Court dismisses complaint of chit fund firm for recovery of ₹3.38 lakh

A Mangaluru court has dismissed a complaint by Navachetana Chits Private Limited following its failure to provide documents to show that a Hubballi-based person owed ₹3.38 lakh to the firm on the date of issuance of cheque by the latter.

The VIII Judicial Magistrate First Class, Mangaluru, recently dismissed the complaint by the firm against P.O. Chandrashekar, a resident of Bridavan Layout in Vidyanagar of Hubballi.

In the complaint, the firm stated that Mr. Chandrashekar was a prized subscriber for the chit value of ₹10 lakh in the chit group of the firm’s Hubballi branch. Mr. Chandrashekar was successful in bidding for ₹2.5 lakh on February 22, 2016, and he received ₹5.47 lakh. To clear the chit amount, Mr. Chandrashekar on July 10, 2017 issued a cheque for ₹3.38 lakh and the same was dishonoured for insufficient funds. Following issuance of statutory notice, a complaint was filed before the court.

The magistrate noted that though the firm maintained an account statement the same was not produced before the court. It failed to produce the chit agreement between the firm and Mr. Chandrashekar. There are no grounds to believe that the cheque was issued by Mr. Chandrashekar as security to the firm at the time of initiating the transaction.

The firm also failed to produce evidence to show that statutory notice by the firm was issued to the address of Mr. Chandrashekar. Failure on the part of the firm to produce documents is fatal to the case, the magistrate noted.

Published - October 23, 2024 07:00 am IST