HINDUSTAN DEVELOPMENT CORPN.LTD vs PREETHA K.

THIS appeal is directed against the order passed by the District Forum, Kozhikode, in O.P. No. 535/94.

SHORTLY stated, the allegations in the complaint are as follows : The complainant applied for 50 partly convertible debentures on 26.2.1992 and remitted Rs. 1,875/-. On 26.5.1992 the complainant received a registered cover from M/s. ABC Computers (Private) Limited, Registrars of the Company, containing three share certificates of one K.J. Mathew alongwith allotment money advice and first and final call money notice. Immediately the complainant addressed the Registrars pointing out the error in forwarding share certificates of K.J. Mathew instead of his certificates. They sent a reply regretting the error and promising that they will correct the mistake shortly and requesting the complainant to wait for their advice. Accordingly the complainant was waiting for the correction of the mistake committed by the Opposite Party. The Company did not forward the debentures and share certificates and allotment money advice and first and final call money notice even though several letters were sent by the complainant. After 2 years, on 5.3.1994 the Opposite Party sent a letter threatening forfeiture of the shares and debentures alleging that the complainant had not paid the allotment money and first and final call money, she was also advised to send the balance amount alongwith interest @ 19% from 14.4.1994. On receipt of this letter, the complainant informed the Opposite Party about the non-receipt of the shares debenture certificate or call money notice in time. The complainant asked the Opposite Party to waive the interest portion since the mistake had occurred at their end due to irresponsible act of their Registrar. The Opposite Party did not take any action on the request made by the complainant. The complainant also sent a complaint to the Company Secretary, H.D.C. Calcutta -2 and other authorities but no reply was received. Finally the Company informed the complainant that her shares and debentures have been forfeited from 28.5.1994. The complainant estimated the loss incurred by her at Rs. 10,000/- and claimed the amount from the Opposite Party. The Opposite Party filed a version admitting that the complainant was allotted 50 debentures in the public issue of Rs. 1,38,86,500/-, 14% secured redeemable partly convertible debentures of Rs. 150/- each series IX. Due to inadvertent mistake of the Registrar to the issue, notice of payment of allotment money and first and final call money of K.J. Mathew were collated with the allotment advice related to the complainant. It was also averred that the complainant knew from the allotment advice as well as from the letter of ABC Computers that she was allotted 50 debentures at her application. Since she received an allotment advice, she knew that she had to pay allotment money and first and final call money against the debentures allotted to her. The first Opposite Party issued reminders dated 28.9.1992, 13.11.1992, 4.1.1993 and 12.8.1993 to all share holders to pay the first and final call money alongwith interest @ 19% from the respective last dates upto the date of actual payment. Finally on 5th March, 1994 a registered forfeiture notice was issued. In spite of that the complainant did not pay the outstanding allotment money and the first and final call money together with interest. If the complainant had paid the money her shares and debentures should not have been forfeited. The Opposite Party''s records do not show that any letter has been received from the complainant. If the complainant wants any relief regarding the inadvertent mistake in collecting the letter of allotment of her allotment advice then she should also make ABC Computers also a party. There is no deficiency on the part of the Opposite Party and the complaint is liable to be dismissed.

The District Forum found that there is deficiency on the part of the Opposite Party in making error, in sending the share certificates of Sri. K.J. Mathew to the complainant and not sending to her the share certificate alongwith allotment money and first and final call notice. It is also found that the Registrar is only an agent of the Opposite Party and if any mistakes were committed by the Registrar the Opposite Parties are liable to compensate the complainant. In that view an order was passed by the District Forum awarding the entire compensation of Rs. 10,000/- claimed by the complainant.

FEELING aggrieved by the said order this appeal has been preferred. The learned Counsel appearing for the appellant submitted that the District Forum Kozhikode has no territorial jurisdiction to entertain the complaint and for that reason alone the complaint was liable to be dismissed. On the other hand the learned Counsel for the respondent/complainant submitted that no such contention has been taken by the appellant before the District Forum and, therefore, it is not open to the Opposite Party to raise such a contention at this stage. We went through the version filed by the Opposite Party and find that no pleading was raised regarding want of territorial jurisdiction in the version submitted by the Opposite Party. In the circumstances we feel that we will not be justified in entertaining such a plea in the appeal. In this context, a reference may be made to the decision of the Supreme Court in AIR 1981 SC 1683 (Koopilan Uneen''s daughter Pathumma and Others v. Koopilan Uneen ''s Son Kutty (dead) by LRs and Others). The Supreme Court referred to Section 21, Civil Procedure Code which states that no objection as to the place of suing shall be allowed by the Appellate or Revisional Court unless such objection was taken in the Court of first instance at the earliest possible opportunity and in all cases where issues are settled, at or before such settlement, and unless there has been a consequent failure of justice and laid down as follows : "In order that an objection to the place of suing may be entertained by an Appellate or Revisional Court, the fulfilment of the following three conditions is essential : (i) The objection was taken in the Court of first instance. (ii) It was taken at the earliest possible opportunity and in cases where issues are settled at or before such settlement. (iii) There has been a consequent failure of justice. All these three conditions must co-exist".

IN the instant case the first 2 conditions were not satisfied. Though all the provisions of the CPC are not applicable to the proceedings before the Consumer Courts, the National Commission in Branch Manager, LIC of India and Another v. Smt. Zareena, I (1995) CPJ 4 (NC), has pointed out that the sound principles of law embodies in the CPC are applicable to proceedings of the Consumer Court as well. The Kerala High Court had occasion to consider the question whether the principle contained in Section 21, CPC is applicable to proceedings under Kerala Buildings (Lease and Rent Control) Act and answered the question in the affirmative. It held that the principle which is given statutory recognition under Section 21, CPC so far as suits are concerned has been applied in cases where the section in terms does not apply and it cannot be said that a defect of territorial jurisdiction can go to the root of the matter or affect the competency of the Court which has been invested with powers under the Rent Control Act. In the above circumstances we hold that the order is not vitiated by reason of the alleged want of territorial jurisdiction of the District Forum which tried the case. It is next contended that there is no deficiency on the part of the Opposite Party. We are unable to accept this contention. Admittedly the agents of M/s. ABC Computers Private Limited did not send the share certificates to the complainant and instead 3 share certificates of one K.J. Mathew were sent. Immediately the complainant addressed the Registrar of the Opposite Party and pointed out the mistake committed by the Opposite Party. This letter was sent by registered post on 26.2.1992. In that letter the complainant not only pointed out the error committed by the agents but also requested them to send the allotment letter and the allotment money remitting challan immediately so that she could remit the allotment money. However, no reply was sent. Again another letter was sent by registered post on 6.9.1993, bringing the matter to the notice of the Company Secretary of the Opposite Party. Her previous correspondence to the Registrar dated 5.6.1992 and Registrar''s reply dated 20.7.1992 and another letter sent by the complainant on 28.10.1992 and further Reminder sent on 12.8.1992 were also referred. However, the ABC Computers did not send any reply except the reply dated 20.7.1992 to the complainant admitting the receipt of the complainant''s letter alongwith enclosures and stating that the error occurred by oversight while developing the documents by daftary people and they are looking into the matter and taking steps to arrange the complainant''s documents in a short-while and requesting her in the meantime to bear with them. We find various letters were sent by registered post by the complainant to M/s. ABC Computers Private Limited and also to the Company Secretary of the Opposite Party but no action was taken on that letter. However, on 5th March, 1994 the Opposite Party sent a letter threatening the complainant that the shares and debentures allotted will be forfeited since the complainant had not sent the allotment first and final call money as advised and interest at the rate of 19%. On receipt of this letter the complainant again sent another registered letter to the Opposite Party stating that she shall remit the amount after hearing from them and requesting them to waive the interest portion and also avoid forfeiture of the debentures as the company had not given her a chance to pay the balance amount without interest for the following reasons. "(i) The Company had not sent the debenture certificate/allotment advice till date, even though she had written many complaints. (ii) The Company had not informed the date of remittance of allotment money or call money without interest. (iii) The Registrars of Company had despatched the documents to some unknown person and the documents received by her are pertaining to one K.J. Mathew, Kannattu House, P.O. Kallanode".

She also sent a letter dated 6.9.1993. All these facts were intimated to the Company and she did not receive any reply. She also filed a complaint to the Secretary, Bombay Stock Exchange on 15.3.1993. She requested to send her debentures, share certificates at the earliest and give a chance to remit allotment/call money without charging interest. No reply was sent by the Registrar of the Opposite Party or by the Opposite Party to any of these communications and finally a communication was sent on 25.6.1994 informing, the complainant that the money sent was forfeited with effect from 28.5.1994. The facts narrated above would show gross negligence on the part of the Opposite Party after debentures were allotted to the complainant. In the circumstances, we are unable to accept the contention that there is no deficiency on the part of the Opposite Party.

THE learned Counsel for the appellant submitted that the complainant had not sent the first and final call money on receipt of the letter demanding the same. As pointed out earlier none of the communications sent by the complainant was replied by the Opposite Party. It is clear from the letter sent by the complainant on 10.4.1994 she was prepared to pay the first and final call money and she was waiting for a reply. But no reply was sent about her request to waive interest and instead a communication was sent on 25.6.1994 forfeiting the money paid by the complainant. THE facts narrated above would show gross negligence on the part of the Opposite Party.

THE next question to be considered is the quantum of compensation to be awarded. In the version the Opposite Party has not stated that the compensation claimed is on the high side, and it is for that reason, the District Forum held that the quantum is not disputed and allowed the entire compensation sought by the complainant. We pointed out the fact to the learned Counsel for the respondent. However, he attempted to rely on Ext. A 13 and submitted that even the amount awarded is on the low side. THE learned Counsel submitted that the expected amount of profit would have been much more if debenture certificates were received by the complainant in-time. THEre is no acceptable material before us to assess the actual loss that has been sustained by the complainant. In the circumstances we feel that the compensation part of the order requires modification. THE complainant demanded @ 18% interest for the amount of Rs. 1,875/- paid by the complainant on 26.2.1992. We have also no doubt that the complainant would have made better profit if the certificates have been sent to the complainant in-time. THE complainant also must have suffered mental agony as she did not receive the share certificates and the Opposite Party did not reply to the various communications sent by the complainant. In the circumstances we feel that it would be legitimate to award Rs. 2,500/- towards compensation. THE complainant is also entitled to her cost before this Commission which we fix at Rs. 1,000/-. In the result, we direct the Opposite Party to pay Rs. 1,875/- together with interest at the rate of 18% from 26.2.1992 till payment and also Rs. 2,500/- by way of compensation and Rs. 1,000/- cost within a period of one month. Order modified.