Oral Order (As per R.Lakshminarsimha Rao, Member)
The opposite parties are the appellants. The appeal is challenge to the order passed by the District Forum which passed the award against the appellants for refund of a sum of Rs. 2,10,000/- along with interest.
The facts of the case are that the complainant is the subscriber of the opposite parties chit fund company under chit series No.JLC6-35 and JLC6-45 for the chit value of Rs.5 lakhs each for 50 months and monthly subscription for Rs.10,000/- each. In the month of October 2004 the complainant participated in auction. He was successful bidder in the chit No.35 and he fulfilled all the formalities and produced the sureties to the satisfaction of the opposite party no.1 but the opposite parties instead of disbursing the chit amount deposited the same vide FDR Nos.HZC-5563132 to 5563135 of Rs.50,000/- each totaling to Rs.2 lakhs in sister concern company of opposite parties firm i.e., Shriram City Union Finance Ltd., and the remaining balance amount adjusted to the future instalments in another chit No.JLC6-45 without obtaining the consent of the complainant. It is the duty of the opposite parties is to kept the prized amount in any nationalized bank.
The complainant was also successful bidder in Chit No.JLC6-45 in auction held on 20.3.2005. After foregoing an amount of Rs.1,12,000/- the complainant was entitled to the prize amount of Rs.3,80,000/-. Even after fulfilling all the formalities the opposite parties failed to pay the prize amount to the complainant. After several visits to the opposite parties, they informed that the complainants name was removed from the chit No.45 and the chit was transferred to some third person on 26.8.2005. The opposite parties adjusted the amount in chit no.45 upto June 2005. Till June 2005 the complainant subscribed a total amount of Rs.1,54,000/-Thus the complainant is eligible to total sum of Rs.2,10,000/- with interest. The opposite parties acted against the public interest and against the provisions of chit fund Act and Rules.
The opposite party no.1 filed counter which was adopted by the opposite parties no.2 and 3 and the opposite party no1. contended that the complainant is not a consumer and the dispute is not a consumer dispute under the C.P. Act. The opposite parties admitted the subscription of the chit No.JLC6-35 and 45 by the complainant and also admitted that the complainant was successful bidder in chit no.35 in the month of October 2004 but the complainant failed to furnish the required sureties to the satisfaction of foreman as such there was delay in disbursing the prize amount. The complainant became successful bidder in chit No.JLC6-45 in auction held on 20.3.2005. The complainant has not furnished sufficient sureties. The complainant is the defaulting subscriber. He is entitled to amount of Rs.1,29,498/- only which is the actual amount paid minus 5% of the chit value. The complainant is also not entitled to receive Rs.1,29,498 unless the complainant clears the outstanding dues of the chit Nol.JLC6-35.
The complainant has filed his affidavit and the documents Exs.A1 to A9.
No affidavit was filed by the opposite parties except the documents Exs.B1 to B4.
Feeling aggrieved by the impugned order the opposite parties have filed the appeal contending that the respondent had not furnished sufficient sureties and as such the appellant could not release the prize amount as also that the respondent was due of arrears to the appellants pertaining to the chit fund transaction.
The points for consideration are:
1) Whether the respondent is entitled to the prize amount?
2) Whether the appellants had deposited the prize amount with Shriram Finance with the consent of the respondent?
3) To what relief?
POINTS NO.1 and 2 The respondent joined the chit group bearing No.JLC6-35 and JLC6-45 by making payment of a sum of Rs.10,000/- each towards monthly subscriptions. The chit value Rs.5 lakhs each and the period of the chit was 50 months. The respondent participated in the chit auction conducted by the first appellant company in the month of October 2004 and he was declared successful bidder in chit No.35. It is the contention of the respondent that he had fulfilled all formalities and produced the sureties to the satisfaction of the oppose party no.1 but instead of disbursing the prize amount the opposite party no.1 deposited the prize amount vide in four FDRS of Rs.50,000/- each in Shriram City Union Finance Limited and the remaining balance amount adjusted to the future installments of another chit No.JLC6-45 without obtaining the consent of the complainant.
The obligation is cast upon the appellant no.1 company to deposit the prize amount, in case of the failure of the respondent who was declared successful bidder to furnish sufficient sureties to the satisfaction of its foreman, in any national bank. The appellant no.1 has not deposited the amount in any scheduled bank and instead it has invested the prize amount with the sister concern M/s Shriram City Union Finance Ltd.,
Section 22(2) of the Chit Funds Act has made it mandatory for the chit fund company to deposit the amount i.e., the prize amount in any Nationalized Bank mentioned in the chit Agreement on account of failure on the part of the successful bidder in regard to furnishing of the sureties. Section 22(2) of the Chit Funds Act reads as under:
2) If, owing to the default of the prized subscriber, the prize amount due in respect of any draw remains unpaid until the date of the next succeeding installment, the foreman shall deposit the prize amount forthwith in a separate account in an approved bank mentioned in the chit agreement and intimate in writing the fact of such deposit and the reasons therefore to the prized subscriber and the Registrar:
Provided that where any prized subscriber does not collect the prize amount in respect of any installment of a chit within a period of two months from the date of the draw, it shall be open to the foreman to hold another draw in respect of such installment.
The appellants have not discharged the duty cast upon them by virtue of Sec.22(2) of the Chit Funds Act. It is true, the respondent has not furnished sufficient sureties to the appellant no.1 at the same time it cannot be lost sight of the fact that the respondent had furnished the copy of title deed of the house bearing door No.4/220 and 4/221 in addition to other documents including the E.C. It does not empower the appellants to invest the prize amount in a private finance company against the mandate of Sec.22(2) of the Chit Funds Act.
Another contention of the complainant that he was also successful bidder in chit No.JLC6-45 in auction held on 20.3.2005 by foregoing an amount of Rs.1,20,000/- out of the chit amount. The opposite party even after furnishing sufficient surety/guarantee to the satisfaction of opposite party no.1 in respect of the chit no.45 by way of depositing the title of property (house) of complainant along with encumbrance certificate the opposite parties have not released the prize amount to the complainant. On the other hand the case of the opposite parties is that the complainant failed to furnish sufficient sureties to the satisfaction of the opposite party no.1in respect of the chit no.45. It is also denied by the opposite parties that the complainant deposited the title deed by way of guarantee for the chit amount. The passbook evidences payment of the monthly subscriptions till 21 instalments by the respondent in the chit No.JLC6-45. The complainant has not adduced any evidence in support of his contention that he had furnished the title deed as security for payment of future instalments on his being declared as successful bidder.
The complainant has been claiming the entire prize amount of the second chit which in fact is not due to him. The claim of the complainant in respect of the second chit i.e., Chit No.JLC6-45 to an extent of Rs.1,54,498/- is not disputed even according to the version of the opposite party. What all the opposite party claims in terms of clause 17 of the chit agreement, the complainant is entitled to the extent of Rs.1,25,498/- and this amount is subject to deduction of 5% of the chit value. As aforesaid, the opposite party has invested the prize amount relating to the first chit in a non-banking institute against the provisions of the chit fund Act. For the lapse on the part of the opposite party the complainant certainly might have suffered hardship and mental tension for which we award the amount equal to the 5% of the chit value as claimed by the opposite party. In that view of the matter, the opposite parties are liable to pay the amount of Rs.1,54,498/-. Accordingly the order passed by the District Forum is liable to be modified.
In the result the appeal is partly allowed modifying the order of the District Forum. The opposite parties no.1 to 3 are directed to pay the amount of Rs.1,54,498/- with interest @ 9% per annum from the date of complaint till payment. There shall be no order as to costs.