KERAL A STATE CONSUMER DISPUTES REDRESSAL COMMISSION
VAZHUTHACAUD THIRUVANANTHAPURAM
APPEAL NO.188/12
JUDGMENT DATED 22.12.12
(Appeal filed against the order in CC.No.127/2011 on the file of CDRF, Idukki dated 29.12.2011)
PRESENT
SHRI.K.CHANDRADAS NADAR -- JUDICIAL MEMBER
1. The Manager,
Sree Gokulam Chit & Finance
Company (P) Limited, Pala Road,
Thodupuzha, Idukki District.
2. The Managing Director, -- APPELLANTS
Sree Gokulam Chit & Finance
Company (P) Limited,
Sree Gokulam Tower No.66
Arcot Road, Chennai – 600 024.
(By Adv.Kollemcode D.S.Jayachandran)
Vs.
1. Sony Kurian,
Thekkevayalil House,
Karimkunnam P.O -- RESPONDENTS
PIN 685586
Nellappara, Idukki District.
2. Indu, W/o Sony,
Thekkevayalil House,
Karimkunnam P.O.
PIN 685586
Nellappara, Idukki District.
(By Adv.R.Suja Mohan)
JUDGMENT
SHRI.K.CHANDRADAS NADAR,JUDICIAL MEMBER
The appellants were opposite parties 1 & 2 in CC127/11 in the CDRF, Idukki. The respondents were the complainants. They alleged that they subscribed to 6 number of chits conduced by opposite parties from 4.12.07 having a prize money of Rs.5 lakhs each. Each chit composed of 20 monthly instalments. The complainants auctioned 3 out of 6 chits subscribed by them. They had received prize money also. At the time of disbursing the prize money, the opposite parties obtained 3 blank cheque leaves, signed white papers and signed prescribed forms from the complainants. The complainants were sureties to one another. They paid chitty instalments up to 9th instalment amounting to Rs.1,95,750/- in each chitty. Due to financial crisis they could not pay the remaining instalments. The complainants contacted the opposite parties and arrived at a settlement regarding the amount to be paid in the 3 chits auctioned by them. But while settling the amount in the non auctioned chits, the opposite parties deducted commission of Rs.25,000/- each from the 3 chits towards commission. According to the complainants, the opposite parties are not entitled to receive commission for the 3 non auctioned chits. So, deduction of Rs.75,000/- from the non auctioned chits amounts to deficiency in service and unfair trade practice. Hence, the complaint for refund of the commission amount deducted by the opposite parties with interest and for other reliefs.
2. The opposite parties filed joint version and contended that the CDRF has no jurisdiction to entertain the complaint. The complainant should resort to arbitration proceedings to resolve the dispute regarding the chits. As per the Central Chitties Act as well as the Kerala Chitties Act, the Foreman of the chitty is entitled to deduct 5% commission and that was done by the opposite parties. The complainant was also convinced about the fact that the opposite parties were entitled to receive 5% commission, when they joined the chits. There was absolutely no deficiency in service on the part of the opposite parties.
3. Before the CDRF, Idukki, the complainant gave oral evidence as PW1. Exts.P1 to P3 (series) were marked on the side of the complainants. No oral evidence was adduced by the opposite parties. Ext.R1 series were marked on their side. The forum held that the appellants were not entitled to charge huge amount as commission without disbursing the chit amount. Hence found that the appellants committed deficiency in service and unfair trade practice. The forum allowed the complaint and directed the opposite parties to settle the chit amount with the complainants by calculating interest for the instalments due at 9% per annum. The opposite parties were also restrained from deducting commission for non auctioned 3 chits subscribed by the complainants. Aggrieved by the said directions, the opposite parties have preferred this appeal.
4. The only question that arises for consideration is whether the forum was right in concluding that the appellants were not entitled to deduct 5% commission with regard to the amount due under non auctioned chits.
5. Admittedly, the complainants had subscribed to 6 number of chits conducted by the appellants, each having prize money of Rs.5 lakhs. They had remitted only 9 chit instalments in each of those chits. They had auctioned 3 out of the 6 chits and received the prize money. The dispute in this case relates to deduction of commission from the amounts remitted as instalments in the 3 non auctioned chits. The appellants had deducted Rs.25,000/- each from 3 non auctioned chits amounting to Rs.75,000/-. The forum rightly referred to Section 16 (1) of the Kerala Chitties Act, 1975 which provides that a Foreman shall be entitled to such commission or remuneration not exceeding 5% of the chitty amount as fixed in variola for the conduct of the chitty. The central act is also on similar terms. The forum held that a foreman is not entitled to deduct commission mainly because of Clause E of Section 16 which gives right to a foreman to substitute subscribers in the place of defaulters subject to the provision of the Act. Hence the Forum reasoned that the foreman could have replaced the complainants with another person and continued the chitty and in the absence of adopting such a procedure he is not entitled to deduct commission for the non auctioned chits. It is true that a foreman has right to substitute subscribers in the place of defaulting subscribers. There is no provision compelling him to do so. Willing subscribers must also be available for substitution in the place of defaulting subscribers. So there is little justification in denying commission to a foreman merely because of the fact that he had failed to substitute a defaulting subscriber with another person and continue the chitty. The forum also found that in the context of failure to produce the variola the appellants were not entitled to collect commission. But the forum itself found that the appellants were right in deducting commission for the auctioned chits. The statute authorizes a foreman to deduct commission not exceeding 5% of the chitty amount. That alone was done by the appellants. It is true that the actual commission should be fixed in the variola subject to the limit prescribed by the statute. The complainants have no case that the appellant had started the chitty without variola. In fact, the definite contention is that the complainants subscribed to the chits after being convinced that 5% commission would be deducted from the chit amount. There is nothing to show otherwise. Deducting permitted commission does not amount to deficiency in service or unfair trade practice. The finding of the Forum to the contrary is erroneous. It follows that the appeal is liable to be allowed.
In the result, the appeal is allowed. The order of CDRF, Idukki in CC.127/11 dated 29.12.11 is set aside. The complaint is dismissed and considering the facts of the case, the parties are directed to bear their costs in the appeal.
K.CHANDRADAS NADAR -- JUDICIAL MEMBER
SL
