NIRMAN CREDITS INDIA LIMITED vs Mohinder Pal Singh

THIS appeal is by the opposite party - M/s. Nirman Credits India Limited challenging order of District Forum, Amritsar dated January 27,1998 whereby direction was given to the appellant to pay Rs. 87,200/- with Rs. 500/- as costs to the complainant Mohinder Pal Singh. On facts there is not much dispute. Thus they can be summarised as arisen out of the pleadings of the parties.

MOHINDER Pal Singh became Member of the Chit Fund Scheme initiated by the opposite party, the appellant. 25 Instalments of Rs. 4,000/- each were to be paid by MOHINDER Pal Singh. Factually he made payment of 22 instalments. The scheme was to be completed in August, 1997. The amount of dividend declared every month was to be paid to the Members after deducting service charges of 5% of the amount of the scheme. On maturity of the scheme since the amount was not paid, District Forum was approached. The opposite party took up the stand that when fault was committed in payment of the instalments, the complainant was asked to approach the office of the opposite party and to settle the account on maturity of the scheme. But he did not come. Hence there was no deficiency in rendering service Both the parties led their evidence on affidavits and documents, on the basis of which the impugned order was passed. Mr. Updip Singh, learned Counsel for the appellant, the opposite party after referring to terms and conditions of the scheme has argued that on commission of default in payment of the instalments, the Member was not entitled to the dividend and further he was liable to pay service charges of 5% of the total amount of the scheme. It was on that basis that his account was to be settled. Clause 4 of the Rule and Regulations of the scheme, Annexure A-3 extract reads as under : "In case the subscriber member fails to deposit the subscription by the due date he/she will be required to pay late fee of two paise per rupee for the first month and if the default, is continued for the second month, the Company may refuse the benefit of dividend. In case of default of payment is continued for the third month also, the Company will be at liberty to remove his/ her name without any intimation. In that case subscriber-member will be entitled to refund of his actual amount paid which would not include dividend earned from other subscribers-members as reduced by Company''s commission @ 5% of the total chit value and any dividend earned by such member shall stand forfeited in favour of the Company."

A simple reading of the regulation referred to above would show that in case of default in payment of any instalment, the opposite party if so advised could order non-payment of dividend to such a member. But in the present case no such decision was taken by the appellant at any stage declining the entitlement of dividend to the complainant. The right of the appellant was optional to deny dividend to such a member and it was not automatic or compulsory in all cases of default. Thus after the complainant had approached the District Forum for the relief that his account had not been settled, the appellant could not arguely upon Rule 4 referred to above to deprive the complainant of his legitimate right of earning dividend on the instalments of the chit fund already made.

In the present case only three instalments of the chit fund were not made by the complainant and obviously there is no question of rendering service for those three instalments. The District Forum, therefore rightly came to the conclusion that the appellant was entitled to deduct service charges amounting to Rs. 4,400/- only from the total amount payable to the complainant.

THE contention of Counsel for the appellant that after maturity of the scheme the complainant was to approach the appellant for getting the amount settled and receive the payment cannot be accepted. It was the duty of the appellant which was maintaining accounts, on maturity of the scheme to settle the account of all the members as per rules and regulations. Such action was not dependent upon any member approaching them for the relief. THEre was thus deficiency in rendering service on the part of the appellant. THE District Forum thus rightly granted the relief. We find no ground to interfere with the same. THE appeal is dismissed with costs of Rs. 500/-. Appeal dismissed.