BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-III, HYDERABAD C.C.No.369 of 2008 Between: Smt.Sravanam Kanakavalli, W/o.Sri A.Kanakaiah, H.No.16-11-410/1/A, Moosarambagh, Hyderabad-500 036. ….Complainant AND M/s. G.P.R.Chits & Finance Pvt. Ltd., Rep. By its Managing Director Sri G. Punna Rao, 6-3-788/32/2, II Floor, Main Road, Ameerpet, Hyderabad-16. ….Opposite Party Counsel for the Complainant :Mr. Surender Kumar Agarwal Counsel for the Opposite Party :M/s.Gopi Rajesh & Associates QUORUM: SRI L. KEDARACHARY, B.Sc., L.L.B., PRESIDENT SMT. C. NIRMALA, B.Sc., M.A., LADY MEMBER SRI.D. MAHESH KUMAR, B.COM., B.L., MALE MEMBER ON THIS THE 24TH DAY OF NOVEMBER, 2008 * * * ORDER (PER HON’BLE SRI. L. KEDARACHARY, B.Sc., L.L.B., PRESIDENT, ON BEHALF OF THE BENCH) This is a complaint filed by the complainant under Section 12 of Consumer Protection Act, 1986 that there is a deficiency of service on the part of the opposite party on the ground that the opposite party failed to pay the amount claimed by the complainant despite several requests made by him personally and also through notices. The brief facts of the complaint are that the opposite party is a financial institution and running chits business under name and style of GPR Chits & Finance Pvt. Ltd., represented by its Managing Director G.Punna Rao having its offices at Ameerpet, Hyderabad. The complainant joined in the chit value of Rs.2,50,000/- on 31.10.2002 after became a member of the opposite party. As per the terms of the agreement, the complainant has to pay the monthly subscription of Rs.5,000/- for 50 months. The opposite party issued a passbook bearing No.GL7KD/8 to the complainant. The complainant paid an amount of Rs.1,00,000/- from 31.10.2002 to 22.05.04 with the opposite party and the opposite party issued receipts by making entries in the passbook in token of the payments made by the complainant. The complainant went to the office of the opposite party and requested the opposite party to repay the amount. The opposite party dilly delayed the payments of money on one pretext or the other and finally the complainant addressed a letter to the opposite party on 02.08.2006 requesting for payment of chit amount paid by him along with interest. The opposite party received the letter but neither paid the amount nor replied. The complainant had addressed another letter on 02.05.2007. The opposite party having received the said letter did not pay the amount nor responded to the notice. Thus, the act of the opposite party amounts to deficiency in service. Because of tactics adopted by the opposite party in not paying the amounts, the complainant has suffered a lot of mental agony and thereby he was put to irreparable loss. Therefore, the opposite party is also liable to pay damages of Rs.50,000/- to the complainant. The opposite party resisted the petition by filing a counter denying the allegations mentioned in the complaint and interalia contended that the complaint is not maintainable for want of jurisdiction and also lack of cause of action. Therefore, this petition is liable to be dismissed on the preliminary issue of jurisdiction of this Hon’ble Forum to entertain the complaint and its maintainability. The opposite party is not a firm. The complainant has not filed any documentary evidence to show that the opposite party is running by Managing Director, G. Punna Rao, Therefore, the complaint is bad for mis-joinder and non-joinder of proper parties. There is no contract between the complainant and the opposite party. Therefore, the complainant is not a consumer. It is the case of the opposite party that the complainant paid an amount of Rs.1,00,000/- only from 31.10.2002 against the chit amount of Rs.2,50,000/-. The complainant has not paid the balance installments to the opposite party. Since, the complainant has not paid the total subscription amount, the opposite party is entitled for 5% chit value towards their commission. The complainant is entitled to the amount paid by him after deducting the 5% of the chit value towards commission of the opposite party. The complainant has to file Civil Suit for the recovery of the amount but not in this Consumer Forum. The complainant has not filed any receipts issued by the opposite party to show that the complainant paid the chit amounts to the opposite party company. It is alleged by the opposite party that the opposite party is not liable to pay damages as claimed by the complainant since; there is no deficiency in service on the part of the opposite party. There is no deficiency in service on the part of the opposite party. Therefore, the complaint is liable to be dismissed with exemplary costs. The complainant’s evidence is filed in the form of affidavit. Ex.A-1 to A-3 are marked on behalf of the complainant. No documents are marked on behalf of the opposite party. Both parties filed their written arguments. The point that arose for determination is, whether there has been any deficiency in service on the part of the opposite party? The point that urged by the learned counsel for the opposite party is on the question of jurisdiction of this Consumer Forum for entitlement of the complaint relating to the chit fund schemes. It is useful to go through the Section 64 of Chit Fund Act 1982 which deals with disputes relating to chit fund business. Section 64(1) says “Notwithstanding anything contained in any other Law for the time being in force, any dispute touching the management of the chit fund is to be referred to the Registrar for arbitration”. Sub-Section (2) deals with that “where any question arises as to, whether, any matter referred to, for the award of the registrar, is a dispute or not for the purpose of Sub-Section (1) the same shall be decided by the registrar whose decision thereon shall be final” and Sub-Section (3) says that “no Civil Court shall have jurisdiction to entertain any suit or the other proceedings in respective of any dispute referred to in Sub-Section(1)”. There is no dispute that Chit Fund Act is statute of the year 1982 whereas Consumer Protection Act is statute of the year 1986. The Section (3) of Consumer Protection Act reads as follows: “Act not in derogation of any other law, the provisions of the act shall be in addition to and not in derogation of the provisions of any other law for the time being in force. The Consumer Protection Act was not in force in the year 1982. As per Section (3) of Consumer Protection Act, that the remedy available under the Consumer Protection Act is in addition to any other law in force at that time. So, the provisions of Consumer Protection Act in such a situation shall override the provisions of the order statute i.e., the Chit Fund Act of the year1982. So, it can safely be said that the provisions of the Consumer Protection Act are not in derogation of the provisions of any other law. Further it is pertinent to note that Section 64(3) bars the jurisdiction of Civil Court. Whereas the Consumer Fora have been held to be not Civil Court. Therefore, we have no hesitation in holding that the chit fund cases fell very much within the ambit of Consumer Forum and the chit fund cases falls within the definition of service as defined under Section 2(1)(o) of Consumer Protection Act 1986 and it is a consumer dispute. Therefore, we feel no merit in the plea taken by the opposite part to that effect as it is not tenable. Hence, over ruled. Now we deal with the present facts of this case. Admittedly, the opposite party is a financial institution and running chit fund business in the name and style of GPR Chits & Finance having its office at Ameerpet, Hyderabad. The complainant was the subscriber of the chit floated by the opposite party for chit value of Rs.2,50,000/-. The complainant is required to pay @ of Rs.5,000/- for 50 months. The complainant paid a sum of Rs.1,00,000/- from 31.10.02 to the persons working in the opposite party. The opposite party received the said amount and issued receipts and made entries in the passbook issued to the complainant as evidenced by Ex.A-1. The complainant made several visits to the office of the opposite party and requested the employees of the O.P to repay the amount paid by him. The opposite party delly-delayed the matter on one pretext or the other. Having vexed with the conduct of the opposite party, the complainant was finally constrained to address letters Ex.A-2 on 02.08.06 and also Ex.A-3 on 02.05.07 requesting for payment of chit amount paid by him. The opposite party received the notice but did not respond to the notice nor paid the chit amount and the same were proved as per the Ex.A-2 & A-3, letters. The complainant has proved his case as per Ex.A-1, that he paid an amount of Rs.1,00,000/- further proved that the opposite party had received the notice did not respond to the notice nor paid the amount. So, the act of the opposite party in not refunding the amount to the complainant or at least responded to the complainant by issuing a reply by repelling the contentions mentioned in the ExA-2 & A-3. The contention of the opposite party is that they are entitled commission of 5% of the chit value as per agreement. The complainant is entitled to the amount paid by him after deducting the 5% of the total chit value towards commission. The contention of the opposite party was that the firm has a right to deduct the 5% to the total value of the chit has no force in the present case. Section 28 of Chit Fund Act herein after called as Act for the convenience deals removal of default Section 30 of the Act deals with the amount so deposited under sub-section (1) shall be paid to the defaulting subscriber as and when he claims the amount and the amount so deposited shall not be withdrawn by the foreman for any purpose other than for such payment. As per Clause 3 of Section 30 says that the contributions of any defaulting subscriber who has not been substituted till the termination of the chit shall be paid to him within fifteen days from the date of termination of the chit subject to such deductions as may be provided for in the chit agreement. It is clear from Clause 2 of Section-30 of the Chit Fund Act the foreman of the opposite party shall pay the amount so paid by the defaulting subscriber as and when he claims the amount. As per Clause -3 the contributions of any defaulting subscriber he has not been substantiate till the termination of the chit shall be paid to him by the opposite party within 15 days from the date of termination subject to chit. In the present case, the opposite party has not filed chit agreement before the Forum to prove that the opposite party is entitled commission of the chit value as per the agreement. There is no explanation forthcoming from the opposite party as to why it could not file the chit agreement which is admittedly in their custody. Non-filing of the chit agreement which is very much in their custody before this Forum, an adverse inference can be drawn against the opposite party. Therefore, the contention of the opposite party that the opposite party is entitled to deduct 5% of the chit value of the chit from the amount relatable to the period paid by the subscriber has no force because of the reasons stated above. It is not the case of the opposite party that it had not received the original of Ex.A-2 & A-3 letters sent by the complainant. As seen from endorsement made on Ex.A-2 & A-3, the opposite party had received the originals of them. There is no explanation at all forthcoming from the opposite party as to why they did not respond to the notice by denying the facts stated in Ex.A-2 & A-3 by saying that they have got a right to deduct 5% value of chit amount towards commission from the amount paid by the complainant. Therefore, there was no deficiency in service on the part of the opposite party. The contention of the opposite party has seen the light of the day for the first time only at the time of the filing of the counter not before that. That apart, the contentions taken in the counter have not been proved by the opposite party by adducing positive evidence. In the absence of such evidence placed by the opposite party as per the contentions raised in the counter, it is futile to contend that it is entitled to deduct 5% of the chit value towards commission from the amount paid by the complainant without there being any record filed to that effect for the entitlement. Therefore, there was no option for us except to hold that the opposite party is not entitled to deduct 5% of the chit value from the amount paid by the complainant towards commission. The non-payment of amount by the opposite party to the complainant despite receipt of letters Ex.A-2 & A-3 amounts to deficiency in service in rendering the service by the opposite party. Upon consideration of the material evidence on record, the complainant is entitled a sum of Rs.1,00,000/- from the opposite party. Since, the opposite party failed to pay the amount when asked by the complainant amounts to deficiency in service. Hence, the opposite party is liable to pay an amount of Rs.1,00,000/- along with interest @ 6% p.a. The opposite party also directed to pay Rs.1,000/- as costs to the complainant. In the result, the complaint is allowed directing the opposite party to pay a sum of Rs.1,00,000/- along with interest @ 6% p.a. from the date of filing of the petition and also costs of Rs.1,000/- are awarded to the complainant. This order is to be complied within four weeks from the date of receipt of this order. Dictated to steno transcribed and typed by her pronounced by us on this the 24th Day of November, 2008. sd/- sd/- sd/- LADY MEMBER PRESIDENT MALE MEMBER APPENDIX OF EVIDENCE WITNESS EXAMINED For Complainant For Opposite Parties NIL NIL For Complainant Ex.A-1-Xerox Copies of Ledger (4) Ex.A-2-Letter from the complainant to O.P. dt.02.08.2006 Ex.A-3-Letter from the complainant to O.P. sd/- sd/- sd/- LADY MEMBER PRESIDENT MALE MEMBER
......................C.Nirmala
......................D.Mahesh Kumar
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