Back
TELANGANA STATE CONSUMER DISPUTES REDRESSAL COMMISSION, HYDERABAD
Meena Ramanathan, Member (Non-Judicial) and K. Ranga Rao, Member (Judicial)
Foreman, M/s Akshara Chit Fund Private Limited – Appellant
versus
Ramreddy Sujatha Reddy – Respondent
First Appeal No. 592 of 2022
(Against Orders in C.C. 56/2021 District Consumer Commission, Warangal)
Decided on 21.1.2026
Consumer Protection Act, 2019 – Section 41 – Appeals – Chit Fund Dispute – Deficiency of service in non-payment of admitted liability – Unjustified deductions for GST and surety verification – Complainant was a subscriber to a chit valued at Rs.25,00,000/- – Opposite Party, Chit Fund Company, failed to pay the prized amount, later claiming various “adjustments” toward another chit, future installments, GST, and surety verification charges – Opposite Party admitted a liability of Rs.8,31,754, they failed to pay even this admitted sum to the subscriber, citing the COVID-19 pandemic as a reason for liquidity issues – District Commission directed the payment of Rs.8,50,504 (including refund of unjustified GST and verification deductions) with 18% interest and compensation – Chit Fund Company appealed – Held – State Commission observed that the Opposite Party failed to respond to the legal notice – OP was failed to pay even the admitted amount during the pendency of the complaint – “Deficiency of service and unfair trade practice” – Commission further held that the deduction of Rs.3,750 for surety verification and Rs.15,000 for GST was unjustified in the absence of supporting material – 18% interest rate was maintained given the long delay and nature of the transaction – Order of the District Commission was confirmed – Appeal dismissed.
Result: Appeal dismissed.
ORDER :
K. Ranga Rao, Member – Judicial—The appeal is filed by the Appellant/Opposite Party u/s 41 of the Consumer Protection Act, 2019, against the order passed by the District Consumer Commission, Warangal, dated 31.05.2022 in CC No.56/2021, with a prayer to set aside the said order and consequently dismiss the complaint.
2. For the sake of convenient discussion, the parties are referred to as arrayed in the complaint. The Respondent was the complainant and the appellant herein was the opposite party in the said CC 56/2021.
3. The factual matrix of the complaint is that the complainant had joined as a Member in the opposite party Chit Fund Company vide Chit No. AKZT02S-30 and the chit value is Rs.25,00,000/- payable in 50 monthly installments @ Rs.50,000/- per month. The complainant submits that she had paid 38 installments to the opposite party and participated in the auction conducted on 24.08.2019 conducted by the opposite party and became the successful bidder by foregoing an amount of Rs.4,50,000/-. The opposite party requested the complainant to furnish the sureties, but the complainant instructed the opposite party to deduct the future installments and to pay the remaining prized amount. Having satisfied with the same, the opposite party obtained the signatures of the complainant on several blank printed papers. The complainant also submits that she also joined in another chit i.e. Chit AKZTO9M-11 and the said chit value is Rs.10,00,000/-. The opposite party also not paid the prized amount of the said chit.
4. The husband of the complainant by name R. Sanjeeva Reddy, approached the opposite party for payment of the prize amount, but the opposite party used to dogged the same with one or the other pretext. On 22.02.2021 the opposite party transferred an amount of Rs.1,00,000/- to the complainant through online but failed to pay the remaining amount till date and the same shows that the opposite party intentionally avoiding to pay the prized amount of the chit. The said attitude of the opposite party amounts to deficiency of service. Due to non-payment of the prized amount of the chit of the complainant suffered physically and mentally for which she is claiming Rs.5,00,000/- towards damages.
5. Vexed with the said conduct of the opposite party, the complainant got issued legal notice on 10.04.2021 to the opposite party and the opposite party despite receiving the same did not respond till date. Therefore, the complainant was constrained to file the present complaint seeking the reliefs mentioned therein.
6. The opposite party filed written version contending that the complainant approached this District Commission with unclean hands by suppressing the real facts and by mis-using the process of law. The opposite party submits that there is an Act provided for the disputes arise out of the Chit Fund Act, i.e. the Deputy Registrar of Chits, Warangal.
7. The opposite party admitted that the complainant joined as chit subscriber on 30.12.2016 and signed its chit agreement vide Group and Ticket No.AKZT-T02S-30 and the value of the said chit is Rs.25,00,000/- payable in 50 months @ Rs.50,000/- per month. The opposite party further admitted that the complainant participated in the auction of the said chit conducted on 24.08.2019 and became successful bidder by agreeing to forego Rs.4,50,200/- out of Rs.25,00,000/-. The opposite party contends that it is false that they obtained signatures of the complainant on blank papers without explaining the contents.
8. The opposite party further submits that the complainant joined in another chit vide Chit Group and Ticket No.AKZT09M-11 in the same branch. The complainant executed their undertaking letter in writing in favour of the opposite party to adjust an amount of Rs.3,01,504/- from the prized amount of the chit AKZT02S-30. Therefore, the opposite party adjusted the said amount to the new chit i.e. AKZT09M-11. The complainant also executed the bid adjustment letter in favour of the o
(1) Proof of Deductions – A Chit Fund Company cannot unilaterally deduct charges for “Surety Verification” or “GST” from a prized amount unless they provide concrete evidence or contractual justifica....
(1) Chit amount – having executed Exs. B2 & B5, the complainant is estopped from claiming the chit amount.(2) Documentary Evidence – When the opposite party has come up with such documentary evidence....
Power of National Commission to review under Section 21 of Consumer Protection Act, 1986 is limited to cases where some prima facie error appears in impugned order.
Consumer forums have jurisdiction in disputes involving chit fund operators, and failure to fulfill obligations pertains to deficiency of service under the Consumer Protection Act, 2019.
Cause of Action – Every complaint shall be filed within two years from the date of cause of action.
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
