National Consumer Disputes Redressal
M/S. Wipro Ltd. vs Surendra Singh Chana & Ors. on 14 September, 2015
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI FIRST APPEAL NO. 244 OF 2009 (Against the Order dated 27/05/2009 in Complaint No. 3/2008 of the State Commission Chandigarh) 1. M/S. WIPRO LTD. Rep. by its Company Secretary, Doddakannelli, Sarjapur Road Bangalore - 560 035 ...........Appellant(s) Versus 1. SURENDRA SINGH CHANA & ORS. S/o Late Sardar Mohan Singh Chana, R/o H.No. 1406 (First Floor), Sector 44-B Chandigarh, U.T. 2. Smt. Renu Chana W/o Shri Surrendra Singh Chana, R/o House No.1406, (First Floor), Sector-44-B, Chandigarh (U.T.) 3. M/s Narinder Singh & Co Spot Delivery Share Dealers, Through its Proprietor/ Partner, SCO n o.58-59, Cabin No.103, Sector-17-D, Chandigarh.U.T. 4. Securities and Exchange Board of India, Through its Authorised Signatory, Southern Regional office, D' Monte Building, 3rd Floor, 32, D' Monte Colony, TTK Road, Alwarpet, Chennai-600 018 Tamil Nadu 5. M/s Narinder Singh & Co Spot Delivery Share Dealers, Through its Proprietor/ Partner, SCO no.58-59, Cabin No.103, Sector-17-D, Chandigarh.U.T. ...........Respondent(s)
BEFORE: HON'BLE MR. JUSTICE D.K. JAIN, PRESIDENT HON'BLE MRS. M. SHREESHA, MEMBER For the Appellant : For the Appellant : Ms. Yovini Rajesh Rohra, Advocate For the Respondent : For the Respondents : R-3 proceeded against ex-parte vide order dated 07.10.2014 NEMO for other Respondents Dated : 14 Sep 2015 ORDER D.K. JAIN, J., PRESIDENT
1. This First Appeal, under Section 19 of the Consumer Protection Act, 1986 (for short "the Act"), has been filed by Wipro Ltd., Opposite Party No.2 (for short "Wipro") in the Complaint under the Act, against the order, dated 27.05.2009, passed by the State Consumer Disputes Redressal Commission, U.T. Chandigarh (for short "the State Commission") in Complaint No. 3 of 2008. While accepting the said Complaint, preferred by Respondents No. 1 and 2 herein, the Complainants, alleging deficiency in service on the part of Wipro in not delivering/dispatching the Bonus Shares, the State Commission, has held that Wipro was deficient in rendering services, inasmuch as the Bonus Shares, to which the Complainants were entitled to, were not delivered to them and rather they were subjected to immense harassment and mental agony. Consequently, the State Commission has directed Wipro to allot 4500 Shares to the Complainants or in the alternative, pay the market value of the same as on date, besides paying ₹50,000/- as compensation and ₹11,000/- towards litigation costs, within a period of two months from the date of receipt of that order. Since no relief was prayed for in the Complaint against Opposite Parties No. 1 and 3, i.e. Narinder Singh and Company (Spot Delivery Share Dealers) and Securities and Exchange Board of India (for short "SEBI") respectively, no direction has been issued to them by the State Commission.
2.1 Succinctly put, the material facts are as follows:-
On 06.10.1989, the Complainants purchased from the market, 50 Shares of Wipro for a consideration of ₹19,312.50, which was paid to the said Narinder Singh & Company. The Shares purchased were "CUM-BONUS". The Share Certificate was delivered to the Complainants on 11.12.1989. On 22.12.1989, the Complainants sent the Share Certificate to Wipro by registered post, for transfer in their name. After effecting transfer of Shares in favour of the Complainants, Wipro sent Share Certificate for only 50 Shares, which was received by the Complainants in April, 1990 at Chandigarh. According to the Complainants, having waited for 50 Bonus shares, to which they were entitled to, as the shares purchased by them were "CUM-BONUS", for over two months, they wrote a number of letters, by ordinary post, to Wipro's office at Bombay and Bangalore during the period from June 1990 to 1997; they were assured by Wipro that their grievance would be looked into; on 21.07.1998 and 03.09.1998 also they issued letters to Wipro, highlighting their pending grievance regarding non-delivery of 50 Bonus Shares; since 9 years had already elapsed and no action was being taken by Wipro for delivery of 50 Bonus Shares, on 12.01.1999 they addressed a letter to Opposite Party No. 3, SEBI seeking its intervention in the matter; SEBI, vide their letter, dated 04.02.2003, informed them that they had taken up the matter with Wipro who would directly interact with the Complainants. On 18.02.2003, the Complainants received a letter from Karvy Consultants Ltd., Bangalore, on behalf of Wipro, seeking certain details, which were furnished by them vide letter dated 03.03.2003. However, Wipro, vide its letter, dated 28.03.2003, turned down the request of the Complainants for issue of Bonus Shares, stating thus:-
" We had not received the transfer deed along with the share certificate before the Record Date for issue of bonus shares. As the share certificate and the transfer deeds were received after the Record Date as well as after closure of the Register of Members and Share Transfer Books, we had affected the transfer sometime in March 1990 and sent you the duly transferred share certificate vide our letter dated March 24, 1990."
2.2 It appears that on receipt of the said communication, the Complainants again took up the matter with Karvy Consultants Ltd. and SEBI but without success. As a matter of fact, vide their letter dated 15.02.2007, SEBI advised the Complainants to approach a Court of law for redressal of their grievance. Some more correspondence ensued between the Complainants, SEBI and Wipro, but for the sake of brevity, we deem it unnecessary to refer to the same.
2.3 Disappointed with the response of all the above Parties and left with no other option, alleging deficiency in service on their part, the Complainants filed Complaint before the State Commission, praying for a direction to Wipro to issue 4500 Shares of the same type and value as would have been issued to them in the year 1989 or in the alternative to make good the market value of 4500 shares which, according to the Complainants, was ₹19,57,500/-, and also pay ₹2,00,000/- as the dividend accrued on the said Shares and further growth of shares; ₹6,00,000/- as compensation for mental and physical harassment; ₹10,00,000/- as punitive damages in terms of Section 14(d) of the Act along with ₹22,000/- as litigation costs. However, as noted above, no relief was claimed against Narinder Singh & Company and SEBI.
3. Though written version was filed by SEBI, but the Complaint was mainly contested by Wipro, on diverse grounds, including its maintainability on the grounds of limitation as well as territorial jurisdiction. On merits, it was pleaded that the share transfer form for transfer of 50 Equity Shares, which the Complainants had purchased from the market, was received by Wipro only after 18.01.1990, i.e. after 26.12.1989, the Cut off date and 27. 12.1989, the Record date for closure of share transfer books and the register of members and, therefore, Complainants request for issue of Bonus Shares on the said 50 Equity Shares, could not be considered. Nevertheless, the said 50 Shares were transferred in the name of the Complainants as per the Resolution passed in the Administrative Committee Meeting of the Board of Directors and were sent to them by post on 24.03.1990. It was asserted that as per the approval received from the Central Government, the Bonus Shares in the ratio of 1:1 were allotted to the original shareholders namely, Mr. Ardeshia Rustom Hakimiyan and Mr. Arnavaz Ardeshia Hakimyan, in whose name the Shares purchased by the Complainants were registered as on the record date; the Share Certificate for the Bonus Shares was sent to them and, therefore once the Bonus Shares had been issued against the said shares, it was not possible to retrieve the same and restore them to the Complainants.
4. Upon consideration of the evidence adduced by the parties before it, the State Commission has accepted the contention of the Complainants that the cause of action in the instant case accrued on 12.10.2007, when they received a copy of letter dated 09.10.2007 addressed to SEBI by Wipro stating the reasons for non-issuance of bonus share, and the Complaint having been filed on 10.03.2008, it was not barred by limitation. As regards the objection relating to territorial jurisdiction, the State Commission has held that since the Shares in question were purchased through Narinder Singh & Co., an Agent of Wipro, which had office at Chandigarh, the Complaint filed before it at Chandigarh was maintainable. On merits also, the State Commission was of the view that in the absence of disclosure of actual date of receipt of share transfer form from the Complainants in the pleadings and the reply by Wipro, the plea of delay in receipt of Shares by Wipro from the Complainants was proved to be a bald averment only, as the same had not been substantiated by any evidence. Consequently, while holding that there was deficiency in service on the part of Wipro in not allotting and dispatching the Bonus Shares to the Complainants, the State Commission has allowed the Complaint and issued the aforestated directions to Wipro. Hence, the present First Appeal.
5. The Appeal was taken up for final hearing on 05.08.2015. The arguments by learned Counsel for both the sides remained inconclusive. It was ordered that the case will be taken up the following day for remaining arguments. However, on the next date, neither counsel for the Complainants nor Complainant No. 1, who was present on the previous day, chose to appear and conclude their submissions. Consequently, after hearing Ms. Yovini Rajesh Rohra, Ld. Counsel for Wipro, we reserved the orders, with liberty to the parties to file their written submissions. Written submissions have been filed only on behalf of Wipro.
6. Having bestowed our anxious consideration to the material on record, we are of the opinion that the impugned order is unsustainable. It is manifest from the impugned order that the sole factor which has weighed with the State Commission in coming to the conclusion that the Complainants were entitled to the Bonus Shares on 50 Equity Shares, purchased on 06.10.1989, is that Wipro had failed to disclose the actual date of receipt of Share Certificate from the Complainants for transfer of Shares in question in their name.
7. It is true that Wipro has not placed on record any documentary evidence to show the exact date of receipt of the Share Certificate from the Complainants, but at the same time the Complainants have also failed to prove as to when the Share Certificate, stated to have been dispatched by them to Wipro on 22.12.1989, by Registered Post, was actually delivered to Wipro by the Postal Authorities. In our opinion, the burden of proving the factum of actual delivery of their letter to Wipro lay on the Complainants, which they failed to discharge. It is trite that ordinarily the burden of proving the fact rests on a party who asserts the affirmative issue and not on a party who denies it. Bearing in mind the fact that the Share Certificate was admittedly dispatched only on 22.12.1989, there is not an iota of evidence on record to presume that the same must have been delivered to Wipro before the Cut-off date, i.e. 26.12.1989. On the contrary, we are inclined to accept the contemporaneous evidence adduced by Wipro in the form of minutes of the Administrative Committee meetings as also the serial number of the dak register against which the said Share Certificate is stated to have been received in its office. It is stated by Wipro, on affidavit, that a share transfer form shown against Sr. No. 433 of the said record was received only on 18.01.1990 and, therefore, the Complainants' share transfer form acknowledged against entry at Sr. No. 438 was obviously received sometime after 18.01.1990, i.e. much after the stated Cut-off record date. Further, the stand of Wipro is that share certificate with respect to Bonus Shares in the ratio of 1:1, bearing distinctive nos. 723261 to 723310 and Share Certificate No. 001000, had in fact been allotted to the original shareholder, in whose names the said Shares stood registered on the record date i.e. 27.12.1989 as per Listing Agreement. In this behalf, it would be apposite to refer to the reply of Wipro to SEBI on the Complaint filed by the Complainants with it. The relevant portion of the reply reads as follows:-
" The Board of Directors of the Company passed a resolution at their meeting held on November 27, 1989 fixing the Record Date for issue of Bonus Shares as December 27, 1989 as well as for closure of the Register of Members and Share Transfer books (Books) from December 27, 1989 to January 3, 1990 (both days inclusive).
The Investor had purported to have lodged the transfer deed and share certificate bearing No. 001000 for 50 equity shares with the postal authorities on December 22, 1989 for sending to our Company. However, as informed to the investor earlier, we had not received the transfer deed along with the share certificate before the Record Date for issue of bonus shares. As the share certificate and the transfer deed were received after the Record Date as well as after closure of the Register of Members and Share Transfer Books, we had affected the transfer after January 3, 1990 (the closing date of Register of Members) and we had sent the duly transferred share certificate vide our letter dated March 24, 1990.
The share certificate with respect to bonus shares allotted in the year 1989 in the ratio of 1:1 had been allotted to the original holder of the shares at that point in time as per Listing Agreement. As explained in the preceding paras, the investor was not eligible for the Bonus Shares issued and allotted in 1989 inasmuch as the share certificate and the transfer deed were received after the record date. We had also sent reply to the shareholder on the same lines.
8. In view of the said reply, we are unable to read any contumacious conduct or mala fides on the part of Wipro to somehow deprive the Complainants from the Bonus Shares as per their entitlement on the aforenoted equity shares. In that view of the matter, we are not persuaded by the Complainants to hold that there was "deficiency" on the part of Wipro in not allotting Bonus Shares to them.
9. Having come to the said conclusion on merits of the Complaint, we deem it unnecessary to delve on the issues whether or not the Complaint was barred by limitation or the State Commission did not have territorial jurisdiction to try the Complaint or that the Complainants had played fraud by misrepresenting, on affidavit, that the distinctive numbers of the second set of 50 Shares, mentioned in Wipro's letter dated 24.05.1990 (Exhibit C-47), were the distinctive numbers of the Bonus Shares, which had in fact been allotted to them by Wipro but later on Wipro changed its stance.
10. Resultantly, in view of the aforegoing discussion, the Appeal is allowed; the impugned order is set aside and the Complaint is dismissed. However, having regard to the facts and circumstances of the case, the parties are left to bear their own costs.
11. It will be open to Wipro to withdraw the amount deposited by it, in this Commission, in terms of the order, dated 20.08.2009, along with interest accrued, if any. However, the statutory deposit made at the time of filing the Appeal, shall be transferred to the Consumer Welfare Fund.
......................J D.K. JAIN PRESIDENT ...................... M. SHREESHA MEMBER