Kapil Chits ordered to pay ₹7.39 lakh over chit prize dispute
HYDERABAD: The District Consumer Disputes Redressal Commission-I, Hyderabad, has directed Kapil Chits (Hyderabad) Pvt Ltd to pay ₹6.99 lakh to a subscriber. The order came in C.C. No. 106/2026 after the commission found that the company failed to clearly explain why it withheld the chit prize money.
The commission also awarded ₹25,000 as compensation and ₹15,000 towards litigation costs to complainant Narsimulu Gajji.
Commission finds no clear basis for withholding prize money
Gajji subscribed to chit group KHYT40P-15, with a chit value of ₹10 lakh and a tenure of 50 monthly instalments. He took part in the auction and became the prized subscriber after agreeing to forego ₹3.01 lakh. This left a prize amount of ₹6.99 lakh.
Gajji said he had submitted the required sureties and that the company had accepted them. He alleged that Kapil Chits did not release the prize money. Instead, the company deposited the amount in a fixed deposit without his knowledge.
He also alleged unauthorised deductions towards commission, verification charges, documentation fees, GST and other charges. He sought the release of the prize money, interest, compensation and litigation costs.
Company cites dues and transactions with sister concern
Kapil Chits denied the allegations. The company said it could release the prize money only after receiving satisfactory security under Sections 21 and 22 of the Chit Funds Act, 1982.
The company also referred to Gajji’s transactions involving another chit and M/s Nalgonda Realtors Pvt Ltd. It claimed that he owed more than ₹5.45 lakh as of March 1, 2026. According to the company, Gajji had consented to adjust the prize money against the alleged dues.
The commission, however, found no clear documentary evidence to establish the alleged consent or adjustment. It noted that the memorandum of understanding relied upon by the company carried Gajji’s signature. However, it did not carry the signature of an authorised representative of Nalgonda Realtors.
The commission also examined subscriber statements produced by both sides. The statements recorded four sureties for the prized chit.
Commission orders payment with permissible deductions
The commission said Kapil Chits failed to clearly explain the alleged outstanding liability. It also failed to produce proper accounts showing the exact amount payable by Gajji.
The bench said the company had to establish through documentary evidence how it dealt with the prize money. It found that the alleged additional guarantee could not justify withholding or diverting the amount.
The commission partly allowed the complaint. It directed Kapil Chits to pay ₹6.99 lakh with 12% annual interest from November 6, 2025, until realisation. The company can deduct permissible commission and statutory charges, including GST.
The commission also directed the company to pay ₹25,000 as compensation and ₹15,000 towards litigation costs.
It further held that Gajji could not be made liable for any alleged outstanding dues that lacked cogent documentary evidence.
