J.K.Synthetics Ltd vs ANITA BHARGAVA

THE instant appeal is directed against an ex-parte order dated 1.9.94 passed by District Forum, Calcutta in CD.F. Case No. 2325/94 in (Re. Anita Bhargava v. J.K. Synthetic Ltd.). THE ex-parte order was served upon the Appellant at Kanpur by Speed Post with A.D. .through learned Advocate of the complainant at Kanpur. Immediately after such service of the order at Kanpur the Appellant came to know the text of the order and preferred this appeal within time. This fact was established by the Appellant with all supporting documents.

THE complainant-opp. party entered appearance and filed written objection in the appeal and the matter was contested between the parties. THE short case of the complaint is as follows: - (a) That the complainant''s husband Late Ramesh Kumar Bhargava was the holder and owner of 2300 shares of the Appellant-company and he died on 17.12.87 leaving her as the legal heir with others. Following the dec laration of offering right issue by the company in July, 1988, to Ramesh Bhargava she deposited Rs. 34,500/- by six cheques dated 8.7.1980 drawn on Bank of India through the Appellant banker, American Express Bank, Delhi in payment of full value of Rupees of 1100 right equity shares and the Appellant received and acknowledged the same. THE Appellant sent six allotment advises dated 7.9.88 in the name of Ramesh .Kumar Bhargava but without share certificates.

(b) Being suspicious complainant enquired about the matter and came to learn that equity shares of Ramesh Kumar Bhargava were sold to four different persons by Ramesh. Ramesh could not transfer the shares as he died on 17.12.1987. (c) Complainant wrote to the Appellant who sent a list containing the particulars in whose names the shares has been transferred.

(d) THE Complainant was sure and certain that a transfer, deed was fictitious and forged because a dead man could not execute any transfer deed. Accordingly, complainant sent a legal notice to O.P. and demanded the transfer certificates or the refund of the price of equity shares with cost and compensation.

The Respondent-Appellant in its appeal stated as follows:- (a) That the Appellant-company is duly registered under Indian Company''s Act having registered office at Kamala Tower, Kanpur (U.P.) where the Appellant received a letter alongwith an impugned order passed by District Forum, Calcutta from one Mr. M.K. Ghosh, Advocate for complainant on 22.10.94 and for the first time came to know the text of the order. The complainant without serving any notice obtained the ex-parte order from District Forum, Calcutta though neither the cause of action nor the Appellant carries on business within the jurisdiction of Calcutta District Forum.

(b) The District Forum in its order observed that the case is not maintainable as the address of the Appellant is outside the jurisdiction of Calcutta District Forum inasmuch as no part of cause of action was arising in Calcutta. Learned District Forum held that the case is barred by Section 11(2) of Consumer Protection Act, 1986.

(c) District Forum further held that the complainant''s allegations regarding fraudulent transfer of names relates to investigation either by Civil Court or by Criminal Court, thereby the jurisdiction of District Forum under C.P. Act is ousted but surprisingly inspite of such observation District Forum should not have passed an order directing the Appellant to refund an amount of Rs. 34500/-alongwith 12% interest and compensation of Rs.1000/-. District Forum further committed wrong by making an observation that a penal action under Section 27 will follow in default of compliance of the order which is nothing but a composite order.

(d) The Complainant case was hopelessly barred by territorial jurisdiction as the Appellant conducts its business and the registered office is at Kanpur which is beyond the jurisdiction of the Forum. Moreso the equity shares were offered lastly on 18.5.88 since then no step has been taken by the complainant when cause of action last arose. Since then six years have elapsed and case is barred by limitation.

(e) Right equity shares were offered admittedly on 18.5.1988 in the name of Mr. Ramesh Kumar Bhargava by sending composite application forms. The composite application forms were instead of being filled in and signed by Ramesh Bhargava was filled in and signed by Mrs. Anita Bhargava as first Applicant and her minor children as second and third respectively. The Complainant instead of disclosing the date of death of her husband to the Company applied at her own risk for the right issues. The Company had sent the allotment advises in the name of Mr. Ramesh Bhargava on or around 7.9.88. The Equity shares were duly despatched in the name of Mr. Ramesh Bhargava on 26.9.88 and 11.10.88. The Complainant admits the receipt of allotment advises which were sent by Company under certificate of posting but denies the receipt of share certificates which were sent by registered post at the same address. All shares were lodged for transfer in the company by various transferees duly supported by original share certificates and valid instruments of transfer deeds. Since the transfer documents were found in order the transaction were approved by the company as per law. The Complainant never informed the company regarding the death of her husband either before or at the time of submitting composite application while subscribing for right equity shares to which she was never entitled to. The Complainant for the first time in April ''93 informed about the death of her husband requesting for transfer of 822 equity shares in her name and also filed succession certificate dated 13.1.93 which was issued by City Civil Court, Calcutta in Case No. 244/90 where the fact of the disputed shares and /or valuation thereto was not mentioned. As such the succession certificate, produced by complainant does not include the right shares.

(f) In absence of due intimation of death of registered share holder Ramesh Bhargava the shares were transferred in the natural course as per the documents duly completed and in accordance with law. The Complainant having full knowledge of the equity shares under dispute obtained a succession certificate without including the equity shares in the list of properties. Accordingly the complainant cannot have any legal right over the shares under dispute. And in view of the above stated facts the case of complainant is liable to be quashed setting aside the contradictory impugned order dated 1.9.94 passed by Calcutta District Forum, in C.D.F. Case No. 2325/94.

It is further submitted on behalf of the Appellant that District Forum has gone beyond the observations made in the order itself. As the registered office of the Appellant is at Kanpur and the payment was made through Appellant''s banker at Delhi the cause of action cannot be construed to be occurred in Calcutta. As such the impugned order is wholly without jurisdiction and contrary to the observations. The National Commission in its land-mark decision reported in II (1991) CPJ 686 (NC) observed that the case is to be filed either in a place where cause of action arose or the respondent resides. In a decision reported in AIR 1992 SC 1514 and in another decision reported in (1994) 2 CTJ 577 (Supreme Court), Hon''ble Supreme Court observed by mere submitting offer from Calcutta and making representation or sending Fax messages from Calcutta did not constitute any part of cause of action. Accordingly the impugned order is wholly without jurisdiction and contrary to the observations of Hon''ble Supreme Court. Calcutta District Forum observed due to non-occurrence of the cause of action within Calcutta and as the Appellant resides and carries on business at Kanpur the case of the complainant was barred by territorial jurisdiction but unfortunately in the ordering portion of the order the Forum below granted reliefs in favour of the complainant.

THE matters relate to complicated issues which can only be dealt in either by criminal or civil proceedings before any competent Criminal/Civil Courts. THE Hon''ble National Commission in its number of decisions observed that such issues can only be decided in Civil Court reported in II (1993) CPJ 154 (NC) (Re. M/s. Satna Syndicate Banker v. Central Bank of India & Ors.), II (1993) CPJ 889 (Re. Ex. Havildar Balbir Singh v. Union of India and Ors.), II (1993) CPJ 1227, (G.B. Patel v. New India Assurance) III (1993) CPJ 327 (NC), (Re. B.K. Sethi v. Chairman, Delhi Financial Corpn.), III (1994) CPJ 77 (NC), (Re. J.B. Medical Publishers Pvt. Ltd. v. THE Bank of India). The Forum below failed to appreciate that any composite order cannot be passed at the time of disposal of any case. An order of refund of certain amount and simultaneously directing that in default an order under Section 27 of the Act would be imposed, is in the nature of composite order which is not provided under Section 14 of the Consumer Protection Act. Hon''ble National Commission in its decision reported in II (1993) C.P.J. 242 (N.C.) in (Re. Union of India & Ors. v. Thiru Vengadam) held that no such composite order can be passed.

FURTHERMORE, it is observed that all steps were duly taken by the Appellant regarding sending of allotment advices which were admittedly accepted by the complainant but the fact of ''non-receipt of share certificates which were sent under registered post cannot be a deficiency in the matter of discharge of the share certificates by the Appellant. If there is any deficiency in the matter of non-delivery of such share certificates, at all, the postal department is to be blamed but unfortunately they are not impleaded as a party. The complaint of the Opposite Party is also not maintainable on the ground of non-joinder of various parties as observed by District Forum below, including postal department.. This impugned order has been passed by District Forum ex-parte without giving reasonable opportunity to the Appellant as such the District Forum committed wrong in passing the order in contradictory to the observations made in the ordering portion. In view of the above discussions and facts and circumstances of the case the impugned order dated 1.9.94 passed by Calcutta District Forum in C.D.F. Case No. 2325/94 is set aside and an amount of Rs. 2000/- is awarded as cost of the proceedings against the Opposite Party. Appeal allowed. Cost awarded.