AVNIBEN NIKHILKUMAR SHAH vs Khaitan Hostombe Spinels Ltd.

THIS appeal is directed against the judgment and order dated September 16, 1993 passed by the District Consumer Disputes Redressal Forum, Surendranagar (District Forum for short) dismissing the appellant''s complaint being Complaint No. 879 of 1992.

FACTS leading to this appeal briefly stated are as follows:- 2.1. The appellants who are original complainants had jointly applied for equity shares offered to public by respondent company. The company allotted 300 shares to the appellants and allotment advice was received by the appellants on July 4, 1991. The appellants paid the balance of the share price payable on allotment with interest to the company by demand draft on September 16, 1991. The said demand draft was sent by Registered Post A.D. at the company''s address. The company, however, failed to send share certificates to the appellants inspite of demand and repeated reminders. It was alleged that the share price of the company had risen up to Rs. 50/- per share but the appellants could not sell the shares since the share certificates were not sent to them. According to the appellants they had suffered loss of Rs. 12,000/-. On the above grounds'', the appellants filed the aforesaid complaint before the District Forum for recovery of loss of Rs. 12,000/-, compensation of Rs. 25,000/- for mental agony, expenses of Rs. 250/- and cost. The company appeared before the District Forum in response to the summons but did not file any reply. It further appears that at subsequent stage of the hearing of the complaint no one appeared on behalf of the company. Therefore, hearing of the complaint proceeded exparte against the company. The District Forum has, by its impugned judgment and order taken a view to the effect that it had no jurisdiction to entertain the. appellants'' complaint. In the view of the District Forum, the appellants should have filed complaint before the Forum which had jurisdiction over the company. According to the District Forum, the company was not running its business within its jurisdiction nor was it having a branch office within its jurisdiction. The District Forum further held that no part of cause of action had arisen within its jurisdiction. Therefore/according to the District Forum, it had no jurisdiction to entertain the appellants'' complaint. In this view of the matter, it dismissed the appellants'' complaint with no order as to costs.

We do not agree with the view taken by the District Forum. It is evident from the facts stated in the complaint which is supported by affidavit of appellant No. 2 that the appellants had applied for shares of the Company from Limbdi and they received allotment advice for allotment of 300 shares at Limbdi. The appellants had also despatched the balance of the share price by demand draft from Limbdi. In view of the facts stated in the complaint and the affidavit of appellant No. 2, we are unable to agree with the view taken by the District Forum that no part of cause of action had arisen within its jurisdiction. In our opinion, part of cause of action had arisen within the jurisdiction of the District Forum and, therefore, it had jurisdiction to entertain the appellant''s complaint under Section 11(2)(c) of the Consumer Protection Act. The judgment and order of the District Forum, therefore, deserve to be set aside and the matter shall have to be remanded to the District Forum for fresh disposal in accordance with law. In the result, this appeal is allowed and the impugned judgment and order of the District Forum are set aside. The matter is remanded to the District Forum for fresh disposal on merits in accordance with law. There will be no order as to costs. Appeal allowed.