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PUNJAB STATE CONSUMER DISPUTES
REDRESSAL COMMISSION, CHANDIGARH
Hon’ble Mr. Justice R.S. Mongia, President;
Mr. C.P. Budhiraja and Mrs. Jasbir Kapoor, Members
SUNITA RANI—Complainant
versus
ZEE TELEFILMS LIMITED & ORS.—Opposite Parties
Original Complaint No. 4 of 2002—Decided on 3.8.2005
Counsel for the Parties :
For the Complainant :Mr. D.S. Patwalia, Advocate.
For the Opposite Party Nos. 1 and 5 :Mr. R.K. Gupta, Advocate.
For the Opposite Party Nos. 3 and 6 : None.
For the Opposite Party No. 1 and 7 : Ex parte.
The main legal point established in the judgment is that the claim for compensation based on speculative transactions is not permissible under the Consumer Protection Act.
Headnote:
Deficiency in Service - Share Transfer - Civil Suit - [Securities Contract Regulation Act, 1956, Companies Act, 1956] - The court discussed the transfer of shares and the alleged deficiency in service by the opposite party in not transferring the shares in a timely manner. The court also considered the claim for compensation based on the fall in market value of shares. The legal provisions of the Securities Contract Regulation Act, 1956 and Companies Act, 1956 were interpreted to determine the liability of the opposite party and the permissibility of compensation for speculative transactions under the Consumer Protection Act.
Fact of the Case:
The complainant purchased shares from two parties and sent the share certificates and transfer deed to the company for transfer. The company allegedly did not transfer the shares despite reminders, leading the complainant to file a Civil Suit. The suit was decreed in favor of the complainant, and the shares were eventually transferred. The complainant then sought compensation for the fall in market value of the shares.
Finding of the Court:
The court found that there was no deficiency in service on the part of the company in transferring the shares after the Civil Court decree. The court also held that the claim for compensation based on the fall in market value of shares was speculative and not permissible under the Consumer Protection Act.
Issues: The issues involved the alleged deficiency in service by the company in transferring the shares, the timing of the share transfer, and the permissibility of compensation for speculative transactions.
Ratio Decidendi: The court held that there was no deficiency in service in transferring the shares after the Civil Court decree and that the claim for compensation based on the fall in market value of shares was speculative and not permissible under the Consumer Protection Act.
Final Decision: The complaint was dismissed by the court, and no order as to costs was made.
Mr. Justice R.S. Mongia, President—Brief facts giving rise to this complaint by Sunita Rani are that she purchased 200 shares of opposite party M/s. Zee Telefilms Ltd. on 24.10.1998 from opposite party Nos. 2 and 3 i.e., M/s. S.P. Mantri, Mantri Finstock Limited, Mumbai and M/s. Sood Sons, Stock and Share Dealers, Ferozepur City. As per the allegations in the complaint, the shares were purchased @ Rs. 676.64 per share whereas the face value of one share was Rs. 10. In other words, for purchasing 200 shares, the complainant paid to opposite party Nos. 2 and 3, a sum of Rs. 1,35,328. The complainant is alleged to have sent the share certificates and transfer deed to the opposite party No. 1 i.e., Zee Telefilms for transferring the share certificates/shares in the name of the complainant. The same were sent to opposite party No. 1 i.e., Zee Telefilms through courier which were allegedly delivered to Zee Telefilms on 15.12.1998. According to the complainant, this fact is corroborated by the delivery report of courier service, Annexure P-8. It is alleged that despite having sent the share certificates/transfer deed to the respondent, the needful was not done despite written reminders, one of which is Annexure P-9 dated 11.3.1999. M/s. Zee Telefilms sent a letter on 17.3.1999, Annexure P-10, in response to letter dated 11.3.1999 which reads as under:
“17th March, 1999
To
Ms. Sunita Rani
House No. 147, Street No. 6,
Bhola Nath Street,
Ferozepur
Sub : Transfer of shares
Ref : Your letter dated 11.3.1999
Dear Shareholder,
With respect to your above mentioned letter, we hereby intimate you that we have already transferred the shares to Mr. B.V. Doshi vide TRF No. 90245 on 8.12.1998.
We further hereby intimate you that as per our records we have not received any share certificates for transfer from you. Hence, kindly send us details of proof of despatch of share certificates or any acknowledgement for the same and address to which such securities have been despatched by you.
Assuring you best of our attention.
For Zee Telefilms Ltd.
Sd/-
Authorised Signatory”
2. It is not necessary to refer to any other correspondence between the parties. Suffice it to say that the complainant filed a Civil Suit before a Civil Court at Ferozepur on 29.4.1999 in which apart from Zee Telefilms, Crown Courier Service and Mr. B.V. Doshi were made defendants. Mr. B.V. Doshi is the person in whose name the shares had been transferred by M/s. Zee Telefilms as was mentioned by them in the letter dated 17.3.1999, Annexure P-10. The suit was filed with the following prayers:
“Suit for a decree of declaration that the plaintiff is bona fide purchaser of 200 shares with distinctive numbers 10282201 to 10282300 with corresponding certificate No. 110383 and 14553601 to 14553700 with corresponding certificate No. 153097, having registered Folio No. 58895, with consequential relief of directions to defendant No. 1 to deliver the share certificate to the plaintiff and for permanent injunction restraining the defendants from dealing with the shares in any manner without permission of plaintiff, on the basis of oral and documentary evidence.”
3. The suit was contested by defendant No. 1 M/s. Zee Telefilms. The suit was decreed on 26.4.2000 and the following relief was granted:
“In view of my findings on issue Nos. 1 and 2, the suit of the plaintiff succeeds and the same is hereby decreed with costs, and the plaintiff is declared to be the bona fide purchaser of 200 shares with distinctive numbers 10282201 to 10282300 with corresponding certificate No. 110383 and 14553601 to 14553700 with corresponding certificate No. 1153097, having registered Folio No. 58895, and defendant No. 1 is directed to deliver the share certificates to the plaintiff. The defendants are further restrained from dealing with the shares of the plaintiff in any manner without permission of the plaintiff. Decree sheet be prepared and file be consigned to record room.”
4. In purported compliance of the decree of the Ci
