F.A.No.329/2008 AGAINST C.C.No.104/2007, DISTRICT FORUM,  Karimnagar.

Between:

1.M/s.Kapil Chit Funds Pvt. Ltd.,

    Central Office, Gunrock Enclave,

    Opp:Sec’bad, Rep. by its Chief Manger,

    Md.Ashraf Ahmed, Hyderabad.

2. Kapil Chit Funds Pvt. Ltd., Branch Office,

     H.No.8-4-197/2, Kaman Road, Karimnagar,

     Rep. by its Chief Manager Md.Ashraf Ahmed.          …Appellants/

                                                                                              Opp.parties

               And

Sri Payakarao Upendra,  S/o.Shankaraiah,

Aged about 32 years, Occ: Employee,

R/o.H.No.4-1-59, Head Post Office Road,

Sircilla Town, Karimnagar District.                   … Respondent/

                                                                                             Complainant

Counsel for the Appellant    : Mr.N.Amarnath

ounsel for the Respondent   : M/s. Srinivasa Srikanth

 QUORUM: THE HON’BLE JUSTICE  SRI D.APPA RAO, PRESIDENT                                                                                      AND

                             SMT.M.SHREESHA, HON’BLE  MEMBER

.

               MONDAY, THE  TWENTY NINTH  DAY OF  NOVEMBER, 

                                          TWO THOUSAND TEN

Oral Order : (Per   Smt.M.Shreesha, Hon’ble Member)
                                                ***

Aggrieved by the order in C.C.No.104/07 on the file of Dist. Forum, Karimnagar, the opp.party preferred this appeal.

The brief facts as set out in the complaint are that the complainant joined as a member   in chit series RTL 05J-8  conducted by the opposite parties for a chit value of Rs.5 lakhs, the date of commencement being 25.11.2005  and the date of termination being 25.12.2009 with a monthly subscription of Rs.10,000/- for a period  of 50 months.  The complainant paid 22 instalments. of Rs.2,20,000/- and has not participated in any chit auction and did not claim any prize amount. The complainant stood as a surety to one Mr.A.Surya Prakash who committed default in paying the chit amounts and a suit for recovery of money of Rs.46,308/- against the said Suryaprakash and others including the complainant was filed vide O.S.No.364/05 on the file of Hon’ble Junior Civil Judge at Karimnagar. The complainant approached opp.party no.2 and also got issued a legal notice on 9.7.2007 not to deduct any amounts from his chit.  The opposite party did not collect any amounts from him and to avoid default the complainant obtained a cheque no.439262 for Rs.16,000/- on 14.8.2007 from SBH, Rampur Branch towards  monthly subscriptions of July and August 2007.  Opp.party no.2 did not accept the said cheque amount. The complainant once again sent a legal notice on 17.8.2007 along with the cheque but opp.party  no.2   neither  replied  nor  issued any receipts for the said cheques. Thereafter opp.parties sent a removal letter stating  that the complainant did not pay the arrears inspite of a notice sent on 13.7.2007.  In this removal letter opp.party no.2 stated that the complainant paid only Rs.85,120/- and deducted 5% of the chit amount towards damages for breach of contract of Rs.25,000/- and the net amount payable is Rs.59,970/-.  Vexed with their attitude the complainant approached the  District Forum seeking direction to the opp.parties to pay Rs.2,20,000/- together  with interest, compensation and costs.

Opposite party no.1 filed memo adopting the counter of opposite party no. 2.

Opposite party no.2 filed counter admitting that the complainant is the subscriber of the chit and he has executed  a chit agreement agreeing to  abide the terms and conditions of the agreement and paid only 20 instalments and not 22 and that he stood as surety to one Mr.A.Surya Prakash who committed default  and opposite party no.2 filed a suit for recovery  of  Rs.46,308/- vide O.S.No.364/05  on the file of Principal Junior Civil Judge, Karimnagar. As per the request of the complainant who contested the matter, opp.party no.2 adjusted an amount of Rs.55,865/- out of the chit amount. Accordingly, opp.party no.2 withdrew the suit as not pressed in view of the payment made by the complainant as guarantor. In view of the default committed by the complainant, opp.party no.2 got issued a notice on 9.8.2007 removing the complainant as a member from the said chit. Thereafter the complainant sent a cheque for Rs.16,000/- and  opp.party no.2 clearly mentioned in their letter dt.9.8.2007 that after deducting Rs.55,865/-, the complainant is entitled to Rs.85,120/- out of which 5% foreman’s commission is deducted together with Rs.150/- towards incidental charges  and the complainant is entitled to Rs.59,970/- only.  The complainant is entitled to the said amount only after the completion of the said  chit as per the terms of the agreement  and he is entitled  to Rs.75,970/- which is including Rs.16,000/-. 

The District Forum based on the evidence adduceed Exs.A1 to A16 and B1 to B3 allowed the complaint in part directing the opp.parties  to pay  Rs.2,04,000/- with 9% interest from the date of the complaint i.e. 27.9.2007  with costs of Rs.1000/- .  

Aggrieved by the said order, the opp.parties preferred this appeal.   

The point for consideration is whether there is any deficiency of service on behalf of the appellants/opp.parties?

   The facts not in dispute are that the complainant joined  the opp.parties’  chit  and Ex.A1 evidences that the monthly subscription is Rs.10,000/- payable in 50 monthly instalments commencing from 1.10.2005.  It is the case of the complainant that he paid 22 instalments amounting to Rs.2,20,000/-  and he stood as surety to one Mr.A.Surya Prakash who committed default in payment Rs.46,308/-and opposite party no.1 filed suit for recovery vide O.S.No.364/2005 on the file of  Hon’ble Principal Junior Civil Judge. Thereafter the opp.parties refused to accept his instalments.  It is the complainant’s case that he got issued a  legal notice on  17.8.2007 and along with it sent a cheque for Rs.16,000/- dt.14.8.2007 towards the monthly subscriptions for July and August’ 2007. The learned counsel for the complainant submitted that the opposite party in the reply notice stated that inspite  of  their notice dated 13.7.2007 the complainant did not pay the amounts   and in this removal letter they submitted that the complainant is entitled to   Rs.59,970/- after deducting the amounts due to the said Suryaprakash i.e. 46,308/- , 5% commission for the foreman amounting to Rs.25,000 and Rs.150/- towards incidental expenses.  

The learned counsel for the appellants/opp.parties contended that the complainant is entitled to only Rs.59,970/- after deducting Rs.55,865/- and Rs.25,000/- towards breach of contract. He further contended  that if a non prized subscriber commenced default continuously for a period of more than 2 months he is not entitled for any dividends   and accordingly opp.party no.2 issued a removal letter.

It is not in dispute that the opp.party already clutched the jurisdiction of the Civil Court and the amount is adjusted  and the suit is  withdrawn  in August 2007. The complainant submits that the suit was withdrawn without his knowledge and therefore he preferred the complaint before the  District Forum.  The contention of the appellants/opp.parties   that an amount of Rs.55,865/- is to be adjusted is without any substantial ground. 

Firstly the appellants did not explain as to how they arrived at the figure  of Rs.55,865/-  when  the said Mr.Suryaprakash Rao defaulted Rs.43,746/- and together with incidental charges interest and cost of legal notice as stated in O.S.No.364/2005 (Ex.B3), the amount is totalling to Rs.46,308/-. Secondly it is the opp.parties’ own case that they have filed this O.S.No.364/05 for recovery of Rs.46,308/- and the suit was dismissed after recording full satisfaction. The complainant in  his affidavit contended that he filed his written statement in that suit and without giving notice to him the appellants/.opp.parties filed a memo claiming full satisfaction and withdrew the suit. It is pertinent to note that appellants/opp.parties did not state in their affidavit or filed the full satisfaction memo giving the details of payments made. In the absence of any documentary evidence with respect to the details of full satisfaction memo, the act of the opposite parties in unilaterally deducting Rs.55,865/- from the account of the complainant (when admittedly the defaulted amount is Rs.46,308/- ), amounts to deficiency in service.  A perusal of Ex.A15 does not disclose as to which defendant  paid what amount.

        The other contention of the appellants/opp.parties is that the complainant is a defaulter and is  therefore not entitled to the dividend amounts. We observe from the record that the opp.parties sent a notice dt.9.8.2007 vide Ex.A10 which reads as follows:

        “As you  have not paid the arrears inspite of the notice  sent to you on dt.13/07/2007,  we were constrained to remove you, from membership on 9.8.2007.

         Please note that this  is a confirmation  notice of your removal  from membership, please further note that a sum of amount is due to you Rs.59,970.00 as  detailed below, payable   on the termination of the chit or as per provisions of the A.P.Chit Fund Act,1971.

        Actual amount paid by you        :              Rs.85,120/-

        Less -5%  of the Chit amount towards    

       damages for breach of contract-Rs.25,000/-

       Incidental charges                             150/-

                                                                       25,150/-

                                                                  ___________

                                  Net amount due to  you    59,970/-

                                                                    __________”

It is evident from this notice that the opp.party is relying on another notice sent to the complainant on 13.7.2007 but has not chosen either to file  a copy of this notice  or atleast an acknowledgement of the same. It is also pertinent to note that the complainant got issued a notice vide Ex.A5 dt.9.7.2007 which is one prior to Ex.A9 and has also filed acknowledgement (Ex.A7) that the opp.party has received it  on 18.7.2007. It is apparent that the opp.party received Ex.A5 and thereafter got issued Ex.A10. The complainant vide Ex.A9 dt.17.8.2007 got issued a  notice to the opp.party mentioning his notice dt.9.7.2007 not to deduct any amounts from his chit.     In this notice Ex.A9 the complainant submitted that an amount of Rs.16,000/- vide cheque dt.14.8.2007 was being sent along with the notice towards monthly subscriptions for the months July and August,2007. It is pertinent to note that the notice of membership removal dt.9.8.2007  does not state as to how much time was given as per the terms and conditions of the  chit agreement,  to the complainant to pay these instalments which were due. We find force in the contention of the complainant that  he sent these two cheques prior to receipt of Ex.A10.  As  against this contention, the appellants/opp.parties did not file acknowledgment copy showing the ‘date of receipt’ of the notice (Ex.A10) to the complainant and also  the previous notice said to have been sent on 13.7.2007. The unilateral act of the opp.parties in not accepting the cheques but crediting them to the account of the complainant on the ground that they would return it after the completion of the chit i.e. by 25.12.09, which,  as on this date is already completed, is unsustainable.  Now that the chit period is completed, the complainant is entitled to the refund of the 16,000/- as well as the amounts paid by him including the dividends as he cannot be termed as a defaulter, when he sent the cheques dt.14.8.2007 for the months of July and August and the opp.party credited it to the account of the complainant. There is also no proof of the issuance of notice dt.13.7.2007 giving an opportunity to the complainant to pay the two instalments.

         The legal notices issued  by the complainant (Exs.A5 & A9) clearly  specify that the complainant  paid 20 instalments amounting to Rs.2,00,000/-  and thereafter sent a cheque for Rs.16,000/- (credited to his a/c.) for July and August,2007. Hence the amounts total to Rs.2,16,000/-. However with respect to awarding the refund of the amounts paid by the complainant, we are of the considered view that the complainant is entitled to the entire amounts paid by him i.e. Rs.2,16,000/-  (Rs.2,00,000/- + Rs.16,000/- ), but after deduction  of 5% foreman’s commission (i.e. Rs.25,000/-).  We  however confirm  the interest @ 9%  awarded by the  District Forum from the date of filing of the complaint till realization  together with costs of Rs.1000/- .

        In the result this appeal is allowed in part modifying the order of the District Forum and we direct the appellants/opp.parties to pay Rs.1,91,000/-  with interest at  @ 9% p.a. from the date of filing of the complaint till realization together with costs of Rs.1000/- . Time for compliance four weeks.       

                                                        PRESIDENT

                                                        MEMBER

                                                        Dt.29.11.2010

Pm*