RAM NARAYAN PARAMESHWARAIYER vs Larsen and Toubro Ltd.

THE appellant is coming in appeal against the order of 5th October, 1991 of the State Commission of Maharashtra in Complaint No. 92/90 whereby the State Commission dismissed the complaint holding that the appellant complainant before the State Commission did not suffer any financial loss till the filing of the complaint and therefore, found the complaint void of substance and dismissed the same.

THE appellant has attacked the order of the State Commission on the ground that the State Commission failed to appreciate the loss caused to him by the delay in issue of allotment letters by the respondent company. According to the appellant allotment letters for 630 preferential shares and 400 rights debentures were released by the respondents after a delay of 14 and 11 months respectively. THE allotment letters are due to be issued under the provisions of the Companies Act within a period of 10 weeks in the case of preferential shares and six weeks in the case of debentures and are tradeable securities. THEy provide liquidity to the investors on the basis of which they can raise money by way of loan/overdraft and on which the investor can make profits by their sale in the capital securities market. Even though the preferential debentures and rights debentures were allotted late, the appellant received the interest for the full period of the debentures. Consequently, the State Commission addressed itself to the question of the loss caused to the complainant by the delay in issue of the debentures.

The complainant had applied for a total of 2,040 debentures out of which he had received 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. As has been noted by the State Commission the complainant never sold or trans ferred any of the debentures received by him and therefore, it cannot be said that the complainant has sustained any financial loss. During the hear ing also the appellant did not maintain that he wanted to raise any loan or advance from banks etc. on the security of allotment letters. Besides it was also pointed out to him that if he had pur chased the debentures for re-sale, which he could not effect in the absence of allotment letters, the transactions would become a transaction for a commercial purpose and therefore, he would not be a ''consumer'' as defined under Section 2(1)(d)(i) of the Consumer Protection Act.

IN any event, the Consumer Forums can consider his claim for compensation under Section 14(1)(d) for any liquidated damages only in case it is established that he has suffered loss due to deficiency in service and negligence on the part of the respondent. This, he has failed to establish. The order of the State Commission is confirmed. The appeal is dismissed. The appellant shall pay a sum of Rs. 2.000/- as costs to the respondent. Appeal dismissed