ICICI Bank Limited vs B.P. GAYATHRI

PARTIES in this Order are referred to according to their ranking in the Complaint filed before the District Forum for the sake of convenience.

APPEAL No. 1215/2004 is by opposite parties (for short "O.Ps.") Nos. 3 and 4 and APPEAL No. 1216/2004 is by the complainant challenging the Order of the District Forum. The simple case of the complainant is that pursuant to the offer to sell shares to the public issued by O.Ps. 1 and 2, she made an application for purchase of 1,000 shares along with payment of Rs. 1,15,000 under a cheque bearing No. 861663 drawn on State Bank of Mysore, Krishnamurthypuram, Mysore Branch to O.P. 3 which is the collecting agent. O.P. 3 forwarded the said application to O.P. 2 and also credited the amount paid by the complainant to the separate account opened by OP-1. OP-3 while sending the statement by mistake has shown that the complainant has paid Rs. 11,500 for 1,000 shares instead of showing the payment as Rs. 1,15,000. Missing of one ''0'' in the statement mentioning the amount deprived the complainant of getting all the shares for which she had applied. There is one more person by name Shri. Chandrahasa who had applied for 50 shares and who is shown to have paid Rs. 1,15,000. O.P. 1 has allotted only 50 shares in favour of the complainant by looking into the Statement of Accounts sent by O.P. 3 showing payment of Rs. 11,500 instead of Rs. 1,15,000. This has made the complainant to file the complaint before the District Forum alleging "deficiency in service".

The case of O.P. 1 is that the complainant cannot maintain a complaint under the Consumer Protection Act, 1986, as she is not a "Consumer" as defined under the Act. O.P. 2 though served with Notice by the District Forum did not appear before the District Forum. O.P. 3 has filed its version. O.P. 4 though initially placed ex parte later on sought permission to contest the case and, accordingly, permission was granted. O.Ps. 3 and 4 have filed common affidavit and additional version.

ON the basis of the pleading of the parties the District Forum has framed three points for consideration. Insofar as the maintainability of the complaint is concerned, the District Forum has held that the complaint is maintainable. So far as "deficiency in service" is concerned, the District Forum has held that there is a deficiency in service on the part of O.Ps. 2 and 3. The only point that arises for consideration in this appeal is: Whether the District Forum is justified in allowing the Complaint of the complainant?

THE case of the complainant in the appeal filed by her is that the District Forum is not right in dismissing the complaint as against O.P. 1. It is an admitted fact that the complainant has made an application seeking for allotment of 1,000 shares by paying a sum of Rs. 1,15,000 through cheque to O.P. 3. O.P. 3 also in turn has forwarded the application along with the statement containing the amount paid by the complainant. But in the statement of Accounts O.P. 3 committed a mistake in mentioning the amount paid by the complainant as Rs. 11,500 instead of Rs. 1,15,000. O.Ps. 1 and 2 relying upon the statement of accounts sent by O.P. 3 without verifying what was the actual amount paid by the complainant with reference to the amount credited have allotted 50 shares and refunded the amount of Rs. 6,250 to the complainant. The complainant having come to know after several correspondence that she has been allotted only 50 shares even though she had sought for 1,000 shares and have allotted 100 shares to one Shri. Chandrahasa despite the fact that he had applied for allotment of 50 shares, has moved the O.Ps. for allotment of remaining shares or, in the alternative, to refund the amount of Rs. 1,08,750. The request of the complainant for allotment of remaining shares did not yield any fruitful result. But after several correspondence O.P. 2 has refunded the amount of Rs. 1,08,750 to the complainant, that too after a considerable delay. This has made the complainant to file the complaint before the District Forum alleging "deficiency in service" on the part of the O.Ps. The learned Counsel appearing for the O.Ps. submitted that so far as non-allotment of shares in favour of the complainant is concerned, the complainant cannot maintain a complaint under the Consumer Protection Act, since she is not a ''consumer'' as defined under the said Act. In support of this submission, the learned Counsel appearing for the O.Ps. relied on the decision of the National Commission in the case of Om Prakash Sahni & Anr. v. State Bank of India & Anr., reported in II (2003) CPJ 100 (NC) and the decision of the Supreme Court in Morgan Stanely Mutual Fund v. Kartick Das, reported in II (1994) CPJ 7 (SC). The National Commission in Om Prakash Sahni''s case has held that the respondent therein who invested money for purchase of shares is a prospective investor and, therefore, he is not a consumer. The Supreme Court also in Morgan Stanley''s case has held that a person who invests for purchase of shares is prospective buyer and, therefore, he is not a consumer. In the instant case also, no doubt the complainant has made an application for allotment of shares. But rightly or wrongly, O.P. 1 through O.P. 2 has allotted 50 shars. So far as non-allotment of shares is concerned, the complainant being a prospective investor cannot be considered as a consumer.

IN the instant case, the District Forum has directed OPs. 2 and 3 to place the complainant in possession of 300 shares of O.P. 1 company. The complainant in her complaint has prayed that she may be placed in possession of 678 shares of O.P. 1 Company and also for awarding compensation of Rs. 50,000 with expenses of Rs. 5,500 and punitive damages of Rs. 50,000 as against O.P. 2. IN view of the decisions of the Supreme Court and the National Commission referred to above, we hold that the complainant is not entitled to ask that she be placed in possession of 678 shares of O.P. 1 company as she is not a consumer, so far as non-allotment of shares is concerned. Further, the shares to be sold are of O.P. 1. Other O.Ps. are the agents and intermediaries of O.P. 1. If that is so, no order could be passed as against the agents to place the complainant in possession of 300 shares, when the District Forum has dismissed the complaint as against O.P. 1. Accordingly, to that extent the complaint filed by the complainant is liable to be dismissed.

THE complainant has sought for a direction to the O.Ps. to pay compensation of Rs. 50,000 with expenses of Rs. 5,500 and punitive damages of Rs. 50,000 as against O.P. 2. But the District Forum has directed O.Ps. 2 and 3 to refund the amount of Rs. 66,000 after deducting the value of the shares to be allotted was directed in the impugned order and Rs. 5,250 which has already been refunded. This relief, in our view, ought not to have been granted by the District Forum since the complainant herself has not prayed for the same in the complaint. It was brought to our notice that O.Ps. 1 and 2 have refunded the amount of Rs. 1,08,750 to the complainant which was paid in excess of the value of the shares allotted in favour of the complainant. When such being the case, there was no reason for the District Forum to direct OPs. 2 and 3 to refund the said amount. THE granting of this relief by the District Forum, in our view, is without any application of mind. THErefore, to this extent the impugned order is liable to be set aside. The case of the complainant is that there is a deficiency in service on the part of O.Ps. 1 to 3. According to the complainant, even though she has paid a sum of Rs. 1,15,000 for the purpose of allotment of 1,000 shares, O.P. 3 while forwarding the application along with the statement containing the particulars regarding the amount paid by the investors has mentioned insofar as the complainant is concerned as Rs. 11,500, instead of Rs. 1,15,000. The missing of one ''0'' in the statement has deprived the complainant of getting her application considered for allotment of 1,000 shares. In the event if O.P. 3 had mentioned the amount as Rs. 1,15,000, in all probability the complainant would have been allotted more shares than what she has been allotted now. From the records it is seen that O.P. 3 no doubt has committed a mistake in mentioning Rs. 11,500 instead of Rs. 1,15,000 in the statement sent along with the application filed by the complainant wherein she had sought for allotment of 1,000 shares. Further, O.P. 3, though committed a mistake in mentioning the amount in the statement, has credited Rs. 1,15,000 to the separate account opened by O.P. 1 Company. If O.P. 2 had examined the application and the amount credited in all probability it would have requested O.P. 3 to correct the mistake in mentioning Rs. 11,500 instead of Rs. 1,15,000 and thereby would have considered the application of the complainant for allotment of 1,000 shares. But, in the instant case, no such efforts appear to have been made by O.P. 2 also. O.P. 1 was in possession of the amount paid by the complainant. The said amount had been utilized by O.P. 1 for its business and it had deprived the complainant of using the said money for her business as per needs, till it was refunded. Therefore, we are of the considered view that O.Ps. 1 to 3 have not provided the required service insofar as the complainant is concerned.

The complainant has brought to the notice of the O.Ps. that she has paid Rs. 1,15,000 by cheque and not Rs. 11,500. When that is so, O.Ps. 2 and 3 could have taken immediate steps to refund the amount. But after several correspondence and after considerable delay O.Ps. 2 and 3 have refunded the sum of Rs. 1,08,750 to the complainant. From this it is seen that the complainant has been deprived of making use of the said money for purchase of any shares or for any other purpose. The said money was in possession of either O.P. 1 or O.P. 2. The said O.Ps. have enjoyed the benefit arising out of the said amount. Therefore, taking all these facts into consideration, we are of the view that awarding a sum of Rs. 50,000 as compensation in favour of the complainant holding that there is a "Deficiency in Service" on the part of O.Ps. 1 to 3, would meet the ends of justice.

THE complainant has filed the appeal challenging the order of the District Forum on the ground that the District Forum was not right in dismissing the complaint as against O.P. 1. THE amount paid by the complainant was credited to the separate account opened by O.P. 1. O.P. 1 has refunded the amount paid by the complainant in excess of the value of 50 shares after an unreasonable delay. As O.P. 1 has enjoyed the benefit arising out of the money paid by the complainant, O.P. 1 is jointly and severally liable to pay compensation to the complainant, since non-refund of the excess money immediately after the allotment of 50 shares amounts to "deficiency in service." In the result, we pass the following Order in modification of the Order of the District Forum as follows: (1) The complaint filed by the complainant is allowed in part. (2) O.Ps. 1 to 3 are jointly and severally liable to pay Rs. 50,000 (Rupees fifty thousand only) to the complainant with interest at 6% per annum from the date of the complaint till realisation. (3) O.Ps. 1 and 2 are also directed to pay Rs. 2,000 to the complainant towards the costs of these proceedings.

Ordered accordingly.