O.P.GOYAL vs LEKH RAJ MALIK

THE complainant entrusted in early December, 1991 shares of three different Companies to the appellants share broker. THEre was no dispute regarding the shares pertaining to the two Companies but as regards three hundred shares of M/s. Jaggatjit Industries Ltd., the complainant shareholder was dis-satisfied with the sale price remitted to him at the rate of Rs. 98/- per share. THE Consumer Dispute Redressal Forum, Union Territory, Chandigarh, ordered that the Share Brokers were not competent to sell the shares at a price lower than Rs. 105/-. It was ordered on 5.2.1997 that the sum of Rs. 10,290/- together with interest @ 12% per annum shall be payable by the share brokers. Aggrieved against it the present appeal has been preferred.

THE shares which were entrusted by the complainant to the appellants have been described as under: "(i) 300 shares of M/s. Jaggatjit Industries Ltd. (ii) 50 shares of M/s. Guest Keen William. (iii) 100 shares of M/s. Milk Food Limited."

So far as item Nos. 2 & 3 are concerned there was no dispute and these did not constitute a part of the complaint. It is only regarding item No. 1 which pertains to 300 shares of Jaggatjit Industries that Lekh Raj Malik complainant is dis-satisfied and approached the Forum alleging that the price of Rs. 98/- per share paid to him was less than the minimum price expected by him. There is a preliminary plea raised on behalf of the appellant that complainant could not be deemed to be consumer in respect of shares sold through them. Since the appellants were entitled to collect 2% of the commission as alleged in the complaint and this fact has not been controverted in the reply, it is obvious that in the case in hand the appellants were rendering service of sale of shares through them provided they paid commission @ 2 per cent. The plea that the District Forum had no jurisdiction has thus no merit.

The shares were entrusted to the appellants in December, 1991 by the complainant. No specific date of the entrustment has been given in the complaint. The sale price was remitted on 19.4.1992. It is not disputed that the rate of shares was Rs. 98/- at that time. There is no agreement in writing that the share was not to be sold at a rate less than Rs. 105/- per share. In the absence of such a specific agreement it cannot be said that the appellants have acted with deficiency in selling a share of Rs. 10/- for Rs. 98/-. It is doubtful if the complainant himself had been clean in his conduct regarding sale of the shares. It shall be useful to refer to an important and relevant part of para 5 of the complaint itself and it is reproduced as under: "On 17.4.1992 the complainant was informed that he could collect the cheques for the sale price of the shares on 19.4.1992. That on 19.4.1992 the complainant sent his daughter to collect the cheques. As the complainant had serious doubts about the dealings of the respondent No. 1 and did not go personally so that if possible the share transfer forms could be had for confirmation of the sale prices. The purpose was that the share transfer forms would have to be sent by hand through his daughter as the complainant would not be there (in the office of the respondent) to sign the documents without keeping a copy thereof. The complainant''s daughter brought back the cheque and the shares transfer forms."

Thus as seen above when a call was received from the appellants regarding sale of the shares the complainant himself did not go and meet the appellants/brokers. He only deputed his daughter to go and collect the cheques on 19.4.1992. If the complainant was not satisfied with the rate and price of the shares there was no justification for him to accept the cheque on that day after deduction of 2% brokerage. The fact that the price of the shares was received without challenging the rate and after payment of the brokerage it cannot be said that there was deficiency especially in this case where there is no evidence in writing that the shares were not to be sold at a rate less than Rs. 105/- per share. Though the purchaser of the shares has not been examined in the Court, yet the evidence in writing that shares were not to be sold at a rate less than Rs. 105/- is wanting.

THE learned Counsel for the respondent has pointed out that the procedure laid down for transfer of shares and debentures in the Companies Act, 1956 has not been followed by the appellants. This cannot be said to be helpful to the respondent because the complainant himself has taken up the plea that he wanted to dispose of the shares. After considering all the facts and circumstances discussed above, we are of the view that the District Forum was not justified in holding the Share Brokers liable for sale of the shares at a rate lower than any alleged minimum price. There is no deficiency on the part of appellants. The conclusion is that the appeal succeeds and the impugned order imposing damages on share brokers is set-aside and the parties are left to bear their own costs. Appeal accepted.