DR. V.K. AGARWAL v. M/S INFOSYS TECHNOLOGIES LTD. & ORS.

Consultant Ltd., OP 2, who is Registrar and Transfer Agent of OP 1, did not send 300 shares pertaining to the allotment of Bonus Shares, for the year 1997. Letters and reminders sent by the complainant did not ring the bell. In the year, 1999, OP 1 again, allotted 300 shares, each of Rs.10/- paid up, in favour of the complainant. In June, 1999, the complainant received dividend for 600 shares. Vide letter dated 10.05.1999, OP1 admitted that the complainant was holding 600 shares and should get the same dematerialised. 5. The grievance of the complainant is that he had neither received 300 shares allotted by respondent No.1 in the year 1997, nor complainant had sold the same to anybody. The complainant is the owner of the above said 100 shares allotted in the year 1997. The complainant had sent 300 Bonus Shares of 1999 to M/s. Gogia Capital Ltd., OP 3 to dematerialize the same in his account No. 10045415. In January, 2000, shares were split into Rs.5/- each, thus, doubling the complainant holding. Complainant received an account statement dated 04.02.2000 from OP 3, wherein, 200 shares had been dematerialized but 100 shares were shown as pending demat but when the complainant received the second statement, dated 10.04.2000, OP 3 had removed the above mentioned 100 shares as pending demat. It clearly revealed that OP 3 was also working hand in glove with the other remaining opposite parties. The request and reminders sent to the opposite parties, fell on deaf ears. The complainant suffered financial loss. 6. It is averred that one M/s. Allied Financial Services Pvt. Ltd, had filed a Suit before the Additional District Judge in the year 2001, against six parties, including Virendar Kumar, defendant No.3, M/s.Infosys & Technical Ltd., defendant No.4, M/s. Suchi Securities Ltd., defendant No.1 and its Director, Sh. Sandeep Surekha, defendant No.2 of the plaintiff. The plaintiff, in that case, submitted that Sh.Sandeep Surekha, Director, defendant No.2 and Virendar Kumar, defendant No.3, offered for trading of the plaintiff held by defendant No.2, in M/s. Infosys & Technical Ltd., to sell/trade these shares at National Stock Exchange, Mumbai. Consequently, those shares were sold by defendant Nos. 1, 2 & 3 to the plaintiff company, M/s. Allied Financial Services Pvt. Ltd., the plaintiff, made prayer for recovery of sale consideration of Rs.1,16,482.60. The defendant No.1 also raised the Sale Bill dated 05.01.1998. As per the Rules and Practice, Original Share Certificates and blank Transfer Deed, purported to have been signed by the defendant No.3, were duly delivered to the plaintiff Company. 7. The Court of Additional District Judge held that the Transfer Certificates were not signed by Virender Kumar Aggarwal, the complainant. It was also held that the plaintiff in that case had purchased the said shares from the open market vide Track Note, ExP3/J, for a consideration of Rs. 4,35,624/-. The learned ADJ decreed the Suit in favour of the plaintiff in the sum of Rs.4,33,624.58, against the defendant No.1 only. It dismissed the case against defendant Nos. 3 to 6. The relief prayed by the plaintiff for grant of specific performance was not granted. It was also held that Mr. Virender Kumar had not sold those shares in favour of the plaintiff. 8. Since 1997, OP 1 & 2 did not send 300 shares to the complainant which were running at very high rate at the relevant time, i.e., Rs.14,000/- each share of Rs.5/- paid up and at the time of filing of this complaint, the above mentioned shares were running at the very low rate of Rs.3,000/- each. It is contended that the complainant is entitled to recover compensation of differential amount of the price of his 800 shares prevailing in the year 1997 and 2001 @ Rs.11,000/- each share i.e. total amount of Rs.88,00,000/- due to gross deficiency in service of the OP 1 to 3. The complainant also claims damages for physical and mental agony to the tune of Rs. 2,00,000/-. He further claims loss of dividend for two years, i.e. 1999 to 2000 at Rs. 2,500/- each year, total being Rs.5,000/-. He filed this complaint for recovery of the total amount of Rs.90,05,000/-. 9. The defences enumerated by the opp.parties are as follows. The complainant is not a onsumer The cause of action arose in 1997 but the present complaint was filed in the

2

year 2001. Consequently, the same is barred by time. The OP 1 despatched 300 Bonus Shares to the complainant in the year 1997, bearing Certificate Nos. 7201-72203 and due entry was made in the Register of OP 1. Again, the complainant himself admitted that he has been receiving dividend in respect of the above said bonus shares. The oppparty did not receive the said bonus shares as returned back unserved/undelivered. In May, 1999, the OP 1 sent a letter to the complainant stating that 600 shares held by it, in physical form, i.e., 300 Bonus Shares, issued in 1997 and 300 Bonus Shares issued in 1999, should be demated. The complainant purported to have received 300 Bonus shares in 1997. The complainant informed the OP 1, for the first time, on 01.02.1998 that he has not received the said Bonus Shares despatched in the year 1997. Vide letter dated 05.02.1999, the OP 1 informed the complainant that those 300 shares have been despatched in the year 1997 and they did not receive it back as ndelivered The complainant was informed that in the event the said Bonus Shares had been lost/misplaced, the complainant could have written a letter for issuance of duplicate shares by submitting the duly stamped Indemnity Bond and Affidavit, vide the above said letter. It is also explained that M/s. Allied Financial Services Pvt. Ltd., sold the above said 100 shares to a third-party, namely, Susheela Harilal Kothari. The said Transfer Certificate was returned on the ground that the Transfer Forms did not match the signatures of the complainant. The OP 1 received another communication dated 28.08.2000 from the complainant in respect of non- receipt of 300 Bonus Shares issued in the year 1997. He was again advised to get the Duplicate Shares by submitting stamped Indemnity Bond and Affidavit. The complainant applied for issuance of 200 Bonus Shares. The OP 1 sent 400 Bonus Shares of Rs. 5/- each, because the

200 Shares of Rs. 10/- each were split into 400 Shares and Rs.5/- each. He applied for duplicate shares, only in September, 2000, pursuant to which, shares were duly issued to the complainant. 10. It was also contended that the present complaint is liable to be dismissed as it does not fall within the pecuniary jurisdiction of this Commission. The plaintiff has exaggerated his claim amount. Again, the highest price of the shares touched for the Financial Year ending 31.03.1998 as per the National Stock Exchange was Rs.2,520/-. 11. OP 1 had filed a case against the complainant before the Company Law Board. The parties have placed on record the judgment of Vice Chairman, Company Law Board, Southern Region, Chennai, dated 07.07.2006. The Company Law Board was pleased to hold, as under:- .The address of the respondent as contained in his share application form reads thus : DR. V.K. AGARWAL, BALAK RAM, NAJIBABAD, UP, BIJNOR 246 763. The dispatch journal, original of which was produced at the time of hearing, reveals that the share certificates were despatched to VIRENDRA KUMAR AGARWAL, POOJA BAZAR, NAJIBABAD (BIJNOR) UP- 246 763. It may be observed that the street name namely, ALAK RAMcontained in the share application does not find place in the dispatch journal. It contains the name of the respondent with the initials expanded therein. But for this subtle difference, I do not find any dissimilarity between the two addresses, as borne out by the relevant records. The register maintained at the Company (A-3) containing the holder details indicates the address of the respondent as BALAK RAM STREET, NAJIBABAD DISTRICT, BIJORE, UP 246 763. While the

allotment advices dated 24.04.1993 and 27.10.1994 were sent to the address at MOH BALAKRAM, PO NAJIBA BAD, UP, DIST. BIJNORE 246 763, the dividend warrants dated 01.06.1998 and 14.06.1998 were forwarded to the respondent at POOJA BAZAR, NAJIBABAD (BIJORE), UP 246 763. I do see the difference in the address given by the respondent in his communications, letter head, share application money and indemnity bond executed in favour of the Company as rightly pointed by Sh. B.C. Thrivengadam, learned Counsel. Thus, the Company has adopted different addresses while corresponding with the

3

respondent. Further more, the dispatch journal would only establish dispatch of any letter or article, but not conclusive service of such letters or article on the address concerned. The fact of the matter ultimately is that the share certificates despatched in October, 1997 to the respondent at POOJA BAZAR, NAJIBABAD (BIJORE) UP 246 763, neither reached the respondent nor returned undelivered to the Company. It is, in my view, futile to go into the controversies in regard to dispatch of the share certificates after a lapse of more than eight years and in the light of the reliefs proposed by me. However, no malafides could be attributed to the Company, in the absence of any material in this behalf, more so, when duplicate share certificates were issued in respect of 200 bonus shares allotted in the year 1997 and 200 bonus shares issued during the year 1999 were dematerialized at the request of the respondent. It has neither been made out that the company unjustly gained at the instance of the respondent It has also come to our notice that some criminal cases are pending adjudication. 12. We have heard the learned counsel for the parties. It is crystal clear that the main controversy swirls around 100 or at the most 300 Shares only. It appears that the complainant has deliberately filed such an inflated claim in order to bring the present dispute within the jurisdiction of this Commission. 13. However, the main jangle between the parties pertains to the question, hether the complainant is a consumer In the complaint, in para 16, it was averred, 6. That the complainant is a consumer within the meaning of Section 2 (1) (d) of the Consumer Protection Act, 1986 There was no other pleading. In the Affidavit, it was stated, as under : 5. That the Deponent is a consumer within the meaning of Section 2(1) (d) (ii) of the Consumer Protection Act, 1986. 16. That since the opposite parties had undertaken to render service to the Deponent for consideration, the act of the opposite party amounts to unfair practice and deficiency in service according to section 2(1) (g) of the Consumer Protection Act, 1986. 17. It is, respectfully, submitted that it is wrong to say on the part of opposite party No.1 that the Deponent is not consumer because for arrangement of money from share market, opposite party sold shares of its company which a good as defined u/s 2(7) of Sales of Goods Act, 1930 and opposite party No. 1 was/is duly bound to provide service after sale his shares itself or through his registrar and share transfer agent i.e. opposite party No. 2 & 3 whereas both are working under control and for the benefit of No.1. But opposite parties worked like a conspirator to harm the Deponent and they have not provided their best services, which comes under definition of deficiency of service as defined in Consumer Protection Act, 1986 14. There is no whisper, word or syllable in respect of this crucial issue. The learned Counsel for the Complainant refrained from arguing this point of utmost importance, occurring in explanation appended to Section 2(1) (d) of the Consumer Protection Act, 1986. This point was raised by the counsel for the OP at the fag end of her arguments, casually. No legal assistance was extended by either of the counsel for the parties. 15. We are of the considered view that the complainant is not a consumer for the following reasons. Section 2 (1) (d) of Consumer Protection Act, 1986, defines the word onsumer as follows :- (1) (d) onsumer means any person who, -- (i) buys any goods for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of deferred payment, when such use is made with the approval of such person, but does not include a person who obtains such goods for resale or for any commercial purpose; or (ii) hires or avails of any services for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such services other than the person who hires or avails of the services for consideration paid or promised, or partly paid and

4

partly promise, or under any system of deferred payment, when such services are availed of with the approval of the first mentioned person but does not include a person who avails of such services for any commercial purpose [ExplanationFor the purposes of this clause, ommercial purposedoes not include use by a person of goods bought and used by him and services availed by him exclusively for the purposes of earning his livelihood by means of self- employment. 16. The above said averments made in complaint clearly depict that the complainant has been trading in the business of shares. The complainant has nowhere pleaded in the complaint that he is dealing with shares business as elf-employment for livelihood. Nor it has been alleged that the services provided by OP 1 were being availed of exclusively for the purpose of his ivelihood by means of elf-employment by the complainant. It must be borne in mind that disputes between the parties relating to commercial purposes are excluded under the Act. This view stands fortified by a recent authority of this Commission, reported in Vijay Kumar Vs. Indusind Bank, II 2012 CPJ 181 (NC). 17. Again, such like question arose for consideration before National Commission in case of Som Nath Jain Vs. R.C. Goenka & Anr, reported in 1 (1994) CPJ 27 (NC). In that case, dealing with sale purchase of shares, National Commission expressed serious doubt whether the complaint qua it would be maintainable under the Consumer Protection Act. Because, qua such transactions, elaborate evidence need to be taken regarding purchase and sale of shares, their prevalent price in the market and evidence regarding passing of instructions by client to the broker. Resultantly, the complainants were relegated to get the dispute decided through civil court. 18. West Bengal State Consumer Disputes Redressal Commission, Kolkata, in case Ramendra Nath Basu Vs. Sanjeev Kapoor & Anr., reported in 1 (2009) CPJ 316 qua share trading has held that transactions between parties do not come under purview of Consumer Protection Act, 1986. 19. Similar view was taken by the Delhi State Consumer Disputes Redressal Commission, New Delhi in case Anand Prakash Vs. A.M. Johri & Ors., reported in III (2000) CPJ 291, by holding that sale purchase of shares are commercial transactions, so, complainant is not a onsumerin such cases. 20. In the result, it is clear that the present complaint is not maintainable, therefore, the complaint is dismissed. However, there shall be no order as to costs. However, nothing will debar the complainant to seek remedy in any other appropriate forum, as per law.

......................J

J.M. MALIK

PRESIDING MEMBER

......................

VINAY KUMAR

MEMBER

5