State Bank of India vs ANUP KUMAR DHIMAN

THE challenge in this appeal is to the order of the learned District Forum, Kangra at Dharamshala dated 28.12.1996, whereby the appellant (hereinafter to be referred to as the State Bank of India) has been directed to pay a sum of Rs. 2,000/- as compensation and costs of Rs. 1,000/- to the complainant.

THE brief relevant facts necessary to be mentioned for determining the point in controversy are that the original opposite party No. 1 (hereinafter to be referred to I.P.C.A. Laboratories) floated equity shares, issue of which was to open on 23.2.1994. THE requisite application bearing Serial No. 1827398 was sent by the complainant/respondent alongwith demand draft of Rs. 4,000/- dated 14.2.1994 obtained from the Punjab National Bank, Khaniara, drawn on Punjab National Bank, C.D.P.C., Bombay vide registered letter delivered at Dharamshala on 15.2.1994 against receipt No. 1089. It appears that the I.P.C.A. Laboratories had hired the services of State Bank of India, Main Branch, Samachar Marg, Bombay which was to collect the aforementioned application alongwith money and to send it to the I.P.C.A. Laboratories.

The appellant-State Bank of India contested this matter before the District Forum. The District Forum on the basis of the material placed on record by the parties, has come to the conclusion that the application submitted by the complainant together with the demand draft amounting to Rs. 4,000/- was received in the Mail Section of State Bank of India, Bombay on 21.2.1994 i.e. well before the date of opening of the issue on 23.2.1994. It has further been found by the District Forum that State Bank of India did not remit the application together with demand draft of the complainant to the concerned Registrar of Issues of the I.P.C.A. Laboratories, which was ultimately to issue the equity shares and that the State Bank of India has been negligent and callous in not sending such application of the complainant to the Company-I.P.C.A. Laboratories for allotment of shares aforementioned and having found deficiency in service on the part of the State Bank of India, the District Forum has awarded Rs. 2,000/- as compensation in favour of the complainant.

MR. B.K. Sood, learned Counsel for the State Bank of India has very vehemently contended that the Consumer FORA has no jurisdiction to entertain this dispute. He has relied upon the judgment of the Supreme Court in Morgan Stanley Mutual Fund v. Kartick Dass, II (1994) CPJ 7 (SC), whereby it has been held that the prospective investor cannot be a consumer within the meaning of Consumer Protection Act and, therefore, the Consumer FORA has no jurisdiction. We regret we are unable to accept this contention, as facts of this case are distinguishable. In this case the question whether merely a prospective investor could be a consumer, was considered by the Supreme Court and the Supreme Court has held that after allotment of shares, rights may arise as per the contract (Articles of Association of Company), but certainly not before allotment. Therefore, at this stage, when one is a prospective investor of future goods, he cannot be called a consumer. On the other hand, in the present case, however, a different question arises that the Bank services were hired by the Company - I.P.C.A. Laboratories for collection application alongwith money and that the State Bank of India has failed to discharge such obligation.

THE exactly similar question came up for consideration before the Punjab State Commission, Chandigarh in Ram Lal Wadhwa v. Bank of Baroda, II (1994) CPJ 618, and the State Commission, Punjab has clearly observed that the services of the Bank were hired by the Company for collection of application alongwith the requisite money for prospective allotment of shares and the complainant was beneficiary of such an arrangements and as such he clearly falls within the definition of ''consumer'' under Section 2(1)(d)(ii) of the Consumer Protection Act and the Consumer FORA has jurisdiction to entertain such dispute against the Bank under the Consumer Protection Act. THEse observations squarely cover and apply with equal force to the present case and accordingly we hold that the Consumer FORA can entertain such dispute. THErefore, the failure of the Bank to remit application money for allotment of equity shares of a Company to the Company constitutes deficiency in service and the applicant/complainant can maintain complaint and the finding of the District Forum is quite in order which needs hardly any interference. The next question which requires consideration is whether the compensation of Rs. 2,000/- awarded by the District Forum is excessive. It is admitted case of the parties that equity shares were purchased for Rs. 4,000/- and since the shares were not allotted and the money has been returned to the complainant, in our opinion, it would be just and equitable if the amount of compensation of Rs. 2,000/- awarded by the District Forum, which seems to be on excessive side, is reduced to Rs. 1,000/-. In the light of what is discussed above, the appeal of the appellant-State Bank of India partly succeeds and that accordingly the appellant State Bank of India shall pay to the complainant an amount of Rs. 1,000/- instead of Rs. 2,000/- as compensation alongwith costs of Rs.1,000/-. The order of the District Forum stands modified accordingly. Order modified.