The Hindu : Andhra Pradesh / Hyderabad News : Chit fund company fined Consumer Notes

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Andhra Pradesh

Andhra Pradesh - Hyderabad

Chit fund company fined Consumer Notes

K. Vijaya Bhaskara Reddy

State Consumer Disputes Redressal Commission upholds Guntur forum’s judgement

HYDERABAD: Sri Ram Chits Pvt. Ltd. was recently fined for not paying the amount that it was supposed to pay a consumer. In this regard, the A.P. State Consumer Disputes Redressal Commission, Hyderabad, upheld the decision of Guntur District Consumer Forum.

Late Rayavarapu Chandrasekhara Rao, a resident of Chirala, invested Rs. 20,000 debentures with Sri Ram Chits’ Bapatla office in November, 2002. The maturity time was three years and the money payable was Rs.26,000. He was also given a three-year life insurance policy for Rs. 80,000 from AMP Sanmar Assurance Company Limited, Chennai, as part of the purchase.

After Chandrasekhara Rao’s death in July, 2005, R. Veera Venkata Sesha Durgamba, his wife, and the nominee in the insurance policy, made a claim for the money. The claim was not settled and there was no result even after representation to the Insurance Ombudsman, Chennai. She filed a complaint against Sri Ram Chits and AMP Sanmar Assurance Company.

All in all, the District Forum ordered the company to pay Rs. 26,000 along with interest at 9 per cent per annum and a further sum of Rs.80,000 with interest at 9 per cent per annum, besides compensation of Rs.3,000 and costs of Rs.1,000. The company contested the verdict in the State Commission. It argued that the forum ought to have directed the insurance company to pay Rs.80,000, the insurance amount, since they had never issued any debenture certificates to pay that amount.

Disinterest cited

The commission said that Chandrasekhara Rao’s wife was entitled to collect the money of debentures as well the insurance amount. If there were any problems, the company ought to have conveyed to her when she wrote to them, which it couldn’t do. Citing the disinterest, the commission upheld the order of the District Forum and time for compliance was four weeks.

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