VINOD KUMAR PODDAR vs SCICI LTD.

THE undisputed facts of the case are that M/s. SCICI Limited, arrayed as opposite party No. 1, offered rights issue in November, 1992. THE complainant, Vinod Kumar Poddar, was entitled to 800 rights share @ Rs. 10/- at a premium of Rs. 35/- i.e. @ Rs. 45/- per share. Exercising the right to apply for additional shares, the complainant, in fact, applied for 1,000 shares and deposited the application together with a cheque dated 7.12.1992 for Rs. 45,000/- drawn on Canara Bank, East of Kailash. THE application and cheque were deposited with Bank of Baroda, Madhuban, Nehru Place, opposite party No. 3, which was the nominated Bank for making such application alongwith application money. THE proceeds of the cheque namely Rs. 45,000/- were collected by the Bank of Baroda, opposite party No. 3 on 21.12.1992. THE complainant received allotment advice only regarding 100 shares on 18.2.1993. He made enquiries from the opposite parties i.e. the Company, M/s. Tata Consultancy Service Ltd.; Registrar to the issue, opposite party 2; and the Bank of Baroda, opposite party 3. THE Company also wrote to the Registrar to explain the discrepancy. It was found that even though the complainant had applied for 1,000 shares and had deposited a cheque for Rs. 45,000/-, the Bank, opposite party 3, in fact, intimated to the Registrar and the Company that the complainant had applied only for 100 shares and had deposited only Rs. 4,500/-. THE Bank admitted its mistake and requested opposite parties 1 & 2 to allot further shares as per complainant''s entitlement but to no purpose. On 21.8.1993, the Bank, opposite party 3, refunded Rs. 42,053/- being the balance of Rs. 45,000/- which had not been forwarded to the Company and Rs. 1,553/- as interest thereon. THE complainant approached District Forum seeking compensation amounting to Rs. 94,500/- on account of loss suffered by him on 900 shares @ Rs. 105/- per share, Rs. 10/000/- incurred as expenditure in making correspondence, visit to Bank and Rs. 15,000/- as expenses of the proceedings before the Fora.

UPON notice issued by the District Forum, opposite parties 1 to 3 neither appeared nor filed any written version. A reply was filed on behalf of Registrar, opposite party 2. At a later stage during the pendency of the proceedings, the Bank, opposite party 3 entered appearance and made an application but failed to appear on the subsequent dates and the application made was dismissed for default. On a consideration of the matter, it was held that the complainant being beneficiary of the service undertaken by the Bank under an agreement with the Company for consideration was covered under the definition of ''Consumer''. It was further held that the Bank, opposite party 3, was deficient in rendering service to the complainant. Opposite parties 1 & 2 were also held guilty of deficiency on the ground that they failed to check the original application which was forwarded by the Bank to the Registrar and ultimately to the Company and point out the mistake in the Schedule submitted by the Bank to the Registrar wrongly describing me application for allotment of 100 shares and the application money being 4,500/- instead of Rs. 45,000/- for 1,000 shares. With regard to the amount of compensation, it was observed that share market was fluctuating from time to time and it could not be said that the complainant would have sold the shares on a particular date when a certain price was prevailing in the market. However, on a consideration of the facts and circumstances, the District Forum quantified the compensation to be Rs. 20,000. Another Rs. 5,000/- was awarded on account of harassment, etc. and thus the amount of Rs. 25,000/- to be paid jointly or severally by the three opposite parties. In the event of failure to pay the amount within 30 days, allowed by the District Forum, the amount was to carry further interest @ 24% till date of payment. Dissatisfied with the order, the complainant has preferred this appeal. Cross objections have been filed by respondent No. 3, Bank of Baroda.

We have heard Mr. Kamal Gupta, Advocate for the appellant, Mr. S. Singhal Advocate for the respondent No. 3, and Mr. Shashi Peter, Advocate for the respondent Nos. 1 & 2 and have carefully gone through the records.

ALONGWITH the appeal, the complainant has filed an application for condonation of delay supported by his affidavit. It has been stated in the application that certified copy of the order was received from the District Forum-II only on 23rd September, 1994. The same having been despatched vide Despatch No. 6545 dated 6.9.1994 by the Forum. The appeal was filed on 5.10.1994 i.e. within 12 days of the receipt of the certified copy. The application for condonation has apparently been filed by way of abundant caution. It has been settled by the Supreme Court in Haryana Housing Board v. HB Colony Welfare Association and Others, III (1995) CPJ 28 (SC), that the period for filing appeal starts running from the date of communication of the order by the Fora. Accordingly, we find that the appeal in the present case was filed within limitation. The Cross Objection filed on 20th February, 1996 by respondent No. 3 are not maintainable as provisions of Order 41 Rule 12, CPC have not been made applicable to proceedings before the Fora. This was so laid down by the National Commission in Manjulaben V. Pannar and Another v. LIC of India and Another, I (1992) CPJ 101 (NC), and Poona Medical Foundation Ruby Hall Clinic v. Maruti Rao L. Titkare and Another, I (1995) CPJ 232 (NC)=1986-96 Consumer 2565 (NS) and the Executive Engineer O & M Tamilnadu Electricity Board and Others v. K.R. Mani, III (1995) CPJ 46 (NC)=1986-96 Consumer 2807 (NS) both Part-II. Various objections sought to be raised in the Cross Objections are legal in nature and assuming that the Cross Objections were maintainable, we may deal with them. It has been stated in the Cross Objection that the complainant was not covered within the meaning of the word ''Consumer''. There was no privity of contract. The complainant paid no consideration and application for allotment of shares did not amount to buying of goods. The complainant''s application for allotment of shares was commercial venture and this conclusion was confirmed from the fact that the complainant had withheld his Books of Account, etc.

IT cannot be disputed that the Company, respondent-1 had hired the services of the Bank, respondent-3 for receiving applications for the allotment of right issues dealing with the same as per agreement and forwarding the applications together with the necessary list of applicants and the money deposited by them for consideration. IT cannot also be disputed that such services were required to be rendered to the persons who applied for the allotment of shares. They were thus beneficiaries and they were availing of the services by the Bank with the consent of the Company. The complainant was thus covered under the definition of ''Consumer'' and the services availed were for consideration passing for the Company, respondent No. 1 to the Bank, respondent No. 3. The case relates to the availing of services, which is covered under Clause (ii) of Section 2(1)(d) and therefore, it is of no consequence whether the transaction was commercial in nature. The objections raised by the Bank have no merit and the same are accordingly decided against the said respondent. The contention of the appellant is that the observation of the District Forum that the complainant failed to lead evidence regarding the market price of the shares on the date of allotment, is contrary to the record. The complainant had placed on record a copy of the notice dated 19.5.1993 sent by the complainant in which reference was made to market price of the shares on the date of allotment as Rs. 105/- and reliance was placed on the relevant clipping from the Economic Times dated 17th February, 1993. According to the said Newspaper, the market price of the shares in question was Rs. 105/-. It has further been contended by the appellant that during the preceding one year of the filing of the application, the price of the share had varied from Rs. 105.50 to Rs. 177.50 as borne out from the Economic Times dated 30th September, 1994 (Annexure R2 to the Appeal) and there was no reason why the complainant should not have been allowed average of the rate on account of compensation. Reliance was placed on Soman S. Dassi v. Asian Coffee Ltd. and Another, (1993) 1 CTJ 772, (Gujarat State Commission). We find force in the contention of the appellant. The compensation should have been worked-out taking 105/- as the market value as on the date of allotment. The complainant would have had to pay Rs. 45 /- per shares in case the share had been allotted. That leaves a balance of Rs. 60/- per share which denotes the loss suffered by the complainant. The complainant has already been allotted 100 shares and he was entitled for 800 shares. With regard to the balance, it is not certain as to whether the complainant would have been allotted any additional shares as well. The compensation, therefore, works out to 700 X 60 per share = Rs. 42.000/-. For these reasons, we allow the appeal and enhance the compensation from Rs. 20.000/- to Rs. 42,000/-. We affirm the direction of the District Forum regarding the payment of costs. The period allowed for payment fixed by the District Forum has elapsed. The opposite parties are allowed a further period of six weeks to make the payment in terms of order of the District Forum as modified by this order. The appeal is disposed of accordingly. A copy of the order be furnished to the parties and sent to District Forum-II. Appeal allowed. _______________