APPOLLO TUBES LTD. vs LAL CHAND MALHOTRA

THIS appeal has been filed by the defendant against the orders of the District Forum dated 9.2.90 by which the defendant has been ordered to pay Rs. 300/- on account of dividend to the complainant with 16% interest from October, 1986 till the date of payment, within one month from the date of order.

BRIEFLY, the facts are that the complainant respondent is a share holder of M/s. Apollo Tubes Ltd., Appellant, and holds 750 shares in his name. On 21.6.86, the Company made an offer of shares on right basis to the share holders and also to the public, at par. It was assured by the appellant that 16% dividend would be paid on each share. The year of the company was to close on 30.9.86. The Company however, did not pay the dividend @ 16% per annum for the year October, 1985 to September, 1986 as promised but paid at a lessor rate. Consequently, it is prayed that the dividend @ 16% per annum for 12 months ending 30.9.86 be got paid to the complainant from the Company. The respondent also made, Consumer Assistance Centre as a complainant alleging that his relatives and friends hold about 5000 shares each, in the Company. It is stated that they were also entitled to the same relief. The Company contested the claim and inter alia pleaded that the Forum had no jurisdiction to entertain the complaint. It is alleged that since the plea of the complainant was that the Company was guilt of offence of unfair trade practice, the jurisdiction of the Forum was barred under Section 2(1)(r) of the Consumer Protection Act because part ''A'' of Chapter-III of Monopolies and Restrictive Trade Practices Act, 1969, hereinafter referred to as the 1969 Act, applied to the Company. It is further pleaded that the Consumer Assistance Centre is not registered under Companies Act and therefore, it could not file the complaint.

The learned District Forum came to the conclusion that the Consumer Assistance Centre could not file the complaint as it was not registered under the Companies Act. Shri Lal Chand Malhotra, who had also signed the complaint was entitled to maintain the complaint as an individual. It also held that the Company was guilty of unfair trade practice. Consequently, it granted a decree in favour of the complainant for recovery of Rs. 300/- with interest as mentioned above. The defendant Company has come up in appeal to this Commission.

IT is contended by the representative of the appellant that the present complaint is not maintainable under Section 2(1)(r) of the Act as the Company is an undertaking to which part ''A'' of Chapter-III of the 1969 Act applies. We heard the agent for the appellant on 18.9.90 in the presence of Shri Lal Chand Malhotra, the respondent. Shri Malhotra later requested for time to prepare the case on the ground that he was not prepared for that argument. We accept all his requests and adjourned the case to 20.9.90. On that date Shri Lal Chand Malhotra did not turn up. In the interest of justice we adjourned the case to 27.9.90 and ordered Shri Mittal, the Agent of the appellant to send a letter to Shri Lal Chand Malhotra informing him about the adjourned date. On 27.9.90, we were informed by Shri Anil Sharma, who appeared for the appellant that a letter under registered cover had been sent to Shri Lal Chand. However, he did not appear on that date. Consequently, we reserved the judgment.

SECTION 2(1)(r) of the Act provides that the expression ''unfair trade practice'' would have the same meaning as in the SECTION 36-A of the 1969 Act but would not include an unfair trade practice adopted by the owner of an undertaking to which part ''A'' of Chapter-III of that Act applies (important words of the SECTION underlined). It is not necessary to refer to the definition of unfair trade practice as given in SECTION 36-A as the present; complaint has admittedly been filed in view of alleged unfair trade practice of the Company. The main question to be determined is whether the Company is governed by the provisions of Part ''A'' of Chapter-Ill of the 1969 Act or not Chapter-Ill starts with SECTION 20 & ends with SECTION 30. SECTION 20 deals with the undertakings to which Part ''A'' applies. According to the SECTION, Part ''A'' applies to those companies the total value of assets of which is not less than one hundred crores of rupees. Section 26 relates to Registration of the undertaking to which Part ''A'' applies. Sub-section (1) of the said section says that the owner of every undertaking to which this part applies at the commencement of the Monopolies and Restrictive Trade Practices (Amendment) Act, 1984 or to which the provisions of that part become applicable thereafter, shall, within 60 days from such commencement or the date on which that part becomes first applicable to it, or within such further time as the Central Government may, on sufficient cause being shown, allow, make an application in such form and containing such particulars as may be prescribed, to the Central Government for the registration of such undertaking as an undertaking to which that part applies. Sub-section (4) says that nothing contained in this Section shall apply to an undertaking which was registered under this Section before the commencement of the Monopolies and Restrictive Trade Practices (Amendment) Act, 1984 and accordingly fresh registration under the Section of such undertaking, shall not be necessary. A certificate of registration dated 12.2.76 of the appellant has been produced. It is evident from the above said, provisions that the registration certificate produced by the appellant inspite of amendment in the 1969 Act still holds good, and the provisions of Part ''A'' of Chapter-III are applicable to it.

IT has already been mentioned above that the case of the complainant is based on unfair trade practice adopted by the Company. However, in view of provisions of Section 2(1)(r) of the Act read with Sections 20 & 26 of the 1969 Act, the unfair trade practice of the appellant does not amount to unfair trade practice as defined in Section 36-A of the 1969 Act. Consequently, we are of the opinion that the present complaint was not maintainable under the Act.

IN view of the fact, we are of the opinion that the complaint is not maintainable against the appellant, under the Act, it is not necessary to decide the appeal on merits. For the aforesaid reasons, we accept the appeal, set-aside the order of the District Forum and dismiss the complaint. However, we leave the parties to bear their own costs. Appeal allowed. _______________