INDIAN PETROCHEMICALS CORPO-RATION LTD. vs BALWANT SINGH BHALLA

THIS appeal under Section 15 of the Consumer Protection Act, 1986 (the ''Act'') by opposite party to Complaint No. 431 of 1994 from the order of District Forum Jaipur-II, Jaipur dated 2.5.1995 arises under the following circumstances :

M/s. Indian Petrochemicals Corporation Ltd. (the ''appellant Company'') is a public sector Petrochemical Company incorporated on 22nd March, 1969 under the Companies Act, 1956 with its registered office at P.O. Petrochemicals 391396 District Vadodara (Gujarat). On receipt of the approval of the Govt. of India, Ministry of Chemicals and Fertilizers, Deptt. of Chemicals and Petrochemicals vide letter dated 26.3.1992 for the manufacture of certain petrochemicals products at its third Petrochemicals Complex at Gandhar in Gujarat the appellant Company came out with Public Issue of 2 crores Equity Shares of Rs. 10/- each at a premium of Rs. 150/- per share. As per terms of the said issue, as mentioned in the prospectus as also in the application forms, Rs. 60/- per equity share was payable on application, Rs. 50/- on allotment of shares and Rs. 50/- on first and final call. The prospectus to the issue, inter alia, provided that moneys paid up in advance of calls shall not, in respect thereof, confer any right to dividend or to participate in the rights of the Company. Balwant Singh Bhalla, the complainant-respondent (the respondent) had applied for 100 equity shares of the above-mentioned issue and was allotted that number of shares with Portfolio No. 137189 vide Share Certificate No. 00293302 dated 25.1.1993.

On 10.8.1994 the respondent filed a complaint under Section 12 of the Act against the appellant, alleging therein that after allotment of the equity shares in the above issue, the appellant Company had adopted a resolution to the effect that holders of 100 equity shares, whose names were recorded in the relevant Register of the Company as on 16.12.1993, would be entitled for allotment of 100 equity shares on right basis, that although respondent''s name was so recorded in the relevant Register but no offer to subscribe to the Right issue was received by him from the appellant Company and thus 100 shares on right basis were not allotted to him causing a loss of Rs. 11,000/- to him. He further contended that due to appellant Company rendering deficient services to him in the matter of allotment of shares in right issue, he suffered loss of interest on Rs. 6,000/-, which he had invested in the public issue of Equity Shares.

THE case put forth by the appellant Company in answer to respondent''s complaint was that in its 24th Annual General Meeting, held on 28th September, 1993, a special resolution regarding issue of secured Redeemable Partly Convertible Debentures to the Equity Share holders of the Company on a right basis in the ratio of One Debenture for every 20 fully paid up equity shares, was passed. With a view to enable those Equity Share holders of the appellant Company, who had not paid the allotment money of Rs. 50/- per Share by 30.4.1993 and/or call money of equal amount per Share by 15.7.1993, to participate in and subscribe to the rights issue, advices were issued requiring them to remit by demand draft, the outstanding moneys together with interest, payable 18% p.a. from the last due dates, as mentioned above, well in advance of the "Record Date" which was 16.12.1993, failing which they would not be eligible to avail of the benefit of the Rights Offer. But despite a Public Notice issued on 30.11.1993 for the purpose, the respondent did not remit the outstanding allotment money as well as the ''call money''. No offer to allot Debentures, as specified above, was, therefore, made to him. The parties were heard and the material on record was gone through.

IT is the undisputed position that the respondent did not pay the "allotment money" and the "call money" of Rs. 50/- each per share. His contention, that since no application form was sent by the appellant Company to him either along with the allotment letter or subsequently thereto and, therefore, he could not deposit the "allotment money" as well as the "call money", has not merit. IT was specifically printed in the application forms as well as in the allotment letter that he was required to pay the "allotment money" of Rs. 50/- per share and the "call money" of equal amount per share. In case the respondent had not received the required application forms for enabling him to deposit the "allotment money" and the "call money" he could have asked for the same from the appellant Company, which he never did. Moreover, appellant''s letter dated 30.11.1993 and the Public Notice of the even date specifically required the Equity Share holders, like him, to pay the unpaid "allotment money" and the "call money" due from them before the "Record Date" which was 16.12.1993. But the respondent admittedly did not pay the same. He had thus not made himself eligible for allotment of any Debenture/Share in the Rights/Issue, simply on the basis of entry of his name as Equity Share holder of the appellant Company in the relevant Register. Letter dated 30.11.1993 as also the Public Notice of the even date contained the following warnings in bold letters. "Holders of Equity Shares Remaining partly-paid on the Record Date will not be eligible for the Rights Offer apart from such partly-paid shares being liable to be forfeited." Since the respondent did not pay the outstanding "allotment money" and the "call money" despite the above specific notice to him and chose to remain the holder of "Partly Paid" Equity Share, the appellant Company did not render deficient service to him in not offering allotment of the Debentures/Shares to him on Right basis. His complaint was, therefore, liable to be dismissed.

SINCE the complaint filed by the respondent in this case fails on its own merits we do not consider it necessary to decide the objection of the appellant Company against maintainability of the complaint on the ground of want of jurisdictions to the District Forum; at this belated stage.

IN the result, the impugned order is set aside and the appeal allowed with cost at Rs. 2,500/- to the appellant Company. Appeal allowed with costs.