March, 2016

 

 

       C.C.No.12 /2015

Between:-

 

Kambala Venkata Mutya Satyanarayana Rao,

S/o. Somayya, aged 55 years, employee,

R/o.D.No.86-2-17/3, Pragati Marg, Near J.N. Road,

Rajahmundry.                                                                                 …        Complainant

 

                                    And

 

1)  Margadarsi Chit Fund Private Ltd.,

     Rajahmundry Branch, represented by its

     Manager, Opp: Syamala Talkies, Innespeta,

     Rajahmundry.

 

2)  Margadarsi Chit Fund Private Ltd.,

     Corporate Office, represented by its Chairman &

     Managing Director, 5-10-195, Fateh Maidan Road,

     Hyderabad – 500004, Telangana.                                         …        Opposite parties

 

 

 

            This case coming on 17.02.2016 for final hearing before this Forum in the presence of Sri Ch.V. Prasad, Advocate for the complainant and Sri M.R. Satya Sai, Advocate for the     opposite parties, and having stood over till this date for consideration, this Forum has pronounced the following:  

 

O R D E R

[Per Sri A. Madhusudana Rao, Member] 

This is a complaint filed by the complainant U/Sec.12 of Consumer Protection Act 1986 to direct the opposite parties 1 and 2 to pay Chit amount of Rs.6,00,000/-; award damages of Rs.5,00,000/- towards deficiency of service; award compensation of Rs.1,00,000/- towards mental agony and award costs of Rs.25,000/-.

2.         The case of the complainant is as follows:-  In the month of May, 2014, the complianant joined in a chit bearing No.LT011XR-16 consisting of 50 members organized by the  1^st opposite party for a sum of Rs.10 lakhs for a period of 50 months commencing from May, 2014. The 1^st opposite party is the Foreman in respect of the Chit bearing No.LT.011X R016. The complainant was allotted Ticket No.16. The complainant paid the monthly subscription without fail. The complainant had demanded the opposite parties a number of times to deliver the chit agreement in vain. Till date, the chit agreement is not delivered to the complainant. The complainant has participated in the auction conducted by the 1^st opposite party in the month of July, 2014, i.e. 27.7.2014. The complainant had agreed to forego a sum of Rs.4,00,000/- out of the chit amount of Rs.10,00,000/-. The same was communicated to the complainant by way of letter dt.30.7.2014. The 1^st opposite party had directed the complainant to collect necessary forms for submission of sureties to it. As per the procedure for receiving the security of immovable property of third party or the security of persons drawing basic salary as specified shall be submitted to the opposite parties. The number of salaried persons can be in multiple numbers depending on future liability of the subscriber. The complainant has submitted the surety forms signed by three persons who are Government employees. But the opposite parties did not accept the same on flimsy grounds. The complainant had also delivered a copy of his title deed dt.5.3.2010 in respect of an extent of Ac.5-00 agricultural property situate at Pedakancharla village in Vinukonda mandal aong with the encumbrance certificate. Apart from that, the complainant had also delivered the document of title in respect of house bearing D.No.1-485 situate at Lalacheruvu, Rajahmundry along with encumbrance certificate. Despite submission of the sureties stated above, the opposite parties did not disburse the chit amount of Rs.6,00,000/- and insisted for further sureties by falsely contending that the sufficient sureties are not submitted and one surety has to be substituted.  Thereupon, the complainant had submitted the surety of Dr. K. Suman Kalyani, Scientist working in C.T.R.I., Rajahmundry. Yet the complainant did not pay the bid amount. The complainant got issued a legal notice dt.20.12.2014 to the opposite parties calling upon them to disburse the chit amount and pay damages. The opposite parties having received the same and kept quiet. Inspite of the deficiency in service on the part of the opposite parties, the complainant is still paying the installments of chit regularly and as there is no response from the opposite parties. Hence, the complaint.

3.         The 1^st opposite party filed its written version and the same was adopted by the 2^nd opposite party and denied all the allegations made by the complainant. It is submitted that there was no deficiency of service on the part of the opposite parties in not disbursing the bid amount to the complainant and it is only on account of negligence and callousness of the complainant and for not producing sufficient sureties, the bid amount could not be disbursed. It is true that the complainant joined as a subscriber in the chit organized by the opposite parties in Chit group L.T.011XR and allotted with ticket No.16 for a chit value of Rs.10,00,000/- and the duration of the chit is fifty months and the monthly subscription for each ticket is Rs.20,000/- and the complainant become prized subscriber for Rs.6,00,000/- agreeing to forego an amount of Rs.4,00,000/- in the auction conducted on 27.7.2014. The complainant has to furnish sufficient sureties to pay the prize amount to him and the sureties to be submitted to the opposite parties are must be to the satisfaction of the opposite parties. The complainant failed to submit required sureties within the stipulated time and consequently, the opposite parties deposited the said prize amount in a separate account in the approved bank by following procedure stipulated under the Chit Fund Act which was duly intimated to the complainant by way of letter dt.23.8.2014. On regular persuasions made by the opposite parties, the complainant had submitted surety forms which have been sent to the 2^nd opposite party for approval and on verification of the sureties, it was found that the sureties submitted by the complainant are the defaulters in other chits conducted by the opposite parties in different branches and thereby those surety forms were returned for want of submitting fresh sureties. The opposite parties have sent a letter dt.30.12.2014 duly intimating the complainant to furnish fresh sureties. In the above circumstance, the prize amount could not be paid to the complainant. Though the opposite parties are ready and willing to pay the prize amount on account of negligence on the part of the complainant in furnishing sufficient sureties, it could not be disburse. The opposite parties are conducting chit fund business with the money of the public and therefore, it has to take appropriate steps and take precautions to make sure that the prize amount is to be recovered from the subscriber in the event of any default by the subscriber, therefore the opposite parties have insisted to furnish sufficient sureties, but the complainant failed to furnish sufficient sureties. Hence, there is no deficiency of service on the part of the opposite parties and the complaint is liable to be dismissed with exemplary costs.

4.         The proof affidavit filed by the complainant and Exs.A1 to A9 have been marked for the complainant. The proof affidavit filed by the opposite parties and Exs.B1 to B14 have been marked for the opposite parties. The complainant filed written arguments.

5.         Heard both sides.

6.         Points raised for consideration are:

 

1. Whether there is any deficiency in service on the part of the opposite parties?

            2. Whether the complainant is entitled for the reliefs asked for?

            3. To what relief?

 

7.  POINT Nos.1 & 2:  On perusal of the record, it is observed that the complainant herein joined as a subscriber during the month of May, 2014 in the chit bearing No.LT011XR-16 for a sum of Rs.10,00,000/- for a period of 50 months at a subscription of Rs.20,000/- per month commenced from May, 2014, conducted by the 1^st opposite party branch at Rajahmundry, for which, the 2^nd opposite party is the head office at Hyderabad as per Ex.A1 passbook. The complainant participated in the chit auction and declared as successful bidder for a loss of Rs.4,00,000/- in the said chit on 27.7.2014 as per Ex.A2 letter communication dt.30.7.2014 from the 1^st opposite party to the complainant. The complainant alleged that despite furnishing of surety forms of three government employees by names (1) A. Ajay Kumar, (2) T. Vardarajulu and (3) K.N.V.S.S. Narayana Murthy, who are working in A.P. Housing Board, Tadepalligudem and they are permanent employees as per Ex.B9 bunch of salary certificates in reference to the 1^st opposite party letter dt.23.8.2014 stating that the bid amount was deposited vide Ex.B8 statement as the complainant did not draw the same by furnishing sureties vide Ex.A3 letter. The opposite parties did not accept Sri A. Ajay Kumar as surety and he was replaced by Smt. A. Vijayalakshmi vide Ex.A4 = Ex.B5 surety forms. Further, the complainant delivered a copy of his title deed dt.5.3.2010 in an extent of Ac.5-00 cents agriculture property situated at Pedakancherla of Vinukonda mandal and further, the title in respect of house bearing No.1-485 situated at Lalacheruvu, Rajahmundry along with encumbrance certificates under Ex.A5 = Ex.B6 along with Ex.B10. The opposite parties failed to disburse the chit amount of Rs.6,00,000/- and insisted for further sureties as the sufficient sureties are not submitted. Once again, the complainant submitted surety of Dr. K. Suman Kalyani, Scientist of C.T.R.I., who is drawing gross salary of Rs.1,25,000/- per month and net salary of Rs.86,826/- per month, yet the opposite parties did not pay the bid amount.

On that, the complainant got issued a legal notice dt.20.12.2014 vide Ex.A6 = Ex.B1 to disburse bid amount to both the opposite parties, which were booked on 4.2.2015 vide registered post and received by the opposite parties on 5.2.2015 and 17.2.2015 as per Exs.A7 acknowledgements and receipts and received reply vide Ex.B3 dt.13.2.2015 and the same was served on the complainant’s counsel under Ex.B2 acknowledgement. Ex.A8 is the letter addressed to the 1^st opposite party dt.2.2.2015 by the complainant demanding for chit agreement copy and for permission to inspect the documents pertaining to above chit and Ex.A9 is the postal receipt for the same.

Ex.B11, B12 and Ex.B13 are Account statements of S. Satyavani, P.Venkayamma and R. Jayasree, defaulters of other branches for whom the above said K. Suman Kalyani stood as guarantor and so, she is also considered as a defaulter. Ex.B14 is the letter from the 1^st opposite party to the complainant dt.30.12.2014 stating that the guarantors furnished by him are defaulters in other chits conducted by other branches of the 2^nd opposite party and further, the prized subscriber himself is a defaulter in other chits vide LT40XA25 as he stood the surety to one R. Jayasree committed default in payment of installments for three months at Ameerpet Branch, Hyderabad.  Further, the opposite parties contended that they do chit fund business in public money, therefore, he has to take appropriate steps and precautions to make sure that the prize amount is to be recovered from the subscriber in the event of any default by the subscriber. Therefore, the opposite parties insisted to furnish sufficient sureties, but the complainant failed to furnish sufficient sureties. It is a fact that the Foreman had a right to demand sufficient surety from any prized subscriber for security the due payment of future subscriptions payable by the prized subscriber under Section 21(e) of the Chit Fund Act, 1982. 

The complainant objected for the above contention of the opposite parties and showed the account statement of the complainant that the complainant always paid extra amount and he cannot be treated as a defaulter. Further, the complainant furnished Ex.A5 = Ex.B6     Ac.5-00 cents of land in Guntur district and house at Lalacheruvu, Rajahmundry belonged to him along with Ex.B9 encumbrance certificate as surety. We observed that the further explanation in the said Section 21(e) of Chit Fund Act, 1982, is stated as that a “security shall be deemed to be sufficient for the purpose 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”.  So, as per this explanation even if the opposite parties considered the sureties furnished by the complainant as defaulters, the opposite parties should have disbursed the prized amount of Rs.6,00,000/- to the complainant, once he furnished the title deed documents stood in his name as further surety to the said bid amount. But, the opposite parties failed to do so to the reasons best known to them, which amounts to deficiency in service on the part of the opposite parties.

We further observed that the complainant demanded the opposite parties to deliver the copy of chit agreement, but in vain and even the complainant’s request to the opposite parties to permit the complainant to inspect and verify the chit documents pertaining to the chit No.LT011XR-16 through Ex.A8 letter dt.2.2.2015 was not fruitful. As per the Section 8 of A.P. Chit Fund Act, 1971, the Foreman shall after obtaining the certificate of commencement, but not later than the date of the first drawing of the chit furnish to every subscriber a copy of the byelaws of the chit and of the chit agreement certified by him to be a true copy given to subscribers and further, as per Section 35, the Foreman shall allow subscribers to examine chit records on payment of such fee not exceeding five rupees as may be specified in the chit agreement. So, the opposite parties committed deficiency in service in providing the copy of the chit agreement to the complainant and denied permission to inspect the chit records. It is further observed that the complainant herein paid all the subsequent chit installments without fail up to date after bidding the chit amount on 27.7.2014.

With the above said discussion and under the facts and circumstances of the case, we are in the considered opinion that the complainant is entitled for the bid amount of Rs.6,00,000/- with interest from the date of demand i.e. 20.12.2014 till realization and costs of this complaint from the opposite parties as the purpose of bidding in the chit auction for a loss of Rs.4,00,000/- out of Rs.10,00,000/- chit amount was not served.                           

8.   POINT No.3:  In the result, the complaint is allowed in part, directing the opposite parties to disburse the bid amount of Rs.6,00,000/- vide Chit No.LT011XR-16 dt.27.7.2014 with interest @ 18% p.a. from the date of demand i.e. 20.12.2014 till realization to the complainant. We further direct the opposite parties to pay Rs.5,000/- towards the costs of the complaint to the complainant. Time for compliance is two months from the date of this order.   

 

        Typed to dictation, corrected and pronounced by us in open Forum, on this the       

       4^th day of March, 2016.

    

                Sd/-xxx                                                                                           Sd/-xxx

              MEMBER                                                                              PRESIDENT(FAC)

         

 

APPENDIX OF EVIDENCE

WITNESSES EXAMINED

 

FOR COMPLAINANT: None.                                         FOR OPPOSITE PARTIES: None.

 

DOCUMENTS MARKED

 

FOR COMPLAINANT:

 

Ex.A1    copy of Chit Passbook of the complainant.

Ex.A2    Letter dt.30.7.2014 issued by the 1^st opposite party.

Ex.A3    Letter dt.23.8.2014 issued by the 1^st opposite party.

Ex.A4    copy of Surety forms submitted by the complainant.

Ex.A5    copy of Title deed submitted by the complainant (2 in number).

Ex.A6    office copy of legal notice dt.20.12.2014.

Ex.A7    Postal receipt & Acknowledgement.

Ex.A8    office copy of the letter along with DD for Rs.30/- sent by the complainant.

Ex.A9    Postal receipt.

 

FOR OPPOSITE PARTIES:-    

 

Ex.B1    Letter dt.20.12.2014 addressed by the opposite parties to the complainant.

Ex.B2    Acknowledgement of the complainant.

Ex.B3    Reply notice dt.10.2.2015.

Ex.B4    copy of account of the complainant.

Ex.B5    True copy of surety form submitted by the complainant to the opposite parties.

Ex.B6    Copies of title deeds submitted by the complainant.

Ex.B7    Account statement of complainant maintained by the opposite party as on 31.7.2015.

Ex.B8    Copy of deposit receipt for auction amount in the name of complainant which is in the

      custody of the opposite parties.

Ex.B9    Salary certificate submitted by the sureties along with surety forms.

Ex.B10   E.C. submitted by the complainant for the Housing Board property pertaining to the

     complainant.

Ex.B11   Copy of account dt.29.1.2016 of the Mr. A. Ajay Kumar, who is a defaulter in Chit No.FT

              13 NE -29 (Eluru Branch).

Ex.B12   Copy of account dt.20.1.2016 of the Ms. K. Suman Kalyani, who is a defaulter in the Chit

              No.FT 5DG -34 (Guntur Branch).

Ex.B13   Copy of account dt.20.1.2016 of the Mr. K.V.M.S. Satyanarayana, who is a complainant

              himself defaulter in Chit No.LT 40XA-25 (Ameerpet Branch).

Ex.B14   Letter of relating to the defaulters issued by the opposite parties.

 

                  Sd/-xxx                                                                                     Sd/-xxx

              MEMBER                                                                              PRESIDENT(FAC)