1

{For kind personal attention of Hon’ble CJI,PIL Cell, Supreme Court of India}

From:- Hyderabad,
Thota Chandrasekhara Reddy, B.Com.,FIII., 26-10-2016.
{Retired Assistant Divisional Manager, (Legal),
LIC of India, Divisional Office, Kadapa – 516004. AP.}

Present address for correspondence:

Thota Chandrasekhara Reddy, {For obvious reasons
Flat No.209, “Sri Krishna Ambhas” Apartments, my identity may please
Hyderguda, Attapur, be kept undisclosed.}
Land Mark: Pillar No.118, PVNR Express Way, (Please see the Annexure-1.)
RANGAREDDY DISTRICT,
HYDERABAD – 500048,Telangana State.
Mobile No.98664 11292.
E mail: chandra_cdpune@yahoo.co.uk

To
The Hon'ble Chief Justice of India,
PIL Cell, Supreme Court of India,
NEW DELHI.

Respected Sir,

RE:- UNLAWFUL DELAY IN PAYMENT OF ‘PRIZE AMOUNTS’

BY THE CHIT FUND COMPANIES TO THE SUCCESSFUL BIDDERS.

Hearty Greetings to you Sir, with Diiwali round the corner!!! Fondly hoping that
this Festival of lights, symbolizing the victory of good over evil, would surely lead
us from darkness to light!!!

1. First of all, let me compliment you Sir, for your sincere lamenting some
time back, in the presence of no less a person than the Prime Minister of
this great country Mr.Narendra Modi himself that the ‘common man's faith
in the justice system is at an all-time low in the country’. I sincerely believe
that this emotional outpouring of yours is genuine and is from the bottom of
your heart and that you are very much concerned with the languishing of
the poor litigants for years, decades and even for generations to get justice
done. I was touched by your empathy towards the pathetic conditions in
which the poor litigants of the country are placed in, because of the justice
system obtaining in the country. On behalf of the countrymen, I sincerely
thank you very much Sir, for your gargantuan concern.
…2
Page8
 2

2. Now coming to the issue proper, please permit me to bring to your kind
notice as to how the Chit Fund subscribers, in general, throughout the
country, and in the states AP and Telanagana in particular, are being
exploited by the Chit Fund Companies particularly by M/s Shriram Chits,
and M/s Kapil Chits, by unlawfully and intentionally delaying the
payment of ‘prize amounts’ due to the successful bidders. Let me
humbly submit to you Sir, that nothing less than your kind intervention by
accepting this appeal as a SUO MOTU PIL petition is going to stop this
exploitation, going on for decades unabated and safeguard the interests of
the gullible chit subscribers who are blissfully ignorant that they are even
being exploited.

3. As I am an ailing senior citizen (aged 70) and a pensioner with meager

income, I cannot afford to file a PIL petition either myself personally or by
availing the expensive services of a professional advocate. Hence, I
humbly appeal to your good selves, the Chief Justice of India, to take up
this matter as a SUO MOTU PIL petition, as the interests of millions of chit
subscribers throughout the country are involved.

4. The people of the country still recollect with respect and awe the judicial
activism of treating just a post card, by the Supreme Court itself, as early
as in the year1983, and also treating just an inland letter by a widow by the
Gujarat High Court in the year 1986 as SUO MOTU PIL petitions, and
doing justice to the people involved.

5. Also I wish to draw your kind attention as to how the Hon’ble Supreme
Court itself had rightly asserted its sky-high powers to chase injustice in
CRIMINAL APPEAL NO.1428 OF 2011 arising out of S.L.P.(Crl.) No. 6349
of 2010. The relevant observation reads as under: -

“Where there is manifest injustice, a duty is enjoined upon this Court

to exercise its suo motu power ….as it is well-settled that illegality
should not be allowed to be perpetuated and failure by this Court to
interfere with the same would amount to allow illegality to be
perpetuated.”

6. Hence it is high time the Supreme Court intervened by exercising its suo
motu powers against the manifest injustice in the instant case I am
explaining and did justice to the millions of victims.

7. Please permit me to explain the matter in a little bit detail now:-

(a) The Chit Funds Acts of either the Union of India or any State
Government have not allowed any time to the Chit Fund Companies
for release of the ‘prize amount’ after furnishing of sufficient security,
by the successful bidder.

…3
Page8
 3

(b) The relevant provision in THE CHIT FUNDS ACT, 1982 of Union of India
reads as under:

“22. Duties of foreman:- The foreman shall, on the prized subscriber

furnishing sufficient security for the due payment of future subscriptions, be
bound to pay him the prize amount.”

And the relevant provision under the heading “14. Duties of the
foreman” in The AP Chit Funds Act, 1971 too, says exactly the same
thing.

8. As can be seen from the above, the wording “on the prized sub-scriber
furnishing sufficient security” ……. “be bound to pay”, in the relevant
clause, both in the Central and the State Government Acts would un-
ambiguously convey the meaning that no time is allowed for payment of
the prize amount when once a sufficient security is furnished by the
subscriber, and that the foreman has no discretion, what so ever, in the
matter.

9. Let us have a close look as to what the Chit Fund Companies have
committed in their literature about release of the ‘prize amount’:-

 Kapil Chits in their website has stated that “the payment can be expected
after completion of documentation.”(Though here is no specific reference as
to the time limit, it certainly conveys that the amount will be paid soon
after completion of documentation.)

 The Margadarsi Chits has stated that if the document (relating to security)
is found to be satisfactory, payment (of prize amount) is ‘released within 2
days.’ There is even a commitment for payment of interest @12%PA from
the date of furnishing security, in the event of any delay.

 On the contrary, Shriram Chits is not only silent as to when they would
pay the ‘prize amount’, but also has unlawfully printed in the surety
proposal form itself that the payment of ‘prize amount’ will be made …….
…“on the 30th day from the date of furnishing surety”. (Please see the Annexure
- 1.)

10. When compared to the unquestionable statutory stipulation that the Chit
Company is bound to pay the ‘prize amount’ on furnishing security and
their own commitments as stated above let us see as to what exactly the
Chit Fund Companies are doing in practice.

Almost all of them,(except Margadarsi Chits) and to be specific, M/s

Shriram Chits., and M/s Kapil Chits, operating in both the Telugu States of
AP and Telangana, or for that matter, even outside these states wherever

…4
Page8
 4

they have their branches, {Shriram Chits, in addition to the States of

Andhra Pradesh, Telangana, operates from Tamil Nadu, Karnataka,
Maharashtra and Puducherry and Kapil Chits operates from different areas
with different names Viz: Kapil Chits (Hyderabad) Pvt Ltd., Kapil Chits
(Kosta) Pvt Ltd., Kapil Chits (Kakatiya) Pvt Ltd., Kapil Chits (Karnataka) Pvt
Ltd., the nomenclature depending upon their area of operation} are
unlawfully and willfully delaying the payment of the ‘prize amounts’ to the
successful bidders almost by a month even after submission of sufficient
security, and are making unlawful gains by earning interest on the huge
‘prize amounts’ which actually belonged to the successful bidders, the
moment they had furnished sufficient securities.

11. Simply because a Chit Fund Company (like Shriram Chits - Please see the
Annexure-1.) had incorporated certain stipulations in its chit Bye-
laws/agreement/security proposal form, as per their own whims and
fancies, violating the provisions of the relevant Acts, they do not become
law and are not binding and cannot be imposed on the subscribers. The
District Consumer Forum, Kadapa, AP., when I challenged this malpractice
of making belated payment of ‘prize amount’ being followed by M/s Shriram
Chit Fund Company has categorically concluded as under:-

“As per provisions of the A.P. Chit Funds Act, the Opposite parties should
pay the prize money immediately after furnishing security without any
delay. The period of 30 days mentioned in bye-law 4 was only a preparation
of the company contrary to the provisions of the A.P. Chit Funds Act.”
(Reproduced from the Order dated 13-10-2010 in CC NO.72/2010 of DF,Kadapa, AP.)

12. Submission of Fixed Deposit Receipts (FDRs) of the same Chit Fund
Company as security is as good as paying off the entire future
subscriptions in cash, in view of the fact that the FDRs have ready
liquidity, in the event of failure of the bidder to pay the future subscriptions
promptly. Hence, when once the FDRs are submitted as security, the
foreman has no right, whatsoever, to defer the payment of ‘prize
amount’ even by a single day as there is no question of even
verification of the sureties. In my case, both the companies have delayed
the payment of my ‘prize amounts’ after my submission of my own FDRs
with them as security and even after my explaining them the legal position.

13. Had there been even a remote possibility for detaining the prize amounts
legally, for a month or so, I do not think the most successful and prudent
businessman like Mr.Ramoji Rao of M/s Margadarsi Chits, would not have
taken advantage of the same, (i.e., retaining the prize amounts for one
month or so) particularly in view of his background of collecting huge
amounts of deposits, unlawfully as a HUF, from the public and refunding
crores of rupees to the depositors when Mr. Undavaali Arun Kumar
challenged their unlawful collection of deposits from public, as a HUF Firm.

…5
Page8
 5

14. What I want to reiterate here is, the fact that the prize money belongs to
the bidder, the moment the satisfactory security is furnished and any
delay is not only very much against all agreed principles of natural justice
but also is in contravention of the provisions of the relevant Acts referred to
above. And this is what the District Consumer Forum too had concluded
when I challenged this malpractice of Shriram Chits. As you know because
of the obvious limitations in the Consumer Protection Act, the District
Consumer Forum could not give any specific general direction to the Chit
Fund Companies to release the ‘prize amounts’ to all the successful bidders
in future soon after submission of securities.

15. This malpractice was brought to the notice of all the Govt. authorities
including the Chief Ministers of both the Telugu States and the
Governor of AP/Telangana and all the individuals who matter. None of
them cared even to acknowledge my letters not to speak of taking any
action.

16. I also wrote to the General Secretary of All India Association of Chit Funds
(AIACF) Mr. T.S. Sivaramakrishnan, who had apparently referred the matter
to the Head Office of Shriram Chits, Hyderabad. The General Manager
(Law) of the Company one Mr.Ch.Venugopala Rao, though had offered to
have a ‘meeting’ with me several times through his e-mails and telephonic
calls, is conveniently avoiding the same for the last several months, in spite
of my constant follow up, evidently because he knows that he has no case
to discuss with me.

17. The very fact of avoiding by M/s. Shriram Chits, to give me certain
information I sought under RTI Act, such as the dates of submission of
securities and the dates of release of the ‘prize amounts’ for a particular
period under different chits, shows that they are still continuing their
malpractice of unlawfully detaining the prize amounts, which they do not
like to disclose in writing.

18. The ABN Andhra Jyoti, a Telugu TV Channel claiming to be a

‘dammunna Channel’ meaning a Channel with guts, though has recorded
my interview on the subject did not telecast it for reasons, best known only
to them.

19. Thus, as there is no tangible result, in spite of my putting in efforts, to the

best of my ability for the last six years or so, I am approaching you, as a last
resort with this PIL petition.

20. I am making this final attempt fondly believing in the functioning of the
democratic system and that justice will be done by the highest judicial
authority of this great country, with a ray of hope particularly after seeing
the empathizing of the Hon’ble CJI with the plight of the litigants. And
honestly believing that the Hon’ble Supreme Court would certainly stand
by the side of justice as the motto in their Logo itself is “Yato dharmastato
Jayah” meaning, “where there is Dharma there is Victory”.
….6
Page8
 6

21. My resolve to write to you this letter has been further strengthened after
my coming across the following passages somewhere in the website of the
‘Legal Service India.’
“Any citizen of India can now approach the apex court of the country seeking legal
remedies in all cases where the interests of general public or a section of public are at
stake.”
“Further, through the so-called PIL, the litigants can focus attention on and achieve
results pertaining to larger public issues, especially in the fields of human rights,
consumer welfare and environment.”
“The rule of law does not mean that the protection of the law must be available only to a
fortunate few……. The poor too have civil and political rights and rule of law is meant
for them also, though today it exists only on paper and not in reality.”
“In the case of People’s Union for Democratic Rights v. Union of India, it was held that
“Public Interest Litigation ……is intended to bring justice within the reach of the poor
masses, ………..is intended to promote and vindicate public interest which demands that
violations of constitutional or legal rights of large numbers of people who are poor,
ignorant or in a socially or economically disadvantaged position should not go
unnoticed and un-redressed.”
“In 1981 Justice P. N. Bhagwati in .S. P. Gupta v. Union of India, articulated the
concept of PIL as follows, “Where a legal wrong or a legal injury is caused to a person
or to a determinate class of persons by reason of violation of any constitutional or legal
right ……… any member of public can maintain an application for an appropriate
direction…...”

22. For reasons of brevity, I desist from narrating the innumerable humiliations
I was subjected to, both by the Shriram and Kapil Chits, when I insisted on
payment of my ‘prize amounts’ after submission of my own FDRs with
them as security and even after my bringing to their notice the legal
position.

23. In the light of the above submissions, you will please appreciate that the
issue I am raising now is a matter of public importance, as there is a clear
violation of legal right of a determinate class of persons and hence there is
urgent need for protection of consumer welfare, and thus need for
admission of this letter as a PIL SUO MOTU petition. It is only in the
interest of justice, I am making this final attempt and not because I have
any vested interest in the matter.

PRAYER
24. In view of the above submissions, I most humbly pray you Sir

(a) to admit this appeal as a SUO MOTU PIL petition; (incognito)

(b) cause a deep probe in to the matter in the manner you deem fit to find out
whether the different Chit Fund Companies in general throughout the
country and M/s Shriram Chits Pvt. Ltd., and M/s Kapil Chit Funds Pvt. Ltd.,
in particular in the states of AP., and Telangana and operating elsewhere
too are actually following the provisions of the relevant Act/s in the matter
of releasing the ‘prize amounts’; and

(c) do justice to the chit subscribers of different Chit Fund Companies in

general by directing all the Chit Fund Companies to release the ‘prize
amounts’ to the successful bidders immediately after their furnishing the
Page8

securities. ….7
 7

25. As “it is well-settled that illegality should not be allowed to be perpetuated” any
failure to interfere at this juncture, in the instant case “where there is
manifest injustice” by this Hon’ble Supreme Court “would amount to allow
illegality to be perpetuated.” Hence there is an urgent need for your kind
intervention in this manifest injustice to ensure that the common man's faith
in the justice system (which already) is at an all-time low in the country
according to your own honest admission is uplifted.

I now look forward to your early and positive response.

With respectful regards,

Yours faithfully,

(Thota Chandrasekhara Reddy)

Addresses of the Chit Fund Companies and AIACF

I was specifically referring to above are furnished here under:-

(1) Shriram Chits Pvt Ltd.,
3-6-478, Anand Estate,
Liberty Road, Himayath
Nagar, Hyderabad,
Telangana - 500026.
(2) Kapil Chits,
H.No. 3-6-612/613, City
Estate Building, Himayath
Nagar 'X' Road, Abids
Road, Gagan Mahal,
Himayath Nagar, Hill Fort,
Adarsh Nagar, Hyderabad,
Telangana – 500029.
(3) Mr. T.S. Sivaramakrishnan,
General Secretary, AIACF.,
C/o The Balussery Benefit Chit
Fund Pvt Ltd,“Bansi House”,
1/24,Asaf Ali Road, New Delhi –
110 002.

VERIFICATION

I, Thota Chandrasekhara Reddy S/o Late Thota Eswara Reddy, aged 70 years,
residing at Flat No.209,’SRKRISHNA AMBHAS’, Hyderguda, Attapur, RR Dt.,
Hyderabad – 500048 do hereby solemnly affirm and state that what has been
stated above is true and correct to the best of my knowledge and belief.

Signed at Hyderabad on this 26th day of October, 2016.

(Thota Chandrasekhara Reddy)

Deponent.

****************************************************************

****************************
Page8
 8

****************************************************************
****************************

…8

(Annexure – 1)
Alas!!! Even fighting against injustice has become a crime
and unsafe in this great democratic Country......!!!

{Scanned Report from the Deccan Chronicle daily dated 17-10-2016.}

******************************************************************
Reproduced hereunder is the scanned copy of the Surety Proposal Form (Relevant
portion) of the of Shriram Chits showing prominently that payment of Prize
amount would be made ‘on 30th day from the date of furnishing security,’ against
the provisions of the Chit Funds Act.
Page8
 9

*************************************************************************************

Page8