O R D E R

Per Sri A. Hazarath Rao,  President:-      The complainant filed this complaint under section 12 of the Consumer Protection Act seeking  payment on interest of Rs.58,090/- for the delayed payment of Bid amount; Rs.20,000/- as compensation towards mental agony ; Rs.10,000/- towards deficiency in service and Rs.5,000/- towards costs.

2.      The complaint averments in short are these. 

The complainant is a business man doing business of cotton and cotton products.  The complainant joined as a member in the chit bearing No.FGRTO1P-27 for Rs.10,00,000/-.  The complainant became a successful bidder on 28-08-13.  The complainant produced sureties in the first week of September, 2013.  Subsequently the complainant produced five blank signed cheques, one blank signed letter pad and signature on empty papers besides four other sureties who are income tax assesses as required by the opposite parties.  The opposite parties returned the sureties for one reason or other postponing the payment of bid amount.  The complainant on 27-12-13 received a cheque for Rs.4,00,000/- and another cheque for Rs.3,63,164/- totaling to Rs.7,63,164/- after a gap of 120 days from the date of auction i.e., 28-08-13.  until the issuance of cheque i.e., 27-12-13 bid amount is with the opposite parties.  The opposite parties used to abnormal interest if a subscriber failed to pay installment amount in time.  The complainant suffered a lot for the attitude of the opposite parties.  The complainant participated the auction with intent to clear his debts barrowed from the out side for his business promotion.  On account of opposite parties belated payments the complainant paid interest for four months to the creditors.  The complainant made monthly installments regularly.  The opposite parties gave reply with false allegations.  The opposite parties committed deficiency of service in not paying the bid amount in time as such they are liable to pay interest @ 24% p.a. from the date of producing sureties.  The complaint therefore be allowed. 

3.      The 2^nd opposite party was set exparte on 09-05-14 as he was absent on receipt of summons. 

4.      The 1^st opposite party was set exparte on 19-08-14 for not filing affidavit inspite of awarding costs.

5.      The contention of the 1^st opposite party in brief is here under: 

          The complaint is not maintainable either in law or on facts and the complainant is put strict proof of all the allegations which were not admitted by the 1^st opposite party. The complainant failed to submit sureties as per chit agreement.  The complainant on 24-11-13 wrote a letter to the 1^st opposite party expressing his failure in submitting the sureties in time.  The complainant produced sureties in the last week of November 2013.  Employees of the 1^st opposite party verified the sureties and submitted report on 30-11-13.  Subsequently the 1^st opposite party sent its approval along with entire record to its central Bid Payable Office, Nellore.  The 1^st opposite party paid bid amount to the complainant on 17-12-13.  The delay in paying the bid amount to the complainant was on account of the complainant’s producing sureties belatedly.  The 1^st opposite party did not commit any deficiency in service.  The complaint therefore be dismissed. 

6.  Exs.A-1 to A-6 were marked on behalf of the complainant.

7.   Now the points that arose for consideration in this complaint are:

1.       Whether the chit fund companies are amiable to Consumer Protection

          Act?

2.       Whether the complainant is a consumer under the purview of

          Consumer Protection Act?

3.       Whether the opposite parties committed deficiency by paying the bid

          amount belatedly?

4.       Whether the complainant is entitled to compensation as claimed?

5.       To what relief?

8.      POINT No.1:-  The registry while numbering the complaint took objection regarding bid applicability to Consumer Protection Act to the transactions covered under Chit Fund Act, 1982.  This Forum on 07-04-14 passed the following order:

9.     Heard, perused the judgment reported in 2004 CTJ 704 A.P which was rendered prior to Chit Fund Act, 1982 came into force in the state of Andhra Pradesh.  Prima facie satisfied that this Forum has jurisdiction to entertain the complaint. 

         In Margadarsi Chit Fund Limited Vs.District Consumer Disputes Redressal Forum, 2004 CTJ 704 Andhra Pradesh it was held : having a look at the Consumer Protection Act, 1986 we do not have any doubt that chit fund company is providing a service and the members of the chit fund company are consumers within the meaning of Section 2(1) (d) of Consumer Protection Act, 1986.         

10.   Chit Fund Act 1982 and Andhra Pradesh Chit Fund Rules, 2008 came into force in the state of Andhra Pradesh w.e.f. 15-09-2008.  The above judgment was rendered prior to Chit Fund Act, 1982 came into force in the state of Andhra Pradesh. 

11.   Section 64 of the Chit Fund Act, 1982 reads as follows :

          64.  Disputes relating o chit business :  (1).  Notwithstanding anything contained in any other law for the time being in force, any dispute touching the management of a chit business shall be referred by any of the parties to the dispute, to the Registrar for arbitration if each party thereto is one or the other of the following namely : 

(a).  a foreman, a prized subscriber or a non-prized subscriber, including a defaulting subscriber, past subscriber or a person claiming through a subscriber or a deceased subscriber to a chit;

(b).    a surety of a subscriber, past subscriber, or a deceased subscriber. 

Explanation:- For the purposes of this sub-section, a dispute touching the management of a chit business shall include. 

(i). a claim by or against a foreman for any debt or demand due to him from a subscriber or due from him to a subscriber, past subscriber, past subscriber or the nominee , heir or legal representative of a deceased subscriber whether such debt or demand is admitted or not;

(ii).  A claim by a surety for any sum or demand due to him from the principal borrower in respect of a loan by a foreman and recovered from the surety owing to the default of the principal borrower, whether such sum or demand is admitted or not; and

(iii).  A refusal or failure by a subscriber, past subscriber or the nominee, heir or legal representative of a deceased subscriber to deliver possession to a foreman of land or any other asset resumed by him for breach of conditions of the assignment. 

(2).  Where any question arises as to whether any matter referred to for the award of the Registrar is a dispute or not for the purposes of sub-section (1) the same shall be decided by the Registrar whose decision thereon shall be final. 

(3).  No Civil Court shall have jurisdiction to entertain any suit or other proceedings in respect of any dispute referred to in sub-section (1). 

12.   Section (3) of the Consumer Protection Act says that the provisions of this Act shall be in addition to and not in derogation of the provisions of any other law “for the time being in force”.      

The Chit Fund Act, 1982 being later enactment we of the considered opinion that the transactions covered by chit fund transactions are amiable to the jurisdiction of Consumer Protection Act.  We therefore answer this point accordingly in favour of complainant. 

13.   POINT NO.2:- The complainant mentioned in his complaint mentioned the following :

         The complainant is the resident of Guntur who is a business man and doing business in cotton and cotton products…………  The complainant further submits that the complainant suffered a lot for the attitude of the opposite parties and the complainant participated in auction with intent to clear his debt borrowed from out side for his business promotion.  The complainant reported the same in his proof affidavit filed on 28-07-14.  The complainant thereby informed that the complainant hired services of the opposite parties.

14.   Section 2(1) (d) (2)  of the Consumer Protection Act reads as follows :

          “consumer” means any person who –

1. buys good for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of deferred payment when such use is made with the approval of such person, but does not include a person who obtains such goods for resale or for any commercial purpose, or   
2. [hires or avails of] any services for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such services other than the person who [hires or avails of] the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payment, when such services are availed of with the approval of the first mentioned person [but does not include a person who avails of such services for any commercial purpose]. 

Explanation:  For the purpose of this clause, “Commercial purpose” does not include use by a person of goods bought and used by him and services availed by him exclusively for the purposes of earning his livelihood by means of self-employment;].  

15.   It is not the case of the complainant that he is doing business exclusively for the purpose of livelihood by means of self employment either in his complaint or in his affidavit.  It can therefore be said that the complainant utilized the services of the opposite parties Chit Fund company to promote his cotton business and thereby the complainant cannot be a consumer within the meaning of Section 2(1)(d)(2) of the said Act.  We therefore answer this point against the complainant. 

16.   POINT NO.3&4:- The contesting opposite parties failed to prove that the complainant executed necessary documents during the last week of November, 2013 and which is within its special knowledge and adverse inference can be drawn are not prove the said contention by the contesting 1^st opposite party.  Under those circumstances we are of the opinion that the delay in paying the bid amount belatedly amounted to deficiency in service.  We therefore answer this point infavour of complainant. 

17.   The complainant claimed interest @ 24% p.a. from 06-09-13 to 27-12-13 on Rs.7,85,000/-; Rs.20,000/- towards mental agony and Rs.10,000/- towards deficiency in service.  In view of our findings on point No.2 that the complainant is not entitled to the reliefs discussed supra.  We therefore answer point against the complainant. 

18.   POINT NO.5:-  In view of our findings on point No.2 in the result the complaint is dismissed without costs.     

Typed to my dictation by Junior Stenographer, corrected by us and pronounced in the open Forum dated this the 05^th  day of September, 2014.

MEMBER                              MEMBER                                             PRESIDENT

APPENDIX OF EVIDENCE

DOCUMENTS MARKED

For Complainant:

PRESIDENT

NB:   The parties are required to collect the extra sets within a month after receipt of this order either personally or through their advocate as otherwise the extra sets shall be weeded out.