State Consumer Disputes Redressal Commission
Caronet Constructions Ch.49 ... vs The Manging Director Sriram Chits & Anr ... on 3 March, 2008
CORRECTED ON : BEFORE THE STATE CONSUMER DISPUTES REDRESSAL COMMISSION, CHENNAI Present : Hon'ble Thiru Justice K.SAMPATH PRESIDENT Thiru Pon. GUNASEKARAN, B.A., B.L., MEMBER-I F.A. No. 379/2005 [ Against OP No.404/2003 on the file of the DCDRF, Chennai(North) ] DATED THIS THE THIRD DAY OF MARCH, 2008 M/s. Caronet Constructions :: Appellant / Complainant (India) Private Ltd, rep. by rep. by Adv. its Manager Mr.K.V.Varadharajaswamy Mr.A.V.Ezhilarasu No.86/4, Thirumangalam Road, Villivakkam, Chennai : 49. Vs. 1. The Managing Director :: Respondents/ Sri Ram Chits, Tamil Nadu Opposite parties (P) Ltd, No.1,Club House rep. by Adv. Road, Subramanya Buildings Mr.K.V.Ananthakrishnan Chennai : 2. 2. The Branch Manager Sri Ram Chits, Tamil Nadu (P) Ltd, No.137, South Mada Street, Villivakkam, Chennai : 600 049. O R D E R
K.SAMPATH J. The complainant in COP No.404/2003 on the file of the District Consumer Disputes Redressal Forum, Chennai (North) is the appellant herein. Their case was as follows:
- The complainant joined in five chits conducted by the opposite parties and paid Rs.1,11,000/- and when they demanded the amount the opposite parties failed to pay the same necessitating the filing of the complaint.
2. The defence set up was as follows: - The person Mr.Varadharaja-swamy who claimed to be the Manager of the complainant company had no authority to file the complaint. He was a surety of the prized chits towards payment of future instalments. The complainant had received the money under both the prized and non-prized chits and no amount was due to the complainant. The amount claimed in respect of the non-prized chits were adjusted towards payment of future instalments of prized chits and hence no amount was payable. Apart from the above, the question of payment in respect prized chits and non-prized chits were decided in the Arbitration proceedings initiated and in the said proceedings the complainant raised the very same point raised in this complaint. Those points were rejected by the Arbitrator and an award came to be passed against the complainant for the recovery of the amount due to the opposite parties. The issues now raised having already been decided between the same parties before the Forum constituted under the Chit Funds Act, the same issue could not be raised once again. The earlier decision would operate as res judicata.
3. Before the District Forum, on the side of the complainant Exs.A-1 to A7 were marked while on the side of the opposite parties Exs.B-1 to B10 were marked.
4. The District Forum accepted the case of the opposite parties and by order dated 22/4/2005 dismissed the complaint. It is as against that the present appeal has been filed.
5. Before us, the opposite parties produced some additional documents relating to the developments that took place subsequent to the decision in the complaint. The learned counsel for the complainant made the following submissions: - There was no res judicata. The Arbitrator may have the right to probe into payment or non-payment. But the Consumer Forum had the full right to find out whether there was any deficiency in service on the part of the opposite parties towards the complainant. The documents already available and the documents produced in the appeal clearly established the case of the complainant. The Arbitrator under the Chit Funds Act did not consider the case of the complainant in the proper perspective. No order on merits has been passed by the Secretary to Government after due verification of the documents filed by the complainant. The amounts for the chits were not paid. The opposite parties made arrangement among themselves and appropriated the money. It had been proved by the complainant in the E.P. by tracing out the account holder who had actually repaid the chit amount on behalf of the complainant which is at present pending in the High Court. Though the complainant had established that one Mr.Sankaranarayanan was a mischief monger who had done this wrong, and in spite of proving it, the opposite parties did not take any action and had not come forward to pay the chit amounts to the complainant. The promissory notes were usually obtained without payment by the chit company. The customers, believing in good faith, only signed the promissory note without receiving the prized money promised to be paid in the next days. One could not rely on the pronote. Nowhere in his order the Arbitrator had said that he verified any of the documents. In the appeal also, no documents were verified. The complainant had applied for further appeal. It was the duty of the Consumer Forum to find out the wrong doer and grant the relief to the complainant.
6. Per contra, the learned counsel for the opposite parties submitted that the said Varadharajaswamy was no longer their Manager and he had no authority to represent the company. The complainant has to file an affidavit to show that his authority existed on the date of the complaint. Both were prized chits. The complainant received the amounts and also executed promissory notes. After receiving the prized amounts the complainant defaulted in payment of instalments. The three chits were non-prized chits and the opposite parties had a lien as security the prized chits on default by the complainant. The opposite parties as per the contract adjusted towards the paid up amount towards prized chits and hence no amount was due and payable by the opposite parties to the complainant. After adjusting, it was found that amounts were still due in respect of prized chits. Hence ARC proceedings were initiated against the complainant before the Registrar of Chits. All the points now raised were raised before the Registrar of Chits. All documents were marked in the arbitration proceedings. The Arbitrator, on the basis of the documents, rejected the case of the complainant and granted relief to the opposite parties. Against the order of the Arbitrator an appeal was filed and the appellate authority, by order dated 26/4/2007 and 3/7/2007 dismissed the appeals. The opposite parties filed execution petition. Against the order made in the execution petition the complainant filed C.R.P. No.198/2006. Pending Revision petition, the complainant moved a stay application. The Honble High Court ordered stay of execution of the award on condition of the complainant depositing Rs.25,000/- to the credit of the ARC. To the best of knowledge of the opposite parties the complainant had not complied with the conditional order and deposited the amount. The award had become final between the complainant and the opposite parties. On the principle of res judicata, the same matter could not be re-opened and trial of an identical issue was clearly barred. The complainant had the benefit of the money in prized chits as well as non-prized chits. The opposite parties acted in accordance with the Chit Funds Act and there could be no allegation of deficiency in service on the part of the opposite parties. The District Forum had rightly dismissed the complaint and no exception could be taken thereto.
7. We have carefully gone through the materials on record. We are satisfied that the order of the District Forum is correct. We cannot sit in judgment over the decision in the Arbitration proceedings. Identical issues were raised before the Arbitrator and the Consumer Forum and the same documents were produced. The same contentions were raised and the Arbitrator held against the complainant and granted relief to the opposite parties. Against the decision by the Arbitrator the complainant went on appeal and the appeal came to be dismissed. Thereafter while the opposite parties took execution proceedings and obtained an order, challenging that order the complainant went before the High Court and a conditional order came to be passed by the Honble High Court and according to the opposite parties the condition was not complied with by the complainant. Be that as it may, we cannot have parallel proceedings. Merely by saying that that was a case of non-payment of chit money and that this was a case of deficiency in service, it cannot be construed that the proceedings were not identical in nature. We cannot sit in judgment over the decision in the Arbitration proceedings. The District Forum has rightly found that there was no deficiency in service.
8. In the result, the appeal fails and the same is dismissed.
Sd/.. sd/ Pon.GUNASEKARAN K.SAMPATH MEMBER-I PRESIDENT INDEX : YES / NO *Basu\Z\KSJ\chit*