SHRIRAM CHITS And INV. P. LTD. vs N.VALLIAMMAI

THIS appeal is by the opposite party Shriram Chits & Investments Pvt. Ltd., against which an award has been passed by the District Forum, Madras (North).

THE first complainant N. Valliammai had joined the Chit Group of the opposite party Company in series FXL 3, and became a successful bidder in the auction held on 11.4.1993 and received a sum of Rs. 48,900/-. For due payment of the future instalments she executed a Promissory Note alongwith 2nd and 3rd complainants as sureties. According to the complainants, the 1st complainant had paid the monthly instalments regularly and there was no instalment amount due. But after receipt of the full instalments, on 30.6.1995 the opposite party deliberately sent a legal notice dated 24.6.1995, which has been despatched only on 5.7.1995 and received by the complainant on 6.7.1995, stating that there were arrears. Further the opposite party failed to return the promissory note executed by the complainants and the guarantee bond executed by the 3rd complainant. THE complainants called upon the opposite party to return the said documents but the opposite party failed to do so. On these grounds alleging deficiency in service on the part of the opposite party the complaint has been filed praying for return of the documents and for compensation. The opposite party contended inter alia that the complaint is not maintainable in view of Section 64 of the Chit Funds Act, 1982 and there was no deficiency in service on their part.

During the pendency of the proceedings, it appears, the opposite party have returned the documents in question.

THE District Forum held that there was deficiency in service on the part of the opposite party. It further held that the dispute in question is not touching the management of the chit business and therefore the complaint is not hit by Section 64 of the Chit Funds Act. THE District Forum passed an award directing the opposite party to pay a sum of Rs. 15,000/- as compensation with a cost of Rs. 500/-. Now in the appeal it is argued that the District Forum is in error in holding that the dispute in question does not come within the purview of Section 64 of the Chit Funds Act, and the complainant is incompetent because of the provisions in the said section. This Commission in its order in "M/s. Selvam Chit Funds v. Alagu Sundaram", II (1996) CPJ 437, has held that regarding the matter which comes under Section 64 of the Chit Funds Act, 1982, a consumer complaint cannot be filed. It is not in dispute that the controversy in the present matter arises out of a chit transaction. The complaint is that the opposite parties failed to return the Promissory Note and Bond executed in connection with a chit transaction. A reading of Section 64 especially the explanation under Sub-section (i) clearly shows that the present claim of the complainant i.e., return of the Promissory Note and the Bond executed in connection with the chit transaction is a dispute that comes within the meaning of a dispute touching the management of a chit business. Therefore we are of the view that the District Forum was in error in holding that the dispute does not come within the ambit of Section 64 of the Chit Funds Act. In view of Section 64 of the Chit Funds Act, 1982 the complaint cannot be maintained.

IN the result, the appeal is allowed, the order of the District Forum is set aside and the complaint is dismissed. However, there will be no order as to costs. Appeal allowed.