Date of Filing:05.11.2014

                                                                                       Date of Order: 07.01.2019         

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM – I, HYDERABAD

P r e s e n t­

HON’BLE Sri P.Vijender, B.Sc. L.L.B.  PRESIDENT

HON’BLE Smt. D.Nirmala, B.Com., LLB., MEMBER

Monday, the 7^th day of January, 2019

C.C.No.630/2014

Between

A.Sudhakar S/o. A.Balakrishna,

Aged about 63 years, Occ: Advocate,

R/o. Flat No.502, Kubera Towers,

D.D. Colony,

Hyderabad – 500007.                                                                         …COMPLAINANT

And

1. The Manager,

Shriram Chits Private Ltd.,

4-101, II Floor, Konark Plaza,

Beside Rajadhani Theatre,

Dilsuknagar, Hyderabad-500060.

2. The Manager,

Shriram Chits Private Ltd.,

H.No.2-2-1132/10/C, 1^st Floor,

New Nallakunta,

Shivam,

Hyderabad-500044.

3. The Manager,

Shriram City Union Finance Ltd.,

Plot No.3-6-629,

1^st Floor, Bhoopal Reddy Complex,

Himayat Nagar,

Hyderabad – 500029.                                            ....OPPOSITE PARTIES 1 to 3

Counsel for the complainant        : Sri A.SUDHAKAR

Counsel for the Opposite Parties    :   Sri M.INDRASEN

O R D E R

(By Hon’ble Sri P.Vijender, B.Sc., LL.B., President on behalf of the bench)

1.         This complaint has been filed under section 12 of Consumer Protection Act, 1986 alleging deficiency of service and unfair trade practice on the part of the Opposite Parties hence  to refund Admission Fee of Rs.1750/-, Foremen amount of Rs.50,000/- and a sum of Rs.2,64,326/- which is due to him and interest thereon 20% p.a., and Rs.1,00,000/- as compensation for causing sufferings and cost of this complaint at Rs.10,000/-.

2.         The complainant’s case in brief is that, he is a retired employee and at the instance of Sri A.Anjaiah an Agent of Opposite Party No.1 Agent joined in a vacant chit on 28.05.2011 by paying an amount of Rs.1,31,000/- as past subscriptions and admission fee of Rs.1,750/- out his retirement benefits.  Chit value was Rs.10,00,000/- and monthly subscriptions payable was Rs.20,000/- for 50 months.  As he was in   need of money to perform his daughter’s marriage  started participating in the auction from November, 2012 onwards, but could not succeed.  He addressed a letters seeking details of the prized  and non-prized subscribers but replies were not sent to him.  He also made personally visited the office of Opposite Party No.1 to verify the records but they were not made available to him.  Later he performed marriage of his daughter on 15.08.2010 by taking loans on interest.  Later in the auction held on 24.08.2013 he became successful bidder and inorder to furnish a bank guarantee requested the Opposite Party No.1 to issue a letter requiring for bank guarantee for 13 future subscriptions of the chit but it was not obliged.  Instead he was prevailed upon to deposit future installments out of the prize amount to release and balance amount.  As he was unable to pay future installments he agreed to deposit future installment amount out of the prize amount.

3.         Subsequently Opposite Party No.1 demanded the complainant to pay monthly subscriptions stating that, Fixed Deposit amount will be returned only after maturity on 23.09.2014.  He once again requested Opposite Party No.1 to issue a letter requiring a bank guarantee to enable him to secure bank guarantee and seek refund the amount with interest but, same was not considered.  The chit was closed on 30.10.2014 but, Opposite Party Nos.1 to 3 failed to pay the deposit amount and by e-mail dated 31.10.2014 informed him that, an amount of Rs.24,326/- is outstanding against his account. 

4.         The Opposite Parties by not obliging his request has caused mental agony and financial loss as he was required to pay high rate of interest on borrowing  for his daughter’s marriage and on the other hand the Opposite Parties continued to make huge profits by withholding the prized  amount of Rs.2,64,326/-.

5.         The Opposite Parties inorder to pay the bid amount asked the complainant to furnish sureties of 4 Gazetted Officers for the 13 future subscriptions amounting to Rs.2,60,000/-. As he was unable to secure the sureties he asked a letter requiring Bank guarantee and offered his residential flat, LIC Bond and Postdated Cheques as security but, same was not considered.

6.         Opposite Party No.1 started harassing the complainant to pay the installments from October-2013 and addressed a letter on 25.10.2013 asking Opposite Party No.1 to deduct future installments subscriptions from the security deposit for every month till the closure of the chit and refund the balance amount at the end, but, there was no response.  He addressed a letter on 22.11.2013 asking the Opposite Parties to refund the Fixed Deposit amount with interest and  he will pay due amounts on date and undertook to furnish personal bond and surety of a co-advocate by deposit of title deeds of residential house.  He also secured bank guarantee in principle from IDBI Bank and approached Opposite Party No.1 on 11.12.2013 with draft bank guarantee on stamp paper to issue a letter requiring to furnish guarantee for future subscriptions.  Again same it was refused by Opposite Party No.1.  Finally he addressed a letter on 28.03.2014 asking to refund the amount on his personal guarantee by obtaining postdated Cheques Opposite Party No.1 issued a letter on 03.04.2014 informing that, an amount of Rs.1,33,100/- is due towards seven (7) installments and same will be deducted from Fixed Deposit amount for which he objected by a letter dated 19.05.2014.  The Opposite Party No.1  once again informed him by a letter dated 17.05.2014 that an amount of Rs.1,52,828/- + penal interest will be deducted towards eight (8) subscriptions from the Fixed Deposit amount for which he objected by a legal notice dated 19.05.2014.  Thereafter, he was invited by Opposite Party No.1 for discussion and a settlement was arrived on 14.06.2014 and inconsequence of it he paid Rs.1,52,828/- towards 46^th installment and Rs.19,798/- towards chit bid auction amount vide bid payable memo and same was acknowledged by Opposite Party No.1 on 21.06.2014.

7.         The complainant issued a notice on 04.09.2014 to Opposite Party No.1 for refund of Fixed Deposit maturity amount of Rs.2,84,700/- and on 23.09.2014 he deposited canceled Cheques issued on IDBI Bank and requested the Opposite Party No.1to deposit matured amount to this account.  But, same was not complied.  Hence, issued another notice to Opposite Party No.1 for refund of maturity amount on 27.09.2014 but, it was of no avail.  The Opposite Parties by utilizing his Fixed Deposit amount of Rs.2,64,326/- earned profit by lending to  the people thus, Opposite Parties have caused not only deficiency in service but also unfair trade practice.  The Opposite Parties unilaterally deposited the bid money payable to him by way of Cheques.  But, an amount of Rs.4,326/- was paid less.  Hence, the Opposite Parties are liable to pay bid amount, Fixed Deposit amount with interest @ 24% p.a., as they have not paid the same even after closure of the chit on 30.10.2014.  Hence, the present complaint.           

8.         The common written version has been filed for Opposite Party Nos.1 to 3 denying the material allegations in the complaint.  The version of the Opposite Parties is that, the chit fund company is not supposed to know for what purpose an individual joined as a subscriber. Opposite Party No.1 never promised the complainant that, it would be pay prize money when he is in need.  A Subscriber has to participate in the auction and shall become a successful bidder inorder to get the bid amount.  The Chit Fund Company has no role in increase of bid amount.   For the letters dated 29.01.2013 and 11.02.2013 a suitable reply was sent to him. Complainant became successful bidder in the auction held on 24.08.2013 having agreed to forgo an amount of Rs.1,21,900/-. He was required to furnish  sureties to be satisfaction of the foremen of the Company.  The complainant has to make out the arrangement to provide third party guarantee and there is no need for the Opposite Parties to write any letter to the banker of the complainant requiring to issue a bank guarantee.  The allegation of the complainant that, he offered residential flat documents, LIC Bond and post-dated Cheques as security and same was refused to by Opposite Parties is not correct.  The complainant was not advised to deposit a sum of Rs.2,60,000/- and infact he voluntarily deposited the said amount with Shriram City Union Finance Ltd.,to earn interest and  to furnish the same as security for the future liability for getting prize money and accordingly he made arrangements and executed documents on 21.09.2013.  He deposited the Fixed Deposit Certificate as security.  A prized subscriber is required to pay monthly subscriptions and he cannot seek exemption because he deposited Fixed Deposit Certificate as security.  Rules does not permit the Chit Fund Company to deduct monthly subscriptions from the Fixed Deposit amount.  When, complainant committed default he was informed by letters dated 23.04.2014 and 17.05.2014.  The Fixed Deposit cannot be foreclosed pre-maturely for adjusting the future deposit, as the complainant would suffered financial loss because interest @ 2% will be deducted in case of pre-mature closure of the Fixed Deposit.  Issuing of notice to a defaulted subscriber does not amount to harassment.  Fixed Deposit Certificate  cannot be released till  future liability of the complainant is cleared. There was no settlement between the complainant and Opposite Party No.1.  Complainant paid an amount of Rs.15,472/- on 21.05.2015 against the actual due of Rs.19,798/- and  he is still due of Rs.4,326/- and if  the complainant pays the said amount he will be given the Fixed Deposit Certificate.  Hence, the complaint is devoid of merits and liable to be dismissed.   

9.                 In the enquiry the complainant filed his evidence affidavit and also exhibited 46 documents. For the Opposite Parties the evidence affidavit’s of Opposite Party No.1 Branch and also that of its officer Mr. Lingaiah are filed and through them 19 documents are exhibited. 

10.            Both sides filed then written arguments and supplemented the same with oral submissions. 

11.           On a consideration of material placed on record the following points have emerged for consideration: 

1. Whether the Opposite Parties have caused deficiency of service to complainant as a subscriber of chit’s and indulged in unfair trade practice by not releasing the Fixed Deposit amount after the maturity date?
2. Whether the complainant is entitled for the amounts claimed  in the complaint?
3. To what relief ?

12. Point No.I: The complainant case is: he was induced by one Mr. Anjaiah stated to be an agent of Opposite Parties in joining as subscriber in the vacancy arose on account of withdrawal of an original subscriber.  At the time of admitting him as subscriber he was stated to have been promised by said Anjaiah that whenever he bids the chit and whenever he needs  bid amount will be paid to him and  the admission fee of Rs.1750/- and foremen commission at 5% amounting to Rs.50,000/- will be refunded to him on termination of the chit.  To substantiate the same complainant has not placed any material on the record.  He also has not got summoned said Mr.Anjaiah to speak about the assurances made to the complainant for refunding of admission fee of Rs.1750/- and foremen commission of Rs.50,000/-.  As already said  the complainant retired from the government service  and he might have served about 25 to 30 years.  Not only that after retirement from the government service he got enrolled as  an Advocate and practicing in the profession as on the date of joining as subscriber in the chit.  So,  the complainant is not an illiterate so, as to believe the so called assurances of said Mr. Anjaiah.  It is also alleged by the complainant that, at the time of joining and bidding chit his signatures were obtained by the Opposite Parties on some blank formats.  As a practicing advocate the complainant ought to have known the consequences of subscribing signatures on the blank forms or formats and chances of misusing the same on a future date.  Hence, in the absence of an acceptable material either in the form of independent oral evidence or a document it is difficult to believe the complainant’s version that, on inducement of Agent of Opposite Parties he joined as subscriber having believed that, admission fee of Rs.1750/- and foremen commission of Rs.50,000/- will be paid to him on termination of chit.
13.     The other allegation of the complainant is that as he was in need of money to perform marriage of his daughter he started participating in the auction of the Chit from November, 2012 onwards but could not succeed because Foremen of the Chit fund Company  prized  subscribed to bid at higher rates.  For this allegation also there is no proof from the complainant’s side as none of the documents placed on the record by the complainant shows that, the Opposite Parties have allowed any of the prized subscriber or their agents to participate in the auction.  As such it is difficult to believe this allegation also of the complainant.      
14.                  It is an admitted fact that, the complainant became successful bidder in the auction held on 24.08.2013 having agreed to forgo an amount of Rs.1,21,900/- out of chit amount of Rs.10,00,000/-.  As per the terms of the Chit Agreement in Ex.B6 and also under Section-31 of Chit fund Act, a prized subscriber inorder to receive the bid amount required to furnish sureties to the foremen of the Company for the security of future liability.  The complainant case is he was asked to produce sureties of 4 gazetted officers, since he retired from the services with no fixed income from the profession of advocacy, was unable to secure sureties.  Hence,    he made a request with the Chit Fund Company to issue a letter requiring him to furnish bank guarantee for the amount equivalent to the future liability but it was not considered by the Chit fund Company.  He was advised by the concerned person from Opposite Party No.1 to obtain Fixed Deposit for the amount equivalent to his future liability and keep it as a security in order to receive the balance of the bid amount.  As he was need of money to repay the debits incurred earlier to perform the marriage of his daughter unwillingly he obtained Fixed Deposit for a sum of Rs.2,60,000/- from Opposite Party No.3 sister concern of  Opposite Party No.1 and deposited this Fixed Deposit Certificate with Opposite Party No.1 then the balance of chit amount was paid to him.  Thereafter, inspite of keeping the Fixed Deposit Certificate Opposite Party No.1 insisted to pay regular instalment and his request either to release the fixed Deposit pre-maturely by accepting his personal bond or property document as security was not considered earlier and these facts of Opposite Party No.1 to 3 amounts to deficiency of service.
15.         As could be seen from the letters addressed by the complainant under Ex.A8 & A9 he requested Opposite Party No.1 to issue a letter requiring him to furnish bank guarantee or release Fixed Deposit certificate accepting his personal bond or property documents of his flats by releasing the Fixed Deposit Certificate so as to enable him to deduct the future installment payable by him by due date from the Fixed Deposit amount and pay him the balance Fixed Deposit amount after the closure of the chit.  The Opposite Party No.1 has not denied the claim of the complainant that his request to issue letter requiring him to furnish a bank guarantee for amount equivalent to future liability.  Infact, it is the contention of Opposite Party No.1 that there was no need for it, to issue such letter.  The terms of chit Agreement of Ex.B1 says a prized subscriber is required to furnish sureties for the future liability to the satisfaction of foremen.  There is no stipulation in Ex.B1 Chit Agreement that the sureties must be in the form of gazetted officers  or a Fixed Deposit Certificate.  What prevented the Opposite Party No.1 company to issue a letter to the complainant asking him to furnish bank guarantee equivalent to future subscription is not stated.  By no stretch of imagination it can be said chit fund company cannot accept a bank guarantee for the future liability  of  the prized subscriber.  As evidenced by Ex.A11 the complainant in principle  obtained  bank guarantee from by IDBI Bank.  If, Opposite Party No.1 has accepted the request of the complainant by issuing a letter asking him to furnish bank guarantee, the complainant would have furnished the same inorder to get the entire bid amount.  The very purpose of participating in the auction and becoming a successful bidder after having agreed to forgo huge amount by a subscriber is to meet his requirement of money.  By not acceding the complainant’s request to issue a letter requiring him to furnish ban guarantee equivalent to future liability the Opposite Party No.1 has caused deficiency of service because no loss would have been caused to Opposite Party No.1 if such a letter was issued.
16.      It is the case of the complainant that inorder to find out as to who have participated in the auction in the same group he requested the Opposite Party No.1 to furnish the details of the same.  Ex.A3 and A8 are the letters written by the complainant to that effect. the Opposite Party No.1 could have furnished atleast the particulars of the subscriber’s in the subject chit group and details of the auctions held till then so as to enable the complainant to prepare for bid.  By not furnishing these details also the Opposite Party No.1 has caused deficiency of service.
17.      Now coming to the aspect of Opposite Party No.1 not acceding the request of complainant to deduct future installments as and when they because due from the Fixed Deposit amount same is not permissible in law because the complainant made Fixed Deposit with Opposite Party No.3 which is sister concern of Opposite Party No.1.  Though both are sister concerns without maturity the withdrawal amount in part of the Fixed Deposit Amount cannot be deducted by Opposite Party No.1.  As rightly explained by Opposite Parties if Fixed Deposit amount is pre maturely withdrawn it invites reduction of assured interest by 2% causing lose the Fixed Deposit holder.  Hence, by not acceding the complainant’s  request the Opposite Party No.1 has not cause any deficiency of service.
18.      The maturity date of Fixed Deposit made by the complainant was 23.09.2014 and the complainant had sent cancelled Cheques of his bank account asking Opposite Party No.1 to transmit the maturity amount to the account.  But, it was no complied.  When the chit was terminated the Opposite Party No.1 could have sent the Fixed Deposit Certificate Opposite Party No.3 which inturn  could  release the maturity amount to credit the same into the complainant’s account.  Admittedly, chit was closed on 30.10.2014 if, there was any due from the complainant’s Opposite Parties could have deducted the amount due from the matured amount and credit the balance amount into the complainant’s account but they have done it.  The maturity amount was paid to the complainant only on 30.01.2015 and by not releasing the amount even after termination of the chit the Opposite Parties has caused any amount of inconvenience and loss to the complainant because it is his case he borrowed the amount from private persons at huge rate of interest. Thus the maturity amount was reasonably withhold by the Opposite Parties for 5 months and it amounts to unfair trade practice. Accordingly the point is answered.
19.     Point No.II: Though the complainant is not entitled for relief of payment of admission fee and foremen commission he is entitled for compensation from the Opposite Parties causing deficiency of service and indulging in unfair trade practice.  Hence, the Opposite Parties are directed to pay a sum of Rs.25,000/- for causing deficiency of service by not acceding the request of the complainant to furnish the details of all the subscription of the chit group in which he was a member and by not issuing a letter requiring him to furnish bank guarantee equivalent to his future liability.  The Opposite Parties further directed to pay a sum of Rs.25,000/- for indulging in unfair trade practice by withholding the fixed deposit amount of the complainant for more 5 months even after termination of the chit.  Accordingly the point is answered.                  
20. Point No.III: In the result the complaint is partly allowed directing the Opposite Parties to pay a total compensation of Rs.50,000/- to the complainant within one month from the date of service of this order as otherwise they are liable to pay interest thereon @12% p.a., from the date of complaint to the date of payment. 

           The Opposite Parties are also liable to pay an amount of Rs.10,000/- as costs by this complaint.  

          Dictated to Steno, transcribed and Typed by her, corrected and pronounced by us on this the 7^th day of January, 2019.

MEMBER                                                                                           PRESIDENT

APPENDIX OF EVIDENCE

 PW1                                                                                  DW1

Sri A.Sudhakar                                                                  Sri Lingaiah, Legal Officer of

                                                                                           Opposite Party No.1

Exs. Filed on behalf of the Complainant:

Ex.A1: Pass book Shriram Chits (P) Ltd.,

Ex.A2: Original Receipt, dt.28.05.2011.

 Ex.A3: Complainant’s letter to the O.P.No.1, dt.29.01.2013.

Ex.A4: Complainant’s letter to the O.P.No.1, dt.11.02.2013.

Ex.A5: O.P.No.1 letter to complainant, dt.28.02.2013.

Ex.A6: Bid payable Memo issued by O.P.No.1.

Ex.A7: Original receipt, dt.21.09.2013.

Ex.A8: Complainant’s letter to the O.P.No.1, dt.25.10.2013.

Ex.A9: Complainant’s letter to the O.P.No.1, with acknowledgment, dt.22.11.2013.

Copy of the Deposit Receipt, dt.23.09.2013.

Ex.A10: Complainant’s letter to the O.P.No.1, dt.11.12.2013.

Ex.A11: Typed matter on stamp paper “Guarantee from IDBI Bank, dt.11.12.2013.

Ex.A12: Complainant’s letter to the O.P.No.1, with acknowledgment, dt.28.03.2014.

Ex.A13: O.P. No.1 Letter to complainant, dt.23.04.2014.

Ex.A14: O.P.No.1 letter to complainant, dt.17.05.2014.

Ex.A15: Legal Notice from Complainant’s letter to the O.P.No.1, dt.19.05.2014.

Ex.A16: Original Receipt, dt.14.06.2014.

Ex.A17: Letter from Complainant to O.P.No.1 & email, dt.20.06.2014.

Shriram Group News, January’14.

Ex.A18: Original receipt, dt.21.06.2014.

Ex.A19: Original receipt, dt.12.07.2014.

Ex.A20: Original receipt, dt.20.08.2014.

Ex.A21: Notice for refund of Maturity amount, dt.04.09.2014.

Ex.A22: Original receipt, dt.01.10.2014.

Renewal Advice from the O.P.No.2 received on 29.08.2014, dt.11.06.2014.

Ex.A23: Notice for refund of Maturity amount to O.P.No.1 & 2, dt.27.09.2014.

Ex.A24: Original receipt, dt.30.10.2014.

O.P.No.1 issued installment wise payment details, 14.06.2014.

Ex.A25: Email from O.P., dt.31.10.2014.

Ex.A26: Email from Complainant, dt.01.11.2014.

Ex.A27: Marriage Invitation Card, dt.15.08.2013.

Ex.A28: Email, dt.09.11.2013.

Original receipt, dt.21.06.2014.

Ex.A29: Complainant’s letter to the O.P.No.1, dt.24.12.2013. .

Ex.A30: Letter issued to O.P.No.2, dt.22.09.2014.

Ex.A31: Receipt of Speed post, dt.24.12.2013.

Ex.A32: Complaint published in Consumer Complaint Forum.

Ex.A33: Complainant’s Lr. To O.P.No.1 with acknowledgment, dt.28.03.2014.

Ex.A34: FD Renewal Advice from the O.P.No.2, dt.11.06.2014.

 Ex.A35: Installment wise payment details, dt.14.06.2014.

Ex.A36: Payment of commutation pension issued by PAO, dt.29.03.2011.

Ex.A37: Notice for refund of Maturity amount to OP.Nos.1 & 2, dt.27.09.2014.

Ex.A38: Legal Notice issued by O.P.No.1, dt.20.04.2015.

Ex.A39: Reply to the Legal Notice by Complainant, dt.04.05.2015.

Ex.A40: Letter from Joint Sub registrar, Chairminar furnishing documents, dt.14.11.2017.

Ex.A41: Form V, dt.21.09.2010.

Ex.A42: List of subscribers (All cases) Group Code: 8005, dt.18.09.2017.

Ex.A43: Form VI, dt.21.09.2010.

Ex.A44: Execution of Agreement of Chit, dt.21.09.2010.

Ex.A45: Minutes of proceedings of Chit No. DLS 05, DT.24.08.2013.

Ex.A46: Receipt of Cheque Nos.003611, 3612 & 3613, dt.21.09.2013.

Exs filed on behalf of the Opposite parties

Ex.B1: copy of legal notice, dt.28.03.2014.

Ex.B2: copy of registered notice dt.23.04.2014.

Ex.B3: copy of registered notice dt.17.05.2014 of the O.P.No.1 to the complainant.

Ex.B4: Legal notice dt.20.04.2015 to the complainant calling upon him to pay Rs.4,236/-.

Ex.B5: Statement of account of the complainant, dt.21.09.2010.

Ex.B6: chit agreement dt.21.09.2010.

Ex.B7: copy of Form No.VI, dt.21.09.2010.

Ex.B8: copy of Form No.XI dt.08.09.2010.

Ex.B9: is copy of Minutes of proceedings, dt.24.11.2013.

Ex.B10: is copy of List of subscribers.

Ex.B11: is copy of return of acknowledgment, dt.30.05.2011.

Ex.B12: is copy of Demand promissory Notes, dt.21.09.2013.

Ex.B13: is copy of Letter from complainant to accept F.D. certificate towards security, dt.23.09.2013.

Ex.B14: is copy of deposit receipt dt.23.09.2013.

Ex.B15: is copy of letter addressed to Registrar of Chits stating that received prized money, dt.21.09.2013.

Ex.B16: is copy of Ministry of Finance Notification No.13/2012 Service Tax dt.17.03.2012.

Ex.B17: is copy of Voucher dt.24.08.2013 showing recovery of amount of Rs.4,326/-.

Ex.B18: is copy of Computer generated receipt, dt.05.09.2013.

Ex.B19: is copy of Section-32 and Section 33 of the Chit Funds Act, 1982.

MEMBER                                                                                           PRESIDENT