Delhi District Court
M/S Jawahar Chits (P)Ltd vs Sh. Atul Arora on 14 February, 2022
IN THE COURT OF MS. KIRANDEEP KAUR:CIVIL JUDGE-05:
CENTRAL DISTRICT:TIS HAZARI COURTS:DELHI
CS No. 96482/2016
M/S JAWAHAR CHITS (P)LTD.
7, NETAJI SUBHASH MARG,
DARYA GANJ, NEW DELHI-110002
THROUGH IT'S DIRECTOR
SH. BHANWAR SINGH TANWER .... PLAINTIFF
VERSUS
SH. ATUL ARORA
S/O- SH. H.C. ARORA
123, MAIN MARKET, KAMAL VIHAR,
KAMAL PUR, BURARI, DELHI-110084. .... DEFENDANT
SUIT FOR RECOVERY OF Rs.2,31,531/-.
Date of Institution : 20.02.2016
Date of Final Decision : 14.02.2022
JUDGMENT
1. Vide this judgment, I shall decide the present suit filed by the plaintiff against the defendant seeking recovery of a sum of Rs.2,31,531/-.
2. Brief facts of the case are as follows:
(a) The plaintiff is a company engaged in the business of chit funds and is duly registered under The Delhi Chit Funds Act 1982. It is having its registered office at the address mentioned herein the memo of the parties. The present suit has been signed, verified and filed by Sh. Bhanwar Singh Tanwer, Director who is well conversant with the facts and circumstances M/s Jawahar Chits (P) Ltd. v Atul Arora Pg. no. 1 of 11 of the present suit. That Sh. Bhanwar Singh Tanwer is the Director and AR of th plaintiff company and has been duly authorized to sign, verify and file the present suit vide resolution dated 18.02.2016.
(b) The defendant had approached to the plaintiff and requested to become a member of the Chit Groups. The defendant was allotted the membership of Chit Group No. JCP-
03, in which he was allotted ticket Nos. 18, having a value of Rs.5,00,000/-, which had commended on 25/03.2011 and terminated in March, 2013.
(c) The defendant had paid 17 installments out of 25 installments in the Chit Group Bearing No.JCP-03, Ticket No.
18. The defendant had taken the prize money of Rs.3,50,000/- in the month of September, 2011 The defendant had committed a default in the payment of installments since September, 2011. There are 8 installments due against the defendant. The total outstanding against the defendant in this Chit Group is Rs.1,60,000/- as principal and Rs.71,531/- as interest as on January, 2016.
(d) The defendant had committed a default in making payments of the above said Chit Groups since August, 2012 onward, and also committed the breach of the terms and conditions of the agreements. The defendant had to make payments of the entire defaulted installments till the termination of the said Chit Group i.e. March, 2013. The defendant is liable to pay Rs.2,31,531/- with interest as agreed to the plaintiff @ 12 P.A. till realization as per the terms and conditions of the Chit Agreements.
M/s Jawahar Chits (P) Ltd. v Atul Arora Pg. no. 2 of 11
(e) The defendant requested the plaintiff and sought some grace period for making the payments of the outstanding installments as he was under some financial crunch but even after elapse of the said grace period the defendant failed to maintain the financial discipline, thereafter the plaintiff has been running from pillar to post to contact the defendant telephonically and requested him to clear the dues, but the defendant has been avoiding the same.
(f) Under the compelling circumstances, the plaintiff was left with no other option then to serve legal notice dated 24.11.2015 itself and had registered post to the accused on 27.11.2015 itself and had requested the defendant to make the payment within 15 days of the receipt of the said notice. The plaintiff sent the Legal Notice at the last known address of the defendant.
In this background, the plaintiff has sought recovery of Rs.2,31,531/- from the defendant.
3. Defendant filed his WS wherein he submits as follows:
a. The plaintiff has relied on the Chit agreement dated 25.03.2011 which has been time bared as three years has been passed in the month of March 2013. Further, defendant has paid all the installments to the plaintiff and last payment of chit agreement paid in the month of March 2013, hence the present suit of the plaintiff is liable to be dismissed.
b. The defendant has paid the whole of the Chit amount to the plaintiff but the plaintiff intentionally and willfully has not M/s Jawahar Chits (P) Ltd. v Atul Arora Pg. no. 3 of 11 issued any receipt of the payment.
Alleging that the suit of the plaintiff is devoid of merit, defendant pray for dismissal of the suit and prays that the
4. Plaintiff filed his replication to the WS of the defendant wherein it denied the averments made in the WS and reiterated the averments made in the plaint.
5. On the basis of the pleadings, Ld. Predecessor Judge vide order dated 04.08.2016, framed the following issues:-
(i) Whether the plaintiff is entitled to a money decree for a sum of Rs.2,31,531/- along with the cost of the suit, as prayed ? OPD
(ii) Whether the suit of the plaintiff is time barred as per Sec. 5 of the Limitation Act, as the Chit Agreement is dated 25.03.2011 ? OPD
(iii) Whether the suit of the plaintiff is without any cause of action and is liable to be dismissed U/o 7 Rule 11 r/w Sec.
151 CPC ? OPD.
(iv) Relief.
6. Sh. Bhanwar Singh Tanwar, Director of plaintiff's company stepped into the witness box as PW-1. He tendered his evidence by way of affidavit which is Ex.PW1/A. He relied upon following documents:-
i. Ex. PW1/1 is the Board Resolution dated 18.02.2016 in favor of the deponent.
ii. Ex. PW1/2 is the Chit Agreement dated 25.03.2011.
M/s Jawahar Chits (P) Ltd. v Atul Arora Pg. no. 4 of 11 iii. Ex. PW1/3 is Statement of Account dated 25.03.2013. iv. Ex.PW1/4 is the copy of the legal notice dated 24.11.2015.
v. Ex. PW1/5 is the copy of the postal receipt dated 27.11.2015.
PW-1 was cross-examined by counsel for the defendant.
7. Vide separate statement of PW-1 recorded on 20.02.2017, PE was closed. Matter was then put up for DE.
8. Sh. Atul Arora, stepped into the witness box as DW-
1. He tendered his evidence by way of affidavit which is Ex. DW1/A. DW-1 was cross-examined by counsel for the plaintiff.
9. Sh. Ishu Arora, stepped into the witness box as DW2. He tendered his evidence by way of affidavit which is Ex. DW2/A. DW-2 was cross-examined by counsel for the plaintiff. Matter was then put up for final arguments.
10. Final arguments heard. Record perused.
My issue-wise finding are as under:
Issue no.2 will be decided first.
M/s Jawahar Chits (P) Ltd. v Atul Arora Pg. no. 5 of 11 Issue no.2 "Whether the suit of the plaintiff is time barred as per Section 5 of Limitation Act, as per the Chit Agreement dated 25.03.2011? OPD"
11. The burden of proof of this issue is on the defendant. The defendant in his written statement alleges that the plaintiff has relied upon the Chit Agreement dated 25.03.2011 and the suit is time barred as the three years has been passed after the execution of agreement. The plaintiff in his plaint has averred that the Defendant has paid 17 installments out of 25 installments in the Chit Group bearing No JCP-03, Ticket No 18. The defendant has taken the prize money of Rs 3,50,000/- in the month of September 2011. The defendant has committed a default in making the payment of the chit group since September, 2011. There are 8 installments due against the defendant.
12. During the arguments, Ld. Counsel for the defendant submitted that the suit is barred by of Section 65 of Chit Fund Act as the period of Limitation provided under Section 65 for recovery of the amount due has already expired. It is pertinent to mention that Hon'ble High Court of Delhi in Sanjiv Kumar vs Ramwa Chit Funds (P) Ltd., AIR 2006 Delhi 274 has held that the Chit Funds Act, 1982 is not applicable in Delhi. So the proceedings in the present matter would be governed by Limitation Act.
13. In the present suit, the bone of contention between the parties is the date of commencement of the period of Limitation. Ld. counsel for the plaintiff argued that the period of M/s Jawahar Chits (P) Ltd. v Atul Arora Pg. no. 6 of 11 limitation shall commence from the date of termination of chit period and not from the date of default. On the contrary, Ld. counsel for the defendant argued that the period of limitation shall commence from date of default which in the present case is August, 2011. Accordingly, the suit is time barred.
14. I would rely upon the judgment of Hon'ble Supreme Court of India in M/s. Oriental Kuries Ltd. represented by its Chairman P.D. Jose Vs. Lissa & Ors. (2019) 19 SCC 732 wherein the Court has discussed the nature of the Chit Fund Agreement and held as follows:
"..that the relationship between a chit subscriber and the chit foreman is a contractual obligation, which creates a debt on the day of subscription. On default taking place, the foreman is entitled to recover the consolidated amount of future subscriptions from the defaulting subscriber in a lump sum."
15. Further, the controversy with respect of the date of commencement of limitation period in the Chit Fund agreement was resolved by the Hon'ble Madras High Court in C.Dhanam vs A.M.Srinivasan AIR 2006 Mad 210 (Full Bench) wherein it was held that The point of limitation for filing a suit in a chit transaction starts from the date of termination of chit period and not from the date of default.
16. In the present suit, the Chit Fund agreement was determined in March 2013 and the suit has been filed on 20.02.2016. The suit is filed within 3 years from the date of termination of chit period. The suit is not barred by Limitation.
M/s Jawahar Chits (P) Ltd. v Atul Arora Pg. no. 7 of 11 In view of the aforesaid discussion, the Issue No 2 is decided against the defendant and in the favour of the plaintiff.
Issue No. 1"Whether the plaintiff is entitled to money decree for sum of Rs.2,31,531/- along with cost of the suit, as prayed for? OPP"
17. The burden of the proof of this issue is on the plaintiff.
18. The plaintiff has relied upon the Chit Agreement dated 25.03.2011 Ex PW1/2. The defendant has admitted that the said Chit Agreement was entered into between the parties. The plaintiff has further relied upon the statement of account Ex PW1/3 as per which the plaintiff has paid 17 installments and the balance amount of Rs.1,60,000/- is due against the defendant. PW-1 was cross-examined by the defendant but there is nothing on record to disbelieve the version of the plaintiff. The burden of proof now shifts on the defendant.
19. The defendant in his written statement has stated that defendant has paid the whole chit amount and the last payment was made in the month of March 2013 but the plaintiff has not issued any receipt to the defendant. In the affidavit of DW-1 it is mentioned that the defendant has paid the installments to Sh. Subash Chand who was the recovery officer of the plaintiff. During the cross-examination DW-1 has stated "some payments were made by cash and some through Cheque". The defendant has not filed his statement of account to prove the payments made by way of Cheque.
M/s Jawahar Chits (P) Ltd. v Atul Arora Pg. no. 8 of 11
20. The defendant has also examined DW-2 Sh. Ishu Arora i.e. son of the defendant. DW-2 in his affidavit stated that all loan installments of Chit Agreement were paid through Sh. Subash Chand in his presence but Sh. Subash Chand never issued receipts. It is pertinent to mention that DW-2 is the son of the defendant and an interested witness. I am of the opinion that as a matter of prudence, the testimony of DW-2 cannot be considered as substantive proof of the fact that the defendant has paid all the installments to the plaintiff. Further, the testimony of DW-2 has also not been corroborated by any independent witness. The defendants have also not examined Sh. Subash Chand to prove that he has paid the all the installments. Further, the defendant has not even mentioned the date of payment of the installments in the written statement which also raises a doubt over the defence of the defendant. In light of the aforesaid discussion, it is concluded that the defendant has failed to discharge his burden of proof.
21. The plaintiff has proved his case on the principle of the preponderance of probabilities. Accordingly, the plaintiff is entitled to the amount due that is Rs.1,60,000/- from the defendant. Further the plaintiff is also entitled to interest of Rs.71,531/- at the rate of 12% p.a on the sum due till filing of the suit.
Accordingly, Issue No. 1 is decided in the favour of the plaintiff and against the defendant.
Issue no.3 M/s Jawahar Chits (P) Ltd. v Atul Arora Pg. no. 9 of 11 "Whether the suit is of the plaintiff is without cause of action and is liable to be dismissed under Order VII Rule 11 r/w Section 151 CPC? OPD"
22. Onus of proving this issue is upon the defendants. It is banal to say that cause of action consists of a bundle of facts which give cause to force the legal injury for redress in a court of law. In other words, cause of action means every fact which if traversed, it would be necessary for the plaintiff to prove in order to support his right to a judgment of the court.
23. Therefore, the test to determine that whether there is cause of action or not is that whether the plaintiff has plausible and prima facie right in his favour which has been infringed or there is apprehension of infringement. In particular, the test for this purpose is not to delve into the proof of the same. In the present set of facts, plaintiff has filed suit for recovery on the basis of the chit fund agreement as the defendant has committed in default in payment of 8 installments. Accordingly, there is prima facie case in the favour of the plaintiff.
Accordingly, Issue No 3 is decided against the defendant and in the favour of the plaintiff.
Relief
24. In view of the discussion made above, suit of the plaintiff is decreed and the plaintiff is held entitled to a sum of Rs.2,31,531/-. Plaintiff is also entitled to the cost of the suit.
25. Decree sheet be prepared accordingly.
M/s Jawahar Chits (P) Ltd. v Atul Arora Pg. no. 10 of 11
26. File be consigned to record room after due compliance.
Announced in the open court through VC on 14.02.2022.
(Kirandeep Kaur) Civil Judge-05/Central THC/Delhi.
Present judgment consists of 11 pages and each page is signed by me.
M/s Jawahar Chits (P) Ltd. v Atul Arora Pg. no. 11 of 11