In a significant ruling protecting senior citizens from financial fraud, the Ernakulam District Consumer Disputes Redressal Commission has ordered a chit-fund company to refund a substantial sum to an elderly subscriber. The commission directed Finisyer Kuries Pvt Ltd to pay back ₹8.55 lakh, including interest and compensation, after the firm shut down its operations without any prior notice to its investors.
The Complaint and the Chit Fund Agreement
The case was filed by Satish Sangamithra, a theatre artist and resident of Kadavanthra in Kochi. According to the complaint, Sangamithra had joined the Kodungallur-based Finisyer Kuries Pvt Ltd back in 2011 for a chit fund scheme valued at ₹16.5 lakh.
He diligently paid his monthly instalments of ₹7,500 without any default. Over a period, he successfully paid 110 instalments, amounting to a total of ₹8.25 lakh. However, when he approached the bank to deposit his 111th instalment, he was met with a shocking discovery.
Abrupt Closure and Disappearance
The company's bank account had been closed, and its office bearers were declared bankrupt. There was no communication or warning provided to the subscribers about this drastic step. Left with no other option, Sangamithra served legal notices to the firm, but received no response whatsoever.
This forced the senior citizen, who had invested his savings for old-age security, to approach the consumer commission for justice. The sudden loss caused him severe mental distress, a point the commission later noted in its order.
Commission's Ruling and Directives
The bench, comprising President D B Binu, members V Ramachandran and T N Srividya, delivered a strong verdict against the chit fund company. The commission held that the firm's failure to complete the chit fund term and return the subscriber's money amounted to a serious deficiency in service.
It further observed that inducing people to invest and then closing the institution without informing them constituted an unethical business practice. The commission found no bona fide justification on record for either the closure of the kuri account or for retaining the instalments already paid.
The final order includes the following directives to Finisyer Kuries Pvt Ltd:
- Refund the principal amount of ₹8.25 lakh to the complainant.
- Pay 12% annual interest on the above amount from the date of each defaulted instalment until the date of payment.
- Pay ₹25,000 as compensation for the mental agony and financial loss suffered by the senior citizen.
- Pay ₹5,000 as cost of the proceedings.
- Complete all payments within 45 days from the date of the order.
This ruling underscores the protective reach of consumer forums in India, especially for vulnerable sections like senior citizens who are often targeted by dubious financial schemes. It sends a clear message to chit fund companies about adhering to ethical practices and fulfilling their contractual obligations to subscribers.
