Per Sri A. Hazarath Rao,  President:-

        The complainant filed this complaint u/s 12 of the Consumer Protection Act seeking direction to the opposite party to pay Rs.42,640/- as damages/interest for the delayed payment of prize amount; Rs.25,000/- towards mental agony and Rs.5,000/- towards legal expenses. 

 2.   In short the averments of the complaint are hereunder:

        The complainant is a subscriber of the chit bearing No.SPTM2/7 run by the opposite party.   Value of the said chit was Rs.5,00,000/- spread over for a period of 40 months.   The complainant paid 18 instalments and became the highest bidder in the bid held on                  22-08-11.  The complainant agreed to forego Rs.90,000/-.   The opposite party has to pay Rs.4,10,000/- as prize money to the complainant immediately. The complainant submitted guarantees/sureties namely P. Elizebeth Rajesri; P.V. Subba Rao and Swapna Rani.  The above sureties are working as teachers drawing attractive salaries.   The complainant also furnished salary certificates of the above sureties besides herself.   Surety bonds of teachers were accepted on previous occasions. Some differences arose regarding payment of separate loan transaction with the sister concern of the opposite party.  Keeping it in mind the opposite party did not chose to pay the bid amount inspite of the complainant fulfilling her obligations.   The opposite party required the complainant to furnish liquid security.   After exchange of notices between them the opposite party paid the prize money of Rs.4,10,000/- on 06-01-12 after delay of five months.   The complainant accepted the said amount under protest. Non payment of prize money within time amounted to deficiency of service.   On account of delayed payment the complainant suffered great loss.   The complainant agreed to forego Rs.90,000/- to meet her urgent demands.   The opposite party used to charge interest at 3% p.a., even for few days of delay in payment of installments.   The opposite party is thus under an obligation to pay interest at 36% p.a., for the delayed payment of prize money.  The complaint therefore be allowed.

3.   The contention of the opposite party in nutshell is hereunder:

        The complainant participated in the bid held in August, 2011 and became successful bidder and agreed to forego Rs.90,000/-.   The complainant was also a prized subscriber in two other chits bearing Nos.SPNX 9/21 and SPNX 9/22 each for Rs.2,00,000/- spread over for a period of 40 months.   The payment pattern of the complainant in the subject chit and other two chits referred to above is not regular.   By paying installments upto date with much delay in respect of subject chit i.e., SPTM 2/7 the complainant participated in the auction held on 22-08-11.   Since the complainant’s payment pattern is not regular   the opposite party suspected that after drawing the prize amount in respect of the chit SPTM 2/7 the complainant may default in subsequent installments and due to that the opposite party will suffer loss.   The opposite party therefore demanded the complainant to furnish liquid security.  The opposite party gave suitable replies to the notices issued by the complainant.   The complainant paid the arrears of installments in all the chits on 28-12-11 by way of demand draft.  The complainant and her husband availed trade loans of Rs.4,00,000/- each from M/s Shriram City Union Finance Limited, Sattenapalli and payment pattern of the above loans is also irregular.   The complainant ultimately furnished the sureties for withdrawing prized amount.   Therefore the opposite party paid the prize money on 06-01-12 to the complainant.   There was no delay in payment of prize amount on the part of the opposite party.  The complaint is not bonafide.   The complaint therefore be dismissed.

4.     Exs.A-1 to A-6 and Exs.B-1 to B-8 on behalf of complainant and OP were marked respectively.

5.     Now the points that arise for consideration are:

1. Whether the opposite party committed deficiency of service?
2. Whether the complainant is entitled to the compensation as sought?
3. To what relief?

6. Admitted facts in this are these:

1. The complainant is a subscriber of the chit SPTM 2/7.
2.  The said chit was for Rs.5,00,000/- spread over for 40 months.
3. The complainant participated in the auction held on               22-08-11 and became highest bidder.
4. The complainant agreed to forego Rs.90,000/-.
5. The opposite party paid Rs.4,10,000/- on 06-01-12.
6. There was exchange of notices between the complainant and the opposite party (Ex.A-1 to A-3).

7.  POINT No.1:-    The opposite party and M/s Shriram City Union Finance Limited are different entities as rightly contended by the complainant.   Each chit is a separate and distinct transaction as also rightly contended by the complainant.   Either the complainant or the opposite party did not mention when sureties were produced.   The salary certificates of the sureties furnished by the complainant are available with the opposite party.   The complainant produced copy of surety certificate (Ex.A-5) showing that she furnished sureties on              02-09-11.  Under those circumstances, nothing prevented the opposite party to furnish the salary certificates of the sureties available with it to know when the complainant furnished them or to rebut (Ex.A-5).   Therefore an inference can be drawn that the complainant furnished sureties on 02-09-11. 

8.     Ex.B-1 is account copy pertaining to SPTM 2/7 chit.   Ex.B-1 reveled that the complainant is not regular in payment of installments.  The opposite party is quite aware of the payment pattern of the complainant in earlier chits (Exs.B-2 and B-3) and ought to have insisted sureties to its satisfaction in writing soon after she becoming a prized subscriber.   The opposite party filed proforma of agreement chit (Ex.B-8 and the concerned chit agreement Ex.B-7).  The complainant has to furnish sureties to the satisfaction of the foreman of the opposite party as rightly contended by it. That in no way authorizes the opposite party to delay the payment of prize money to any prized subscriber. 

9.   Neither Ex.B-7 nor B-8 did contain the time limit under which the prize money has to be paid to a prized subscriber.  Section 22 of the Chit Funds Act, 1982 is similar to Section 14 of AP Chit Funds Act, 1971.   Section 22 of Chit Funds Act reads as follows:

“22. Duties of foreman.- (1) The foreman shall, on the prized subscriber furnish sufficient security for the due payment of future subscriptions, be bound to pay him the prize amount:

Provided that the prize subscriber shall be entitled to the payment of the prize amount without any security whatsoever if he agrees to the deduction there from of the amount of all future subscriptions and in such a case, the foreman shall pay the prize amount to the prized subscriber within seven days after the date of the draw or before the date of the next succeeding installment, whichever is earlier:

Provided further that where the prize amount has been paid to the prized subscriber under the first proviso, the amount deducted shall be deposited by the foreman in an approved bank mentioned in the chit agreement and he shall not withdraw the amount so deposited except for the payment of future subscriptions.

(2) If, owing to the default of the prized subscriber, the prize amount due in respect of any draw remains unpaid until the date of the next succeeding installment, the foreman shall deposit the prize amount forthwith in a separate account in an approved bank mentioned in the chit agreement and intimate in writing the fact of such deposit and the reasons therefore to the prized subscriber and the Registrar:

Provided that where any prized subscriber does not collect the prize amount in respect of any installment of a chit within a period of two months from the date of the draw, it shall be open to the foreman to hold another draw in respect of such installment.
(3) Every payment of the prize amount or the amount of future subscriptions under sub-section (1), and the deposit of the prize amount under sub-section (2),shall be intimated to the subscribers at the next succeeding draw and the particulars of such payment or deposit shall be entered in the minutes of the proceedings of that draw.

(4) The foreman shall not appropriate to himself any amount in excess of what he is entitled to under clause (b) or clause (c) of sub-section (1) of section 21:

Provided that where the foreman is himself a prized subscriber, he shall be entitled to appropriate to himself the prize amount subject to his complying with the provisions of section 31: 

Provided further that the foreman may appropriate to himself the interest accruing on the amount deposited under the second proviso to sub-section (1)

(5) The foreman shall not admit any person as a subscriber to a chit, if by such admission, the total number of tickets mentioned in the chit agreement is increased.

(6) The foreman shall distribute among the subscribers, in accordance with the chit agreement, the dividend either in cash, grain or by way of adjustment towards the subscriptions payable for the next installment, if any.

10.   Considering Section 22 of Chit Funds Act, 1982 we are of the opinion that fifteen days time is reasonable to scrutinize the sureties furnished by any prized subscriber.   The conduct of the complainant regarding her payment pattern in earlier chits has nothing to do with payment of prized amount in the subject chit having allowed her to subscribe this chit also.   The only option with the opposite party in our considered opinion is to insist for sufficient sureties and their nature in writing for payment of future installments soon after the complainant becoming a prized subscriber.   The opposite party failed to do such exercise.   Under those circumstances, the opposite party ought to have paid the bid amount on or before  17-09-11.    Thus there was a delay of three months 19 days in paying the prized amount to the complainant and it amounted to deficiency of service.   The complainant is entitled to interest @12% p.a., from 17-09-11.   We therefore answer this point in favour of the complainant.

11.    POINT No.2:-   The complainant claimed Rs.25,000/- as damages towards mental agony for delayed payment.  A person hard pressed for money participates in the bid and agreed to forego amount from the chit amount as rightly contended by the complainant. On account of delayed payment the complainant was prevented from using that amount under the pressing circumstances for which she bid.    Under those circumstances, awarding Rs.5,000/- as damages will meet ends of justice.  We therefore answer this point accordingly.

12.    POINT No.3:-   In view of above findings in the result the complaint is allowed partly as indicated below:

1. The opposite party is directed to pay interest at 12% p.a., on Rs.4,10,000/- from 17-09-11 till 06-01-12.
2. The opposite party is directed to pay Rs.5,000/- (Rupees five thousand only) as damages and Rs.1,000/- (Rupees one thousand only) towards costs of the complaint.
3. The opposite party is directed to deposit the amount within six weeks from the date of receipt of the copy of the order.

        Typed to my dictation by Junior Steno, corrected by me and pronounced in the open Forum dated this the 25^th day of July, 2012.

MEMBER                                  MEMBER                                PRESIDENT

APPENDIX OF EVIDENCE

DOCUMENTS MARKED

For Complainant:

For opposite party:

                                                                                                                           PRESIDENT