Tamil Nadu

North Chennai

113/2014

J.Ramesh,S/o.Jayaraj, - Complainant(s)

Versus

The Manager,M/s.Shree Guruvayurappan chit fuds (p) Ltd, - Opp.Party(s)

M/s.T.Pappaiah Dharmarajan

13 Nov 2018

ORDER

                                                              Complaint presented on:  16.06.2014

                                                                Order pronounced on:  13.11.2018

 

DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, CHENNAI (NORTH)

    2^nd Floor, Frazer Bridge Road, V.O.C.Nagar, Park Town, Chennai-3

 

 PRESENT: TMT.K.LAKSHMIKANTHAM,B.Sc.,B.L.,DTL.,DCL.,DL &AL  : PRESIDENT

              THIRU. D.BABU VARADHARAJAN B.Sc.,B.L.,  :    MEMBER - I

 

TUESDAY THE  13^th   DAY OF NOVEMBER 2018

 

C.C.NO.113/2014

 

 

J.Ramesh, S/o.Jayaraj,

Authorised Signatory,

M/s.Sri M.Periyandavar Traders,

No.53/4, Gandhi Nagar, 5^th Street,

Sathuma Nagar, Thiruvottiyur,

Chennai – 19.

                                                                                           ….. Complainant

 

..Vs..

1.The Manager,

M/s. Sree Guruvayurappan Chit Funds (P) Ltd.,

Red. Office:No.156,

T.H.Road Chennai – 19.

 

2. The Manager,

M/s. Sree Guruvayurappan Chit Funds (P) Ltd.,

Central Office:10 & 11,

Umpherson Street,

•  

Chennai – 600 108.

….Opposite Parties

Date of complaint                                 : 18.06.2014

Counsel for Complainant                      : M/s.T.Pappaiah Dharmarajan,  

                                                                    M.R.Senthil Kumar

 

Counsel for  opposite parties                   : P.V.Sanjeev

O R D E R

BY PRESIDENT TMT.K.LAKSHMIKANTHAM,B.Sc.,B.L.,DTL.,DCL.,DL &AL

          This complaint is filed by the complainant to direct the opposite parties to re-pay the sum of Rs.1,57,000/- with 24% per annum from 27.07.2012 till the date of payment and to pay a compensation of Rs.10,00,000/- to the complainant and to return the blank cheques bearing No.093547 and 093548 Tamil Nadu Mercantile Bank, Old washermenpet Branch, with cost of the complaint u/s 12 of the Consumer Protection Act.1986.

1.THE COMPLAINT IN BRIEF:

          The Complainant  had subscribed  2 chits  namely GPZ 42/7 and GPZ 60/2 for the value of Rs.5,00,000/- in the opposite parties  Chit company. He was the Prized subscriber for of the Chit.GPZ.42/7and paid subscription  upto the month of 2012 for both the chits. During September 2012,  the complainant decided to withdraw from  the chit GPZ 60/2 and the total accumulated amount at that time in GPZ 60/2 was 1,05,000/- and he had paid a total  amount of Rs.3,32, 000/-towards the Chit GPZ 42/7. The opposite parties  had advised him to  adjust the subscribed amount  of GPZ 60/2 to GPZ 42/7. Since the Complainant was paying regularly he is entitled to dividend under both chits. Since the adjustment is made, the opposite parties  is bound to give credit  of the amount as a regular  payment towards Chit GPZ 42/7. In such a way, the complainant is eligible for  dividend  further opposite parties  is holding a sum of Rs.1,05,000/- in advance  for which the complainant is entitled for interest. The Chit of GPZ 42/7 ought to have terminated  by March 2013 instead he was asked to pay Rs.50,000/- towards the settlement of all the outstanding. On 21.08.2013 a letter was received from opposite parties  alleging that the complainant  had paid a sum of Rs.3,31,850/- and a sum of Rs.58,150/- is pending. When there was an instruction to adjust the amount, the complainant is not termed as a defaulter. The amount  under Chit GPZ 60/2 was the Complainant’s money  under the unlawful custody of the opposite parties  and the opposite parties  ought to have adjusted towards the instalments as and when it fell due since the money was in their custody. The failure on the part of opposite parties  is breach of duty and deficiency in service. Since the opposite parties deliberately failed to adjust the money towards the money in Chit  GPZ 42/7, the Complainant is deprived of all benefits such as Divided and also burdened with penalties. The complainant has paid Rs.1,10,000/- on 27.07.2013 as adverted by the opposite parties  and totally paid Rs.1,57,000/- in excess and is entitled for the refund of the same.  The Opposite parties  wanted the Complainant  to give Two Blank Cheques as security, when the Chit GPZ 47/2 was prized in his favour, accordingly the complainant gave Two Blank Cheques and the opposite parties  is still holding. Because of this, the complainant had lot of pain and suffered loss therefore the complaint is filed.

2. WRITTEN VERSION OF THE OPPOSITE PARTIES IN BRIEF:

          The Complainant failed to invoke  section 64 of Chit Funds act and as per Section 64(3) No Civil court has jurisdiction to entertain suit in respect of any dispute referred to subsection (1) of  section 64. A Prized subscriber cannot be deemed to be a Consumer of any good or service. There is also no arrangement of hiring of service   for consideration between prized subscriber and the Chit Fund. Hence the Complainant is not a Consumer under the Act. The Registrar  of Arbitration  had jurisdiction to entertain any Complaint under Section 64 (3) of Chit Funds Act. The Chits   are GPZ 42/7,GPZ 60/2  for the sale value of Rs.5,00,000/-. The Complainant had participated  in the Chit Auction  in Group GPZ 42/7 and prized the Chit amount of Rs. 5,00,000/- After deducting the  discount and Company Commission  as agreed upon a sum of Rs.3,75,000/- was paid to the Complainant  through Cheque and it was acknowledged by the Complainant. The Complainant is liable to pay Rs.25,000/- per month for a period of twenty months, but the Complainant is very irregular in payment and become a Chronic defaulter. For the Chit GPZ 42/7 as on 12.07.2013, the Complainant had paid  a sum of Rs.4,41,850/-and  due to pay Rs.58,150/- with interest to opposite parties  is  still remaining due.  A detailed letter was addressed to the Complainant and then he had issued a Cheque for Rs.70,000/- which was dishonoured subsequently and the Case is pending under 138  N.I.Act. With regard to other group in GPZ 60/2 also the complainant is irregular in payment and requested the opposite parties  to adjust the amount of Rs.60,000/- paid by the Complainant in Group GPZ 42/7. As per the Chit funds act, Once the subscriber becomes defaulter, he is not entitled for any dividend.  This Complaint is filed  only to avoid payments to opposite parties . No security cheques have been handed over to opposite parties.  No merits in the Complaint and the Complaint is to be dismissed.       

3. POINTS FOR CONSIDERATION:

          1. Whether the complainant is a Consumer and this Forum has jurisdiction

               to entertain this complaint?

 

2. Whether there is deficiency in service on the part of the opposite parties?

 

3. Whether the complainant is entitled to any relief? If so to what extent?

 

 

 

04. POINT NO :1

          The opposite parties  had taken a stand that  the Complainant is not a Consumer under Consumer protection Act and Consumer protection act is not applicable  to the complainant and the Complainant failed to invoke section 64(3) of  Chit funds act. It is also argued by the Learned council for opposite parties  that  “No Civil Court shall have jurisdiction to entertain suit or other proceedings in respect of any dispute referred to in sub-section (1) of  under section 64” of Chit Funds act. But as per section 3 of the Consumer protection Act, the provisions of Consumer protection act   shall be in addition to and not in derogation of any other law for the time being in force, therefore the complaint can be proceeded against the opposite parties  before the Consumer forum. The opposite parties  had again put forth that the complainant is not considered as a Consumer and the dispute cannot be considered as a Consumer dispute so far as the nature of the Chit Funds is concerned no service rendered to the prized subscriber, so subscriber to a Chit Fund cannot be deemed to be consumers under the Consumer protection act. Since he is not a consumer & this forum has no jurisdiction to try this complaint. Supporting to the version of the opposite parties,  the following citations are submitted.

 1. II(1996) CPJ 437- State Commission,Madras in M/s Selvam Chit Funds Vs AlaguSundaram ,

 2.  II (1995) CPJ 227 National Commission, New Delhi

In Dwarkadhish Chits Pvt.Ltd.,& another Vs Sanjuram Agarwal.

Wherein it is held that Subscribers to Chit cannot be deemed to be a consumers under Consumer protection act and

 

 3.  I-LW-984 or 2008 7 Supreme Court Cases 166 in

K.Sagar, M.D. Kiran Chit Fund VS A.Bal Reddy and another.

Where in it is held  that issues  relating to jurisdiction has to be decided by the Forum First and the matter was remitted back to the State Commission to consider the question of jurisdiction..

             05. On the side of the Complainant, III (2003) CPJ 87 (NC) in KOVILLAKAM CHITS AND FINANCIAL SERVICE LTD. VS. K.L.BENNY

Section 64(1) reads “Notwithstanding anything contained in any law for the time being in force…”. There is no dispute that Chit fund Act is a statute of 1982 whereas Consumer Protection Act is a statute of 1986, whose Section  3 reads as follows:  “Act not in derogation of any other law. 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”.

C.P.A., 1986 was not in force in 1982, whereas opposite is true. The intent of the legislation is clear that remedy under C.P.A. was in addition to any law in force at that time. The provision of subsequent legislation i.e. CPA in such a situation shall override the provision of older Statute i.e., Chit Fund Act, 1982 and sec 64 (3) bars the jurisdiction civil court  whereas Consumer Forum have been held to be not a Civil Court and it is also decided the Chit Funds cases falls within the definition of Service as defined in section 2(1)(o) of Consumer Protection Act.

       In view of the above decision held in III (2003) CPJ 87 (NC) in KOVILLAKAM CHITS AND FINANCIAL SERVICE LTD. VS. K.L.BENNY,  this Forum confirms that the complainant is a Consumer and the complaint falls within the jurisdiction of Consumer Protection  Act and point No 1 is decided in favour of the complainant.

06. POINT NO :2

Admittedly the complainant is a subscriber for two Chits namely GPZ 42/7 and GPZ 60/2 for the value of Rs. 5,00,000/- each in the opposite parties’  company for which pass books are submitted as Ex.A1 and A2.Subscription was paid upto September 2012 regarding both the chits and the complainant is  prized subscriber for GPZ 42/7. During September 2012, the complainant decided to withdraw from the Chit GPZ 60/2 and the total accumulated amount at that time was Rs.1,05,000/- in GPZ 60/2 and also  the total amount of Rs.3,32,000/- was paid towards the Chit in GPZ 42/7. Since the complainant had decided to close the chit GPZ 60/2, he advised the opposite parties to adjust the amount accumulated in GPZ 60/2 towards the due in Chit GPZ 42/7. GPZ 42/7 commenced from 27.08.2011 and termination date is 27.03.2013 and for GPZ 60/2 date of commencement is  from 28.05.2012 and the termination is on 28.12.2013. The amount in GPZ 42/7 was Rs.60,000/- after  deducting  the commission, dividend and cost etc., and it is being admitted by the complainant in his letter in Ex.B2 dated 12.07.2013. Account settlement Voucher  in GPZ 60/2 is Ex.B1. Ex.A3 is the letter dated  21.08.2013 addressed to the complainant  demanding him to make the payment of Rs.58,150/- pending in his chit account. Since  the due amount was not paid in due dates , opposite parties  had claimed Rs.10,039/- as interest. In the meantime the complainant had participated in the Chit Auction in Group GPZ 42/7 and prized the Chit amount of Rs.5,00,000/- and after deducting the commission as agreed upon the complainant had received Rs.3,75,000/-. The amount was paid by the opposite parties  vide cheque No.594594, Punjab National Bank, Old Washermenpet, Chennai  and this fact is not denied by the complainant.

            07. As per the Chit agreement the complainant has to pay Rs.25,000/- per month for a period of 20 months and he has not paid in time and he is a defaulter according to the opposite parties and it is made clear from Ex.A3 notice also and there is no reply by the complainant for the letter. Now the complainant contends that the opposite parties had not adjusted the entire amount of Rs.1,05,000/- towards the GPZ 42/7 Chit and if adjusted he would be eligible for  dividends. As requested by the complainant himself in his letter dated 12.07.2013 in Ex.B2, it was adjusted as per the terms and conditions and it was also deducted as requested by the complainant only, in his letter in Ex.B2, therefore the complainant’s contention as the entire amount of Rs.1,05,000/- was not adjusted deliberately by opposite parties  as such cannot be considered as correct. For the rest of the amount the complainant becomes a defaulter and he has not produced any document as to show that he has paid the due amounts in time without default. The complainant could not pay the amount to the Chit GPZ 60/2,  and it is being admitted by the complainant in his letter itself, hence he had requested to adjust the amount earlier paid in the said Chit to the other Chit in GPZ 42/7 itself indicates that he is a defaulter. The opposite parties  contends that the  defaulter not eligible for dividend is not denied by the complainant but the complainant only alleges that he is not a defaulter without any poof.  Therefore the defaulter cannot file a complaint  against the opposite parties . Ex.B2 is dated  12.07.2013 and Ex.B1 indicates the same date as the settlement date. Therefore the complainant cannot claim  any interest over the same and the contention of the complainant that the surrendered amount is not adjusted for more than a year and the opposite parties  had kept the amount without  adjustment cannot be considered as correct by this forum.

            08.  Having admitted the due amount and  contents of the letter in Ex.A3 the complainant had issued a cheque for Rs.70,000/- drawn on Tamil Nadu Mercantile bank, Chennai and admittedly the cheque got dishonoured and case under 138 N.I. Act is pending. The termination date of GPZ 42/7 is27.3.13 and the Schedule in the complaint and proof-affidavit indicates the payment beyond  and invariable dates and amounts.  There is no proof filed by the complainant  that he had given a blank cheque to the opposite parties  when it is especially denied by the opposite parties  and no notice is also given to opposite parties  to that effect also by the complainant. Ex.A4 to Ex.A7 is not relevant to this complaint so far as the deficiency is concerned.

           09.  As per discussions held, the complainant has not proved the alleged deficiency in service on the part of the opposite parties  and also  the allegations of security cheques given to opposite parties  and hence there is no question  returning the same will  arise therefore  the complainant is not entitled to get compensation also .

10. POINT NO:3

          The complainant failed to prove his allegations in the  complaint and the alleged deficiency in service and being a defaulter he cannot file a complaint against opposite parties  therefore   he is not   entitled for any relief .

 In the result, the complaint is dismissed. No Costs.

          Dictated to the Steno-Typist transcribed and typed by her corrected and pronounced by us on this 13^th  day of November 2018.

 

MEMBER – I                                                                PRESIDENT

 

 

LIST OF DOCUMENTS FILED BY THE COMPLAINANT:

Ex.A1 dated 28.07.2011                   Copy of Pass Book of GPZ 42/7

Ex.A2 dated 17.04.2012                   Copy of Pass Book of GPZ 60/2

Ex.A3 dated 21.08.2013                   Notice

Ex.A4 dated 17.04.2012                   Promissory Note executed by complainant

Ex.A5 dated 25.03.2015                   Copy of Evidence of opposite party (Cross

                                                      Examination)

 

Ex.A6 dated 06.09.2016                   Copy of Statement of accounts (complainant) from

                                                     01.01.2012 to 31.12.2012

 

Ex.A7 dated 07.09.2016                   Copy of Evidence of opposite party (Cross

                                                    Examination)

 

LIST OF DOCUMENTS FILED BY THE OPPOSITE PARTY :

 

Ex.B1 dated 12.07.2013                   Voucher payment receipt

 

Ex.B2 dated 12.07.2013                   Letter issued by the complainant

 

 

 

MEMBER – I                                                                PRESIDENT