Date of Registration of the Complaint:13-12.2007

                                                                                                Date of Order:23-01-2015

BEFORE THE DISTRICT CONSUMERS FORUM-II AT

                             VISAKHAPATNAM

P  r  e  s  e  n  t:

1.  Sri H. Ananda Rao, M.A., L.L.B.,

     President           

2. Smt K. Saroja, M.A. B.L.,

     Lady Member 

                                3. Sri C.V. Rao,  M.A., B.L.,

                                     Male Member

                             Friday, the 23^rd day of January, 2015.

                                 CONSUMER CASE No.783/2007

Between:-

Dr. Lakkaraju Veera Raghava Rao,

S/o late Ramachandra Rao, Hindu,

aged 57 years, R/at Door No.10-2-9/3,

Siripuram, Visakhapatnam-530003.

….. Complainant

And:-

1.M/s. RAJMA Chit Fund Private limited,

   represented by its Managing Director

  S. Madhava Rao (Surname and father name not

   known to the Complainant), Hindu, Major having

   its  Office at D. No. 10-50-32, Opp: CDR Hospital,

   Waltair Main Road, Visakhapatnam-530002.

2.S. Madhava Rao (Surname and father name not known

   to the Complainant), Hindu, Major Managing Director

   of the 1^st Opposite Party, is having Office at Door

   No. 10-50-32, Opp: CDR Hospital, Waltair Main Road,

   Visakhapatnam-530002.

                                                                                         …  Opposite Parties

          This case coming on 09.01.2015 for final hearing before us in the presence of M/s. Lanka Jagannadham, Advocate for the Complainant and Sri L. Satyanarayana, Advocate for the Opposite Parties and having stood over till this date for consideration, this Forum made the following:

                                                ORDER

          (As per Sri. H. Ananda Rao, Honourable President, on behalf of the Bench)

1.       This consumer complaint is filed by the Complainant against the Opposite Parties directing them to  pay an amount of Rs.1,20,000/- (Rupees One lakh and twenty thousand only) with interest @ 12% p.a. from Feb. 1999 till the realization, to pay an amount of Rs.50,000/- towards damages and costs.

 2.      The case of the Complainant in brief is that the 1^st Opposite Party is a Chit Fund Company and the 2^nd Opposite Party is a Managing Director of the 1^st Opposite Party and he joined in chit on 01.07.1996 for the value of Rs.1,50,000/- under chit reference No. RMC-24A-46 at Rs.3,000/- per month for a period of 50 months and paid 5 installments to a tune of Rs.10,000/-with dividends the amount paid by the Complainant is Rs.15,000/-  under Receipt No.13761 dated 01.07.1996.   The Complainant paid Rs.1,20,000/- towards 40 monthly installments up to January, 1999 and that he is having some of the receipts and some of them misplaced.  He paid the amount on receipt of the intimation card by cheques, he paid 40 installments on 23.01.1999.

3.       That in the month of Feb, 1999 the Opposite Party was absconded from Visakhapatnam inspite of his best efforts, there was no response and again in the month of November, 2005 the Opposite Parties again started his chit fund business in the same office and when approached him to repay the amount, the 2^nd Opposite Party failed to pay the same.    Hence, this Complaint.

4.       The Case of the Opposite Parties admitting their running Chit Fund Company and the Complainant joined in a chit on 01.07.1996 for value of Rs.1,50,000/-  referred supra.   At the rate of Rs.3,000/- per month for a period of 50 months and denied the other material averments.   He further admitted the Complainant paid 35 installments only i.e., Rs.69,059/- and failed to pay further installments, for the reasons best known to him and discontinued the transaction as such, they deducted the commission Rs.7,500/- @ 5% and incidental charges of Rs.100/- and the net amount due to the Complainant is only Rs.61,459/-.

5.       That they have got issued a Legal Notice dated 01.04.1999 informed the Complainant to receive the same, but he failed to receive and that he never absconded from Visakhapatnam and they carry their business in Visakhapatnam only.   The Complainant claim is barred by time.   The chit transaction was abanded by the Complainant himself, they have issued a Registered Notice demanding the Complainant to pay the installments from 35 to 40 for the months of August, 1998 to February, 1999 failing which the chit will be terminated and as there is no response, then they closed the chit transaction by notice dated 01.04.1999 and the Complainant failed to receive back the amount of Rs.61,459/-, as such, there is no deficiency of service.   For these reasons the complaint is liable to be dismissed.

6.       To prove the case of the Complainant filed he filed his sworn affidavit and got marked Exs.A1 to A6.      No proof affidavit and documents were filed by the Opposite Parties.

7.       Ex.A1 is the Receipt No.13761 for Rs.10,000/- issued by the Opposite Parties in favour of the Complainant dated 01.07.1996.  Ex.A2 is the Receipt No.17670 for Rs.10,000/- issued by the Opposite Parties in favour of the Complainant dated 22.12.1997.   Ex.A3 is the Receipt No.18529 for Rs.12,616/- issued by the Opposite Parties in favour of the Complainant dated 31.03.1998.   Ex.A4 to 40 are the installments intimation cards of the Complainant.   Ex.A5 is the 31^st installments intimation cards.

8.       Both parties are filed their respective written arguments.

9.       Heard arguments.

10.     Now the points that arise for determination is:-

Whether there is any deficiency in service on the part of the Opposite Parties and the Complainant is entitled for the reliefs of advance amount with interest, compensation and costs.

11.     According to the Complainant inspite of payment of installments @ Rs.3,000/- per month the Opposite Parties towards monthly chits, the Opposite Parties  failed to pay an amount of Rs.1,20,000/-.   According to the Opposite Parties the Complainant paid only 34 installments amounting to Rs.1,20,000/-  and  discontinued the chit as such after deducting foreman’s commission they offered Rs.61,459/0 but inspite of receiver of the notice there was no response from the Complainant, therefore they closed the chit transaction.   Thus, it is clear from the respective contentions that the Complainant is a chit subscriber of the Opposite Parties paid some installments.     According to the Complainant, he paid 40 installments, whereas according to the Opposite Parties, the Complainant paid 34 installments.     Perusal of exhibits marked on behalf of the Complainant much less different receipts clearly goes to show that the paid total amount of Rs.1,20,000/- only i.e., 34 installments and rest of them have not paid.         To show that the Opposite Parties issued registered notice calling upon the Complainant to receive an amount of Rs.61,459/- no proof is filed acknowledging the notice was duly served on the Complainant.    In the absence of proof it cannot be said that the Opposite Parties had, not taken steps calling upon the Complainant to receive an amount of Rs.61,459/-Postal receipt and acknowledgement are the relevant documents but they are not filed.    Thus it can be held the contention of the counsel for the Opposite Parties that inspite of their efforts for sending an amount of Rs.61,459/-,   the Complainant has not responded, does not hold any water.

12.     The sworn affidavit of the Complainant’s evidence coupled with exhibits clearly and categorically goes to show that the Complainant paid 40 installments towards chit to the Opposite Parties at the rate of Rs.3,000/- per month to an amount of Rs.1,20,000/- and inspite of his demands the Opposite Parties failed to pay the same.     It is not the case of the Opposite Parties that the Complainant has not paid chit amount.   Their case appears to be they offered the Complainant an amount of Rs.61,459/- after deducting Foremen’s Commission but no response.   If that be so, Chit Fund Act contemplates certain Foremen Commission to safe-guard the amounts of chit subscribers by deposit them by way of F.D.Rs in Banks but they did not do so.   Inpite of filing counter, they did not choose to file their evidence affidavit and documents to prove their case, on the other hand the evidence affidavit of the Complainant and Ex.A series clearly establishes the acts of the Opposite Parties i.e., nonpayment of chit amount paid by the Complainant clearly comes under the deficiencies of service on the part of the Opposite Parties.   Having regard to all these facts and circumstances we are of the considered opinion that the Complainant is entitled for an amount of Rs.1,12,500/- only after deducting Foremen’s Commission of Rs.7,500/- from out of Rs.1,20,000/-.

 13.    Now the question that comes up for consideration, at this stage of our discussion, what is the rate of interest for which the Complainant is entitled.   The rate of interest claimed by the Complainant is 12% p.a.  This rate of interest claimed by the Complainant appears to be excessive, of course, it is a fact that the transaction covered by Ex.A1 is in commercial in nature, but that does not and cannot mean to say that the Complainant is a licenced to claim interest @ 12% p.a. on Ex.A1.    But at the same time, it is an imperative on our part to award a reasonable interest.   Having regard to all these facts and circumstances, we sincerely feel having considered the case on hand awarding of interest @ 9% p.a. on Ex.A1 would better serve the ends of justice.    Consequently, we proposed to fix at rate in question @ 9% p.a. on Ex.A1 in question.   Accordingly interest is ordered.

14.     Whether the Complainant is entitled for compensation of Rs.50,000/-is to be considered.   It appears as seen from the evidence of PW-1 that the Complainant was compelled to approach the Opposite Party and therefore experienced a lot of physical strain besides mental agony and financial loss. It is un-dispute fact that the Opposite Party did not refund the amount subscribed by the Complainant.   Naturally that made have put the Complainant to suffer some mental agony besides physical stress and strain.   In this view of the matter, we sincerely feel that it is a fit case to award compensation.   But that does not and cannot mean to say that the Complainant claim for compensation is acceptable.    Having regard to all these facts and circumstances, we are of the considered opinion, award of compensation of 10,000/- would serve the ends of justice.   We therefore, proposed to award compensation of Rs.10,000 /-,  in the circumstances of the case on hand. Accordingly this point is answered. 

15.     Before parting our discussion, it is incumbent and imperative on our part to consider the costs of litigation.    The Complainant ought not have to approach this Forum had his claim for refund of the sum of Rs.1.20,000/- or reliefs sought for have been honored by the Opposite Parties within a reasonable time and in view of the matter, the Complainant’s claim for claims for cost deserves to be allowed.   In our considered and unanimous opinion awarding a sum of Rs. 5,000/- as costs would appropriate and reasonable.   Accordingly costs are awarded.

16.     In the result, Complaint is allowed, in part directing the Opposite Parties to pay an amount of Rs.1,12,500/- (Rupees One lakh, twelve thousand and five hundred only) with interest @ 9% p.a. from 01.04.1999 till the date of realization, Rs.10,000/- (Rupees Ten thousand only) towards compensation and Rs.5,000/- (Rupees Five thousand only) towards costs to the Complainant.    Time for compliance, one month.

     Dictated to the Steno, transcribed by him, corrected and pronounced by us in the Open Forum, this the 23^rd  day of January, 2015.

Sd/-                                     Sd/-                                            Sd/-

Male Member                   Lady Member                                          President

                             APPENDIX OF EVIDENCE

For the Complainant:-

For the Opposite Parties:-                                           

                                      -Nil-

     Sd/-                                Sd/-                                                Sd/-

Male Member                     Lady Member                                    President