2001 (5) TMI 902 - Commission - Companies Law

Summary

Issues:
1. Jurisdiction of the District Forum under the Consumer Protection Act regarding disputes arising from a chit fund scheme.
2. Interpretation of Section 64 of the Chit Fund Act and its applicability in resolving disputes related to chit business.
3. Adjustment of chit fund amount against a loan taken by a family member.
4. Validity of the State Commission's decision to award the complainant the due chit fund amount with interest.

Jurisdiction of District Forum under Consumer Protection Act:
The case involved a complaint by the respondent against the petitioners regarding denial of chit fund amount. Initially, the District Forum dismissed the complaint citing Section 64 of the Chit Fund Act, stating it was not maintainable under the Consumer Protection Act. However, the State Commission allowed the appeal, emphasizing that there was no bar to its jurisdiction under the Act. The State Commission directed the payment of the due amount to the complainant with interest, rejecting the argument that the District Forum lacked jurisdiction. The National Consumer Disputes Redressal Commission upheld the State Commission's decision, emphasizing that the Consumer Protection Act does not restrict the Forum from deciding disputes arising under the Chit Fund Act.

Interpretation of Section 64 of the Chit Fund Act:
The petitioners argued that disputes related to chit business should be referred to the Registrar for arbitration as per Section 64 of the Chit Fund Act. However, the Commission clarified that the Registrar could arbitrate on disputes mentioned in the Act, but there was no bar on the jurisdiction of the District Forum, State Commission, or National Commission under the Consumer Protection Act. The Commission highlighted that the Consumer Protection Act is a benevolent legislation, and its provisions should be liberally considered. It concluded that the Forum under the Consumer Protection Act is not prohibited from deciding disputes arising under the Chit Fund Act, rejecting the contention that disputes should be entertained by the Registrar under the Chit Fund Act.

Adjustment of Chit Fund Amount Against Loan:
The State Commission correctly held that the amount due to the complainant from the chit fund could not be adjusted against any loan owed by his father. The complainant was wrongfully denied the due amount, and the State Commission's decision against the petitioners was upheld by the National Consumer Disputes Redressal Commission.

Validity of State Commission's Decision:
The State Commission's decision to award the complainant the due chit fund amount with interest was deemed valid by the National Consumer Disputes Redressal Commission. The Commission dismissed the revision petition filed by the opposite parties, affirming the State Commission's ruling in favor of the complainant.