Chit Fund Company Liable For Improper Passbook Entries, Thrissur Consumer Commission Directs Refund Of ₹1.99 Lakh

The Consumer Disputes Redressal Commission, Thrissur, comprising C.T. Sabu (President), Sreeja S. (Member) and Ram Mohan R. (Member), partly allowed a consumer complaint against Dhana Kendra Kuries & Loans (P) Ltd., holding that although the complainant was not entitled to the prized chit amount for failing to prove readiness to furnish sufficient security, the chit fund company was deficient in service for failing to properly maintain and endorse instalment payments in the passbook and for failing to refund the amount payable to the subscriber under the chit scheme.

Brief Facts

The complainant, Paulson M.O., had subscribed to a chit fund (kuri) conducted by Dhana Kendra Kuries & Loans (P) Ltd. under the “14th Day Pooval Kuri” scheme. The chit consisted of 50 instalments of ₹7,000 each. According to the complainant, he had regularly paid 33 instalments and successfully bid the chit at the 33rd instalment held on 14-11-2017, becoming entitled to a prized amount of ₹2,64,500.

The complainant alleged that despite being ready and willing to furnish the necessary security for payment of the prized amount, the opposite party failed to disburse the amount. He further claimed that even after issuing a legal notice demanding payment, the opposite party neither released the prized sum nor provided any satisfactory response.

Aggrieved by the non-payment of the prized chit amount, the complainant approached the Consumer Disputes Redressal Commission, Thrissur, alleging deficiency in service on the part of the chit fund company and seeking payment of ₹2,64,500 along with compensation and costs.

Contentions of the Opposite Party

The opposite party admitted that the complainant was a subscriber to the chit and that he had become entitled to a prized amount of ₹2,64,500. However, it contended that the complainant had failed to furnish sufficient security for the payment of the remaining instalments, which was a prerequisite for release of the prized amount. The opposite party maintained that it was always willing to release the amount if the complainant provided adequate security and, therefore, denied any deficiency in service on its part.

Observation and Decision

The Commission observed that the complainant had failed to produce any evidence to substantiate his claim that he was ready and willing to furnish sufficient security for release of the prized amount. Therefore, the Commission held that the opposite party's refusal to pay the prized chit amount of ₹2,64,500 could not be treated as a deficiency in service.

However, the Commission found fault with the opposite party for failing to properly record several instalment payments in the complainant's passbook, despite admitting receipt of 33 instalments. It held that the opposite party was duty-bound to maintain proper records and refund the amount payable under the terms of the chit scheme.

The Commission further noted that due to the opposite party's failure to properly endorse several instalments in the passbook, it was not possible to accurately compute deductions towards auction discount. Observing that the complainant could not be made to suffer for the opposite party's lapse in maintaining records, the Commission proceeded to determine the refundable amount on the basis of the admitted payments made by the complainant.

Holding this lapse to be a deficiency in service, the Commission partly allowed the complaint and directed the opposite party to refund ₹1,99,500, pay ₹25,000 as compensation for mental agony and financial hardship, and ₹5,000 towards costs, along with 9% interest from the date of filing of the complaint until realization.

Case Title: CC/660/18

Case Title: Paulson M.O. v. Dhana Kendra Kuries & Loans (P) Ltd.

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