Delhi District Court
Sunil Kumar vs Pratap on 27 November, 2018
Page no. 1 of 15
IN THE COURT OF SH. SUSHIL ANUJ TYAGI, JSCC CUMASCJCUM
GUARDIAN JUDGE, DISTRICT: SOUTHEAST, NEW DELHI.
Civil Suit no. 51741/16
IN THE MATTER OF:
SUNIL KUMAR
S/o Late Darshan Lal
R/o A2/1313, JJ Colony
Madanpur Khadar
New Delhi76
........PLAINTIFF
VERSUS
PRATAP
S/o Late Hari Singh
R/o A2/1374, JJ Colony
Madanpur Khadar,
New Delhi76.
.......DEFENDANTS
Date of Institution : 26.09.2015
Date of reserving order : 27.11.2018
Date of Judgment : 27.11.2018
Civil Suit no. 51741/16 (Sushil Anuj Tyagi)
Sunil Kumar JSCC cumASCJcumGJ
Vs. South East, Saket Courts/27.11.2018
Pratap
Page no. 2 of 15
EXPARTE JUDGMENT:
1. This is a suit filed by the plaintiff against the defendants for recovery
of Rs. 93,148/ alongwith pendente lite and future interest @ 18 % p.a from
the due date till realization along with costs.
2. The facts of the case as per the plaintiff are as follows:
2.1. It is alleged that the plaintiff was organizer /cashier of three
committees in which several persons were participated.
2.2. In the present case the plaintiff has averred that the plaintiff
organized a committee on 11.09.2011 of Rs. 1 lakh in which there
were 20 members and each person contribution was fixed at Rs.
5,000/. It was agreed that the committee would last for 20 months
and each member would be entitled to receive the committee amount
in turn by auction or tender. It is alleged that till 10th month everything
went right and the defendant participated in the auction and has
collected Rs. 40,000/ on 18.09.2011 on behalf of his nominee i.e.
Vishwanath Shukla and he has also collected another committee of
Civil Suit no. 51741/16 (Sushil Anuj Tyagi)
Sunil Kumar JSCC cumASCJcumGJ
Vs. South East, Saket Courts/27.11.2018
Pratap
Page no. 3 of 15
Rs. 52,500/ on his turn on 15.01.2012. It is further alleged that
thereafter, the defendant never paid his shares in the said committee
and the plaintiff had to pay his shares of the committee as plaintiff
was the organizer and cashier of the said committee.
2.3. It is further alleged that similarly on 02.10.2011, plaintiff
organized second committee of Rs. 42,000/ of 14 members and each
person contribution was Rs. 3,000/. It is alleged that on 15.01.2012,
the defendant collected Rs. 26,500/ on his turn and Rs. 27,000/ on
15.02.2012 on behalf of his nominee Shri Ajay Kumar and later did
not pay his contribution and plaintiff had to pay for the same.
2.4. It is further alleged that on 05.02.2012, the plaintiff organized
third committee of Rs. 50,000/ in which there were ten members and
contribution was of Rs. 5,000/. It is alleged that the defendant
collected the committee amount of Rs. 28,400/ and thereafter, did not
pay his contribution and plaintiff has to pay his share.
2.5. It is thus alleged that plaintiff has paid a total of Rs. 1,33,168/
Civil Suit no. 51741/16 (Sushil Anuj Tyagi)
Sunil Kumar JSCC cumASCJcumGJ
Vs. South East, Saket Courts/27.11.2018
Pratap
Page no. 4 of 15
in the aforementioned three committees on behalf of the defendant
and his nominees and plaintiff is entitled to recovery the same from
the defendant. It is further alleged that on 15.04.2013, the plaintiff had
adjusted Rs. 28,685/ i.e. contribution of wife of defendant to
extinguish the partial liability of the defendant. It is further submitted
that on 06.01.2014, Mr. Jagdish paid Rs. 23,000/ to the plaintiff on
behalf of the defendant and after deducting the aforementioned
payments, the total outstanding amount due towards the defendant is
Rs. 83,168/ along with the interest. Hence, the present suit.
3. In written statement, defendant raised preliminary objections stating
that the present suit is not maintainable it its present form as the suit is
time barred and there is no application for condonation of delay filed by the
plaintiff as the alleged payment were due on 18.09.2011, 15.01.2012,
15.02.2012 onward and the plaintiff knew this fact also as well as the
present suit for recovery of alleged amount filed on /or after 24.09.2015.
On merits, defendant denied the averments made in the plaint.
4. No replication was filed by the plaintiff to the WS of defendant.
Civil Suit no. 51741/16 (Sushil Anuj Tyagi)
Sunil Kumar JSCC cumASCJcumGJ
Vs. South East, Saket Courts/27.11.2018
Pratap
Page no. 5 of 15
5. After completion of pleadings of the parties, the following issues
were framed by the Ld. Predecessor:
Sl.no. Issues Onus to
prove
1 Whether the plaintiff is entitled to recovery of the OPP
amount and interest as sought for?
2 Relief.
6. Thereafter, defendants stopped appearing and were proceeded
against ex parte on 15.12.2017.
7. Thereafter, plaintiff Sh. Sunil Kumar, has led exparte evidence by
way of affidavit Ex.PW1/A wherein plaintiff has reiterated the averments
made in the plaint. He has proved the following documents:
Sl. Documents Exhibits
No.
1.Copy of list of member of committee of Rs.1 Ex.PW1/1 (OSR) Lac.
2. Chart of Committee of Rs.1 Lac Ex.PW1/2
3. Receipt dated 20.09.2011 of Rs.37,900/ by Ex.PW1/3 (OSR) the defendant on behalf of one of his Civil Suit no. 51741/16 (Sushil Anuj Tyagi) Sunil Kumar JSCC cumASCJcumGJ Vs. South East, Saket Courts/27.11.2018 Pratap Page no. 6 of 15 nominee i.e Vishwanath Shukla on stamp paper.
4. Receipt dated 15.01.2012 of Rs.52,500/ by Ex.PW1/4 (OSR) the defendant on stamp paper.
5. Receipt dated 15.01.2012 of Rs.52,500/ by Ex.PW1/5 (OSR) the defendant.
6. Election I Card of the defendant. Mark A
7. Copy of list of number of committee of Ex.PW1/6 (OSR) Rs.42,000/
8. Chart of committee of Rs.42,000/ Ex.PW1/7
9. Receipt dated 15.01.2012 of Rs.26,900/ by Ex.PW1/8 (OSR) the defendant on stamp paper.
10. Receipt dated 15.01.2012 of Rs.26,900/ by Ex.PW1/9 (OSR) the defendant.
11. Receipt dated 15.02.2012 of Rs.27,000/ by Ex.PW1/10 (OSR) the defendant on stamp paper
12. Receipt dated 15.02.2012 of Rs.27,000/ by Ex.PW1/11 (OSR) the defendant
13. Copy of chart of committee of Rs.50,000/ Ex.PW1/12 (OSR)
14. Chart of committee of Rs.50,000/ Ex.PW1/13
15. Receipt dated 15.02.2012 of Rs.28,400/ by Ex.PW1/14 (OSR) the defendant on stamp paper
16. Receipt dated 15.02.2012 of Rs.28,400/ by Ex.PW1/15 (OSR) the defendant
17. Police complaint dated 24.08.2014 Ex.PW1/16 (OSR)
8. The plaintiff examined PW2 Govind who also gave his evidence by Civil Suit no. 51741/16 (Sushil Anuj Tyagi) Sunil Kumar JSCC cumASCJcumGJ Vs. South East, Saket Courts/27.11.2018 Pratap Page no. 7 of 15 way of affidavit Ex.PW2/A and relied upon the documents already exhibited. The plaintiff examined PW3 Mahesh to give his evidence by way of affidavit Ex.PW3/A who relied upon the documents already exhibited. Plaintiff also examined PW4 Jitender Chauhan who gave his evidence by way of affidavit Ex.PW4/A and relied upon the documents already exhibited.
9. Thereafter, Plaintiff Evidence was closed.
10. I have heard the arguments advanced by Ld counsel for the plaintiff and perused the material available on record. Issue no. 1: Whether the plaintiff is entitled to recovery of the amount and interest as sought for?
11. The burden to prove this issue lies upon the plaintiff.
12. To prove the case, the plaintiff examined himself as PW1 and gave his evidence by way of affidavit Ex.PW1/A and relied upon the documents Ex.PW1/1 to ExPW1/16.
13. The plaintiff also examined PW2 Govind who also gave his Civil Suit no. 51741/16 (Sushil Anuj Tyagi) Sunil Kumar JSCC cumASCJcumGJ Vs. South East, Saket Courts/27.11.2018 Pratap Page no. 8 of 15 evidence by way of affidavit Ex.PW2/A and relied upon the documents already exhibited. PW2 Govind stated to be one of the participants in the two committees of Rs. 1 lakh and Rs. 42,000/. He corroborated the version of PW2.
14. The plaintiff also examined PW3 Mahesh to give his evidence by way of affidavit Ex.PW3/A and relied upon the documents already exhibited. PW3 Mahesh is stated to be one of the participants of the two committees of Rs. 42,000/ & 50,000/. He supported the version of the plaintiff.
15. The plaintiff examined PW4 Jitender Chauhan who gave his evidence by way of affidavit Ex.PW4/A and relied upon the documents already exhibited. PW4 Jitender Chauhan is stated to be one of the participants of the committee of Rs. 42,000/ and he also supported the version of the plaintiff.
16. The main question that arises for consideration in the present case is whether the plaintiff is entitled to recover the aforesaid amount from the Civil Suit no. 51741/16 (Sushil Anuj Tyagi) Sunil Kumar JSCC cumASCJcumGJ Vs. South East, Saket Courts/27.11.2018 Pratap Page no. 9 of 15 defendant and whether the suit of the plaintiff is maintainable in view of Chit Funds Act, 1982, The Indian Contract Act, 1872 and The Prize Chits and Money Circulation Schemes (Banning) Act, 1978.
17. At this juncture it is apt to refer to Section 23 of the Indian Contract Act, 1872 which provides what consideration and objects are lawful and what not. It reads thus:
"The consideration or object of an agreement is lawful, unless -
It is forbidden by law; or is of such a nature that, if permitted it would defeat the provisions of any law; or is fraudulent; or involves or implies, injury to the person or property of another; or The court regards it as immoral, or opposed to public policy.
in each of these cases, the consideration or object of an agreement is said to be unlawful. Every agreement of which the object or consideration is unlawful is void."
18. It is also equally important to refer to Section 2 (b), Section 4 and Section 76 of the Chit Funds Act, 1982. They are reproduced below for Civil Suit no. 51741/16 (Sushil Anuj Tyagi) Sunil Kumar JSCC cumASCJcumGJ Vs. South East, Saket Courts/27.11.2018 Pratap Page no. 10 of 15 reference:
Section 2 (b): - "Chit" means a transaction whether called chit, chit fund, chitty, kuri or by any other name by or under which a person enters into an agreement with a specified number of persons that every one of them shall subscribe a certain sum of money (or a certain quantity of grain instead) by way of periodical instalments over a definite period and that each such subscriber shall, in his turn, as determined by lot or by auction or by tender or in such other manner as may be specified in the chit agreement, be entitled to the prize amount.
Section 4: - Prohibition of Chits not sanctioned or registered under the Act. -
(i) No chit shall be commenced or conducted without obtaining the previous sanction of the State Government within whose jurisdiction the chit is to be commenced or conducted or of such officer as may be empowered by that Government in this behalf, and unless the chit is registered in that State in accordance with the provisions of this Act.
Section 76. Penalties. - Whoever contravenes or abets the contravention of any of the provisions of sections 4, 5, 8, 9, 11, 12, 13, 14, 19, 20, 22, 24, 30, 31, subsection (4) of section 33, Section 46, 47 or subsection (5) of section 61 shall, on conviction be punishable with imprisonment for a term which may extend to two years or with fine which may extend to five throusand rupees or with both.
19. It is also apt to refer Section 2 (e), Section 3 and Section 4 of the Prize Chits and Money Circulation Schemes (Banning) Act, 1978. They are Civil Suit no. 51741/16 (Sushil Anuj Tyagi) Sunil Kumar JSCC cumASCJcumGJ Vs. South East, Saket Courts/27.11.2018 Pratap Page no. 11 of 15 reproduced below for reference:
Section 2 (e): "Prize Chit" includes any transaction or arrangement by whatever name called under which a person collects whether as a promoter, foreman, agent or in any other capacity, monies in one lump sum or in installments by way of contributions or subscriptions or by sale of units, certificates or other instruments or in any other manner or as membership fees or admission fees or service charges to or in respect of any savings, mutual benefit, thrift or any other scheme or arrangement by whatever name called, and utilizes the monies so collected or any part thereof or the income accruing from investment or other use of such monies for all or any of the following purposes; namely : -
(i) giving or awarding periodically or otherwise to a specified number of subscribers as determined by lot, draw or in any other manner, prizes or gifts in cash or in kind, whether or not the recipient of the prize of gift is under a liability to make any further payment in respect of such scheme or arrangement;
(ii) Refunding to the subscribers or such of them as have not won any prize or gift, the whole or part of the subscription, contributions or other monies collected, with or without any bonus, premium, interest or other advantage by whatever name called on the termination of the scheme or arrangement, or on or after the expiry of the period stipulated therein.
but does not include a conventional chit. Section 3. - Banning of prize chits and money circulation schemes or enrollment as members or participation therein.
- No person shall promote or conduct any prize chit or money circulation scheme, or enroll as a member to any Civil Suit no. 51741/16 (Sushil Anuj Tyagi) Sunil Kumar JSCC cumASCJcumGJ Vs. South East, Saket Courts/27.11.2018 Pratap Page no. 12 of 15 such chit or scheme, or participate in it otherwise, or receive or remit any money in pursuance of such chit or scheme.
Section 4. - Penalty for contravening the provisions of Section 3. -
Whoever contravenes the provisions of Section 3 shall be punishable with imprisonment for a term which may extend to three years, or with fine which may extend to five thousands rupees, or with both:
20. In the present case, the plaintiff admittedly ran the three impugned committees in which the defendant is alleged to be one of the member. The impugned committees falls within the definition of "Chit" and "Prize Chit" and thus barred under Section 4 of the Chit Funds Act, 1982 and Section 3 of the Prize Chits and Money Circulation Schemes (Banning) Act, 1978.
21. Section 23 of the Contract Act provides that if the object of the agreement or consideration of the agreement is forbidden by law then it is unlawful and the agreement is void.
22. Thus, the committees having barred/ forbidden by law renders the agreement in the present case as void and not enforceable by law.
Civil Suit no. 51741/16 (Sushil Anuj Tyagi)
Sunil Kumar JSCC cumASCJcumGJ
Vs. South East, Saket Courts/27.11.2018
Pratap
Page no. 13 of 15
23. It is the argument of the counsel for the plaintiff that under Section 65 of the Indian Contract Act, any person who has received the advantage under any agreement or contract which is discovered to be void or becomes void, is bound to restore or pay compensation to the person from whom he has received it. It is argued by the counsel for the plaintiff that plaintiff did not know that the agreement is void at the time of entering the contract and therefore, the contract is later discovered to be void and thus the plaintiff is entitled to receive the restoration of compensation from the defendant who has received the money from the plaintiff. The counsel for the plaintiff relied upon the judgment of the Orisa High Court in Fakir Chand Seth Vs. Dambarudhar Bania, AIR 1987 Orissa 50.
24. In the present case, the committees run by the plaintiff are hit by Section 2 (b) and Section 4 of the Chit Funds Act, 1982 which provides that the chit shall not be commenced or conducted without previous sanction of the State Government and unless the chit is registered in that State in accordance with the provisions of the Act. The Act also provides for the penalties for the contravention of the provision of Section 4 of the Civil Suit no. 51741/16 (Sushil Anuj Tyagi) Sunil Kumar JSCC cumASCJcumGJ Vs. South East, Saket Courts/27.11.2018 Pratap Page no. 14 of 15 Act in Section 76 of the Chit Funds Act 1982.
25. The present case of the plaintiff is also hit by Section 2 (e) of the Prize Chits and Money Circulation Schemes (Banning) Act, 1978 as the impugned committees fall within the definition of "Prize Chit" which are banned under Section 3 of the said Act. The Act also provides for the penalty under Section 4 for the Contravention of Section 3."
26. The counsel for the plaintiff has stressed upon Section 65 of the Indian Contract Act which provides for restoration of the benefit but the section applies only where the contract is discovered to be void or later becomes void. In the present case, the contract is void ab initio being forbidden by law under Section 23 of the Indian Contract Act and thus Section 65 of Indian Contract Act is of no benefit to the plaintiff.
27. The judgment of Fakir Chand (supra) relied upon by the counsel for the plaintiff is not applicable to the facts and circumstances of the present case, as the present case pertains to the violation of Chit Funds Act, 1982 and the Prize Chits and Money Circulation Schemes (Banning) Act, 1978 Civil Suit no. 51741/16 (Sushil Anuj Tyagi) Sunil Kumar JSCC cumASCJcumGJ Vs. South East, Saket Courts/27.11.2018 Pratap Page no. 15 of 15 whereas the case referred by the plaintiff pertains to the Orrisa Rice and Paddy Control Order, 1965. Thus, this court does not find it appropriate to apply the judgment to the facts and circumstances of the present case. RELIEF
28. In the light of above, this court is of the considered view that the suit is not maintainable and it is accordingly dismissed.
29. No order as to costs.
30. Decree sheet be drawn accordingly.
31. File be consigned to record room, after due compliance. Announced in the open court (Sushil Anuj Tyagi) today i.e on 27.11.2018 JSCCcumASCJcumGJ South East, Saket Courts:New Delhi 27.11.2018 (r) Civil Suit no. 51741/16 (Sushil Anuj Tyagi) Sunil Kumar JSCC cumASCJcumGJ Vs. South East, Saket Courts/27.11.2018 Pratap