Sriram Priya Chit Fund Pvt Ltd vs Punna Ramu

SRIRAM Priya Chit Fund Pvt. Ltd./Opposite Party No.1 has challenged the order of A.P. State Consumer Disputes Redressal Commission (for short the State Commission) in this Appeal. The order was passed in CC No. 44 of 2005. The State Commission has allowed the Complaint of Complainant Punna Ramu and made the following award in his favour:

"In the result, the complaint is allowed and the first opposite party is directed to pay the following amounts: To pay a sum of Rs.8,00,000/ - under Chit Group No. RLG 4/30 with interest at 9% p.a. from the date of termination of the chit i.e., from May, 2004 till the date of realization; To pay a sum of Rs.9,50,000/ - under Chit Group No. RLG 4/32 with interest at 9% p.a. from May, 2004 till the date of realization; To pay a sum of Rs.1,37,500/ - under Chit Group No. RLF 10/21 with interest at 9% p.a. from 9.8.2003 till the date of realization; To pay a sum of Rs.1,12,500/ - under Chit Group No. RLF 10/22 with interest at 9% p.a. from 9.8.2003 till the date of realization; To pay a sum of Rs.25,000/ - to the complainant towards compensation for mental agony; and To pay costs of Rs.5,000/ -. Time for compliance 6 weeks failing which the amount would attract an interest of 12% p.a."

THE case of the Complainant Punna Ramu before the State Commission related to his participation in four chits between 2002 and 2004. The complaint petition gives details of four different chits, which were subscribed by the Complainant. It is claimed that the Complainant had liberty to deduct the accrued dividends of a previous month while paying the subscription in the current month. He had paid his subscription in this manner for 39 instalments out of 40 in Chit No.RLG 4/32. Similarly, in Chit No.RLG 4/30, the Complainant had paid 32 instalments. In this chit allegedly the prize was declared in the 23rd instalment but not paid to the Complainant, despite the fact that he was the successful bidder for it.

ACCORDING to the Complainant, in Chit No RLG 4/30 total receivable from the OP -1 was Rs.8 Lakhs, against which no amount was received by him. The other two chits subscribed by the Complainant were RLF 10/21 and RLF 10/22. It is claimed in the Complaint Petition that in both these Chits, 9 out of 11 instalments were paid. Allegedly, as the prize money in RLG 4/30 was not paid to him, the Complainant stopped payment of further instalment due to loss of confidence in the OP -1. Even OP -1 had stopped sending his representatives for collection of further subscription from the Complainant. In the above background of non -payment of his claims, Complainant/Respondent filed the consumer complaint in July, 2006 before the State Commission with the following prayer: " i) Rs.8,00,000/ - (Rupees Eight Lakhs only) with interst @ 24% per annum from the date of termination of the chit i.e. from May, 2004 to till the date of realisation which is due and payable under the chit reference No. RLG4/30.

ii) Rs.9,50,000/ - (Rupees Nine Lakhs and Fifty thousand only) with interest @ 24% per annum from May, 2004 to till the date of realisation which is due and payable under chit reference No. RLG4/32.

iii) Rs.1,37,500/ - (Rupees One Lakh Thirty Seven thousand and Five hundred only) with interest @ 24% per annum from 9 -8 -2003 to till the date of realisation which is due and payable under chit reference No. RLF10/21.

iv) Rs.1,12,500/ - (Rupees One Lakh Twelve thousand and Five hundred only) with interest @ 24% per annum from 9 -8 -2003 to till the date of realisation which is due and payable under chit reference No. RLF10/22.

v) Rs.2,00,000/ - (Rupees Two Lakhs only) towards compensation for mental agony hardship and serious inconvenience.

vi) Rs.20,000/ - (Rupees twenty thousand only) towards costs of the case."

In respect of Chit No RLG 4/30, the Written Statement of the Appellant/OP -1 before the State Commission claimed that Rs.1.50 Lakhs being the dividend earned, was credited to his account in this Chit. It is admitted that the Complainant was entitled to the prize money of Rs.6.35 Lakhs in this Chit but the explanation of the OP -1 was that out of it Rs.1 Lakh was adjusted to Chit Account No. RLG 4/32, Rs.50,000/ - to RLG 10/21 and another Rs.50,000/ - to RLG 10/22. The OP -1 also claims to have paid the balance of Rs.4,34,933/ - to the sister of the Complainant in two separate cheques, one for Rs.2.00 Lakhs dated 09.01.2003 and the other of Rs.2,34,933/ - dated 04.02.2003.

IN the account of Chit No RLG 4/32, it is stated that dividend of Rs.1.50 Lakhs was ''passed on'' to the Complainant. While the case of the Complainant was that 39 out of 40 instalments had been paid by him, the written response of the Appellant/OP -1 claims that only 34 were paid and that the Complainant was declared a defaulter. It is also claimed that after settlement of the account in this Chit the Complainant was informed that he will be paid Rs.5,20,836.50. However, there is no indication how this amount was eventually paid to the Complainant, if at all.

IN Chit No. RLF 10/21 admittedly 9 instalments were paid and thereafter the Complainant was declared a defaulter. However, as per the pleadings of the Appellant/OP -1 the accounts were settled and an amount of Rs.84,975/ - remained to be paid to the Complainant.

SIMILARLY , in Chit No. RLF 10/22, it is claimed that 9 instalments were paid and after that the Complainant had become a defaulter. The admitted liability towards the Complainant is shown as Rs.45,880/ -. There is no indication how these two amounts were paid under Chit Nos. RLF 10/21 and RLF 10/22. In general a colourless assertion is made that the Appellant/OP -1 is willing to pay the balance of the amount.

THE State Commission in its order of 28.02.2007 allowed the Complaint and made the award as per the details noted earlier in this order. The plea of the Appellant/OP -1 that the dispute involved complicated questions of fact and law, which needed to be referred for detailed adjudication by a Civil Court, has been rejected. The State Commission has held that it is possible to examine what was due and what was paid. Therefore, no complicated question of law and fact is involved. Considering the material on record, we find ourselves in agreement with this view of the State Commission.

DETAILED finding has been recorded by the State Commission in individual Chits. Referring to the admitted liability of Rs.6.53 Lakhs in Chit No RLG 4/30, the State Commission has pointed out the contradictions in the accounts, as rendered by the Appellant/OP -1. As claimed by appellant/OP -1, a letter was written to the Registrar of the Chit Funds that this amount had been paid to the complainant in a Bank cheque of 10.1.2003. If the amount had been adjusted as claimed, there would be no question of writing to the Registrar of Chit Funds that the entire amount had been paid to the Complainant in a bank cheque of 10.01.2003. The other findings of fact reached by the State Commission are : (a) After going through the record it was found that there were no dues in other three Chits. Therefore, there would be no possibility of transferring amounts to them from Chit No. RLG 4/30; (b) The payments of Rs.2.00 Lakh and Rs.2,34,933/ - do not relate to Chit No. RLG 4/30. They relate to refund of fixed deposit made by the Complainant.

(c) As the Complainant had admittedly paid 32 instalments in RLG 4/30, he was entitled to total dividend of Rs.8.00 Lakhs after deducting the four months commission.

ON Chit No. RLG 4/32 the finding reached is that there is no default in payment of instalments by the Complainant. The State Commission has questioned the claim of Appellant/OP -1 that only Rs.5,20,836.50 is payable to the Complainant. The Commission has noted that in a document submitted before the Registrar of Chit Funds the OP -1 had admitted that the Complainant was entitled to prize money of Rs.9.50 Lakhs. In fact, this letter also claimed that the same had been paid to the subscriber SRPF, VJF through a cheque of 24.06.2004. This recipient, as observed by the State Commission, was none other than OP -1 Sri Rampriya Chit Fund itself. It has, therefore, rejected the contention that the amount had already been paid to the Complainant. Coming to the other two smaller Chits (RLF 10/21 and RLF 10/22) the State Commission has noted that admittedly 11 and 9 instalments were paid respectively and thereafter the Complainant had discontinued payment of further subscription, dismayed by the conduct of the Appellant/OP -1. The amounts due in these two cases has been determined as Rs.1,37,500/ - and Rs.11,520/ - respectively with dividends.

WE have gone through the records as submitted by the two sides and heard them at length.M D Bharatkumar, Advocate has been heard for the appellant/OP -1 and Ms. A Subhashini, Advocate for the Respondent/Complainant.

IN the Memorandum of Appeal the Appellant has reiterated its claim that the payment of Rs.2.00 Lakhs and Rs.2,34,933/ - was made to the Complainant in account of Chit No. RLG 4/30 and not as refund of fixed deposit. The Appeal Memorandum, however, does not explain why and under what authority payment due to the Complainant was made to his sister. Learned Counsel for the Appellant Mr. D. Bharat Kumar drew our attention to a hand written letter, signed by one S. Rama Devi and addressed to the Appellant/OP -1, which reads as follows: "I am a sister of P. Ramu. So, I have received prized cheque no.381681 of amount Rs.2,00,000/ - dated 9.1.03. Thanking you, Sir"

THIS undated letter does not carry or mention any authorization from the Complainant to permit S. Rama Devi to receive the payment on his behalf. Learned Counsel could not also explain with what authority such a payment was made and if made on behalf of the Complainant, how was it acknowledged by him for the record of the Appellant/OP -1. Therefore, no credence can be attached to this document. We may add that during the course of arguments Counsel for the appellant was asked by the Bench to show the documentary proof of this payment. He drew our attention to the Account Copy dated 29.06. 2005. It has an entry of payment of Rs.4,34,933/ - dated 9.1.2003. But, if the payment was made in two different cheques as claimed, this Statement showing the total amount as paid on 9.1.2003 - - cannot be documentary evidence of the claimed payment. Learned counsel could not explain but merely stated that the alleged payment was made in two cheques.

ANOTHER ground of appeal is that in a proceeding before Civil Judge, Vijaywada, OP -1 had been directed not to pay Rs.6,34,066/ - to the Complainant. It is claimed that this order prevents the Respondent/Complainant from receiving this amount under Chit No. RLG 4/32. This runs counter to the claim of the Appellant that it had issued a termination notice for the Chit on 03.02.2004. There is no explanation how, more than one and a half years after the close of this Chit, the Appellant undertook before the Civil Court to withhold a sum of Rs.6,34,066/ - from the account of RLG 4/32. More than anything else, no documents are produced to show that this amount had in fact been paid to Sri Jonnalaiagadda, the petitioner before the Civil Court. We therefore agree with the State Commission that the amount remains payable to the respondent/complainant.

GROUND E in the Memorandum of Appeal says that "admittedly the complainant became defaulter in paying the instalments in Chit No RLG 4/32, RLF4/21 and RLF 10/22. Hence he is not entitled to claim dividend occurred in said Chits from the OP -1." This is clear attempt to mislead. The admission of default by the respondent/Complainant was in relation to the other two smaller Chits and not in relation to RLG 4/32. On the contrary, the admitted position in relation to RLG 4/32 is that 39 of 40 instalments had already been paid and the 40th one was paid by a cheque of 3.3.2004.

ON the basis of details as examined above, we find ourselves in full agreement with the award of the State Commission, in so far as it relates to Chit No RLG 4/32. Coming to Chit Nos RLF 10/21 and RLF 10/22, we have noted, earlier in this order, the admission of default by the Respondent/Complainant beyond 9th and 11th instalments. Therefore, in those two cases, deduction of 5% towards Foreman''s Commission is permitted. For the same reason, the claimed adjustment of Rs.50,000/ - each to these two from the amounts payable by the appellant/OP -1 in Chit No RLG 4/30 is also permitted.

THE appeal is partially allowed in the aforesaid terms with no orders as to costs.