National Consumer Disputes Redressal
Kovilakam Chits And Financial Service ... vs K.L. Benny on 3 August, 2005
Equivalent citations: 3(2006)CPJ193(NC)
ORDER
P.D. Shenoy, Member
1. This is the First Appeal directed against the order of Kerala State Consumer Disputes Redressal Commission dated 22.2.2001. This case pertains to eligibility of a prize to the Chit Fund member who had become a defaulter.
2. The complainant is a subscriber of B-1 26th Tri-monthly Kuri conducted by Kovilakam Chits and Financial Services (P.) Ltd. The ticket No. of the Kuri is S-199. The total sale of the Kuri is Rs. 12,00,000 which is divided into 48 instalments of Rs. 25,000 each with Rs. 2,00,000 commission to the company. The complainant participated in the daily collection scheme towards the instalment amount which was agreed toby the respondent. On 27.12.1999 the respondents conducted the draw and the complainant was the winner. On the same day the 3rd respondent sent a registered letter to the complainant stating that though he has won the prize in the draw since the chit is in default from the 9th instalment 3 instalments are over due, it was declared as forfeited.
3. Aggrieved by this, the appellant filed a complaint before the Kerala State Consumer Disputes Redressal Commission requesting the Commission to pass order and directing the respondents to pay the complainant the prize money of Rs. 10,00,000 as per the draw and to award cost and other reliefs. The respondents filed a written statement rebutting the claim made by the complainant and submitted that the complainant had defaulted tri-monthly instalments from the months of September, December, March and June, 1999 being the 9th instalment payable. The draw that was held on 27.12.1999 was pertaining to the 11th instalment. In view of the fact that the complainant had defaulted payment of the 9th, 10th and 11th instalments of Kuri/Chitty by virtue of the provisions of the 'Variola', the terms and condition of the Kuri (Chit Fund) the chit of the complainant was liable to be forfeited automatically without any further notice of the opposite parties. In fact the entire scheme of the chit was so mooted so as tobenefit the subscriber in as many ways as possible. It is true that the number of the complainant's chitty was allowed to remain in the lot for drawing purposes as per the chitty conditions. But as per the terms of forfeiture inspite of the fact that the complainant had struck the draw no amount was payable to him to virtue of the fact that he had defaulted three consecutive instalments of chitty and that he was liable for automatic forfeiture and further even for the purpose of drawing the number of the complainant's lot is also put as per the terms of the 'Variola' he was entitled to the balance amount from the amount paid by him after deducting the amount of Rs. 1,20,000 being the foreman's commission.
4. The State Commission having heard the parties held that the complainant is entitled to the prize amount on his executing the necessary bond and producing security as provided for in Exhibit R-3, as the complainant was successful.
Submissions of the learned Counsel for the appellant
5. The appellant conducted 'Kuries' in one of which having a paid up capital of Rs. 12 lakhs, the respondent was a subscriber who had to pay, 48 instalments of Rs. 25,000 each. However, the respondent was permitted to pay the said instalments under a daily collection scheme. The respondent was a complainant before the State Commission where he complained that though he participated in the draw on 27.12.1999 in which he was the winner of the prize amount of Rs. 10 lakhs, it was not paid to him and the appellant sent him a registered letter stating that he is not eligible for the prize amount as he was a defaulter having forfeited his whole right.
6. The respondent has been in the habit of not making payment regularly at the effective time on 27.12.1999, Rs. 34,364.10 being the defaulted amount of the 9th, 10th and 11th instalments including 12% interest in respect of each default. Hence he was not entitled to any relief.
7. The provisions of Clauses 12 and 13 of the 'Variola' i.e. terms and conditions of Kuri/Chit Fund clearly indicate that the defaulter's name though would be included in the draw of lots he will not be entitled in the prize amount.
8. However, the learned Counsel for the appellant submitted that though the amount deposited by Shri Benny can be fully forfeited by the chit fund as compromise offer, he is willing to refund, the deposited amount of approx. Rs. 80,000 with some reasonable interest.
Submission of the learned Counsel for the respondent
9. The learned Counsel for the respondent submitted that though there has been a default in payment of 9th, 10th and 11th instalments, the default was waived by the Chit fund organization and he was permitted to participate in the draw of lots when he made the daily payment of Rs. 100. He also won the prize of Rs. 10 lakhs. He has already lost interest on this prize amount since 1987. Now the Chit Fund cannot reverse their stand and accordingly he is entitled for the prize money with reasonable interest. However, he is willing to provide security and execute the necessary bond for encashing the prize amount.
10. The curcial issue to be considered in this case are the relevant provisions of the Chit Fund Scheme.
Clause 12-Forfeiture of non-bid and non-prized Ticket Non-prized and non-bid subscribers making default of any instalment may pay the subcription thereof with a late fee @ 12% p.a. for a ticket valued at Rs. 25,000 on or before the date of the immediately succeeding instalment considering actual numbers of days of default rounded to the next nearest Rupee. If defaulter is made to pay the subscription at the later instalment also the subscribers shall be allowed to pay the subscription with a late fee at the above rate without considering the numbers in days of default, but in month-wise or a ticket valued at Rs. 25,000 on or before the date of the third instalment since the date of default. But three consecutive defaults deprive the defaulters of their right to be subscribers in the chit unless otherwise allowed by the foreman, in the case of three consecutive defaults, the foreman company obtains the right to substitute itself and subscribe for such tickets or enroll fresh subscribers instead and to stipulate necessary terms and conditions in connection therewith according to his discretion. Non-removal from the list of subscribers or non-substitution of another in such cases shall not be construed as having allowed the defaulter to continue as a subcriber as forfeiture takes place automatically in the case of three consecutive defaults.
Clause 13-Consequence of Forfeiture In the case of forfeited ticket the subscriber concerned shall lose all benefits of dividends accrued and all other privileges attached to the ticket. But the number comprising the ticket shall continue to remain in the lot which, when drawn in any of the subsequent drawing entitles the defaulter to the actual amount subscribed for by him exclusive of all dividends and less the amount ofRs. 1,20,000 of the particular ticket being commission of the foreman. The amount which is thus entitled will be paid after four months since the date of the drawing of his defaulted tickets on surrendering the chit pass book together with requisite discharge receipts.
(Emphasis supplied)
11. It is undisputed fact that the respondent, Mr. Benny had defaulted payment of 9th, 10th and 11th instalments of 'Kuri' and by virtue of the provisions of the 'Variola', the chit of the complainant was liable to be forfeited automatically without any further notice.
12. The balance in the account of Shri Benny on the date of the 11th instalment of the Chitty falling due on 27.12.1999 in the daily collection account was only Rs. 1,218.45. At the same time, the defaulted amount was Rs. 34,364.10. A simple reading of the Clauses 12th and 13th of 'Variola' indicates that the number of the complainant's chitty was allowed to remain in the lot for drawing purposes, therefore, as per the terms and conditions of the forfeiture in spite of the fact that complainant had won the prize in the draw, no amount was payable to him by as he had defaulted three consecutive instalments of chitty and, therefore, he was liable for automatic forfeiture. Further, as per the terms of 'Variola' he was entitled to the balance amount from the amount paid by him after deducting the amount of Rs. 1,20,000 being the foreman's commission.
13. The cursory glance of the 'Variola' indicates that it appears to be one sided but these are the contractual terms accepted by all the subscribers. Accordingly it is clear that Shri Benny is not eligible for the prize amount.
14. The learned Counsel for the Chit Fund submitted that as per the order of this Commisison, he had deposited Rs. 80,000 with the Registrar of this Commission. He was fair enough to say that Chit Fund is willing to pay reasonable rate of interest on this amount from the date of drawal of lots.
15. Accordingly, we hereby set aside the order of the learned State Commission of the Kerala and allow the appeal. However, we direct that the amount of Rs. 80,000 deposited with this Commission may be withdrawn by the respondent. The foreman of Chit Fund imposes 12% interest on the delayed payment by the subscribers. Therefore, the appellant shall also pay 12% on this amount of Rs. 80,000 from the date of the drawal of lots i.e., 27.12.1999 till the date of payment. There shall be no order as to costs.