B. SUBBARAO vs M/S. SUN PHARMACEUTICALS LTD. & ORS

By this Revision Petition, under Section 21(b) of the Consumer Protection Act, 1986 (for short "the Act"), the Complainant questions the correctness and legality of order dated 28.05.2008, passed by the Andhra Pradesh State Consumer Disputes Redressal Commission at Hyderabad (for short "the State Commission") in First appeal No. 1680 of 2005. By the impugned order, the State Commission while allowing his Appeal, has directed Respondent No. 1, M/s Sun Pharmaceuticals Ltd.; and its Registrar for Shares, Respondent No. 2 herein, to refund an amount of 26,000/-, representing the value of 100 equity shares, originally held by the Petitioner in the said Company, together with interest @ 12% per annum from the date of filing of the Complaint till realization and compensation of 15,000/- towards the mental agony as also for the loss suffered by him on account of fluctuations in the share market.

Succinctly put, the facts leading to the filing of the Revision Petition are that the Petitioner was holding 100 Shares of the face value of 10/- each of Respondent No. 1 Company. The Share Certificate was in the physical form. According to the Petitioner, he lost the Share Certificate and accordingly, vide his letter dated 02.02.1999, reported the matter to the Company, praying for issuance of a Duplicate Share Certificate. Vide its letter dated 13.02.1999, the Company while informing the Petitioner that "they have marked necessary caution in the shares" advised him to lodge a complaint with the nearest Police Station for the loss of Share Certificate and send to them a copy of the FIR along with an Indemnity Bond and affidavit in the prescribed format, enclosed therewith, so as to enable it to place the same before the Board of Directors for their approval and to issue the duplicate Share Certificate. A certificate for lodging the FIR was issued by the Sub-Inspector of Police on 26.08.1999 and accordingly, vide his letter dated 29.12.1999, the Petitioner furnished all the requisite documents, by Registered A/D Post, which was acknowledged by the Company vide letter dated 06.01.2000. It seems that in the meanwhile, on 17.02.2000, the Company received the original Share Certificate along with Share Transfer Certificate and affidavit, purportedly sworn by the Petitioner, from Respondent No. 3 for transfer of Shares in his favour. Acting, rather swiftly, the Company claims to have transferred the Shares on 23.03.2000 in the name of Respondent No. 3. Having waited for the response from the Company to his request for issue of duplicate certificate, for sufficient time, on 25.05.2000 the Petitioner issued a reminder to the Company, again requesting them to do the needful at the earliest. While the Petitioner was waiting for the Duplicate Share Certificate, responding to Petitioner''s Letter dated 25.05.2000, Respondent No. 2, vide its letter dated 16.06.2000, informed him that the Shares held by him, had already been transferred in favour of Respondent No. 3 on 23.03.2000. Contending that he had never approached the Company for transfer of Shares in question in favour of Respondent No. 3; the affidavit, alleged to have been sworn by him for transfer of the said Shares was fabricated; the details mentioned on the concerned documents were not his; and the signatures on the documents were forged, on 10.07.2000 the Petitioner issued a legal notice to all the Respondents calling upon them to issue Duplicate Share Certificate within 15 days of receipt of the notice. Since there was no positive response from the Respondents, alleging deficiency in service on the part of Respondents No. 1 & 2, in not issuing duplicate Share Certificate and transferring the Shares in the name of Respondent No. 3, the Petitioner filed a Complaint before the District Forum, praying for a direction to Respondent No. 1/Company to: (i) issue duplicate Share Certificate; (ii) pay Dividend declared on the shares from the years 1999 onwards with interest; (iii) cancel the transfer of shares in the name of Respondent No. 3 and (iv) pay a compensation of 3,00,000/- along with cost of litigation.

The District Forum, however, opined that since the dispute related to transfer of shares, it was covered by the provisions of the Companies Act, 1956 and further, dispute also involved verification of signatures, it did not have jurisdiction to adjudicate upon the same. Consequently, the District Forum granted liberty to the Petitioner to approach appropriate Court for redressal of his grievance.

Aggrieved, the Petitioner filed Appeal before the State Commission. The State Commission, has come to the conclusion that having assured the Petitioner that "they have marked necessary caution" in respect of the Share Certificate, the Company did not take any precautionary steps to prevent any unauthorized transfer of shares, there was clear deficiency in service on the part of Respondents No. 1 and 2. Accordingly, the State Commission has issued the afore-noted directions to them.

Still dissatisfied, the Petitioner has assailed the order of the State Commission, mainly on the ground that having held that there was deficiency in service on the part of Respondents No. 1 and 2, the State Commission ought to have evaluated the monetary loss/damage caused to the Petitioner on account of illegal transfer of the shares held by him and awarded adequate compensation therefor.

It is pertinent to note that since Respondents No. 1 and 2 have not challenged the order passed by the State Commission, the finding of deficiency in rendering service to the Petitioner in its failure to issue duplicate Share Certificate by them, has attained finality.

Therefore, the short question for consideration is whether or not the Respondent Company is liable to pay further compensation to the Petitioner for the loss suffered by him for losing a valuable security, viz. 100 equity shares, held by him in Respondent No. 1 Company, because of Company''s negligence and deficiency in its service, in addition to the aforenoted relief already granted by the State Commission?

It is trite that the word ''Compensation'' is of very wide connotation. It not only constitutes actual loss, it includes expected loss in future. In Lucknow Development Authority Vs. M.K. Gupta (1994) 1 SCC 243, explaining the width and scope of the powers conferred on the Consumer Fora under the Act, the Hon''ble Supreme Court has observed that the Commission has been vested with Jurisdiction to award value of goods or services and determine compensation for any loss or damage suffered by a consumer, which in law is otherwise included in wide meaning of compensation. The Consumer Fora is entitled to award not only the value of the goods or services but also to compensate a consumer for the injustice suffered by him due to deficiency in service in sale of goods or rendering of service, as the case may be.

Bearing in mind these observations, the next question falling for consideration is with regard to the basis or the yardstick to be applied for determining the loss, which the Petitioner claims to have suffered for having been deprived of the ownership of 100 equity shares held in the Respondent Company. Having regard to the nature of the script involved, we are of the view that the standard norm to determine the extent of loss is the extent of earnings on the concerned security. In other words, the amount of dividend the Petitioner would have earned on the said equity shares and other benefits accruing from the share holding, would be the relevant factor for estimating the loss suffered by the Petitioner. In this regard, the Petitioner has placed on record the details of the dividends declared by the Company from year to year. Additionally, according to the Petitioner, as per the information furnished by the Company, during the period from 1994-95 till 2013-14, the Company had issued Bonus Shares in the year 2000-2001, in the ratio of 1:2; in the year 2004-05, in the ratio of 1:1 and then in the year 2013 in the ratio of 1:1, in addition to splitting of share with face value of 10/- into 2 equity shares of 5/- each and then again, reducing its face value to 1/-. It is the stand of the Petitioner that as on 03.01.2015, the value of the share was 826.25p per share and therefore, taking into account the Bonus shares, etc. as on the said date the value of the total shares held by him would have been 99,15,000/- and by now, he would have earned dividend amounting to 1,51,750/-. By including legal expenses (50,000/-), compensation for mental agony (3,00,000/-) and misc. expenses, the Petitioner has thus, worked out the compensation at over 1,00,00,000/-, which according to him, deserves to be paid to him.

Having bestowed our anxious consideration to the afore-noted facts and figures, stated by the Petitioner in his written submissions, we are of the opinion that at this stage, it would neither be possible nor expedient to determine exact amount of loss, which the Petitioner would have suffered by relying on the said facts and figures, now filed before us, particularly when the total amount of compensation claimed by the Petitioner in the complaint was 3,00,000/-. More so, when the element of uncertainty in such kind of scripts cannot be altogether ruled out. It cannot be said with any amount of certainty that the Petitioner would have continued to retain the shares or may have sold the same or a part thereof. Therefore, taking an overall view of the matter and bearing in mind the fact that cost of the shares as on the date of filing of the complaint along with interest @ 12% p.a. has already been awarded by the State Commission, in our opinion, ends of justice would be subserved if an additional lump sum compensation of 2,50,000/- is awarded in favour of the Petitioner and against Respondent No.1 Company, in addition to the amount already awarded by the State Commission.

Resultantly, we allow the Revision Petition and direct that the aforesaid additional compensation shall be paid by Respondent No. 1 Company to the Petitioner, within 4 weeks of receipt of a copy of this order. The Petitioner would also be entitled to costs, quantified at 20,000/-.

The Revision Petition stands disposed of in the above terms.