BEFORE THE  A.P.STATE CONSUMER DISPUTES REDRESSAL COMMISSION: AT HYDERABAD

 F.A.NO.12 OF 2013 AGAINST C.C.NO.63 OF 2010 DISTRICT FORUM NIZAMABAD

Between

M/s Kapil Chit Fund (P) Ltd.,
Rep. by its Branch Manager,
D.No.5-6-510/6 and 7A,Andhra Bank
Building, Saraswathi Nagar, Hyderabad Road
Nizamabad

                                                        Appellants/opposite party

A N D

Mr.Mahmood Khan S/o Abdul Majeed Khan
Agedabout 59 years, Occ: Govt. Employee
R/o H.No.8-5-58, Line Gally, Nizamabad

                                                        Respondent/complainant

Counsel for the Complainant          M/s N.Amarnath

Counsel for the opposite parties     M/s Y.S.Yellanand Gupta

 QUORUM:        SRI R.LAKSHMINARSIMHA RAO, HON’BLE MEMBER

                                                        &

                                SRI T.ASHOK KUMAR, HON’BLE MEMBER.

      TUESDAY THE TWENTY FIRST  DAY OF JANUARY

    TWO THOUSAND FOURTEEN

             Order ( As per R.Lakshminarsimha Rao, Hon’ble Member)
                                                            ***

1.           The opposite party-chit fund company  is the appellant. The respondent   filed compliant seeking direction to the respondent-chit fund company to return  an amount of `62,755/- with interest @ 24% p.a.  and `50,000/- towards compensation.

2.             The appellant joined in the chit group bearing reference no. VL03J-27  with the respondent-chit fund company for the chit value of  `5 lakh  and the monthly subscription payable is `12,500/-   in  duration of 40 months. The appellant joined the chit group  on 28.07.2008  and he participated in the auction conducted on 27.02.2009 as also he was declared successful bidder having agreed to forego `1,75,000/- out of chit value of `5,00,000/-.. The respondent stated to have furnished 6 sureties as required by the appellant-chit fund company.

3.             The respondent submitted that his name was removed from membership list on the premise of irregular payment of installments and the appellant informed him about the removal of his name from the membership list on 30.09.2009.  The respondent submitted that the name of non-prized subscriber only can be removed from the membership list and not that of a prized subscriber and that in case of removal of non-prized subscriber, after deducting 5% of the chit value, the appellant has to pay an amount of `62,755/- which the appellant failed to do and non-payment of amount constitutes deficiency in service on the part of the appellant-chit fund company.

4.             The appellant-chit fund company resisted the claim on the premise that the respondent became successful bidder in the chit auction dated 27.02.2009 and as per the terms of bye-laws and chit agreement, the respondent had to submit sufficient sureties to the satisfaction of the foreman of the appellant-chit fund company. The respondent collected the surety form and he did not submit the sureties and the appellant addressed letter dated 2.09.2009 to the respondent informing him that if he does not furnish sureties, he had to pay bid the loss.

5.             The appellant-chit fund company conducted reaction on 20.09.2009 as per the terms of chit agreement and bye-laws and the same was confirmed in favour of the other subscriber, K.Narsing Rao for `1,13,850/- and there was loss to the tune of `61,150/-. The respondent committed default in payment of the chit installments and the appellant issued letter dated 30.09.3009 removing the name of the respondent from the membership list of subscribers.

6.             The appellant submitted that as per the terms of the chit agreement, the respondent has to bear an amount of `61,150/- towards bid loss and it deducted  an amount of `25,000/- towards damages for breach of contract and a sum of `150/- towards incidental charges. The respondent is due an amount of `150/- to the appellant-chit fund company. The appellant submitted that the respondent has to approach the Chit-Registrar and the District Forum has no jurisdiction to try the matter.

7.             The appellant submitted that the respondent had not submitted the sureties with an intention to discontinue the chit and that he had not approached the District Forum with clean hands and the respondent suppressing the true facts, filed the complaint with malafide intention to extract money from the appellant. Hence, the appellant prayed for dismissal of the complaint.

8.             The respondent had filed his  affidavit and the documents Exs.A1 to A12.  On behalf of the appellant-chit fund company, its  Legal Officer had filed his affidavit and the documents Ex B1 to B5.

5.             The District Forum allowed the complaint on the premise that the appellant failed to prove that the respondent had not furnished the sureties and that the appellant conducted re-auction as also that the respondent is not entitled to refund of the amount paid by him minus 5% of chit value.

6.             Aggrieved by the order of the District Forum, the opposite party has filed the appeal contending that the District Forum had not considered the evidence in correct perspective.   It is contended that the correspondent failed to furnish the sureties for withdrawal of the prize amount and he did not file any document to prove that he furnished sureties.  It is contended that the District Forum erred in disallowing the amount towards bid loss to the appellant chit fund company and came to a wrong conclusion that the respondent furnished sureties for withdrawal of the prize amount.

7.             The learned counsel for the respondent has filed written arguments.

8.             The points for consideration are:

1.     Whether there was deficiency in service on the part of the appellant company in not making payment of the  prize money to the respondent?

2.     To what relief?

9.             POINTS NO.1 :  The respondent  had subscribed to the chit group series No. VLG03J-27 conducted by the appellant-chit fund company. The value of the chit is `5,00,000/-.  The appellant allotted Ticket where under monthly subscription of `12,500/- is payable in 40 months. The respondent paid monthly subscription for 7 months.  The District Forum disbelieved the version of the appellant-chit fund company that the respondent had not furnished sureties.  

10.            The respondent paid an amount of `87,755/- evidenced by Exs.A1 to A10, receipts issued by the appellant chit fund company.  The District Forum observed that according to the version of the appellant chit fund company the actual contribution for the chit group by the respondent as on 27.3.2009 is `86,075/-.  The District Forum opined that the respondent furnished sureties for withdrawal of the prize amount and the sureties were working as office subordinate, assistant teachers (3), record assistant and junior assistant.

11.            The learned counsel for the appellant chit fund company has submitted that there is no evidence on record to show that the respondent furnished the sureties.  The District Forum had drawn inference from inaction on the part of the appellant chit fund company in issuing notice requiring the respondent to submit sureties as also its failure to conduct re-auction. 

12.            The appellant chit fund company addressed letter dated 2.9.2009 bringing it to the notice of the respondent that he had not furnished sufficient sureties.  Failure to furnish sufficient sureties by the respondent does not mean that he had not submitted sureties.  It is not the case of the appellant chit fund company the sureties are not  government empllyees nor is it the case of the chit fund company that it had conducted re-auction within three months from the date of failure of the respondent to furnish the sureties. 

13.            Even if it is presumed that the respondent had not furnished sureties to the satisfaction of the foreman of the appellant chit fund company, the option left to the appellant is to deposit the amount i.e., prize money in a nationalized bank and inform the respondent that on his failure to furnish sufficient sureties, the prize amount would be adjusted towards the future instalments pertaining to his chit ticket.  The appellant has not deposited prize amount nor did it conduct re-auction of the chit.

14.            The learned counsel for the appellant chit fund company has contended that re-auction was conducted in the month of September 2009.  The District Forum disbelieved the version of the appellant as to re-auction stated to have been held in September 2009 on the premise that the appellant failed to produce re-auction proceedings or notices stated to have been sent to the other subscribers of the same chit group.  Another pertinent feature of the case is that the appellant chit fund company has been contending that in terms of the byelaws and chit agreement it had conducted the auction on 27.2.2009 and re-auction in the month of September 2009.   In the absence of the filing of any byelaws or chit agreement, the appellant chit fund company cannot heard to say that it had complied with the terms thereof and is entitled to the amount of Rs.61,150/- towards bid loss and a sum of Rs.24,025/- towards adjustment of the balance amount as the foreman’s commission. 

15.            We do not find any reason to deviate from the conclusion arrived at by the District Forum that the appellant chit fund company failed to prove that the respondent had not furnished sureties for withdrawal of the prize money as also that the appellant conducted re-auction in the month of September 2009 so as to claim the amount of `87,755/-.  In the absence of any  evidence as to the claim made by the appellant chit fund company.  We do not find any infirmity in the findings returned by the District Forum.

16.            In the result the appeal is dismissed confirming the order of the District Forum.  There shall be no order as to costs.

                                                                                   Sd/-

                                                                                                                         MEMBER

                                                                                   Sd/-

                                                                                MEMBER

                                                                              Dt.21.01.2014

కె.ఎం.కె.*