A.P. STATE CONSUMER DISPUTES REDRESSAL COMMISSION AT HYDERABAD.
F.A. 745/2007 against C.C 919/2006 , Dist. Forum-I, Hyderabad.
Between:
1) M/s. Kapil Chit Funds Pvt. Ltd.
Rep. by its Chief Manager
IInd Floor, H.No. 6-2-938/39
Plot No. 204, Purni Plaza
Khairatabad, Hyderabad-4
2) M/s. Kapil Chit Funds
Rep. by its Zonal Office
H.No. 5-23/1, II Floor
Kukatpally, Hyderabad. . *** Appellants/
O.P. 1& 2.
And
R. Krishna Reddy
S/o. R. Narsimha Reddy
Age: 35 years, Business
R/o. Balapur X Roads
Chandrayanagutta
Hyderabad. *** Respondent/
Complainant.
Counsel for the Appellant: M/s. N. Amarnath
Counsel for the Resp: M/s. K. Sridhar.
CORAM:
HON’BLE SRI JUSTICE D. APPA RAO, PRESIDENT
&
SMT. M. SHREESHA, MEMBER
THURSDAY, THIS THE FIFTH DAY OF AUGUST TWO THOUSAND TEN
Oral Order: (Per Hon’ble Justice D. Appa Rao, President)
*****
1) This is an appeal preferred by the opposite party chit fund company against the order of the Dist. Forum directing it to pay Rs. 24,500/- together with costs of Rs. 1,000/-.
2) The case of the complainant in brief is that he subscribed a chit floated by the appellant chit fund company for a sum of Rs. 1 lakh payable at Rs. 2,500/- in 40 equal monthly instalments. He joined in the chit commencing from June, 2004 to be terminated by September, 2007. He had paid altogether Rs. 24,500/- . He participated in the auction conducted on 28.6.2005 by foregoing Rs. 65,000/-. When he sought for the amount along with sureties as required under rules the Manager/Foreman refused to receive the sureties and declared that as he did not submit the sureties within 15 days his membership was terminated. It alleged that the said chit was allotted to another person, insisted him to take Rs. 9,500/- out of Rs. 24,500/- and the balance amount was shown adjusted in other accounts. The appellants have been harassing him and was not paying the amount due to him. Thus he filed the complaint for refund of Rs. 24,500/- paid by him with interest @ 12% p.a., together with compensation of Rs. 50,000/- towards mental agony and costs.
3) The chit fund company resisted the case. While denying each and every allegation made by the complainant, however it admitted that he having subscribed the chit paid Rs. 24,500/- failed to furnish the sureties as required under the Chit Fund Act and Clause -20 of the chit agreement despite notice dt. 5.12.2005 issued to him. He failed to pay monthly subscriptions for which notice was also issued informing him about his removal from chit, indicating the amounts which he was entitled to after deduction of bid loss amount and breach of contract etc. Since the complainant failed to fulfil his obligation by furnishing the required sureties and regular payment of chit subscriptions he was not entitled to the amount claimed or any compensation. A belated notice was given on 18.10.2006 by which time they had issued notice dt. 5.12.2005 and 22.3.2006 demanding the amount and termination of membership of the complainant. Therefore it prayed for dismissal of the complaint with costs.
4) The complainant in proof of his case filed his affidavit evidence and got Exs. A1 to A4 marked while the appellants filed the affidavit evidence of its Branch Manager and got Exs. B1 to B4 marked.
5) The Dist. Forum after considering the evidence placed on record opined that the complainant had admittedly paid Rs. 24,500/- towards chit amount and when he was a successful bidder he cannot be denied that the sureties were not acceptable. Therefore it has directed the appellant to pay Rs. 24,500/- together with costs of Rs. 1,000/-.
6) Aggrieved by the said decision, the chit fund company preferred the appeal contending that the Dist. Forum did not appreciate either facts or law in correct perspective. It ought to have seen that the complainant having bid in the auction failed to furnish the sureties for which notices were issued. He was removed from the list of subscribers in view of the fact that he failed to pay the remaining amounts. His own legal notice dt 18.10.2006 Ex. A4 shows that he did neither furnish sureties nor pay the remaining instalments, and therefore it was not liable to pay any amount. It was only liable to pay Rs. 9,500/- after deducting the dues from the complainant.
7) The point that arises for consideration is whether the order of the Dist. Forum is vitiated by mis-appreciation of fact or law?
8) It is an undisputed fact that the complainant having subscribed in the chit floated by the appellant chit fund company for Rs. 1 lakh wherein he had to pay Rs. 2,500/- per month in 40 equal instalments commencing from June, 2004 to be terminated by September, 2007. In all he paid Rs. 24,500/- . He participated in the auction conducted on 28.6.2005 agreeing to forego Rs. 65,000/-. In order to withdraw the prize money he had to furnish two sureties vide Ex. B1 agreement.
9) It is not in dispute that a notice was issued by the appellant chit fund company calling upon him to furnish sureties and draw the prize amount by Ex. B2 letter dt. 5.12.2005. When he did not respond, Ex. B3 notice dt. 22.3.2006 was issued intimating that his membership was cancelled. These notices were received under acknowledgements Ex. B4. The complainant did neither give reply nor furnish sureties. The appellant alleges that by virtue of clause-4 of the chit agreement Ex. B1 the discount is distributable by way of dividend. Foreman’s commission or remuneration is also liable to be deducted. The discount minus foreman’s commission shall be divided equally among all the subscribers as dividend. The foreman’s commission shall be five percent of the chit value. It alleges that by virtue of this clause, it had deducted Rs. 30,000/- and distributed the said amount among other subscribers. It is its further contention that re-auction was conducted wherein auction was confirmed for an amount Rs. 25,000/-. i.e., for less amount of Rs. 10,000/-. Clause 15(4) of Ex. B1 chit agreement categorically stipulates that “A subscriber removed from the chit before termination for any reason is entitled for a refund of only the net amount of subscription deposited by him less five percent of chit amount towards damages for breach of contract. This refund will be made after the substituted subscriber draws the prized amount or at the close of the group.” By virtue of said clause from out of Rs. 24,500/- paid by him an amount of Rs. 10,000/- was deducted. It came to Rs. 14,250/-. An amount of Rs. 5,000/- was deducted towards damages for breach of contract and Rs. 150/- towards incidental charges. Thus an amount of Rs. 9,100/- was only liable to be paid to the complainant.
10) The complainant did not dispute about his bid for Rs. 35,000/-. He did not dispute as to non-tendering of solvent sureties in order to draw the prize amount. He did not give any reply when he was directed to furnish sureties and equally when his membership was terminated. By virtue of clause 15(4) which we have already discussed, necessarily the appellant was entitled to deduct Rs. 19,400/- from out of the amount paid by him. Therefore the complainant is entitled to Rs. 9,100/- and not the amount paid by him towards subscription. The Dist. Forum did not consider the terms and conditions of chit agreement Ex. B1 wherein the appellant was entitled to deduct the amounts in case the subscriber fails to draw the prize amount by furnishing solvent sureties.
11) In the result the appeal is allowed in part modifying the order of the Dist. Forum. The appellant is directed to pay Rs. 9,100/- instead of Rs. 24,500/-. However, the appellant was having advantage of this amount as it did not send the demand draft or cheque for the said amount along with termination of membership, therefore the complainant is entitled to interest on the said amount @ 9% p.a., from the date of termination viz., 22.3.2006 till the date of payment. In the circumstances of the case no costs. Time for compliance four weeks.
1) _______________________________
PRESIDENT
2) ________________________________
MEMBER
Dt. 05. 08. 2010.
*pnr
