The Hindu : Andhra Pradesh / Visakhapatnam News : Chit fund company told to repay

Online edition of India's National Newspaper
Saturday, Apr 16, 2005

Andhra Pradesh

Andhra Pradesh - Visakhapatnam

Chit fund company told to repay

B. Prabhakara Sarma

Deficiency in service, unfair practice cited

VISAKHAPATNAM: A chit fund company has been directed by the Visakhapatnam District Consumer Forum to repay the money to a consumer with interest for deficiency in service and unfair trade practise.

A textile businessman in the city, I. Satyanarayana, joined a chit group of Margadarsi Chit Fund at its KGH Down branch in October 2000 for a total value of Rs.2.5 lakhs with a monthly subscription of Rs. 5,000 for 50 months.

He became a successful bidder in June 2001, forgoing Rs.99,500 and submitted two sureties.

But the chit fund agency failed to pay. Instead, it deducted the future instalments and deposited the amount without the consent of the consumer.

The consumer had to move around its office and finally the latter sent letters in March and April 2002 stating that the amount was adjusted towards the subscription.

Complaining this act as arbitrary, illegal and amounting to deficiency in service, the consumer filed a complaint (Consumer Dispute no: 1471/2003) against the chit fund office in the Forum seeking compensation for mental agony. The opposite party in its counter said that on verification the sureties were found to have been offered for his wife's chits in which they had become defaulters.

Suits were also pending in court against this, and as per rules, the money, after adjusting for future instalments, was kept in deposit, it explained. The Forum President, C. Rambabu, and its Members, D. Suseela and G. Viswanatha Reddy, in their verdict on Wednesday, felt that the chit fund company was justified in saying that the sureties offered by the consumer were not acceptable and also in depositing the amount as per rules.

``But now the chit period is completed and the amount due by the consumer has already been adjusted from the prize amount. There are no dues but the opposite party had failed to pay the money. On the other hand, it is insisting on execution of surety bonds.

When liability has been discharged, we don't think the opposite party is justified in this. The amount lying with them belongs to the consumer who is entitled to payment of Rs.73,668.20,'' they said and held that retention of the money amounted to unfair trade practise and deficiency in service..

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