Indian Acrylics Limited vs SANTOSH KUMAR MOR

THE opposite party No. 1 has filed this appeal under Section 15 of the Consumer Protection Act, 1986 (for short the ''Act'') against the order dated 20.9.1994 passed in case No. 26/93 by the District Consumer Disputes Redressal Forum, Jabalpur (for short the ''District Forum'').

THE opposite party No. 1 (O.P. 1) is a registered Company under the Companies Act, 1956 while the opposite party No. 2 is a Private Limited Company, the authorised agent of opposite party 1. THE two share holders of the opposite party 1 viz. Aditya Sethi and Anand Kumar Jain transferred their 200 shares of the face value of Rs. 10 to the complainant. THE shares for registering the transfer of the shares was received by opposite party 1 on 14.2.1992. THE shares so sent after registering transfer and making endorsement were not sent to the complainant within two months from the receipt of the shares by the opposite party 1. THE appellant alleged that the shares duly endorsed mailed through courier service were not delivered to complainant due to sudden death of the owner of the concerned courier. After the efforts, the shares were traced out and were mailed to the complainant on 20th April, 1993 by registered post, which were received by the complainant in July, 1993. THE complainant alleged that he suffered loss as if the shares would have been received in time he would have earned the profit as the value of the shares at that time was Rs. 40/- when the shares were received the value went down to Rs. 16/-. Thus, the complainant claimed loss of Rs. 4,800/-, besides, the compensation of Rs. 5,000/- for mental agony and Rs. 100/- expenses incurred in correspondence, in all Rs. 9,900/- with interest thereon at the rate of 18% per annum. The opposite parties after notice did not appear before the District Forum. However, the opposite party 1 sent a reply dated 14.5.1993 to the complainant with a copy to the Presiding Officer, District Forum, Jabalpur. The District Forum after appreciation of evidence on record found deficiency in service and awarded the amount of Rs. 4,800/- the loss suffered, Rs. 100/- expenses incurred in correspondence and the costs of the proceedings Rs. 100/-, total Rs. 5,000/- which was ordered to be paid with interest thereon at the rate of 18% per annum from 19.1.1993.

It was first contended that the complainant was not a ''consumer'' as there was no transaction between the complainant and the Company, reliance was placed on a decision of the State Consumer Disputes Redressal Commission, Delhi in M/s. I.G. Petro Chemicals Limited v. Sushil Kumar, 1996 (2) CPR 140. The contention in the facts of this case is devoid of merit. The complainant was not the prospective investor, who applied for allotment of shares. The Supreme Court in Morgan Stanley Mutual Fund v. Kartick Das, II (1994) CPJ 7 (SC), a case related to a prosepctive buyers of the shares observed that till the allotment of shares takes place "the shares do not exist". Therefore, they can never constitute goods as defined under Section 2(1)(i) of the Act. In other words, before allotment of shares, an application for allotment of shares cannot constitute goods. Therefore, such an applicant before allotment of shares, would not be called as a consumer as a sale according to Sale of Goods Act, 1930 takes place when the property passes from seller to buyer. However, it is after allotment, rights may arise as per contract (Articles of Association of Company) but certainly not before allotment.

THE present case is of after allotment of shares, therefore, the decisions relied are distinguishable and are of no help to opposite party 1. THE question in similar circumstances in an appeal filed by the present appellant in another case was raised before Punjab State Consumer Disputes Redressal Commission in case of Indian Acrylics Limited v. Rajni Goyal & Ors., II (1997) CPJ 46=1998 CCJ 1467, which was repelled observing that in the matter of transfer of shares, which had already been issued by the Company to the share holders, a separate transaction takes place between the share-holder and the transferor. THE question of making endorsement thereon either with respect to paid up value or with respect to its transfer is merely a part of rendering service by the Company which had floated the shares. THE contention that no separate consideration is to be paid by the complainants and thus, they cannot be held to be ''consumer'' is devoid of merit. Consideration need not transaction of rendering service in the matter of issuing shares by the companies, there is implied promise to effect transfers as shares are marketable commodity and the amount received by the Company would also impliedly include the value of the share as well as service charges. Next, it was contended that there was no deficiency in service as the delay was caused because the shares sent after endorsement were not delivered by the courier then the said shares were sent by the registered A.D. post cannot be accepted. After endorsement, the shares ought to have been sent by registered A.D. post or by courier so as to reach the complainant within time but the shares were not sent which were sent after long correspondence. This was an act of deficiency in service causing harassment and mental agony to complainant.

LASTLY, it was contended that on the compensation of speculative market price of shares the compensation could not have been awarded deserves consideration. The market value of the shares remains speculative as share prices go up and come down according to market condition. Therefore, on speculative market value of the shares loss could not have been awarded. See, the decision of Assam State Consumer Disputes Redressal Commission in Pawan Kumar Sharma & Anr. v. Nagarjuna Fertilizers and Chemicals Limited, III (1994) CPJ 306=1995 (2) CPR 102. However, as the deficiency in service was clear, therefore, we are of the view that the complainant was entitled to a just compensation for the deficiency in service. Considering over all circumstances, it would be just and proper to award a reasonable sum of compensation of Rs. 1,000/- plus Rs. 100/- expenses incurred in correspondence, total Rs. 1,100/- with interest thereon at the rate of 12% per annum from the date of the order of the District Forum. In the result, the appeal is partly allowed. The order of the District Forum shall stand substituted as indicated hereinabove. In the circumstances, the appellant shall bear the costs throughout which are quantified at Rs. 500/-. A copy of this order be conveyed to the parties and a copy be sent to the District Forum alongwith record of the case. Appeal partly allowed.