P. STATE CONSUMER DISPUES REDRESSAL COMMISSION :
AT HYDERABAD
F.A. 997/2007 against C.D. 54/2002 on the file of the
District Forum II, Visakhapatnam.
Between :
1. M/s. Margadarsi Chit Fund Ltd
Rep. by its Managing Director,
Ch. Sailaja Kiron, Hyderabad
2. M/s. Margadarsi Chit Fund Ltd
Gajuwaka Branch rep. by its
Manager, Visakhapatnam .. petitioner/Appellants
And
1. Mr. H. Raja Gopala Rao
S/o Late Rama Rao
Hindu, aged about 47 years,
R/o MIG ¾ Pithapuram colony,
Visakhapatnam …Respondent/Complainant
2. Mr. S. R. Vallabhneni, Agent,
M/s. Margadarsi Chit Fund Ltd.,
Gajuwaka Branch
Visakhapatnam respondent/Opp.no. 3
(Respondent No.2 is not a necessary party to this appeal )
Counsel for the Appellant : M/s. Smt. Nanda Ramachandra Rao
Counsel for the Respondents . H. S.Dora
F.A. 1025//2007 against C.D. 724/2003 on the file of the
District Forum II, Visakhapatnam.
Between :
1. M/s. Margadarsi Chit Fund Ltd
Rep. by its Managing Director,
Ch. Sailaja Kiron, Hyderabad
2. M/s. Margadarsi Chit Fund Ltd
Gajuwaka Branch rep. by its
Manager, Visakhapatnam .. petitioner/Appellants
And
1. Mr. H. Raja Gopala Rao
S/o Late Rama Rao
Hindu, aged about 47 years,
R/o MIG ¾ Pithapuram colony,
Visakhapatnam …Respondent/Complainant
2. Mr. S. R. Vallabhneni, Agent,
M/s. Margadarsi Chit Fund Ltd.,
Gajuwaka Branch
Visakhapatnam respondent/Opp.no. 3
(Respondent No.2 is not a necessary party to this appeal )
Counsel for the Appellant : M/s. Smt. Nanda Ramachandra Rao
Counsel for the Respondents : Mr. H. S. Dora
Coram ; Sri Syed Abdullah … Hon’ble Member
And
Sri R. Lakshminarasimha Rao… Hon’ble Member
Wednesday, the Sixteenth Day of June, Two Thousand Ten
Oral Order : ( As per Sri Syed Abdullah, Hon’ble Member )
*******
These appeals are arising out of separate impugned orders dated 14.5.2007 passed in CD 54/2002 and C.D. 724/2003 by the District Forum II, Visakhapatnam pertaining to two chit bearing nos. LT04TU33 and LT04TU40 of the same chit group, wherein, the appellants/opposite parties were directed to pay interest on the prize amount of Rs.2,75,000/- with interest at 12% pa from 05.05.99 till the prize amount was kept in the bank and also to pay dividend of Rs.60,856/- with interest thereon at 12% pa from 13.10.2002 till the closure of the chit bearing No.LT04TU33 along with compensation of Rs.6000/- and costs of Rs.1500/-.
The parties in both the C.Ds are common and also the dispute involved in respect of the two complaints which is in respect of payment of the interest on the chits and as well dividends. Both the cases are interlinked with each other. So we propose to dispose of the same by common order.
The facts as stated in CD 997/2007 are as hereunder : The first opposite party is a company has been dealing with chit fund business, the second opposite party is the Branch Manager and the third opposite party is their agent who enrolls the subscribers. The opposite parties 1 and 2 have floated the chit bearing No. LT04TU33 and on the inducement of OP. 3, the complainant joined as a member and he had taken two tickets of the same chit group. He was assured that he would be permitted to bid for the first three occasions and on the said assurance he joined in the chit by taking two tickets of the same group bearing no. LT04TU 33 and LT04TU40. In the auction held on 14.02.99, the complainant was declared as a successful bidder for entitlement of the prize amount. The opposite parties 1 and 2 changed their version and informed that he was declared as highest bidder in the auction held on 11.04.99. The complainant submitted sureties but the opposite parties rejected the same and dragged on for disbursement of the amount till August, 99 withholding of the prize amount which amounts to deficiency in service. The complainant had paid 29 instalments of the chit bearing No. LT04TU 40 he could not pay the remaining 21 instalments. He had suffered financial loss on account of delay in payment of the prize amount. The complainant is entitled for claiming interest on the amount of Rs.2,75,000/- right from February, 99 to August, 99 , so also, to claim for compensation of Rs. 2 lakhs with costs.
The opposite parties 1 and 2 in its version have stated that the complainant had submitted a bid offer from during the month of September, 1998 for over a period of 10 months, i.e., up to June, 1999 so as to participate in the ensuring auctions pertaining to the chits by foregoing an amount of Rs.2,25,000/- out of the total value of the Chit amount of Rs. 5 lakhs. The complainant was declared as prized subscriber in the auction held in the 8th month, i.e., April, 1999 which was held on 11.04.99 which fact was informed to the complainant requiring him to submit solvent sureties for releasing the prize but the complainant failed to submit sureties till August, 1999. So prize money was kept in the fixed deposit in the name of the complainant in Vijaya Bank, Gajuwaka. So the question of rendering deficiency in service does not arise at all. The complainant had paid only 29 instalments pertaining to the chit No. LT04TU40 and thereafter committed defaulting in payment of further amounts. so the opposite parties 1 and 2 filed Civil Suit against the complainant before the Civil Court in O. S. No. 256/2002 which has been decreed. Therefore, the complainant claims either for interest or compensation as claimed by him is untenable.
The facts of the case in C. D. 724/2003 are that he joined as a subscriber in two chits bearing No. LT04TU 33 and LT04TU40 on the promise that the opposite parties would declare him as a successful bidder in one of the first three occasions without insisting for sureties since the other chit will be given as security for his liability in the prized chit. The complainant was in dire need of money as he was running Petrol Bunk business. So he accepted the two tickets of the same chit for a value of Rs.5 lakhs each. Agreeing to pay at Rs.10,000/- per month for equal monthly subscriptions, by April, 2002 he had paid instalments’ amount of Rs.2 lakhs under chit No. LT04TU 33 including the net dividends that were credited to his account in the chit. Though the Opposite parties 1 and 2 have given assurance to permit him to take the bid for the first three months but betrayed the assurance. The complainant suffered business loss as he could not get the prize amount within time. As he failed to pay the chit instalments pertaining to the Chit bearing No. LT04TU 33 , the same was terminated with the opposite parties in September, 2002 and the dividends that accrued on the amount have not been credited to his account. Non crediting of the dividends would amounts to deficiency in service. Further, the complainant suffered mental agony and inconvenience and also suffered loss in his business on account of the opposite parties who failed to fulfill their promise.
The opposite parties 1 and 2 in their version while denying the allegations made in the complaint have stated that the complainant paid 18 instalments regularly and for the 19th and 20th instalments he has issued a cheque which had bounced and thereafter he did not make any arrangement to pay the amount pertaining to the two instalments,. As he has become defaulter, a letter was addressed to the complainant for payment of the amount and continue the chit but there was no response. So his name was struck off from the live rolls of the chit bearing No. LT04TU 33. However, he is entitled to claim for refund of the actual amount that was paid by him by deducting commission at 5% from out of the amounts paid less deduction of Commission is entitled for Rs.93,694.80 ps which amount has been credited into the complainant’s account in respect of another chit bearing No. LT04TU40 on the instructions given by the complainant himself. So nothing remains due or payable in the chit bearing No. LT04TU 33. So the question of deficiency as alleged does not arise at all.
During the enquiry, to substantiate claim in C. D. 54/2002 the complainant along with his evidence affidavit filed Ex. A-1 to A-26 and similarly the Opposite parties along with the evidence affidavit filed B-1 to B-24.
The District Forum had framed the following points for adjudication of te dispute
(1) whether the complainant was declared as the successful bidder on 14.02.1999 or 11.04.1999 ?
(2) whether the complainant is entitled to claim for interest on the prize amount ?
(3) whether the complainant is entitled to claim for compensation ?
(4) whether the complainant is entitled to claim for costs of the litigation ?
During the enquiry in C. D. 724/2003 along with the evidence affidavits both the complainant and the opposite parties have filed Ex. A-1 to A-4 and Ex. B-1 to B-8 respectively.
The impugned order passed in C. D. 54/2002 directing the opposite parties to pay interest at 12% pa on the prize amount of Rs.2,75,000/- for the period from 05.05.1999 till the prize amount was deposited in the Bank and thereafter it was released to the complainant.
The complainant’s contention is that he made bid offer during the month of September, 1998 for over a period of 10 months, i.e. up to June, 1999 to participate in the ensuing auctions to be held in the said chit groups for loss to a tune of Rs.2,25,000/- out of the total value of the chit of Rs. 5 lakhs and on the basis of the said offer he was declared as prized subscriber in the auction held in the 8th month and in the auction held in February, 99. whereas, the version of the opposite parties 1 and 2 is that some other bidders also gave the same offer to have the prize money soon after the commencement of the money. When the amount offered by the subscribers is equal, some lots will be drawn and from the lots successful person will be given the prize amount.
It is an undisputed fact that the first opposite party company is a registered Chit fund Company and it has to satisfy the norms and conditions as prescribed by the Chit Fund Act and Bye Laws. Further, the monthly auctions held for each of the chits and Minutes recorded in the presence of subscribers are to be sent to the Chit Registrar promptly, else, there will a penalty for it. The opposite parties have filed relevant record pertaining to the chit, so also, the original bid offer given by the complainant. The copies of the Minutes of the auction held regularly, the ledger extracts pertaining to the amount paid and the sureties and the agreement executed by the complainant for payment of the prize amount to him. On the basis of these documents, the District Forum after making discussion of it had arrived at the conclusion as to the date when the complainant became successful bidder. In the discussion made at point no. 1, the contention of the complainant was rejected holding that he had not become successful bidder on 14.02.99 and that he became successful bidder on 11.4.99 in respect of Chit No. LT04TU40. The observation is that Ex. A-4 is an empty auction form as it was rejected as insignificant in the light of documentary evidence Ex. B-4 and B5 along with Ex. B-18 to B.20. It can be said without any hesitation that the contention of the claim or contention of the complainant that he became the successful bidder on 11.02.99 is not correct and that as per the record he was declared as successful bidder on 11.04.99. The complainant has not disputed any of the documents that are filed by OPs which are regularly kept and maintained by the opposite parties 1 and 2 in its regular chit business. Apart from it. The first opposite party is expected to send all the accounts and Minutes to the Chit Registrar regularly. In case of any irregularity, under the provision of A. P. Chit Fund Act, 1971, a subscriber has right to complain to the Chit Registrar and seek immediate redressal which the complainant failed to do so. Under the provisions of Chit Fund Act and Bye Laws, a subscriber in order to get the prize money has to furnish sureties which are acceptable by the Company and considering the solvency of the sureties that have been furnished so as to ensure payment of the future instalments of the chit. The records of the accounts that were maintained in regular course of business by the Chit Fund company are relevant U/s. 34 of the Indian Evidence Act and they are admissible. There is no dispute that when there are several bid offers from the subscribers who are ready to forego the same amount from out of the chit amount and in case the bid amount offered by them is equal the lots are to be drawn from those bidders and whoever will be a lucky he will get the first priority. No chit company will assure a subscriber that he will be allowed to participate in the 1st auction or second auction at his own convenience. After all, depending upon the necessity, a subscriber would come forward to forego some amount out of the total amount of the chit and he will come forward to pay back the amount in instalments. From out of the amount realized, dividend will be given to the other subscribers who did not participate in the auction. Dividend will be paid to the subscribers, who, pay the instalments regularly and continuously till the closure of the chits. The subscription amount will be lesser for each one depending on the benefit gain in the bids. Thus, there is an advantage to the subscriber, who, continues to pay the monthly instalments till the closure of the chit whosoever wants to have chit money earlier would give an offer to forego certain amount from out of the total chit amount. By means of his necessity a chit subscriber would make an offer for the prize amount. The chit subscribers instead going for loan and pay exorbitant interest they join in the chits and participate in the auction to knock the bid. It is an admitted fact that the complainant in para 3 of the complaint in C. D. 54/2002 has categorically admitted that due to financial loss he could not continue chit bearing No. LT04TU 33, so he agreed for closure of it and the outstanding amount in that chit was transferred to the chit bearing No. LT04TU40. This arrangement was made with the consent of the complainant himself. It is not known how it can be attributed as deficiency in service. Ex B-6 is very crystal clear a defaulter/complainant cannot be allowed to participate in the chit auctions. It is also in evidence that the complainant had issued a cheque for Rs.13,619/- in respect of 19th and 20th instalments and the said cheque had bounced covered by Ex. B-7. when the chit bearing No. LT04TU 33 discontinued, the company has every right to deduct Commission as per its bye laws and to pay pack the outstanding amount from out of the chit instalments. Thus, a sum of Rs.93,694/- was promptly paid. When the complainant had discontinued the chit bearing No. LT04TU 33, the question of participating in the chit does not arise or that to say that he remained a non-prized subscriber It is not known how there can be any deficiency in service on the part of the opposite parties 1 and 2 in such a situation. The complainant has filed C. D. 54/2002 claiming interest on the prize amount alleging that there was delay in payment of the prize amount which amounts to deficiency in service and also he filed another complaint CD 724/2003 claiming dividend alleging that the dividends were not paid in respect of the terminated chit. As on 14.02.1999, the complainant was a defaulter as such he cannot have right to participate in the auction. So it is far fetched contention that he became a successful bidder in February 99 itself but the opposite parties have wrongly shown that he became successful bidder on 1.4.99. Unless the sureties are accepted and the agreement was executed that payment of prize amount will not arise. It is only after due satisfaction for recovery of the future instalments, prize amount will be disbursed. The allegation against opposite parties 1 and 2 is that right from February, 99 , the opposite parties have delayed in payment of the prize amount and it was paid only on 10.08.99 which is incorrect. The complainant submitted sureties on 26.05.99 mentioning the names of three sureties but the said sureties were not accepted as the income of the sureties 1 and 2 was not sufficient. In this regard, a letter dated 5.6.99 was also sent to the complainant and on that the complainant had furnished another sureties on 27.7.88 which was accepted on execution of agreement of guarantee and promissory note. Ex B and B are the agreement and pronotes accepted from the sureties. Soon after acceptance of sureties, prize amount was paid which is to be paid within 30 days but it was paid on 10.08.99 which is very clear from the Bye laws on this aspect. In such it is to be explained how there was a deficiency in service on the part of the Opposite parties 1 and 2. There was a delay on the part of the complainant himself in furnishing the sureties. As there was delay in furnishing the sureties, the opposite parties have opened an account and kept the prize amount in bank in the name of the complainant. So that prize amount would accrue interest. This is contemplated in the statute itself. So there is no question of any deficiency or irregularity on the part of the opposite parties. The complainant failed to establish that the payment of the prize amount was delayed right from February, 99 till August, 99. Further, the complainant failed to pinpoint as to how the documents Ex. B1 to B8 in C. D. 724/2003 filed in and Ex,. B1 to B-24 in CD. 54/2002 are incorrect.
It is significant to note that during the pendency of CD. 54/2002 which was actually filed in December, 2001, the 1st opposite party had filed Civil Suit against the complainant and the sureties for non payment of future instalments for which they have executed surety agreement. The Opposite parties have field a suit OS 256/2002 before the Civil Court, Visakhapatnam on 30.11.2002 in which the complainant and the sureties remained exparte at first , so an exparte decree was passed on 10th July, 2003 itself. However, it is seen from Ex. B23 judgment in OS. 256/2002 that the case was again contested and it was decreed against the complainant and others on 6th December, 2006. in the said suit, the subject matter of the dispute is same pertaining to these two chits. On merits the suit was decreed in favour of the OP. no. 1 directing the complainant and other sureties to pay a sum of Rs.1,76,292/- with interest at 12% pa., from the date of suit ( i.e., 30.11.2002) till realization on principal amount of Rs.2,01,985/-. The complainant did not take any steps to get the suit O.S. 256/2002 stalled or delayed till disposal of the CD. 54/2002 which was earlier in point of time. By the date of pending of C. D. 54/2002 in the District Forum, the Civil Suit O.S. 256/2002 was also pending for the amounts due and payable. The complainant had an opportunity to file claim set off under Order 8 Rule 9 of CPC on the basis of C.D. 54/2002 field by him but he did not do so. The complainant was examined as DW.1 in OS. 256/2002. He was cross examined in the said suit at length. The complainant was cross examined that as per the acknowledgement given by him covered by Ex. A-6 filed in that suit. As per clause 19 of the agreement Bye laws were supplied to him but he assert that he was not supplied with the copy of the Bye laws, so also, denied of his participation in the auction on 11.04.99. While admitting the bid offer given by him on 08.09.98, he has denied about the bid offer given for one month and that the signature on Ex. A-6 bid form is not with him. It is not known why that he had not sent the disputed signature contained in Ex. A-7 for verification by the expert. He cannot placed ignorance of rules and laws which will reflects his own folly and ignorance. The complainant categorically admitted that he had received amount through cheque dated 03.08.99 drawn on Vijaya Bank but he himself retract saying that the said amount relates to some other chit transaction. He did not say that he has any other chit apart from these two chits to say that the prize amount received by him does not pertain to LT04TU40. Thus, the stand is very inconsistent. In cross examination, when the complainant was questioned he made categorical admission of the admission made in para 3 (k) of C. D. 54/2002 that the instalments paid by him in the second chit were adjusted by the opposite parties in the first chit at his request. But he denies this fact which himself made in the complaint which speaks that the complainant has not come forward with clean hands. In the Civil Suit, elaborate evidence was recorded and on the basis of it, the Civil Court had decreed against the complainant directing him to pay a sum of rs.1,76,292/- and also interest there on 6% pa from the date of decree till realization. The enquiry made in C. D. 54/2002 and C. D. 724/2003 are summary in nature which were disposed of subsequent to the disposal of the suit pending between the parties. The complainant has not filed any evidence to show that he filed any appeal against the Judgment passed in OS. 256/2002. Though copies of the Judgment in OS 256/2002 were marked in both the cases, no discussion has been made by the District Forum. The District Forum gave its finding on surmises without any basis and documentary evidence even though the opposite parties filed documentary evidence in both the complaints, along with the Judgment passed in OS 256/2002 by the Civil Court which cuts the roots of the entire contentions of the complainant.
Thus. On an overall consideration of the factual and legal aspects involved in these cases, we are of considered view that there was no deficiency in service by the opposite parties as alleged by the complainant and the complainant miserably failed to substantiate it and the orders of the District Forum are liable to be set aside.
In the result, both the appeals are allowed setting aside the impugned orders passed in CD 54/2002 and C. D. 724/2003 as not maintainable. Consequently, the complaints are dismissed with costs of Rs.2000/- in each case.
Sd/-
MEMBER
Sd/-
MEMBER
DATED : 16.06.2010.
