State Consumer Disputes Redressal Commission
M/S. Margadarshi Chit Fund Pvt Ltd., vs M. Ravi Kumar, on 1 October, 2024
1
BEFORE THE TELANGANA STATE CONSUMER DISPUTES
REDRESSAL COMMISSION : HYDERABAD.
F.A.No.642 OF 2019
AGAINST ORDERS IN C.C.123/2016
DISTRICT CONSUM ER COMM ISSION, RANGA REDDY
Between:
M/s Margadarsi Chit Fund Pvt., Ltd.,
17-85, 1st Floor, Annapurna Complex,
Gaddiannaram, Dilsukhnagar, Hyderabad-500 060,
Rep. by its Branch Manager.
...........Appellant/Opposite Party
And:
M.Ravi Kumar, S/o Late M.Srinivas Rao,
Aged about 51 years, Occ.: Business,
R/o Flat No.104, Block No.1, Shubha Lakshmi Apartments,
RD No.3, Green Hills Colony, Saroornagar,
R.R.Dist.-500 035. .....Respondent/Complainant
Counsel for the Appellant/Opposite Party : M/s R.Chankradhar
Counsel for the Respondent/Complainant : M/s A.Naveen Kumar
QUORUM :
HON'BLE SMT. MEENA RAMANATHAN, I/c PRESIDENT
&
HON'BLE SRI. V.V.SESHUBABU, MEMBER - (JUDICIAL)
TUESDAY, THE 1st DAY OF OCTOBER
TWO THOUSAND TWENTY FOUR
**********
Order : (PER HON'BLE SRI. V.V.SESHUBABU, MEMBER - JUDICIAL)
1.The appeal is filed u/s 15 of Consumer Protection Act, 1986 by the Opposite Party, aggrieved by the order of District Consumer Commission, Ranga Reddy, dated 25.09.2019 in CC 123/2016, where under the opposite party was directed to return the amount of Rs.1,65,000/- along with interest @ 18% p.a. from the date of complaint till the date of realization and to pay costs of Rs.10,000/-. Time for compliance is 30 days, in default the opposite party shall pay Rs.20,000/- as punitive damages to the complainant.
2. The brief averments of the complaint are that the complainant is a member and subscriber of the Chit bearing No.LTO 11D D/22 (CAR No.346/2015), value of Rs.25,00,000/-
2duration is 50 months; that he is the prized subscriber for Rs.15,00,000/- with discount of Rs.10,00,000/- in an auction held on 17.01.2016. The complainant furnished necessary documents and sureties to the opposite party for getting the bid amount of Rs.15,00,000/-, but they have not paid the bid amount. The complainant has paid chit amount for few months, i.e. in total he had paid Rs.1,65,300/- after that he discontinued because the opposite party has not paid the bid amount; that inspite of several requests made by the complainant, the opposite party either paid the bid amount or returned the chit amounts paid by the complainant. The complainant issued a legal notice dated 12.04.2016 and the opposite party has sent reply notice dated 04.05.2016 stating that the discretion of the opposite party to accept personal surety instead of insisting on the immovable property, security; that the complainant has never asked to submit any immovable property as security. The non-payment of the bid amount to the complainant constitutes deficiency in service; hence, the complaint.
3. The brief averments of the written version of Opposite Party are that the complaint is misconceived and not maintainable either under law or facts. It is admitted that the complainant has joined as chit member and became a successful bidder in the auction held on 17.01.2016; that complainant submitted sureties' particulars on 06.02.2016 to release the prize amount for the scrutiny of this opposite party; that after scrutiny of the said documents and sureties by the Corporate Office, it was found that documents were not satisfied and the same was informed to the complainant vide letter dated 26.03.2016; that the complainant has not furnished the required documents, so the opposite party has informed the complainant that prize amount will be deposited in an approved bank which carries no interest and the same was deposited before Union Bank of India, Dilsukhanagar; that the complainant has requested to refund the paid amount, which is against the terms and conditions of the Chit Agreement. According to the Chit Agreement when a prized subscriber does not furnish 3 sufficient security, the foreman has the right to adjust the unpaid deposited prize amount to future installments and if the unpaid prize money is not sufficient to meet future subscriptions or the bid, falls in the re-auction held in respect of such installment, the foreman has the right to recover such losses and also incidental charges form the account showing to the credit of such unpaid prized subscriber. So, as per the said agreement, the opposite party is entitled to adjust the unpaid installments from prize amount for defaulted installments. The opposite party has acted according to the rules and regulations of the Chit Fund Company and they have not all de viated the procedure; that the complainant has not approached the Forum with clean hands. With this requested to dismiss the complaint with costs.
4. Before the Commission below, complainant filed evidence affidavit as PW1 and marked Ex. A1 to A5. One Sri D.V.Naryana Rao, Foreman, of opposite party filed evidence affidavit as DW1 and got marked Ex.B1 to B13. Both the parties have filed their written arguments respectively.
5. The Commission below, settled the following points for discussion viz..:
Whether there is any deficiency in service or unfair trade practice on the part of Opposite Party? To what relief?
6. Having heard both sides, the Commission below basing on the material available on record passed the order as stated supra. Aggrieved by the same, the present appeal is filed by the opposite party with the following grounds:
The order of the Commission below is contrary to law, weight of evidence and probabilities of the case. The Commission below failed to appreciate the Ex.B9/letter dated 26.03.2016 addressed to the complainant to furnish the pay-slip and bank account of Mr.S.Ramesh Kumar and it was dispatched by 4 Registered Post and also not considered Sec.27 of the General Clauses Act.
The Commission below failed to observe that the complainant not only violated the Provisions Act, 1982, but also the terms and conditions of the Chit Agreement.
The Commission below failed to appreciate Clause 7(9) of Chit Agreement which authorizes the foreman to adjust the unpaid deposited prize amount towards future installments if they are unpaid by the prized bidder.
The Commission below failed to appreciate that the opposite party deposited the prized bid amount of the complainant in the Union Bank of India, Dilsukhnagar, when the complainant failed to furnish the sureties to the satisfaction of the foreman.
The Commission below pronounced the order on its own assumptions and presumptions, moreso, when it is not the case of either party to the complainant that a re-auction was conducted.
With these grounds and others that will be urged at the time of arguments requested to set aside the order of the Commission below and to dismiss the complaint.
7. Now the points for determination in the appeal are :
(1) W hether there is any deficiency of service and unfair trade practice on the part of the opposite party? (2) W hether the order under appeal is sustainable under law? (3) Relief?
8. Heard both sides. For the sake of the convenience the parties will be addressed as they arrayed in the impugned order.
9. POINTS 1 to 3: Admittedly, PW1 joined as a member in the Chit for a sum of Rs.25,00,000/- payable in 50 monthly installments at Rs.50,000/- each and the Chit was commenced on 31.10.2015. It is also an admitted fact that PW1 became highest bidder in the auction conducted on 17.01.2016 having agreed to 5 forego Rs.10,00,000/- out of Rs.25,00,000/-. It means he has to be paid Rs.15,00,000/- subject to the furnishing of sureties.
10. Admittedly, under Ex.B3 dated 15.02.2016, opposite party informed PW1 that so far, PW1 has not suggested the names of sureties or offered other acceptable security to enable him to draw the prize amount and requested to arrange the sureties. Ex.B4 is another letter, dated 19.02.2016 addressed to the PW1 giving a reminder to the Ex.B3 stating that if sufficient sureties are not furnished the prized amount can be adjusted towards future subscriptions and no interest shall be given on the amount. It further informed that the surety submitted by him is under verification. The Commission below observed that no any other letter was given by opposite party informing PW1, that what was the defect in the sureties submitted by PW1 and the reason for thereof. For this, the answer of opposite party is that it issued Ex.B9 letter, dated 26.03.2016 informing that pay slip and bank statement of the offered surety by name Mr.S.Ramesh Kumar, is required. The address of PW1 as mentioned in the Ex.B9 letter, is similar to his address mentioned in the complaint. Ex.B9 is followed by a Statement like document issued by the Post Office, which goes to show that a registered letter number RN 150991385IN mentioned in the name of PW1 on his address bearing flat No.104, Block-I, Shubha Lakshmi Apartments, Saroornagar, was posted on 26.03.2016.
11. It is the contention of Commission below that there is no acknowledgement for the Ex.B9 letter, to prove that it was served on PW1. Whereas, the opposite party relied upon Sec.27 of the General Clauses Act. As per the said section, if any registered letter addressed to a person to his admitted address, the service of the same shall be drawn on the addressee. As already stated supra since the address mentioned on the Ex.B9 and the State ment like document issued by the post office are one and the same, one has to presume that Ex.B9 is served on PW1. It is also to be observed that in case, the opposite party not made any communication regarding the acceptance of the surety as mentioned in its letter 6 under Ex.B4, PW1 should have caused inquiries. In such circumstances there is no reason for the opposite party to hide the Ex.B9 or to inform about the necessity of furnishing the pay-slip and Bank Statement of Mr.Ramesh Kumar. Therefore, we are of the view that PW1 not approached the Commission below with clean hands or with true facts. It is to be observed that all chit fund Companies will thrive and survive on the chit installments made by the members. If some of the prized bidders failed to collect the bid amounts would automatically lead the Company, to run the show very hard. Therefore, we found no reason for the opposite party to suppress the factum of requirement to furnish pay slip and bank statement of Mr.S.Ramesh Kumar, by PW1. So, the logic is also against the version of PW1.
12. The terms of the Chit Agreement shall be followed by both parties to the documents. Ex.B1 is the chit agreement. Nowhere, it is mentioned what should be done, in case, a prized bidder fails to collect the amount and wishes to opt out from the running chit. However, there are clauses in the agreement to show how to deal with prized bid amount, if it is not collected. The foreman can utilize the prized bid amount towards future installments payable by the concerned chit member. The opposite party filed Bank Statement under Ex.B6 relating to customer ID No.104959379, dated 01.03.2016 for the period from 01.02.2016 to 29.02.2016 of the Union Bank. It shows on 20.02.2016 a sum of Rs.1,61,24,500/- was deposited into the Bank account vide cheque No.2233992 and for the said amount a break-up figures were given, in which the name of PW1 is mentioned with an amount of Rs.15,00,000/-. So, it is a foregone conclusion that the prized bid amount of PW1 was deposited in the Union Bank, Dilsukhnagar on 20.02.2016 by the opposite party. It shows the opposite party not mis-appropriated the bid amount of PW1 and followed the rules of the game.
13. It is the contention of PW1 that all together he paid Rs.1,65,000/- towards installments of the chit No. No.LTO 11D D/22 (CAR No.346/2015). As per Ex.B1, clause 11 relating to 7 foreman's commission and installment at which the foreman used to get the prize amount reads thus:- (i) all the subscribers should pay the 1st installment in full to the foreman. The foreman shall subscribe to a ticket in the chit and shall obtain the chit amount in the 2nd installment without any deduction of discount. Therefore the 3rd installment also should be paid in full by all the subscribers and subsequent installment should be paid after deducting the dividend declared for each month. (ii) The foreman's commission shall be at 5% of the chit amount i.e. to say Rs.1,25,000/- at every installment of auction. If the above said point No.ii, coupled with the entire 1st installment which goes to the foreman are taken into consideration, the total comes to Rs.1,75,000/-, whereas, the amount paid by PW1 is only Rs.1,65,000/-. Therefore, PW1 is not entitled to get anything in those circumstances.
14. The opposite party not submitted any account to show whether they have taken any substituted chit member, when PW1 started committing default in the payment of future installment. Noting is mentioned how much dividends were given to the other members after PW1 became prized bidder on 17.01.2016. The opposite party not submitted any document certified by the Registrar of Chits that no other member was inducted in the same chit after PW1 discontinued. Without these documents one cannot vouch whether re-auction was conducted or any other member was inducted into the group. To deduct entire Rs.1,65,000/- paid by PW1 is nothing but a harsh step. Under the principle of had and received, the opposite party is liable to refund some amount or the other to PW1 after deduction of its expenses. Otherwise, it amounts to unjust enrichment. No document is filed to show that the deposit of Rs.15,00,000/- with Union Bank continued till the chit is terminated. Therefore, we are of the view that the order of Commission below though liable to be set aside, some amounts shall be refunded by opposite party to PW1.
15. Out of Rs.1,65,000/- the amounts paid towards the 1st installment which belonged to the foreman shall be deducted. No dividend is entitled for PW1 for the 2nd and 3rd installments. A sum of Rs. 25,000/- shall be deducted towards expenses of the opposite 8 party in maintaining the chit. Therefore, we are of the view that a sum of (Rs.1,65,000-75,000/=Rs.90,000/-), Rs.90,000/- shall be refunded to PW1 with interest at 8% per annum from the date of termination of the chit till the date of realization. It is important to note that without making any efforts to furnish the surety, PW1 rushed to the Commission to make a wrongful gain, so he is not entitled for any compensation and costs. The points are answered accordingly.
16. In the result, the appeal is allowed by setting aside the order dated 25.09.2019 in CC 123/2016 by the DCDRC, Ranga Reddy, ofcourse it is modified with a direction to the opposite party to refund Rs.90,000/- with interest at 8% per annum from the date of termination of the chit till the date of realization without any compensation and costs.
The complainant is entitled to receive the statutory amount of Rs.25,000/- made by the opposite party while preferring the appeal along with accrued interest thereon, after the lapse of revision period. The complainant is at liberty to execute the proceedings to recover the balance if any.
Typed to my dictation by Stenographer on the System; corrected by me and pronounced by us in the Open Court on this the 1st day of October' 2024.
Sd/- Sd/-
I/c PRESIDENT MEMBER-JUDICIAL
Dated : 01.10.2024
*AD