TATA SHARE REGISTRY LIMITED Vs. R P KAPUR

JUDGEMENT

(1.) This appeal has been filed against the order dated 23rd of February, 1994 of the District Consumer Disputes Redressal Forum, Karnal directing the appellant-Company to pay to the respondent-complainant a sum of Rs.2,72,561/- as compensation for the loss caused to him and also to delete the name of his grand son Amitabh Kapur and his daughter-in-law Deepika Kapur from the shares issued to him and to pay another sum of Rs.5000/- as compensation for mental anguish and harassment caused to the complainant. The facts are not in dispute. The appellant-Company had issued a rights issue offer on 29th of May, 1992 offering a number of rights shares at a premium of Rs.70 per share to existing share holders of the Company. The closing date of the said offer was originally 21st of July, 1992 but was subsequently extended to 31st of July, 1992. The respondent-complainant, who holds shares jointly with his grand son and daughter-in-law applied for the rights issue on July 17, 1992 under his own signatures only while stating that the "second joint holder does not wish to join. " However the requisite renunciation form duly signed by the joint holders were submitted to the Company only on 25th of August, 1992 well after the closing date of the offer. In these circumstances, since the amount required had been paid, the Company issued the shares in the name of the joint holders as per their record. It is against this, that the respondent-complainant felt aggrieved and filed the complaint before the District Forum. It was his contention that the shares should have been issued only in his name and not in the joint names. Had that been done, he would have sold the shares at the then prevailing high price. However, since this was not done, loss had been caused to him for which he deserves to be compensated. On receipt of the notice of the complaint, the Company sent its detailed comments to the District Forum but thereafter did not bother to appear either for producing any evidence or at the stage of hearing of arguments. Therefore, the District Forum decided the complaint after recording the evidence of the complainant and hearing his arguments alone. It is probably this fact which has affected the decision of the District Forum and the respondent has also laid great stress on this point. This argument will be adverted to lateron.

(2.) The appellant-Company has apart from oral presentation by its Counsel has also made written submissions. The main contention of the appellant-Company is that there has been no violation of the rights offer made to the complainant. Had the renunciation form been sent alongwith the application, they would have issued the shares in the name of the complainant alone. However since no renunciation form was sent, mere endorsement of the complainant that the second joint holder did not wish to join in the rights issue does not give any right to the complainant to get the shares in his own name. The rights offer was made subject to the supervision of SEBI and the Stock Exchanges at which the shares of the Company were listed and any violation thereof would have made the Company liable for action by these authorities. Moreover it was clearly specified in the application form that application complete in all respect, must be submitted before the closing date, on the printed form provided to the complainant/- respondent complete in all respects. Any applications which were not complete in all respect or were not accompanied by proper amount of remittance were liable to be rejected. Therefore, since the duly completed application forms alongwith the signatures of the joint holders were not submitted by the due date, the Company was well within its right to reject the application in toto. However, it has still issued the shases in the names of the joint holders and it can not be held guilty of any deficiency in service in this regard. In fact, it has been over-indulgent to the complainant-respondent. Moreover, there is a set procedure for deletion of the names of joint holders which can only be done, when the joint holders submit their application in prescribed form by affixing the prescribed stamp duty, otherwise the Company would be guilty of violation of these provisions as well as the Stamp Duty Act by deleting the names of the joint holders. Therefore, the directions of the District Forum with regard to deleting the name of the joint holders are illegal and without any jurisdiction.

(3.) Mr. R. P. Kapur, complainant-respondent who appeared in person has argued personally and also submitted written arguments. He laid stress mainly on the provisions of Sec.13 (2) (b) (ii) of the Consumer Protection Act in support of his contention that when the present appellant had failed to appear before the District Forum, the Forum had no option but to pass an order against the present appellant. The relevant provisions are reproduced below : " (2) The District Forum shall, if the complaint received by it under Sec.12 relates to goods in respect of which the procedure specified in Sub-Section (1) cannot be followed, or if the complaint relates to any services : -. (b) where the opposite party, on receipt of a copy of the complaint, referred to him under Clause (a) denies or DISPUTES the allegations contained in the complaint, or omits or fails to take any action to represent his case within the time given by the District Forum, the District Forum shall proceed to settle the consumer disputes : -. . (ii) On the basis of evidence brought to its notice by the complainant where the opposite party omits or fails to take any action to represent his case within the time given by the Forum. " it is not disputed that the renunciation form was not sent alongwith the application and it was submitted only subsequently on 25th of August, 1992. The contention of the learned complainantrespondent that the Forum had no choice but to pass an order against the opposite party in the absence of any defence by it, can not be upheld. What has been provided under the law is that "district Forum shall proceed to settle the CONSUMER dispute" and not that it should decide in favour of the complainant. It is true that the present appellant did not follow up the case after filing its written statement before the District Forum but in view of the detailed reply given in the written statement it was incumbent on the District Forum to take into account the stand of the opposite party in its written statement especially when the facts were never in dispute. Therefore, the absence of evidence of the opposite party was not material in this case as the complaint was to be decided only on the basis of the legal or contractual liability of the opposite party to issue the shares as claimed by the complainant.