Date:28/07/2007 URL: http://www.thehindu.com/2007/07/28/stories/2007072858750600.htm

Andhra Pradesh

Chit company told to pay compensation

Prabhakkar Sharma

Failure to give intimation amounts to deficiency in service

VISAKHAPATNAM: Failure to intimate non-acceptance of sureties and keeping the complainant in the dark by a chit fund company resulted in the Visakhapatnam District Consumer Forum-I allowing the complaint with payment of bid amount, compensation and costs.

An employee of Railways, Surakattula Srinath, residing in Akkayyapalem joined a chit series of Shriram Chits Private Ltd., behind Sangam-Sarat Theatre in the city. He was to pay Rs. 1,000 a month for 50 months.

After paying 18 instalments, he participated in auction and became the highest bidder forgoing Rs. 9,300.

After deducting the commission, he was to get Rs. 40,700.

The consumer furnished guarantors but the chit fund company delayed the payment. Vexed with it, the consumer filed a complaint (674/2006) against Shriram Chits Private Ltd.’s branch manager (Opposite Party -OP 1) behind Sangam-Sarat Theatre and also against its Managing Director/Chairman (OP 2) at Hyderabad, seeking a direction to repay the bid amount with compensation for mental agony and costs.

Counter filed

The OP 1 filed a counter and OP 2 adopted the same. The OP denied the allegations specifically and said that as per the terms of the chit agreement, the complainant had to produce three independent guarantors whose net salary was Rs.3,000 a month with current monthly payslips.

It further contended that the complainant furnished first guarantor by name P.V. Rama Rao who already stood as guarantor for another subscriber while another guarantor S. Venugopal was a defaulter in a chit of the company and a suit was filed against him for recovery. Therefore, the complainant himself was responsible for not releasing the prize money in time, it argued while seeking the dismissal of the complaint.

President of the Forum Y. Dhilleswara Rao and member D. Suseela, in their verdict earlier this month, opined that the OP should have intimated the fact of non-acceptance of the sureties. It had not filed any document showing it had informed the complainant about the disqualification for acceptance of sureties.

“Since the opposite parties failed to intimate the fact of non-acceptance of sureties of P.V. Rama Rao and S. Venugopal and consequently kept the complainant in the dark, we hold there is deficiency in service,” the Forum said.

In the result, the OPs were directed to pay the bid amount of Rs.40,700 to the consumer on production of three sureties other than P.V. Rama Rao and S. Venugopal.

The Forum further directed the Ops to pay Rs.3,000 towards compensation for causing mental agony to the consumer and Rs. 500 towards litigation costs.

The consumer should continue to pay the balance monthly subscription until the bid group was terminated, the Forum added.