Bengaluru man pays ₹12,500 per month for 40 months, gets ₹20,000 from chit fund: Consumer court orders payment of ₹4.08 lakh

Bengaluru Consumer Commission ordered Samith Chits Pvt Ltd to pay ₹4,07,940 to the subscriber who only received ₹20,000 after winning the offer va ₹5,000,000 chit pool scheme. The commission also ordered the company to pay interest at 6.5% per annum on the amount owed and ₹NOK 3,000 for legal costs, Times of India reported.

The order was passed on September 28, 2026 by the Bangalore First District Consumer Disputes Redressal Commission comprising President Syed Anser Khaleem and two members. This happened after a complaint filed by Vishnuprasad against the chit fund company.

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Bengaluru man pays ₹12,500 per month for 40 months

According to the complaint, Vishnuprasad applied ka ₹5 lakh chits scheme operated by Samith Chits. According to the scheme, he was obliged to pay ₹12,500 every month for 40 months.

The chit period ended in June 2025. Vishnuprasad successfully applied for the chit in May 2025, making him eligible to receive the award under the contract.

However, the company did not pay him the full amount owed. She subsequently issued two checks for payment: one for ₹1 lakh from 5th July 2025 and further for ₹3,27,940 dated July 15, 2025.

Both the checks were issued at the private bank’s Rajajinagar branch in Bengaluru.

Both checks were returned due to insufficient funds

Vishnuprasad introduced ₹1,000,000 check into his bank account at Ramamurthy Nagar branch on 17 July 2025. The check was returned unpaid with a “Funds Insufficient” endorsement.

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He presented a second check to the value of ₹3,27,940 on 24 July 2025. This check was also dishonored due to lack of funds.

The commission’s order records that Samith Chits eventually paid Vishnuprasad ₹20,000 after he followed up on the unpaid amount. However, the company did not pay the remaining fees ₹4,07,940.

Vishnuprasad then issued a legal notice under Section 138 of the Negotiable Instruments Act, which deals with dishonor of cheques. He also initiated proceedings in the Additional Chief Judicial Magistrate, Bengaluru in two cases, numbered CC No. 72718/2025 and CC No. 72660/2025.

He subsequently turned to the consumer commission with a request for relief for unpaid financial rewards.

Why consumer commission ruled against Samith Chits

The documents submitted by Vishnuprasad included a company brochure, a statement issued by Samith Chits, copies of both cheques, records showing their dishonor and evidence of ₹payment of 20 thousand.

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Samith Chits did not appear before the commission despite being warned. It was placed ex parte on July 24, 2026, with Vishnuprasad’s allegations and supporting evidence undisputed in the consumer proceedings, TOI reported.

Based on the material on record, the committee concluded that the company failed to pay the due amount after the underwriter successfully tendered the chit. He stated that the conduct constituted a deficiency in service and an unfair business practice.

Can a chip fund subscriber approach a consumer commission after a check bounces?

The Commission also assessed separate proceedings initiated pursuant to Section 138 of the Act on Negotiable Securities.

He noted that a dishonored check proceeding and a consumer complaint serve different purposes. The existence of the former did not prevent Vishnuprasad from pursuing a remedy under the Consumer Protection Act.

The Commission relied on Section 100 of the Consumer Protection Act 2019, which provides that remedies under that Act are in addition to remedies available under other laws and not in derogation of them.

He also referred to the decision of the Supreme Court in Shriram Chits (India) Private Limited v. Raghachand Associates (2024). The Commission cited the decision to support its position that a chip subscriber can qualify as a consumer and a chip pool operator as a service provider under the Consumer Protection Act.

On this basis, it held that Vishnuprasad was entitled to seek redress from the consumer commission despite separate check and dishonor proceedings.

The company ordered to pay ₹4.08 lakh with 6.5% annual interest

The commission allowed the complaint and directed Samith Chits through its CEO to pay Vishnuprasad ₹4,07,940 with interest at 6.5% p.a. The interest will be calculated from the date of the consumer’s complaint until the realization.

The company must also pay ₹3,000 for the costs of the proceedings.

The order directs Samith Chits to comply within 30 months from the date of receipt of the order and submit a compliance report to the commission within 45 days from the date of receipt.

The decision provides relief to the subscriber for the unpaid amount of the chips, while separately addressing the costs incurred in handling the consumer’s complaint.