Bengaluru Consumer Commission Orders Chit Fund Company to Refund Outstanding Amount After Cheque Dishonour

Case Background

A Bengaluru resident, Vishnuprasad, has secured a legal victory against Samith Chits Pvt Ltd after a dispute regarding a chit fund scheme payout. Vishnuprasad had participated in a Rs 5 lakh chit scheme, contributing Rs 12,500 monthly for a period of 40 months. Upon winning the bid in May 2025, the scheme concluded in June 2025.

The Dispute

Following the bid, the company issued two cheques to the participant:

• Rs 1 lakh dated July 5, 2025.
• Rs 3,27,940 dated July 15, 2025.

Both cheques were dishonoured by the bank due to insufficient funds when presented for clearance in July 2025. Despite follow-up efforts, the complainant received only Rs 20,000, leaving an outstanding balance of Rs 4,07,940.

Commission Ruling

On September 28, 2026, the Bengaluru Consumer Commission, led by President Syed Anser Khaleem, ruled that the company’s failure to pay constituted a deficiency in service and an unfair trade practice. The commission noted the following:

• The company failed to appear for proceedings despite receiving notice and was placed ex parte on July 24, 2026.
• Pending cases under Section 138 of the Negotiable Instruments Act do not preclude a consumer from seeking relief under the Consumer Protection Act, 2019.

Order Details

The Commission has directed Samith Chits Pvt Ltd to:

• Pay the outstanding amount of Rs 4,07,940 with 6.5% annual interest from the date the complaint was filed.
• Pay Rs 3,000 towards the costs of the proceedings.
• Comply with the order within 30 days of receipt and submit a compliance report within 45 days.

Complainants seeking redress in similar matters can verify original orders through the official consumer court portal or by consulting legal counsel regarding their specific service agreements.