S.P.ASSOCIATES vs R.ARUNACHALAM

THIS appeal is directed against the order dated 28.11.1996 in O.P. No. 147/95 on the file of the District Consumer Disputes Redressal Forum, Erode.

THE appellants are the opposite parties while the respondent is the complainant. The short facts leading to the filing of this appeal, may in brevity, be stated in order to understand the crux of the issue arising for consideration in this action.

The 1st opposite party M/s. S.P. Associates, is a partnership firm of share brokers. The 2nd opposite party one S.P. Jawahar, is the Managing Partner of the said partnership firm.

THE complainant one R. Arunachalam, is the son of one R. Vedanayaki. THE said Vedanayaki was holding 200 shares of Bank of Madura with distinctive numbers 636731 and 630930. Those shares were sought to be sold in the share market by the said Vedanayaki through his son R. Arunachalam, the complainant. THEse shares were sought to be sold @ Rs. 195/- per share. THE opposite party, when contacted by the complainant, agreed to sell those shares at the said price. THE transaction was confirmed by a memo of confirmation bearing No. 149 dated 10.12.1992 issued by the opposite parties. Subsequently, the opposite parties issued a voucher selling the shares @ 123.75 per share and agreed to pay Rs. 24,750/- on 25.1.1993. In spite of repeated demands, the opposite parties did not at all pay the amount to the complainant. This sort of an act on the part of the opposite parties, he would stay, would amount to deficiency in service on their part. Alleging the factors as above, he knocked at the doors of the Forum below and filed the complaint for certain reliefs as prayed for.

THE opposite parties in pith and substance would contend that the complainant is not at all a consumer under the Consumer Protection Act, 1986. THE complaint filed as such is barred by limitation. This apart, they would deny the entrustment of the shares to them and undertook to sell them @ Rs. 195/- per share. THEy did not at all sell the 200 shares @ 123.75 per share and agreed to pay Rs. 24,750/- on 25.1.1993. THE complaint as such is liable to be dismissed. The Forum below after taking into consideration the materials placed on record, recorded the findings as below : (1) The complainant is a consumer within the purview of the Act. (2) There was deficiency in service on the part of the opposite parties. (3) The opposite parties are liable to pay to the complainant a sum of Rs. 24,750/- with interest at 18% p.a. from 25.1.1993 till payment and a payment of Rs. 2,500/- towards mental agony, harassment and inconvenience. (4) The complaint had been filed within the period of limitation. It is on those findings the Forum below passed the order. The operative portion of which is reflected as below : "In the result, the petition is allowed with costs of Rs. 1,000/- and the respondents are directed to pay Rs. 24,750/- with interest at 18% p.a. from 25.1.1993 till date of payment towards the value of 200 shares or return the 200 shares and to pay Rs. 2,500/- as compensation to the petitioner apart from costs within a period of 2 months from the date of the receipt of this order, failing which necessary action will be taken under Section 27 of the Consumer Protection Act, 1986 for disobeying the order of this Forum."

AGGRIEVED by the order as above, the opposite parties resorted to the present action by engaging a Counsel of their choice namely learned Counsel M/s. V. Srimathi.

ON service of process, the respondent/complainant entered appearance through a Counsel of their choice namely learned Counsel Mr. Subbaraya Somasundaram, R. Ilango. When this matter came up for hearing before us today, the said learned Counsel representing the respondent/complainant were called absent and no representation is made on their behalf. The fact that they are absent does not mean that we cannot dispose of the appeal on merits, of course, on perusal of the materials placed on record and after hearing the arguments of learned Counsel appearing for the appellants/opposite parties. That is exactly what we have done in the instant case.

The one and only question that arises for consideration in this action as to whether the order of the Forum below is sustainable in law on the facts and in the circumstances of the case.

IT is the first and foremost contention of the opposite parties that the complainant, on the facts and in the circumstances of the case, cannot at all be construed as a consumer. To this sort of a contention, we are unable to affix our seal of approval, on the facts and in the circumstances of the case. The shares in question admittedly stood in the name of one Vedanayaki, the mother of the complainant. IT is a notorious fact which is being capable of taken judicial notice of that the shares in the stock market are sold mainly on instructions oral through telephone and on a few rare occasions the transactions of selling and purchase take place by way of written instructions. In the case on hand, the 200 shares belonging to the mother of the complainant were sought to be sold through the medium of the share brokers, the opposite parties at a specified rate per share. The rate agreed to be sold per share was at Rs. 195/- and on this aspect of the matter the opposite parties issued a memo Ex. A1 dated 10.10.1992. Another fact which could be taken judicial note of is that the shares are entrusted to the share brokers like the opposite parties with transfer deeds affixing the signature of the holder of the share in the share certificates leaving the name of the person in whose favour the shares are sought to be transferred not having been filled up. Unless and until, the transfer deed as well as the signed blanket share certificates are entrusted to the share broker, there was no possibility of effecting the sale of shares.

IN the case on hand, the shares had been sold out by the opposite parties @ Rs. 123.75 per share. They agreed to pay a sum of Rs. 24,750/- on 25.1.1993. This aspect of the matter gets the solidified support not only by the affidavit Ex. A2 filed by the complainant but also the memo Ex. A3 dated 25.1.1993 issued by the opposite parties. IN such state of affairs, to say as has been said by the opposite parties that the share certificates were not at all entrusted to them and they in fact never sold the shares at the rates specified as above cannot at all be acceded to, on the facts and in the circumstances of the case. Yet another fact which could be taken judicial note of is the fact that as and when the shares are sold in the share market by the share brokers, he is paid of his commission by deduction of the commission from the sale proceeds of the share and, therefore, for availing such services there is practically consideration paid. In the case on hand, services of the opposite party, share brokers had been utilised by the complainant in selling the shares of his mother for consideration. In such circumstances, to say that the complainant cannot at all be construed as a consumer qua the opposite parties falling within the definition of Section 2(1)(d)(ii) of the Consumer Protection Act, 1986 (for short, "the Act") cannot at all be acceded to, on the facts and in the circumstances of the case.

THE second point urged for consideration was that the complaint as filed is hopelessly barred by limitation. No doubt true it is that the shares were delivered to the opposite parties for the purpose of sale on 10.10.1992 and the complaint had been filed before the Forum below on 24.5.1995 more than two years after the cause of action has arisen. It is the contention of the opposite parties that on the face of the salient provisions adumbrated under Section 24-A of the Act, the complaint filed as such far beyond the period of two years after the arising of cause of action is barred by limitation. This sort of a contention appears to be credible on the face of it. THE utter untenability of such a submission would get exposed, little bit of a probe if made into such submission. Section 24-A of the Act, came into force only on 18.6.1996 and under this section, the period of limitation for filing complaint had been fixed at two years from the date on which the cause of action had arisen. In the case on hand, the cause of action did not arise on 10.10.1992 but arose on 25.1.1993 long before Section 24-A of the Act came into force.

PERTINENT it is to note at this juncture, a decision arising from this Commission in the case of Apex Roller Flour Mills (P) Ltd. v. Indian Overseas Bank & Anr., 1995 (1) CPR page 468. In that case, the Commission took the view that "the complaint under Consumer Protection Act, in respect of claims for which the cause of action arose before the amendment of the Act on 18.6.1993, can be filed within the original period of limitation i.e., within a period of 3 years from the time when the cause of action arose". In the present action, the complaint having been filed on 24.5.1995 cannot at all be stated to be far beyond the period of limitation of 3 years. Therefore, the contention of the opposite parties on the aspect of limitation brizzles next to nothing. The opposite parties would also contend that the complainant has no locus standi at all to file the complaint in question. The argument is that the share certificates stand in the name of the complainant''s mother by name one Vedanayaki and such being the case, it cannot at all be stated that he is having the locus standi to institute proceedings before the Forum below. While making this submission, the opposite parties forget the fact that the share certificates are movable properties, namely goods. Once the share certificates along with the blank transfer deed in the sense of leaving the name of the party in whose favour the certificates are sought to be transferred blank, then, in such an eventuality the holder of the share certificates will become the owner thereof and he is having the full power to effect transfer of the share certificate in the name of any person he wants. In the instant case, the mother of the complainant entrusted the share certificates to his son just for the purpose of convenience and the son had undertaken the job as per the instructions of the mother. Nothing foul in such a transaction can be suspected and once the complainant''s son holds such share certificates, he is definitely entitled to avail the services of the opposite parties for the selling of those share certificates for consideration and that is what he had done. In such a situation, to say that he is not having any locus standi, cannot at all be acceded to, on the facts and in the circumstances of the case.

One more argument snatched by learned Counsel appearing for the opposite parties is that the complainant, on the facts and in the circumstances of the case, cannot at all be construed as a beneficiary and consequently he is not entitled to launch the complaint before the Forum below and the complaint filed as such is not maintainable. In support of such a submission, reliance is sought to be placed in the case of Nirupama Paramguru v. The Managing Director, Favourite Small Investments Ltd. & Ors., I (1993) CPJ 285=1993 (2) CPR Page 306. This sort of an argument and the decision relied upon cannot at all hold water on the facts and in the circumstances of the case. We have already decided that the complainant himself is having the locus standi to file the complaint in the sense of himself being construed as the owner of the shares and the said shares were entrusted to the opposite parties for the purpose of sale for consideration. Therefore, this argument, as such, has to necessarily fail.

THE last but not the least of the arguments as projected by learned Counsel appearing for the appellant was that the Forum below has no power at all to order for the return of the share certificates entrusted to the opposite parties and such sort of a relief capable of being claimed elsewhere for specific performance. In support of such a submission, relief is sought to be placed upon the decision in the case of G. Krishnamurthi Chetty v. K.V. Chowdary & Anr., II (1995) CPJ 25=1995 (2) CPR Page 556. In that case, the State Commission of Andhra Pradesh, by taking into consideration the salient provisions adumbrated under Sections 2 and 14 of the Act, took the view on the facts and circumstances of the said case that the District Fora has no power at all to issue a direction for the delivery of the shares and the remedy lies elsewhere for specific performance or for damages as a consequence of the breach of contract by the opposite parties. THE facts of the case herein are altogether different from the factual matrix or situation of the case that arose for consideration before the State Commission of Andhra Pradesh. By saying so, we are not running away from the situation without answering the argument as raised by the said learned Counsel. To understand the argument as projected by the said learned Counsel, one must have a clear perception of views relatable to existence of power and exercise of power. Existence of power and exercise of power are altogether two different concepts. THE fact that there is existence of power does not mean that such a power is capable of being exercised on all situations. At the same time, exercise of power is not at all permissible in the absence of existence of power having been specifically ingrafted in the salient provisions adumbrated under the Act. Only such of those reliefs as are adumbrated under Section 14 of the Act are capable of being granted. That is to say, existence of power is there for the Forum or the Commission as the case may be to grant such of those reliefs as enumerated under the said section. THE fact that there is a power to grant the various categories of relief under the said section does not mean all such reliefs are capable of being granted in the absence of requisite factual matrix which necessitate the grant of such relief. THE reliefs that are capable of being granted are enumerated under Clauses (a) to (i) of Sub-section (1) of the said section. THE Sub-section (1) itself specifically prescribes that it shall issue an order to the opposite party directing him to do one or more of the reliefs enumerated under Clauses (a) to (i). In the case of goods beset with defects, the Forum is given the power under Clause (b) thereof to replace the goods with new goods of similar description which shall be free from any defect. THE Forum is also given power under Clause (c) to return to the complainant the price as the case may be the charges paid by the complainant. THErefore, the Forum constituted under the Act in the case of goods suffering from defects is given the necessary and requisite power to order for the replacement of the goods with new goods of similar description free from any defect or to return or refund the price of the goods. In the case on hand, the Forum below directed the opposite parties to pay to the complainant a sum of Rs. 24,750/- representing the value of the shares @ Rs. 123.75 per share for 200 shares with interest @ 18% p.a. from 25.1.1993 till the date of payment or to return the 200 shares apart from granting other incidental reliefs. The question that arises for consideration is whether the option of the return of the shares is permissible, on the facts and in the circumstances of the case. Since the shares had been sold out in favour of third parties by the opposite parties, share brokers, the question of issuing any direction to them for the return of the shares is in the very nature of thing not feasible or possible. Such being the case, the relief capable of being granted on the factual matrix of the case on hand is to issue a direction for the payment of the value of the shares which had been quantified in a sum of Rs. 24,750/- with appropriate interest as ordered by the Forum below. Therefore, we are of the view that though the Forum below has the necessary and requisite power to order for the return of the shares, yet, on the facts and in the circumstances of the case, such exercise to power is not feasible. The order of the Forum below to the extent as indicated has to necessarily get modified.

THE appeal, as such, fails and the same is dismissed except to the extent of the modification as indicated above. We however make no order as to costs on the facts and in the circumstances of the case. Appeal dismissed.