Decided on March 03,2006

Registrar Of Chit Funds Appellant
S S Marketing Respondents


- (1.) THE short question arising in this appeal directed against order dated 19.2.2002 passed by District Forum is whether the Consumer Forum has the power to direct the appellant in releasing the amount to the respondent in view of the mandatory provision of Section 12(2) of Madras Chit Fund Act, 1961 .
(2.) BROAD facts are more or less admitted and are as under: Respondent was a member of chit fund company vide Chit No. DCP -7 and was making monthly subscription of chit of Rs. 12,000. The total value of chit deposited during a period of 25 months was Rs. 1,10,536. The chit collection had commenced on September, 1998. The amount was paid by the respondent to the appellant through cheques, the details of which have been given as evidence in statement of account. The respondent had paid 23 instalments out of 25 instalments. In the month of July, respondent found that the company had closed down and the director was absconding. The respondent complained before the Registrar, Chit Funds and received a notice from them. Respondent was informed by the inspecting officers that no representative of the company Digamber Chits Pvt. Ltd. had come forward in response of the complaint. On 13.12.2000, the appellant received a notice/letter No. F. 2/complaint/3657 that due to non -cooperative attitude of the directors of the company/Digamber Chits Ltd. they were advised to seek legal remedy. During investigation, respondent had found out that Rs. 5,00,000 are in fixed deposits with the Registrar of Chit Fund in the name of Digamber Chit Pvt. Ltd.
(3.) THERE is no dispute that respondent S.S. Marketing was a member of chit fund company vide No. DCP -7 and was a holder of Ticket No. 960. However, appellant showed their inability to produce the records of all subscribers who were satisfied and also inability to settle the amount of respondent. The relevant clause of Section 12 is as under: (3) Subject to the provisions of Section 520 of the Companies Act, 1956 (Central Act 1 of 1956), the security given by all the foremen under Sub -section (1) shall not be liable to be attached in execution of a degree or otherwise (i) until the chit is terminated and the claims of all the subscribers are fully satisfied; (ii) until all dues payable by the foreman under this Act to the Registrar or any other officer have been paid; (iii) where owing to the default of the prized subscriber the prize amount due remains unpaid even after the termination of a chit until the foreman deposits such amount in an approved bank mentioned in the chit agreement and intimates in writing the fact of such deposit to the prized subscriber; (iv) The Registrar shall, after the termination of a chit and after satisfying himself that the requirements under Clauses (i) to (iii) of Sub -section (3) have been complied with, release the property charged by way of security or order the release of the cash security or the Government securities referred to in Sub -section (1) and in so doing he shall follow such procedure as may be prescribed.;

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