BEFORE THE DISTRICT CONSUMER FORUM AT NALGONDA
PRESENT: SRI D.SINGARA CHARY, B.A., LL.B.,
PRESIDENT.
SMT.CH.A.LATHA KUMARI, M.A.,M.Sc.,LL.M.,
FEMALE MEMBER.
. . .
TUESDAY, THE TWENTY SIXTH DAY OF NOVEMBER, 2013
CONSUMER COMPLAINT No. 78 OF 2012
Date of 1st appearance: 07-12-2012
Date of Disposal: 26-11-2013
Between:
S.Sunitha Raaj D/o S.R.Krishna, Age: 27 years, Occ:
Private Employee, R/o H.No.17-235, Santhosh Nagar Colony,
Devarakonda Town of Nalgonda District.
…COMPLAINANT.
AND
- Sri Sai Venkateshwara Chit Funds Private Limited,
(Corporate Identity No.U65992 AP 2007 PTC 055887),
Door No.4-10-628/3, Venkateshwara Complex, DVK Road,
Nalgonda Town and District. Represented by its Managing
Director, Aedukondala Venkatesham.
- Aedukondala Venkatesham S/o Maraiah, Age: 43 years, Occ:
Managing Director of Sri Sai Venkateshwara Chit Funds Pvt.
Ltd., R/o H.No.4-10-780, Sidhartha Colony, Nalgonda Town
and District.
- Kolloju Sathyanarayana Chary S/o Gopaiah, Age: 60 years,
Occ: Director, R/o H.No.4-10-779, Sidhartha Colony,
Nalgonda Town and District.
- Komatireddy Mohan Reddy S/o Papi Reddy, Age: 50 years,
Occ: Director, R/o H.No.4-10-744, Sidhartha Colony,
Nalgonda Town and District.
- Kamishetty Sujatha D/o Chennaiah, Age: 40 years, Occ:
Director, R/o H.No.6-5-23, Beet Market, Hyderabad Road,
Nalgoda Town and District.
- Poreddy Sabitha W/o Ram Reddy, Age: 52 years, Occ:
Director, R/o H.No.5-11-19, Shanthi Nagar, Nalgonda town
and District.
- The Assistant Registrar of Chits, Nalgonda.
…OPPOSITE PARTIES.
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This complaint coming on before us for final disposal on this day, in the presence of Sri S.Radha Krishna, Advocate for the Complainant, and Sri K.Venkateshwarlu, Advocate for the Opposite Parties No.1 to 5 and Sri M.Venugopal Reddy, Advocate for the Opposite Party No.7, and the Opposite Party No.6 having been set ex-parte, and on perusing the material papers on record, and having stood over for consideration till this day, the Forum passed the following:
ORDER OF THE FORUM DELIVERED
BY SRI D.SINGARA CHARY, PRESIDENT
1. The Complainant filed this complaint Under Section 12 of the Consumer Protection Act, 1986 to direct the Opposite Parties to pay a sum of Rs.1,40,000/- with interest @ 12% pa. from 01-06-2012 till realization and for other reliefs.
2. The facts leading to the filing of this complaint are as follows:
The Opposite Party No.1 runs chit fund company of which the Opposite Parties No.2 to 6 appear to be the Managing Director and Directors respectively. The Opposite Party No.7 is the Assistant Registrar of Chits, Nalgonda. The chit fund company of the Opposite Party No.1 started a chit for a sum of Rs.2,00,000/- and the Complainant became one of the members of the chit group No.SSVCF/NJ4-23. Se has to pay a sum of Rs.5,000/- for 40 months. The Complainant paid 28 installments from February, 2009 to May, 2011. Thereafter there were disputes among the chit fund company and it had stopped the business. The chit was completed in the year 2012. The Complainant paid in all a sum of Rs.1,40,000/- including the dividend she was entitled to in 28 months. The Complainant approached the Opposite Party No.1 Managing Director and the
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Directors Opposite Parties No.2 to 6 to get her money back, but it was
no effect. She got issued a legal notice Ex.A-3 and it was served on the Opposite Parties No.1 to 7. Since nothing could be done, the Complainant filed this complaint.
3. The Opposite Party No.1 filed a written version which was adopted by the Opposite Parties No.2 to 5. The Opposite Parties No.1 to 5 in their written version admitted that they were running the chit in question, but denied the Complainant taking membership in the chit in question and, therefore, the Complainant has no cause of action to file this complaint. No legal notice was received by them. The Complainant not having joined the chit is not entitled to any relief.
4. The Opposite Party No.7 the Assistant Registrar of Chits, Nalgonda filed a written version speaking to the procedure and the registration of the chit in question under the Chit Fund Act, 1971. The value of the chit is Rs.2,00,000/- and it was commenced from 28-02-2009 for 40 months. As a matter of fact, the Complainant was not allotted any chit according to the record of the chit fund company. The chit No.23 which the Complainant claims to have allotted to her was in fact allotted to one R.N.Bhushan and thereafter it was transferred in the name of sri Dhan Singh. The Complainant has no concern with the chit in question.
5. The parties filed their respective proof affidavits. While the Complainant marked Exs.A-1 to A-9, the Opposite Parties did not mark any documents.
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6. The points for consideration are:
1) Whether this Forum has jurisdiction to entertain
the complaint?
2) Whether the Complainant is entitled to the amounts claimed?
7. POINT No.1:
The learned counsel for the Opposite Parties No.1 to 5 submits that this Forum has no jurisdiction to entertain the matters arising out of the Chit Funds Act. In support of his contention, he relies on a decision reported in K.Sagar, M.D., Kiran Chit Fund, Musheerabad Vs.A.Bal Reddy and another ( 2008 (5) ALd 113 (SC) ) rendered by the Hon’ble Supreme Court. The said case also arose out of chit transactions. The Complainant therein filed a consumer complaint before District Forum and the District Forum dismissed the complaint. On appeal, the State Commission reversed the order of the District Forum and allowed the complaint. The Complainant carried the matter to the Hon’ble National Commission and the Hon’ble National Commission had confirmed the order of the State Commission. The matter was further carried to the Hon’ble Supreme Court and before the Hon’ble Supreme Court, the question of jurisdiction was raised by the chit fund company. The chit fund company relied on a decision of the Hon’ble National Commission reported in Dwarkadhish Chit Funds Private Limited Vs. Sanju Ram Aggarwal (F.A.No.590/1992, decided on 13-01-1995). The Hon’ble Supreme Court disposed off the appeal remanding the matter to the State Commission and while remanding the Hon’ble Supreme Court observed that the issue relating to jurisdiction has to be decided by the Foras first and for that purpose
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remanded the matter to the State Commission. The Hon’ble Supreme Court did not express any opinion as to whether the Consumer Fora and Commissions created under the Consumer Protection Act have jurisdiction and on the other hand had left open the matter to be decided by the Fora.
8. The next decision relied on by the counsel for the Opposite Parties No.1 to 5 is the one reported in Dwarkadhish Chit Funds Pvt.Ltd. Vs. Sanju Ram Aggarwal (decided by the Hon’ble National Commission, vide F.A.No.590/1992 disposed on 13-01-1995). According to the learned counsel for the Opposite Parties No.1 to 5, in the said decision it was specifically held that Consumer Fora have no jurisdiction to decide the cases arising out of Chit Fund Act. The said decision was rendered by a three Members Bench namely; Hon’ble Sri Justice V.Balakrishna Eradi, President, Sri Y.Krishan and Sri B.S.Yadav, Judicial Members. The facts of the said case are that the Complainant approached the State Commission of Delhi with a consumer complaint against the Chit Fund Company and the State Commission allowed his consumer complaint. The Chit Fund Company therein had carried the matter in First Appeal to the Hon’ble National Commission. Of the three Members, Hon’ble Sri B.S.Yadav, Judicial Member and Hon’ble Sri Y.Krishan delivered different judgments. Hon’ble Sri B.S.Yadav did not touch the question of jurisdiction and on facts confirmed the order of the State Commission. However, Hon’ble Sri Y.Krishan, Member entered into the question of jurisdiction and held that a prized subscriber cannot be deemed to be a consumer of any goods or service and held that the Consumer Fora and Commissions created under the Consumer Protection Act have no jurisdiction to entertain or
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dispose off the consumer matters and dismissed the complaint before the State Commission thereby allowing the appeal, though it is not specifically stated in so many words. Even though it is not clear as to with whose judgment His Lordship Justice V.Balakrishna Eradi had agreed, yet from the way Hon’ble Sri B.S.Yadav, Judicial Member coined the words at several places by using plural form, this Forum infers that His Lordship had agreed with the view expressed by Hon’ble Sri B.S.Yadav, Judicial Member. To mention few instances at the end of para No.6, it is stated in the judgment to the effect that “We do not find any ground to differ with the finding of the State Commission”. Again in the result portion in Para No.7, it is stated to the effect that “as We have endorsed the above findings of the State Commission we do not find any force in the present appeal and dismiss the same with costs which we assess at Rs.1,000/-“. In the judgment prepared by Hon’ble Sri Y.Krishan, Member, in para No.11 the singular form was used like “I am, therefore, of the view ……”. Again in para No.12 in two places he used the words ”I”. Therefore, it can safely be said that His Lordship the President Hon’ble Justice V.Balakrishna Erade had concurred with the view expressed by the Judicial Member Hon’ble Sri B.S.Yadav. The majority of the Bench namely; His Lordship Justice V.Balakrishna Eradi and Sri B.S.Yadav, have then did not touch the aspect of jurisdiction. However, the minority order of Hon’ble Sri Y.Krishan entered into the question of jurisdiction and recorded a finding that prized winner is not a consumer within the meaning of the Consumer Protection Act and thereby held that the Consumer Fora have no jurisdiction to entertain the disputes arising out of the Chit Funds Act and dismissed the complaint and allowing the appeal.
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9. In spite of the fact that Hon’ble Sri Y.Krishan rendered minority judgment, its effect is to be considered and examined as to whether his findings that the Consumer Fora have no jurisdiction to entertain the disputes arising out of the Chit Funds Act. A close reading of the pleadings mentioned in the order prepared by Hon’ble Sri B.S.Yadav, Judicial Member shows that the question of jurisdiction was not raised by the Opposite Parties either before the State Commission or before the Hon’ble National Commission. However, Hon’ble Sri Y.Krishan, Juicial Member appeared to have entered himself into the question of jurisdiction and recorded the above finding. Therefore, the finding recorded by Hon’ble Sri Y.Krishan that Consumer For a have no jurisdiction is obiter-dicta since such point was not raised and argued by any of the parties. However, in a decision reported AIR 1957, Madras Page No.23 rendered by Madras High Court it was held that obiter dicta of a judgment, even dissenting, is to be given high respect. Therefore, giving due regard and respect of the view expressed by Hon’ble Sri Y.Krishan, Judicial Member to his finding that the Consumer Fora have no jurisdiction in regard to the matters relating to Chit Fund Act, we shall examine and dispose off the case in the light of the decision relied on by the learned counsel for the Complainant which will be discussed just hereafter.
10. The learned counsel for the Complainant relies on a decision reported in Narinder Kumar and others Vs. Sanjiv Kumar ( 2001 CPJ 27 (NC) rendered by Hon’ble National Commission. In the said case also, a complaint was lodged before the District Forum for a direction to a Finance Company to pay the amount arising out of chit run by the
said finance company. It was also a case under the Chit Funds Act.
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The District Forum in the said case dismissed the complaint holding that Section 64 of the Chit Fund Act, 1982 bars the jurisdiction of Consumer Fora. On appeal, the State Commission had over turned the findings of the District Forum. The finance company carried the matter in revision to the Hon’ble National Commission and the Hon’ble National Commission agreed with the judgment of the State Commission and dismissed the appeal. While coming to the said conclusion, the Hon’ble National Commission had deep peep into the provisions of the Chit Fund Act, more particularly Section 64, which according to the District Forum bars the jurisdiction of the Consumer Fora in matters relating to the Chit Fund Act. The Hon’ble National Commission had extracted Section 64 of the Chit Fund Act. According to Section-64 (1) of the Chit Fund Act, any matter involving a dispute between Foreman and prized subscriber, between a Chit Fund Company and Member or subscriber, disputes between a Member and
Members of the Chit Fund Company, a surety of a subscriber or a deceased subscriber shall be referred to by any of the parties to the dispute, to the Registrar for arbitration. Sub-Section 3 of Section 64 bars the jurisdiction of the Civil Court, in matters relating to the issues cognizable by Registrars under section 64 of the Act. Considering the effect of sub-section 3 of Section 64 of the Chit Fund Act, the Hon’ble National Commission observed that what the said provision had barred the jurisdiction was of civil court only, but not the Consumer Fora and Commissions created under the Consumer Protection Act and that even though the Fora created under the Consumer Protection Act have trappings of civil court, it is only a quasi judicial body, it is never a civil court and, therefore, the bar of the jurisdiction under section 64(3) of
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the Chit Fund Act is not applicable to the Consumer Fora. Apart from it, the Hon’ble National Commission also made a dwelt on section 3 of the Consumer Protection Act, 1986 and found that the remedy under Consumer Protection Act in addition to and not in derogation of the provisions of any other law for the time being in force. This judgment of the Hon’ble National Commission reported in Narinder Kumar and others Vs.Sanjiv Kumar ( 2001 CPJ 27 (NC ), wherein it was held that the Consumer Fora has jurisdiction in matters arising out of the Chit Fund Act, had discussed at length the provisions of the Chit Fund and Consumer Protection Act. Therefore the minority view, that too obiter-dicta, expressed by Hon’ble Sri Y.Krishan, Judicial Member, who delivered the dissenting of his own in Dwarkadhish Chit Funds Pvt.Ltd. Vs. Sanju Ram Aggarwal (decided by the Hon’ble National Commission, vide F.A.No.590/1992 disposed on 13-01-1995) cannot glitter over the judgment reported in Narinder Kumar and others Vs.Sanjiv Kumar ( 2001 CPJ 27 (NC ). The decision in Narinder Kumar’s case is also latter in point of time and as already stated is based on sound reasoning with reference to the provisions of the Consumer Protection Act and the Chit Fund Act. Accordingly, following the said judgment, we hold under this point that this Forum has jurisdiction to decide this complaint.
11. POINT No.2:
The plea of the Complainant that she jointed the chit in question was countered by the Opposite Parties No.1 to 7 by stating that she never took membership in the chit in question nor ticket No.23 was allotted to her. The learned counsel for the Complainant submitted
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during the course of arguments that the Complainant had taken the broken chit in between and paid all the amounts due till then namely; March, 2010, totally 14 installments under receipt dated 11-10-2010 one of the receipts in the bunch of Ex.A-2. He also submits that the Complainant paid the chit amounts till 28th chit. The bunch of receipts Ex.A-2 shows that the Complainant had in all paid 28 installments. The fact that she paid 14 installments in one go under the receipt dated 11-01-2010 probablises the submission of the learned counsel for the Complainant that she had taken broken chit in 14th month. The pass book Ex.A-1 also shows that the Complainant had paid 28 installments. The Opposite Parties No.1 to 6 did not explain as to how their company pass book and receipts for the ticket in question are in the name and possession of the Complainant. Therefore, the oral submission of the learned counsel for the Opposite Parties No.1 to 7 during the course of arguments that the Complainant had taken broken chit is correct.
12. It is established through the pleadings of the Complainant in the complaint and the written version of the Opposite Parties No.1 to 5 that OP-1 Chit Fund Company was closed due to internal disputes. The affidavit of the Complainant proves that the Opposite Parties did not refund the money to her. The Opposite Parties No.1 to 5 did not file any documents to show that they discharged their burden of refunding the amount on closure of the business. Therefore, the Opposite Parties No.1 to 6 are liable to pay the chit amount of 28 installments including the dividend earned by the Complainant. The same comes to a sum of Rs.1,40,000/-.
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13. The public who intends to save the money for the welfare of their children and to construct houses and also for progress in their life, knock the doors of the Chit Fund Companies and join the chits with utmost faith. If the Chit Fund Companies do people like this and avoid payment, they may have spent sleepless nights and ruining their health. It is not uncommon that day in and day out many instances are broken out, wherein the chit fund and finance companies have put down the shutters and aired the hopes of public who reposed confidence in them. Such people do not deserve any sympathy and on the other hand the people who suffered in their hands needs to be suitably compensated. In the circumstances, we feel that this is a fit case where a sum of Rs.50,000/- can be awarded towards deficiency of services and a sum of Rs.5,000/- towards costs.
In the result, the complaint is allowed and the Opposite Parties No.1 to 6 are directed to deposit in this Forum, a sum of Rs.1,40,000/- ( Rupees One lakh and forty thousand only ) towards the chit amount with interest @ 9% p.a. from the date of the complaint till realization and a sum of Rs.50,000/- ( Rupees Fifty
thousand only) towards deficiency of services and a sum of Rs.5,000/- (Rupees Five thousand only) towards costs. Time for compliance one month.
Dictated to Steno-Typist, transcribed by him, corrected and pronounced by us in the open Forum on this 26th day of November, 2013.
FEMALE MEMBER PRESIDENT
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APPENDIX OF EVIDENCE
WITNESSES EXAMINED
For Complainant: For Opposite Parties:
Affidavit of the Complainant. Affidavit of Opp.Party No.2.
EXHIBITS MARKED
For Complainant:
Ex.A-1 Dt.11-10-2008 Chit Pass Book.
Ex.A-2 Dt. Bunch of Receipts (7) issued by OP-1.
Ex.A-3 Dt.01-10-2012 O/c of legal notice issued by Sri S.Radha
Krishna, Advocate to the Opposite Parties.
Ex.A-4 Dt. Bunch of Courier Receipts (7).
Ex.A-5 Dt. Courier Acknowledgements.
Ex.A-6 Dt. Un-served Postal Cover (Opp.Party No.5).
Ex.A-7 Dt. True copy of Certificate of Incorporation
(Form-1).
Ex.A-8 Dt.26-02-2009 True copy of Deposit Receipt.
Ex.A-9 Dt.29-09-2010 Form-20B (Annual Return).
For Opposite Parties:
Nil.
PRESIDENT
DISTRICT CONSUMER FORUM
NALGONDA
TO
1). Sri S.Radha Krishna,
Advocate for the Complainant.
2). Sri K.Venkateshwarlu,
Advocate for the Opp.Parties No.1 to 5.
3). The Opposite Party No.6.
4). Sri M.Venugopal Reddy,
Advocate for the Opp.Party No.7.
