MANAGER, CATHOLIC SYRIAN BANK LTD. vs K.MADHUSOODHAN

THE first opposite party in O.P. No. 387/1996 on the file of the District Forum, Thiruvananthapuram, is the appellant. THE 3rd opposite party invited applications for allotment of shares, in response to the same the complainant applied for allotment of 500 shares by remitting one half of the value of the shares as per the conditions of the 3rd opposite party Company and submitted the same with the first opposite party who is the banker of the 3rd opposite party. THE complainant''s application was on 2/3/1996 with a cheque drawn through his banker 4th opposite party for an amount of Rs. 2,500.00 in favour of the third opposite party; and as indicated, submitted the same with the first opposite party who is the banker of the 3rd opposite party. THE application and the amount had to reach on the appointed date. THE grievance of the complainant is, since the first opposite party did not sent up the application and the cheque before the appointed date the complainant could not get 500 shares allotted on paying the balance of Rs. 2,500/-. THErefore, according to the complainant that would constitute deficiency of service, and consequently, he is entitled to compensation which he claimed as per the quoted value of the share in the share market on the date of the complaint for the 500 shares, which was Rs. 28,750/-. He also claimed incidental reliefs.

THE opposite parties 1 to 3 have filed separate versions. THE first and second opposite parties maintained that, the complaint is not maintainable against them as the complainant did not hire their service; the shares could not be allotted as the first opposite party did not sent up the application and the papers to the opposite parties 2 and 3 in time. Second opposite party in addition maintained that the first opposite party had sent up a Nil collection certificate also to the second opposite party. In such circumstance opposite parties 2 and 3 maintained that, they cannot be made liable. First opposite party in-addition maintained that, it was due to an in advertant omission that the same was not sent up the application and the cheque to the 3rd opposite party in time. It was also maintained that in the meanwhile share value has fallen down and therefore he is not entitled to any compensation. THE fourth opposite party was ex-parte. On the side of the complainant his agent was examined as PW1 and he produced Exts. PI to P7. On behalf of the first opposite party, their Manager was examined as D W1 and Ext. Dl was marked. THE District Forum on consideration of the said evidence came to the conclusion that there is deficiency of service and on the basis of the said finding directed the first opposite party to pay Rs. 28,750/- with Rs. 500/- as costs to the complainant within a period of one month, failing which the first opposite party shall also be liable to pay interest at 12% on the aforesaid amount of Rs. 28,750/-. In this appeal by the first opposite party the said direction is challenged. The learned Counsel for the appellant maintained that, the complainant being not a consumer as he sought to purchase shares, which under the law, is a commercial transaction. The learned Counsel alternatively maintained that, since the default that alleged against the first opposite party being the result of inadvertent omission, that cannot constitute deficiency of service under the law. At any rate, according to the learned Counsel the quantification of the compensation cannot be supported as according to him there being no certainty that the shares would be allotted to the complainant; and fixing the compensation on the basis of its value on the date of filing of the complaint cannot be supported. If at all, according to the learned Counsel, only a compensation which cannot have relationship with the value of the shares on the date of the complaint alone could be fixed. This is particularly so as according to the learned Counsel Ext. Dl would show that, by the time the version was filed the market value of the share in less than 2 months have come to down from Rs. 57.50 to Rs. 11 /-. On the other hand the learned Counsel for the respondent/complainant would maintain that, since the complainant is the beneficiary of the service availed by the 3rd opposite party he, under the law, is a consumer. Then the learned Counsel maintained that as per the materials placed before the District Forum the inevitable inference being that the allotment was not made solely on the ground that his application did not reach the 3rd opposite party in time, his prayer cannot be denied on the ground that, his claim for share being contingent, there could not be any deficiency of service or eligibility for compensation. The learned Counsel maintained that in the facts and circumstances of the case since the complainant has lost his right to sell the shares, the measure of compensation has to be as on the date of filing of the complaint and not a future date.

As regard s the first question as to whether complainant is a consumer it is necessary to read Section 2(1)(d) of the Consumer Protection Act, 1986. The said section reads : "consumer" means any person who- (i) buys any goods for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of deferred payment when such use is made with the approval of such person, but does not includes a person who obtains such goods for resale or for any commercial purpose; or (ii) (hires or avails of) any service for consideration which has been paid or promised or partly paid and partly promised or under any system of deferred payment and includes any beneficiary of such services other than the person who (hires or avail s of) the service for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payments, when such services are availed of with the approval of the first-mentioned person;

(Explanation : For the purpose of Sub- clause(i), "commercial purpose" does not include use by a consumer of goods bought and used by him exclusively for the purpose of earning his livelihood, by means of self employment). It has to be observed in this connection that, the learned Counsel for the appellant sought to maintain that since there is no pleading as to the complainant availing service or that the complainant is a beneficiary of the service, the complainant cannot now maintain that himself being a beneficiary of the service availed by the 3rd opposite party he is a consumer. It has to be immediately noted that the allegation in the complaint that first opposite party is the banker of the 3rd opposite party and that the said application with the necessary draft had to be forwarded to the first opposite party for sending the same to the 3rd opposite party and the said allegation having been not denied, certainly complainant is entitled to rely on the said case pleaded by him to maintain that, he is a beneficiary as the said data confers him the status of a consumer. Even if there is no specific statement that he being a beneficiary he is a consumer, one cannot hold that he is not a consumer, as Clause (ii) of Section 2(1)(d) specifically includes a beneficiary of the service also. The data constituting the same are alleged. It is not the case of the first opposite party that, the first opposite party is not the bank of die 3rd opposite party. The service of the first opposite party is availed by the 3rd opposite party for facilitating transaction; and with due regard to the character of the said parties it cannot be argued that the first opposite party rendered, service gratuitously, or without consideration. It was pointed out by the learned Counsel for the respondent that, DW 1 had admitted that the first opposite party rendered service for consideration. Then the complainant being a beneficiary of the service he is a consumer within the meaning of the Consumer Protection Act, 1986.

NOW the question that falls for consideration is whether there is deficiency of service. Learned Counsel for the appellant brought to our notice the decision of the National Commission reported in II (1996) CPJ 114 (NC) Cwherein the National Commission declined to hold the appellant therein is guilty of deficiency of service as the lapse alleged was on account of the inadvertent mistake committed by the clerical staff. It was pointed out by the learned Counsel for the respondent that, there was no plea by the appellant to that effect. In the case reported in II (1996) CPJ 114 (NC), referred to earlier the matter that arose for determination was with respect to National Savings Certificate. On maturity the certificate should earn a total interest. With regard to the rate of interest, on 1.4.1997 by a Gazette Notification, rate of interest was reduced. On the certificate it was printed that on expiry of 6 years the purchaser would get Rs. 10,075/- but the Post Office paid only Rs. 9,505/- less by 1% in interest. Due to the in advertence of clerical staff of the post office the old rate of maturity value which was printed on the certificate was not corrected. On this the National Commission found that, that being an inadvertent omission by the clerical staff of the Post Office, that cannot be treated as deficiency of service. The question for consideration is, whether the default by the first opposite party to forward the application with the draft can be equated with the situation dealt with in the aforesaid decision. Admittedly, the appellant/ first opposite party was duty bound to send up the application with the cheque in due time. Not only he did not sent up the application with the aforesaid cheque, he had sent up a ''NIL'' statement on 12.3.1996. In the version filed by the opposite parties 2 and 3 they have contended that the first opposite party had sent a ''NIL'' statement on 12.3.1996. The said statement also is appended. If at all it could be treated as failure to send the same as a dereliction, inasmuch as the first opposite party had sent up a ''NIL'' statement, the same, in the circumstance, would acquire pivotal importance for at least at that time they should have verified and satisfied the correct position, particularly when their service was enlisted by the 3rd opposite party. It is a sheer negligence when one is charged with a duty being in possession of the relevant materials fails to perform his duty to the detriment of the person who is to be benefited by its service. We are unable to agree with the learned Counsel for the appellant when he submitted that the first opposite party cannot be held to be guilty of deficiency of service because omission is only the result of inadvertent mistake. In view of the above discussion we are of the view that, the first opposite party has committed deficiency of service. Now the question for consideration is as to the compensation to which the complainant is eligible. Learned Counsel for the appellant relied on the decision of the National Commission reported in I (1993) CPJ 3 (NC) (Ram Narayan Parameshwara Iyer and Another v. Larsen & Toubro Ltd. & Others) to maintain that, the complainant is not entitled to the award of any compensation because he has not adduced any material to show the actual loss which he has sustained on account of the default of the first opposite party. The decision I (1993) CPJ 3 (NC) concerns the application of the complainant for 2040 debentures out of which he had allotment letters for 800 rights debentures and 200 preferential debentures in April, 1990, 810 debentures in September, 1990, 400 rights debentures in November, 1990 and 630 rights debentures in February, 1991. He sought to maintain that he sustained loss because of the late debentures. The complainant alleged that the debentures reached only after a delay of 14 and 11 months respectively. Para 3 of the decision reads : "Even though the preferential debentures and rights debentures were allotted late, the appellant received the interest for the full period of the debentures." In such circumstances the National Commission said, since the complainant had no case that he had never sold or transferred and thereby sustained loss, he is not eligible for compensation. It is clearly distinguishable. In the case in hand no shares were never allotted to him, so he had no occasion to sell them. The next decision relied on by the learned Counsel is the decision of the Punjab Chandigarh State Commission reported in II (1994) CPJ 618=1994 (3) CPR 171. (Ram Lal Wadhwa v. Bank of Baroda) wherein, according to the learned Counsel, in a similar situation a notional compensation of Rs. 2,500/- alone was awarded observing that it would have been a matter of chance that the share should be allotted to him and therefore he was awarded only Rs. 2,500/-. The second decision is the one of the Delhi State Commission reported in I (1998) CPJ 184 (Munish Sahni v. State Bank of India and Others) in a situation as in the earlier Punjab decision, the Delhi State Commission awarded only an amount of Rs. 2,500/- as compensation. But the Counsel for the complainant relied on the decision of the U.P. State Commission reported in 1997 (2) CPR 205 (Samanya Sahayak Prabandhak, State Bank of India and Another v. Abdul Moin) in support of his argument in a situation like the one in hand the complainant is entitled to the value of the shares the date of the complaint. Before going into the decision of the U.P. State Commission it would be relevant to see whether in the given facts and circumstances there could have been any uncertainty in the matter of allotment of share to hold that, the complainant is not eligible for awarding value of shares as it stood on the date of the complaint. Learned Counsel for the appellant sought to highlight that even in the complaint the complainant has only stated that he had the possibility of the shares being allotted to him. At any rate the plea is not the same as saying that he has only a chance of allotment of share. In Ext. P2 the total number of shares that was decided to be transferred as well as the actual number of shares that were allotted are mentioned. Total number of applications were 2581 and the successful applicants were 2571. Thus out of the 2581, except 10 applicants all were allotted. with shares. It has to be noted that, rule of appreciation of evidence in civil cases, particularly in Forum constituted under the Consumer Protection Act being preponderance of probability and not proof beyond doubt, this aspect has to be judged with due regard to the aforesaid evidence and the attending circumstances. Therefore, it would be enough for the complainant to prove, that his claim, in the context of the materials produced and attending circumstance is probable. It is necessary in this connection to note that, in the version filed by opposite parties 2 and 3 they have no case that the complainant suffered from any disability for allotting share, in fact nobody has got a case like that. When such is the situation, one cannot say that, the chance of the complainant to get allotment was only a remote possibility, on the other hand the materials to which advertence has already been made would drive to the inevitable inference but for the failure of the first opposite party to forward his application with the cheque in time, he certainly would have been allotted the shares. In this context it is necessary for us to refer to the U.P. State Commission decision reported in 1997 (2) CPR 205 referred to early. The principles in the matter of award of compensation in such a situation is discussed in para 11 of the decision. It is observed : "In a case like the present it is not possible to direct the Company to issue to the complainant the shares after taking the amount of its price now. There has been no deficiency on the part of the Company. It is the deficiency on the part of the Bank which has put the complainant in this predicament and it is for the Bank to compensate the complainant for the loss of profit which could reasonably be expected to be earned by him if he was in possession of the shares and wanted to dispose them of The District Forum rightly relied upon the prevailing value of the share on the relevant date in the share market as evidenced by the quotation placed before the District Forum on behalf of the Company from authentic source. The fundamental principle for determining the quantum of compensation which naturally flows from the consequence of the deficiency in service on the part of the Bank is that as far as possible the injured party should be placed in as good a situation as if there had been no deficiency in service and the complainant would have succeeded in obtaining the shares from the Company."

Principle of awarding compensation is to reimburse loss as a direct result of deficiency of service. Here, there being no dispute that the value of the share on the date of institution of the complaint was Rs. 57.5 that could be taken as the basis for awarding compensation. The District Forum has fixed the value of the shares in question at Rs. 28,750/-. But it has to be noted that in selling the shares he may be forced to pay brokerage. The decision reported in 1997 (2) CPR 205 deducted 10% of the said amount as brokerage. We follow the same because that in our view is reasonable to be adopted. Therefore, after deducting 10% and Rs. 2,500/- towards the balance value of the shares from Rs. 28,750/-, the balance has to be fixed as the compensation. Therefore, with the said modification, we have to confirm the direction made by the District Forum. In the result the appeal is dismissed subject to the aforesaid modification. However, there will be no order as to costs in this appeal. Order confirmed with modifications.