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Mandeep Singh and anr. Vs. Thapar Agro Mills Ltd. - Court Judgment

LegalCrystal Citation
CourtDelhi State Consumer Disputes Redressal Commission SCDRC New Delhi
Decided On
Case NumberCase Nos. A-288 & A-289 of 1997
Judge
AppellantMandeep Singh and anr.
RespondentThapar Agro Mills Ltd.
Excerpt:
consumer protection act, 1986 - section 14(1)(d) - cases referred: 1993 (2) cpj 216 (nc). 1995 (1) cpj 121 (nc). 1994 (2) cpj 7 (sc). 1994 (2) cpj 93 (nc). 1994 (3) cpj 306. comparative citation: 1998 (1) cpj 487.....the complainant was that the company declared dividend @ 12% at the annual general meeting of the company held on 30th december, 1994 and me said dividend was payable within 42 days as required under section 207 of the companies act. the company, however, failed to send the dividend which had not been received till the filing of the complaint. it was in these circumstances that the complainant claimed compensation amounting to rs. 44,616/- and dividend alongwith interest @ 24% besides damages for harrassment caused to him. the opposite party m/s. thapar agro mills ltd. failed to enter appearance inspite of service. it was proceeded ex parte. the district forum observed that ordinarily the complainants averments having not been controverted, he was entitled to receive compensation.....
Judgment:

A.P. Chowdhri, President:

1.  By the impugned order. District Forum-II dismissed two complaints being Case No. 3777/ 95, Mandeep Singh v. Thapar Agro Mills Ltd., and Case No. 3780/95, Joginder Kaur Bawa v. Thapar Agro Mills Ltd., on the ground that the facts did not constitute a consumer dispute. The complainants are in appeal.

2. The facts in the two cases are identical and it will be sufficient to refer to the facts in the case of Mandeep Singh. Mandeep Singh, complainant, lodged Share Certificate No. 102052 for 50 equity shares with the respondent on 28.11.1991 for transfer in his favour. Under Section 113 of the Companies Act, the shares were required to be transferred within a period of 60 days. However, the shares were received duly transferred only on 31.8.1992. Further grievance of the complainant was that the Company declared dividend @ 12% at the Annual General Meeting of the Company held on 30th December, 1994 and me said dividend was payable within 42 days as required under Section 207 of the Companies Act. The Company, however, failed to send the dividend which had not been received till the filing of the complaint. It was in these circumstances that the complainant claimed compensation amounting to Rs. 44,616/- and dividend alongwith interest @ 24% besides damages for harrassment caused to him. The opposite party M/s. Thapar Agro Mills Ltd. failed to enter appearance inspite of service. It was proceeded ex parte. The District Forum observed that ordinarily the complainants averments having not been controverted, he was entitled to receive compensation besides dividend, but in view of the law laid down by the National Commission, the facts did not disclose a consumer dispute and accordingly dismissed both the complaints.

3. We have heard Mr. B.S. Bawa, authorised Agent for the appellant, Mr. Bawa stated that appellants had received the share certificates duly transferred in their name on 31.8.1992 but they failed to receive the dividend. He further stated that at the initial stage, appearance was entered on behalf of the opposite party but later on, the opposite party was not represented.

4. In coming to the conclusion that the facts did not add-up to a consumer dispute, the District Forum relied on three decisions. We have gone through the same and we find that these are distinguishable. The first decision relied upon is Sqn. Ldr. Gurdaial and Others v. United Land and Housing Ltd. and Others, II (1993) CPJ 216 (NC). The case of the complainants was that they purchased 2,000 shares of the opposite party. The opposite party promised to repurchase the shares but only 400 shares were repurchased. The State Commission awarded back value of the shares. In the appeal it was held by the National Commission that the transaction, between the parties was plainly one of sale of shares by the Company to the complainant with a stipulation for repurchase of the same within a period of three years. This was held to be purely a transaction of sale of goods with a condition for repurchase and not an agreement of hiring of any service. There being no defect in the goods sold, there was no cause of action for the complainant to initiate proceedings under the Act in respect of the said transaction of sale of shares. It is plain that the decision has no application to the facts of the case before us.

5. The next decision relied on by the District Forum is Usha Rectifier v. K. Dattatraya citation of the decision is not given except that it was a Revision Petition No. 208 of 1993. Even the date of decision is not given in the order of the District Forum. We are able to locate one reported decision of the National Commission in Usha Rectifier Corporation (I) Ltd. v. R. Krishnaswami, I (1995) CPJ 121 (NC). This related to an application for allotment of shares. The applicant was not allotted any share and the question before the National Commission was whether the complainant was a consumer. Relying on the well-known decision of the Supreme Court in Morgan Stanley Mutual Funds v. Kartik Das, II (1994) CPJ 7 (SC), the National Commission held that the complainant was not covered under the definition of consumer and accordingly the revision was allowed and the complaint dismissed. It is evident that the decision had no application to the facts of the case in hand.

6. The third and last decision relied is Sushila Agarval vI.T.C. Agro Tec. Ltd. and Another, II (1994) CPJ 93 (NC). In this decision also, the question raised was whether the alleged non- issue of shares and debentures for which the petitioner applied fell within the purview of the Act. For the reasons which need not be repeated, this decision was also not relevant for deciding the question in hand.

7. On the contrary, the Companies Act makes it penal if the shares lodged for transfer are not transferred within the time limits laid down in Section 113. Unless the shares are transferred, they would cease to be tradeable. This is a service which is required to be performed by the Company; issuing the shares and deficiency therein squarely falls within the purview of the Consumer Protection Act. There are numerous decisions of various State Commissions. We would refer only to a couple of them. In N. Madu Ram Financial Services Pvt. Ltd. v. Marine Ltd. Jaipur, II (1992) CPJ 756, Tamilnadu SCDRC held that failure to effect transfer of shares constituted deficiency in service. In Pavan Kumar Sharma and Others v. Nagarjuna Fertilisers and Chemicals and Others, III (1994) CPJ 306, the Company caused delay in returning the shares with necessary endorsement. This was held to constitute deficiency in service. Apart from the point of law, however, in the facts of that particular case, the delay stood explained and no amount was awarded on this count.

8. For the foregoing reasons, we allow both the appeals, set aside the orders of the District Forum-II and remand both the cases for fresh decision according to law. The DF shall readmit both the cases to their original No. and proceed to determine the compensation to which the complainants are entitled. The parties shall appear before the District Forum for further proceedings on 27.2.1998. A copy of this order be sent to the parties as well as to District Forum-II.

Appeals allowed.


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