Syed Abdullah - (1.)The unsuccessful opposite parties preferred this appeal against the order directing payment of Rs.2,63,500/- with interest at 12% pa from 28.06.2004 with compensation of Rs.15,000/-and costs of Rs.3000/- pertaining to the chit fund transaction. The order is assailed as erroneous since the chit transaction in between the parties is unauthorized and that it is an illegal contract which cannot be enforced.
(2.)The facts of the case are that the opposite party approached the complainants father and lured him to join in the chit. So his father took membership in the chit Group No. STM -2M-17 for a value of Rs.2,10,000/- for a period of 30 months and for each month Rs.7000/- to be paid and the chit commenced in the month of December, 99 and it was completed by 29.06.2002. The opposite party again induced that they are conducting unauthorized chit and in case he becomes a member he will get more profits for a value of Rs.2,50,000/- for a period of 25 months and that for each month Rs.10,000/- is to be paid. The said chit commenced from march, 2001. Regular chit instalments were paid in the first chit STM-2M-17 by 29.06.2002. The complainants father requested the second opposite party for repayment of chit amount. At last he gave two cheques one for Rs.one lakh in the name of the complainants father and for Rs.2,50,000/- in the name of the complainant as a bearer cheque. The complainants father presented his cheque which was honoured but the second cheque which was bearer cheque was dis-honoured for want of funds. The complainants father insisted the opposite parties company to pay the amount covered by the second cheque. He has promised to adjust within 10 or 15 days. Again the cheque was presented but it was once again dishonoured. The complainants father stopped paying the remaining instalments to the opposite party pertaining to the second chit. About 18 instalments @ Rs.10,000/- were paid in the second chit. So also, demanded for payment of Rs.92,500/- given under the second cheque. But the opposite parties postponed payment of the total amount of Rs.2,72,500/- on some pretext or the other. Non-payment of the amount by the opposite parties amounts to deficiency in service.
(3.)The first opposite party filed its counter which was adopted by the second opposite party denying the allegations made in the complaint. With regard to payments covered by unauthorized chit was denied totally.