GURDIAL SINGH Vs. UNITED LAND AND HOUSING LTD

JUDGEMENT

(1.) This complaint has been filed by Sqn. Ldr. Gurdial Singh and his wife Smt. Jagjit Kaur, both of Chandigarh against three respondents namely; United Land and Housing Ltd. , New Delhi, Harson (India) Pvt. Ltd. , New Delhi and Shri Surinder Mehta, Director (Operation) of respondent No.1 with the allegations which are these. The respondent Company (meaning respondent No.1) advertised public issue of shares with certain highlights, one of these being guaranteed by-back of shares by the promoters, after the expiry of the non-transferability period at Rs.21/- per share, the original price whereof was Rs.10/- per share. The complainants were tempted to subscribe to the public issue and paid Rs.40,000/- for the allotment of 2000 shares to each of them. These shares of the denomination of Rs.10/- were allotted to the complainants at par. It is stated that the share certificates have not been received. The complainants after the expiry of three years from the date of allotment of shares approached the respondent Company for buy-back facility at the rates of 21/- per share. In response to the above, respondent No.1 directed the complainants to contact respondent No.2 for the purpose. The original letters said to have been received by the complainants have not been produced but its specimen issued to some other persons have been placed on record as Annexures C-2 and C-3.

(2.) It is further alleged in the complaint that on pursuing the matter, the respondents purchased 400 shares of complainant No.1 at Rs.21/- per share but the residuary shares of the complainants were not purchased. Another grievance made is that the respondent did not pay any dividend to the complainants. With these allegations it was contended that the respondent Company has indulged in unfair trade practice which has caused loss to the complainants. A total compersation of Rs.1,59,966/- has been claimed on behalf of the complainants against the respondents for providing deficient service and indulging in unfair trade practice.

(3.) Notice having been issued to the respondents in the complaint, they filed a joint reply. Apart from raising some preliminary objections regarding jurisdiction etc. , the main contentions on merits are these. None of the respondent companies advertised the public issue of shares. However, respondent No.1 Company had issued the brochure for providing placement of shares amongst the directors/employees, associates and relations, in accordance with the terms and conditions incorporated in the brochure (Annexure C-1 ). The fact that complainant No.1 had been allotted 2000 shares on payment of Rs.40,000/- has not been denied. At the same time it is stated that complainant No.1 had subscribed for these 2000 shares to become Area Manager and not under a public issue. The said complainant did not comply with the other conditions attached to his appointment as Area Manager. As regards complainant No.2, it was admitted that she had applied for purchase of 2000 shares but she too had not complied with the terms and conditions. She had also defaulted in the payment of interest on delayed payment to the extent of Rs.2800/-. In view of these facts, both the complainants had not been issued any share certificate. Another significant defence taken is that its was respondent No.2 Company which was the promoter and as and when any share-holder applied to the said promoter the shares were purchased. It was obliguely admitted that the respondent Company had gone in losses, though the same is attributed to non-cooperation of the complainants. The fact that the respondent having repurchased 400 shares of complainant No.1 at the rate of Rs.21/- per share was also denied. On the contrary it is alleged that the said complainant had borrowed Rs.8,000/- as against the pledge of 400 shares. With these facts it was prayed that the complaint may be dismissed.