K. SAGAR, M.D., KIRAN CHIT FUND MUSHEERABADversusA. BAL REDDY & ANR.

                               [2008] 9 S.C.R. 1129

     'I'

--          K. SAGAR, M.D., KIRAN CHIT FUND MUSHEERABAD
                                     v.
                                                                          A

                          A. BAL REDDY & ANR.
                      (Civil Appeal No. 1498 of 2005)
                                 JUNE 11, 2008
                                                                          B
              [DR. ARIJIT PASAYAT AND P.P. NAOLEKAR, JJ.]

                Consumer Protection Act, 1986:
                 Jurisdiction - Dispute between Chit Fund and its prized
           subscriber - Jurisdiction of Consumer Forums - Held: The       c
           issue of jurisdiction of Consumer Forum in entertaining dis-
           putes in question was raised before the State Consumer Com-
           mission but it was not considered by it - Revision Petition
           dismissed by National Consumer Commission even without
           referring its earlier decision on the issue - Hence, the matter D
           remitted to State Consumer Commission to decide the issue
           relating to jurisdiction.
                The question which arose for determination before
           this Court in this appeal was as to whether the Consumer
           Forums have jurisdiction to entertain dispute between the      E
           Chit Fund and its subscriber/subscribers.
               Appellant-Chit Fund contended that the Consumer

-    >-    Forums have no jurisdiction to entertain the dispute be-
           tween a chit fund and one of its prized subscribers or
           between the prized subscribers.
                                                                          F

                Respondents-subscribers submitted that this issue
           was not specifically raised before the Forums below and
           therefore should not be entertained.
                                                                          G
                Partly allowing the appeal, the Court
                 HELD: 1. It is not correct as contended by the re-
           spondent No. 1, the subscriber, that the question of juris-
           diction was not raised before the Consumer Forums. In
                                      1129                             H
    1130       SUPREME COURT REPORTS                  [2008] 9 S.C.R.


A fact the State Commission observed that since the re-
  spondents before it i.e. functionaries of the chit fund were
                                                                        -
  not consumers, the issue regarding jurisdiction cannot
  be adjudicated in the appeal before it. The National Com-
  mission unfortunately does not appear to have referred
B to its earlier decision while dismissing the revision peti-
  tion. In the aforesaid background, this Court is of the view
  that the issue relating to jurisdiction has to be decided by
  the forums first. Hence, the impugned order of the Na-
  tional Commission confirming the order passed by the
c State Commission is set aside and the matter is remitted
  to the State Commission to consider the question of ju-
  risdiction. (Paras - 7, 8 and 9) [1132-D,E,F & G]
         2. It is clarified that this Court has not expressed any
    opinion on the merits of the case. (Para - 9) [1133-A]
D
         CIVILAPPELLATE JURISDICTION: Civil Appeal No. 1498
    of 2005
       From the final Order dated 12.4.2004 of the National Con-
  sumer Disputes Redressal Commission, New Delhi in Revi-
E sion Petition No. 1227 of 2001
           L. Roshmani (for M/s. P.S.N. & Co.) for the Appellant.
           A. Bal Reddy Respondent-in Person.
           The Judgment of the Court was delivered by
F
          Dr. ARIJIT PASAYAT, J. 1. Challenge in this appeal is to
    the order passed by the National Consumer Disputes Redressal
 .. Commission, New Delhi (in short the 'National Commission').
    Before National Commission challenge was to the order passed
G by the Andhra Pradesh State Consumer Disputes Redressal
    Commission, Hydrabad (in short the 'State Commission'). By
   ·its order dated 19.6.2001 the State Commission allowed the
    appeal filed by the respondent No.1 (hereinafter referred to as
    the 'Complainant'). The District Forum II Hyderabad had dis-
H missed the complaint filed by the complainant.
                              'I


                  K. SAGAR, M.D., KIRAN CHIT FUND MUSHEERABAD 1131
                      v. A. BAL REDDY [Dr. ARIJIT PASAYAT, J.]

                 2. Factual scenario giving rise to the revision before the A
            National Commission is as follows:
                  The complainant joined as a member in Chit Fund Co. of
            which opposite party No. 1 is the Managing Director and oppo-
            site party No. 2 is the manager. The present appellant was run-
            ning a chit for Rs.1 lakh with monthly p.ayment of Rs.5,000/- for B
            20 months in the year 1995. He was a prize bidder subscriber.
            He was paid Rs.60,000/- by cheque. The complainant defaulted
            after paying for 11 months from January, 1996. When the present
            appellant issued a notice to him demanding an amount of
            Rs.79,300/-, the complainant replied that out of the chit amount c
            of Rs. 70,000/-, the present appellant paid only Rs.60,000/- and
            the balance of Rs.10,000/-was payable to him with interest and
            that since he paid Rs.54,700/- already, he is ready to pay the
            balance of Rs.45,300/- in instalments. The complainant ap-
        r   preached the District Forum for a direction to the opposite par- D
            ties to pay Rs.14,000/- to him.
                  3. Though the appellant i.e. Kiran Chit Fund accepted mem-
            bership of the complainant to the Chit Fund, it took the stand
            that the prize amount has been paid to M/s Kiwanis Finance
            Pvt. Ltd. as per the authorization letter of the complainant an no E
            due certificate was also given to the complainant. There was
            exchange of affidavits. The District Commission proceeded on
            the basis that admittedly the commission was a defaulting prized
    t
"           subscriber. It also held that there was no scope of taking any
            action on the complaint. Accordingly, the complaint was dis- F
            missed. In appeal, the State Commission took the view that a
            sum of Rs.45,300/- was to be paid to the complainant. It took
            the view that whether the chit fund was a consumer cannot be
            adjudicated in the appeal. Accordingly the appeal filed by the
            complainant was allowed. The National Commission was of the G
            view that in the cheque somebody had added some figures but
            who did the mischief was not known. However since somebody
            has committed the mischief, the revision petitioner before it
            cannot be granted any benefit. The revision petition was ac-
            cordingly dismissed without cost.                                  H
                                                                     '            J
    1132       SUPREME COURT REPORTS                   [2008] 9 S.C.R.


A         4. In support of the appeal, learned counsel for the appel-
    lant submitted that the Consumer Forums have no jurisdiction
    to entertain the dispute between a chit fund and one of its prized
    subscribers or between the prized subscribers.

           5. Strong reliance was placed on a decision of the Na-
B tional Commission in M/s Dwarkadish Chits Pvt. Ltd. and Anr.
    vs. Sanju Ram Aggarwal in First Appeal No. 590 of 1992 de-
    cided on 131h January, 1995 reported in (1986-96) National
    Commission and SC on Consumer Cases 2469(NS).

c         6. Learned counsel for the respondent No. 1 who appeared
    in person took the stand that this issue was no specifically raised
    before the forums below and therefore should not be enter-
    tained.

          7. We find that M/s Dwarkadish Chits' case (supra) dealt
D   with the issue of jurisdiction under the Consumer Protection Act,     -f
    1986 (in short the 'Act') as to whether the Consumer Forums
    established under the Act have jurisdiction to entertain dispute
    between the chit fund and one of its prized subscriber or be-
    tween the subscribers. It is not correct as contented by the re-
E   spondent No. 1 that the question of jurisdiction was not raised.
    In fact the State Commissioner observed that since the respon-
    dents before it i.e. functionaries of the chit fund were not con-
    sumers, the issue regarding jurisdiction cannot be adjudicated
    in the appeal before it. The National Commissioner unfortunately          . ,...
F   does not appear to have referred to its earlier decision while
    dismissing the revision petition_
           8. In the aforesaid background, we are of the view that the
    issue relating to jurisdiction has to be decided by the forums
    first.
G
          9. We therefore, set aside the impugned order of the Na-
    tional Commission confirming the order passed by the State
                                                                          y
    Commission, and remit the matter to the State Commission to
    consider the question of jurisdiction. To avoid unnecessary delay
    let parties appear before the State Commission without further
H
          K. SAGAR, M. D., KIRAN CHIT FUND MUSHEERABAD 1133
              v. A. BAL REDDY [Dr. ARIJIT PASAYAT, J.]

    notice on ? 1h of July, 2008 so that the date of hearing can be    A
    fixed. We make it clear that we have not expressed any opin-
    ion on the merits of the case. The parties are permitted to pro-
    duce certified copy of the judgment so that necessary follow up
    action can be taken.

         10. The appeal is allowed to the aforesaid extent with no     8
Y   order as to costs.

    S.K.S.                                   Appeal partly allowed.