BEFORE THE DISTRICT CONSUMER FORUM : MEDAK AT SANGAREDDY
PRESENT: Sri Patil Vithal Rao, B.Sc., LL.B.,President
Smt. Meena Ramanathan, B.Com., Lady Member
Sri G.Sreenivas Rao, M.Sc., B.Ed.,LL.B.,PGADR (NALSAR),Member
Friday, the 11th day of January, 2013
CC.No. 66 of 2011
Between:
1. Smt. J. Padma W/o J.K. Reddy,
Age 46 years, Occ: Business
2. J. Krishna Reddy S/o Narayana Reddy,
Aged 57 years, Occ: Employee.
Both R/o H.No. 2-42/1/3, Gowthamnagar Colony,
Chanda Nagar, R.R. District.
…..Complainants
And
Smt. E. Rajeshwari W/o E.B. Ramanaiah,
Aged about 45 years, Occ: Business,
R/o H.NO. 6-74, M.G. Road,
Patancheru Mandal, Medak District.
...Opposite party
This case came up for final hearing before us on 04.01.2013 in the presence of Sri C. Narsing Raj, Advocate for complainants and M/s M. Sudhakar, advocate for opposite party and heard the arguments of both sides, on perusing the record and having stood over for consideration till this day, this Forum delivered the following:
O R D E R
(Per Se Sri Patil Vithal Rao, President)
1. The complainants have approached this forum with the present complaint under Section 12 of the Consumer Protection Act, 1986 by contending, in brief, that the complainant No. 1 joined a chit group being run by the opposite party in the month of October, 2008 for a sum of Rs. 5,00,000/- to be subscribed @ Rs. 25,000/- per month in the name of her husband, complainant No. 2 and paid entire amount of Rs. 5,00,000/-. Again, in a similar way she subscribed two chits. The second chit commenced in the month of July, 2009 for a sum of Rs. 2,00,000/- @ Rs. 10,000/- p.m. and she paid Rs. 1,10,000/- upto the month of May, 2010. Lastly the complainant No. 1 subscribed 3rd chit of the opposite party for a sum of Rs. 5,00,000/- in the month of May, 2010 @ Rs. 25,000/- per month and paid Rs. 14,600/- upto
May, 2010. When the opposite party informed the complainants about her closure of chit business, they demanded her total due amount of Rs. 6,24,600/- paid by them under the three chit series noted above but she evaded the payment for quite some time but however on repeated pursuance she issued a cheque for Rs. 1,71,726/- on the name of the complainant No. 1. The complainants have further contended that the said cheque was bounced, on 24.06.2011 on presentation, by the HDFC Bank Limited, Hyderabad on the instructions of the opposite party and as such they got issued legal notices to her and filed the criminal case under Section 138 of the Negotiable Instruments Act, 1881 before the Additional Judicial First Class Magistrate Court (AJFCM), Sangareddy. For all these reasons, on the premise of deficiency of service, the complainants have claimed a sum of Rs. 6,24,600/- towards total chit amount with interest @ 18% p.a., Rs. 10,000/- towards mental agony, Rs. 25,000/- towards compensation and Rs. 5,000/- towards cost, against the opposite party.
2. The opposite party filed the counter and resisted the claim of the complainants by denying all the allegations. However she has alleged that on receipt of the legal notice dated. 13.06.2011 from the complainant No. 1, she gave a cheque for Rs. 1,71,726/- on 20.06.2011 on account of a hand loan transaction between them as per mutual agreement but the complainant no. 1 did not return the opposite party the material documents pertaining to the said loan transaction. Therefore she instructed her bankers not to honour the cheque. But the complainants taking advantage of the cheque have setup a false story and came up with the present case with baseless and imaginary allegations. The opposite party has further alleged that infact the present complaint is barred by limitation and also this Forum has no jurisdiction to entertain the same for want of territorial and pecuniary jurisdiction. On these counts she prayed to dismiss the same with cost.
3. During the course of enquiry the complainants have filed evidence affidavit of complainant No. 1 as PW.1 and got marked the documents as Exs. A1 to A15 to substantiate their claim. The opposite party has filed her affidavit as DW.1, in defense.
4. Despite reasonable opportunity was given the parties did not choose to file their written arguments.
5. Heard the learned counsel for the both the parties.
6. Now the points for consideration are:
(i) Whether this Forum has no jurisdiction to entertain the complaint for want of territorial and pecuniary jurisdiction?
(ii) Whether the complaint is barred by limitation?
(iii) Whether there is any deficiency of service and if so the complainants are entitled for the reliefs as prayed for?
7.Point No. (i):
The opposite party stays within the limits of Medak District and the disputed transaction took place in the same District. Therefore we hold that this Forum has jurisdiction to entertain the lis under Clause (2) of Section 11 of the Consumer Protection Act, 1986.
It is to be noted that the total claim of the complainants is of Rs. 6,64,600/- under various counts i.e., Rs.6,24,600/- towards chit amount due, Rs. 10,000/- towards mental agony, Rs. 25,000/- towards compensation and Rs. 5,000/- towards cost. As per clause (1) of Section 11 of the Consumer Protection Act, 1986 this Forum can entertain a claim to the limit upto Rs. 20,00,000/-. Thus the claim under dispute is within the statutory limit and as such we hold that the same is not barred by pecuniary jurisdiction.
8. Point No. (ii):
The complainants have contended that they paid the chit premiums upto 13.06.2011 and got issued two legal notices on 26.06.2011 and 12.07.2011 when the opposite party failed to return their due amounts and that she sent a legal notice to them on 13.06.2011 by setting up an imaginary story of a hand loan. The period of limitation for preferring a claim is two years from the date of cause of action as per Section 24-A of the Consumer Protection Act, 1986. When the above noted relevant dates are taken into consideration, the claim of the complainants comes well within the period of limitation. Therefore we hold that the case is not barred by the limitation.
9. Point No. (iii):
The present dispute between the parties arose on account of chit transactions. The complainants have propounded that three (3) chits, in a private unregistered chit company being run by the opposite party, were subscribed by them on the name of complainant No. 2, who is husband of complainant No. 1, for different amounts believing the version of the opposite party that her chit fund business was under the process of due registration. Ex. A1, A2 & A15 are the original pass books of the chit series on the name of complainant No. 2. It seems the 1st chit of Rs. 5,00,000/- was matured and that when the opposite party represented the complainants that she winded up the chit fund business, they stopped subscribing further the remaining two chit series. The complainants have been claiming the due amount of Rs. 5,00,000/- pertaining to the 1st chit, Rs. 1,10,000/- pertaining to the 2nd chit and Rs. 14,600/- pertaining to the 3rd chit, in total Rs. 6,24,600/-. The opposite party seems to have issued cheque vide Ex.A5 for an amount of Rs. 1,71,726/- towards part payment and promised to pay the balance amount subsequently. On 20.06.2011 when the said cheque was bounced on presentation at the Bank concerned, the complainant No. 1, who made payments under the chits noted above on the name of her husband, the complainant No. 2, got issued a legal notice vide Ex. A8 on 12.07.2011 calling upon the opposite party to make payment of the entire balance due amount. Exs. A6 & A14 are copies of memos issued by the said bank to complainant No. 1 stating that the opposite party gave instructions to stop payment of the amount covered by the cheque, Ex.A5.
The initial burden lies on the complainants to establish their case. In this regard they have filed the original pass books with regard to the 3 chit series vide Exs. A1, A2 & A15. No doubt they do not bear any signature of the opposite party or seal of the chit company but it is to be noted that the company is unregistered one. Moreover the opposite party has clearly admitted about issuance of cheque Ex.A5. However she has setup a plea that it was issued in connection with another loan transaction between her and complainant No. 1. In the circumstance the onus of proof of the alleged loan transaction shifts on the opposite party.
Now let us see whether the opposite party could establish her defence as setup by her. In this regard it is to be noted that the cheque for a sum of Rs. 1,71,726/- under Ex. A5 was issued on 20.06.2011 but the opposite party has referred to it in her legal notice dated 13.06.2011 vide Ex. A3. On page No. 2 (7th line) it has been noted that the opposite party issued instructions to the Manager of the bank concerned to stop payment of cheque amount. It is not clear as to how she could give instructions on 13.06.2011 when the cheque was not even issued on that day but was issued only on 20.06.2011. Even the legal notice under Ex.A3 is self contradictory. Because on page no. 1 at line nos. 8 & 9 it was noted that the opposite party repaid the loan amount to the complainant No. 1 through the cheque Ex.A5. But as per her later version in the same notice referred above she stated that she gave instructions to the Bank not to honour the cheque. Further the opposite party, except her sole affidavit, did not choose to produce any witness to establish the alleged loan transaction. In view of all these facts and circumstances, in our considered opinion, the preponderance of probabilities tilt in favour of the complainants to say that the complainant No. 1, must have remitted the amounts covered by the 3 chits under Ex. A1,A2 & A15, on behalf of her husband, the complainant No. 2. Further, the complainant No. 1 immediately on receiving of the legal notice under Ex. A3 from the opposite party, sent a reply notice, Ex.A4 on 21.06.2011 i.e., on the very next day of the cheque, Ex. A5 and clarified all the facts while denying the story of loan transaction etc., setup by the opposite party. Ex. A7, A9, A10, A12 & A13 are postal receipts and acknowledgement where as Ex. A11 is a document with regard to a typographical mistake crept in the notice Ex.A8. The complainant No. 1 has also filed her affidavit, as PW. 1 to substantiate her contention.
The learned counsel for the complainants has cited and relied on the decision in, “G. SUNIL KUMAR versus A. VENU”, [2005] 1 CPJ 90 in which it was held that having issued a cheque by the opposite party admitting the liability, he cannot make somersault to wriggle out of the liability. In the said case the opposite party had admitted issuance of cheque to the complainant but did not assign any reason for the same except total denial of the complainant’s claim. The said case was also based on a chit transaction. In the instant case too the opposite party made bald denial of the claim of the complainants by setting up a story of loan transaction but failed to establish the same. In another decision of “M/s. Sri Rampriya Chit Fund Pvt. Ltd. versus
Yara Srinivasa Rao”, [2010] 2 CPR(NC) 76 it was held that a claim basing on chit fund transaction is maintainable before the District Forum and the opposite party, on due proof, is liable to pay the same to the complainant. No doubt the chit Fund Company being floated by the opposite party is unregistered one and as such illegal in the eye of law but this itself is not sufficient to discharge the opposite party from her liability when the complainants have established the chit transactions and the money subscribed by them. This view is fortified by the decision in “SAHARA INDIA LTD. & ANR versus JAWANMAL JAIN”, [2004] 4 CPJ 829. Thus all these decisions support the case of the complainants.
In view of the above facts and circumstances, we hold that the complainants have established their claim and as such they are entitled for refund of the total amount of Rs. 6,24,600/- with reasonable interest thereon @ 9% p.a.
The learned counsel for the opposite party has cited circular No. 6/SO/2010 issued by the Hon’ble High Court of Andhra Pradesh in ROC.No. 825/SO-2/2010, basing on the judgment dated 03.05.2010 of the Hon’ble Supreme Court in criminal appeal No. 963/2010 between “Damodar S. Prabhu versus Sayed Babalal H.”. The said circular is to the effect that when a complaint U/s 200 of the Criminal Procedure Code, 1973 is pending under the Negotiable Instruments Act, 1881 before a court, a subsequent case, if any, filed before some other court on the same set of facts should be transferred to the first court and that the complaint shall disclose the pendency of earlier case in the later case by way of sworn affidavit. But the said circular is not applicable to the facts of the present case for the simple reason that the criminal case filed by the complainants before the Addl. JFCM, Sangareddy u/s 138 of the Negotiable Instrument Act, 1981 is for different relief than the relief sought for in the present case. Moreover the present case is not filed u/s 200 Crl.P.C but has been filed u/s 12 of the Consumer Protection Act, 1986. Therefore the opposite party cannot avail any benefit from the said circular.
From the aforesaid discussion it is crystal clear that the opposite party has caused deficiency of service to the complainants by way of resorting to unfair trade practice.
The complainants on account of the dispute raised by the opposite party must have suffered harassment, mental agony etc., and as such they are entitled for a sum of Rs. 10,000/- towards compensation. The opposite party is further liable to pay Rs. 1,000/- towards cost of the present proceedings.
Thus, we hold that the complainants are entitled for a total sum of Rs. 6,35,600/- against the opposite party with interest @ 9% p.a. on the total chit amount of Rs. 6,24,600/- from this day till the date of realization to meet the ends of justice.
10. The point is answered accordingly in favour of the complainants.
11. In the result, the complaint is allowed directing the opposite party to pay a sum of Rs. 6,35,600/- to the complainants with interest @ 9% p.a. on the total chit amount due of Rs. 6,24,600/- from this day till the date of realization. One month time is fixed for compliance.
Dictated to Stenographer, after correction the orders pronounced by us in the open court this the 11th day of January, 2013.
Sd/- Sd/- Sd/-
MALE MEMBER LADY MEMBER PRESIDENT
APPENDIX OF EVIDENCE
WITNESS EXAMINED
For the complainant: For the opposite parties:-
PW.1 – Smt. J. Padma DW. 1 Smt. E. Rajeswari
DOCUMENTS MARKED
For the complainant: For the opposite parties:-
Ex.A1/dt. 05.10.2008 – Original chit pass book. | -Nil- |
Ex.A2/dt.11.07.2009 – Original chit pass book. | |
Ex.A3/dt.13.06.2011 – Copy of legal notice. Ex.A4/dt.21.06.2011 – Copy of reply notice issued by opposite party. | |
Ex.A5/dt.20.06.2011 – Copy of HDFC Bank cheque for Rs. 1,71,726/-. | |
Ex.A6/dt. 24.06.2011- Copy of Return memo issued by the HDFC bank, Hyderabad. | |
Ex.A7/dt.28.06.2011 – Copy of acknowledgement. | |
Ex.A8/dt. 12.07.2011 – Copy of legal notice. | |
Ex.A9/dt.13.07.2011 – Copy of postal registration slip. | |
Ex.A10/dt.26.07.2011 – Copy of acknowledgement. | |
Ex.A11/dt.21.07.2011 – Copy of Correction. | |
Ex.A12/dt. 21.07.2011 – Copy of postal registration slip. | |
Ex.A13/dt.28.07.2011 – Copy of acknowledgement. | |
Ex.A14/dt. 23.06.2011 – Copy of Cheque return memo. | |
Ex.A15/dt. 05.05.2010 – Original chit pass book. | |
Sd/- Sd/- Sd/-
MALE MEMBER LADY MEMBER PRESIDENT
Copy to
1) The Complainant
2) The Opp.Parties
3) Spare copy
