SHRIRAM CHITS P LTD., REP. BY ITS MANAGER Vs. JAMMI ASIRAYYA

JUDGEMENT

(1.) The opposite parties have filed the appeal challenging the order passed by the District Forum whereby they were directed to pay Rs.46,000/- together with interest and costs.

(2.) The respondent was a subscriber in chit group bearing No.KLL7/17 conducted by the appellants. The value of the chit was Rs.one lakh payable on monthly subscription of Rs.2,000/- which was paid on 14.4.2003. The chit would last over a period of 50 months. The respondent was declared successful bidder in the auction conducted on 20.9.2003 by the appellant no.1 whereby he had agreed to forego Rs.49,100/- and 5% towards foreman commission. The respondent was offered an amount of Rs.46,000/-. In the month of April 2004, the respondent offered sureties and signed the documents as required by the appellant no.1 who accepted them and promised to pay the bid amount within 30 days therefrom. The appellant no.1 has issued acknowledgement slip but has not paid the bid amount to the respondent and despite that the resonant paid the instalments regularly till 25.8.2004. The respondent was bedridden and due to his ill health he could not pay the balance instalments. The appellant no.1 without making payment of the bid amount issued a notice dated 6.2.2005 demanding the respondent and the sureties to pay the instalments due. The respondent paid an amount of Rs.4,000/- towards due and requested for time for payment of the entire instalments due. The respondent has got issued a reply dated 23.3.2005 with a request for grant of time as also demand for the bid amount. On 29.3.2005 the respondent expressed his readiness to clear of the instalments and demanded the appellant no.1 to pay the bid amount. The first appellant refused to receive the installments amount and threatened the respondent that they would withdraw the bid amount deposited in the bank and thereafter they would file a suit against the respondent and surety. The appellant no.1 adjusted an amount of Rs.13,438/- from the bid amount towards the instalments due without obtaining the consent of the respondent and to the effect endorsed in the passbook issued by them.

(3.) The respondent got issued notice dated 25.7.2005 to the appellant no.1stating that the bid amount deducted without consulting him was illegal and as such demanded the appellant No.1 to pay the bid amount whereon the appellant no.1 did neither give any reply nor pay the bid amount to the respondent. The appellant no.1 without obtaining the consent of the respondent obtained Road Safety Club Pvt. Ltd., membership certificate dated 30.9.2003 and 30.7.2003 in the name of the respondent by deducting certain amount from the bid amount. The respondent is an un-employee and he has been running electrical article repairing business. For the purpose of developing his business the respondent subscribed to the chit and participated in the auction as also furnished the sureties as required by the appellant no.1. The appellant no.1 by retaining the bid amount with it, had caused inconvenience and financial loss, mental agony, frustration to the respondent and the sureties. 3. The appellant no.1 filed counter and the same was adopted by the appellant no.2. It was contended that the respondent without following the rules participated in the auction and became successful bidder on 20.9.2003 but failed to furnish sufficient sureties to release the prize money. As per the agreement the respondent was required to furnish four employees surety whose net income should cross Rs.8,000/- per month. The respondent after a period of 8 months i.e., in the month April 2004 furnished two sureties whose income was not upto the mark. The appellant no.1 released the prize money of Rs.41,000/- and deposited the said amount with Sriram Investment Limited under FDR No.3782892. The respondent gave consent for obtaining insurance card for a sum of Rs.1,500/-. Total prize money was Rs.54,100/-. Rupees 41,000/- was deposited in the name of the respondent with the Shriram Investment Limited. The respondent committed default in making payment of regular monthly instalments. As per the agreement the appellant no.1 encashed the FDR of the respondent and has been paying the instalment amount regularly by awarding dividends to the respondent. The appellants acted in accordance to the rules of A.P. Chit Fund Act, 1971 and encashed the FDR with the knowledge and consent of the respondent. Hence prayed for dismissal of the complaint. The respondent has filed his affidavit. Exs.A1 to A10 were marked on his side. The Manager of the appellant no.1 company has filed his affidavit in support of their case. The District Forum allowed the complaint holding that the respondent was entitled to the prize amount of Rs.40,000/- with interest @ 12% per annum and an amount of Rs.25,000/- towards compensation and Rs.1000/- towards costs.