National Consumer Disputes Redressal
M/S Sterlite Industries (India) Ltd. vs Ganapati Finsec Pvt. Ltd. on 12 July, 2013
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI REVISION PETITION NO. 3345 OF 2012 (Against the order dated 10.01.2012 in Appeal No. 176/2009 of the State Consumer Disputes Redressal Commission, Rajasthan, CIRCUIT BENCH NO.2, Jaipur) M/s Sterlite Industries (India) Ltd. a Company incorporated under the Companies Act, having its Registered Office at SIPCOT Industrial Complex, TV Puram, Tuticorin -628 002 (Represented By its Company Secretary) ........ Petitioner Versus Ganapati Finsec Pvt. Ltd. Registered Office : 37 K Block, Sriganganagar,Rajasthan Through its Director, Shri Devendra Kumar Mittal .Respondent BEFORE: HON'BLE MR. JUSTICE J.M. MALIK, PRESIDING MEMBER HONBLE DR.S.M.KANTIKAR, MEMBER For the Petitioner : Mr. Manish Garg, Advocate For the Respondent : Mr. Vijay K. Jain, Advocate Pronounced on : 12th July, 2013 ORDER
JUSTICE J. M. MALIK, PRESIDING MEMBER
1. Ganapati Finsec is a private limited company. It had purchased 116 shares from the Sterlite Industries Limited. The above said 116 shares were deposited in the complainants Demat Account.
2. It is alleged that the respondent company, without the permission of the complainant, sent the cheque of Rs.11,600/- to the complainant company, drawn at Standard Chartered Bank Branch, M.G. Road, Mumbai, under Buyback Scheme for 116 shares @ Rs. 100/- per share, in the year 2002, along with 580 Non-Convertible Debentures. The complainant company refused to accept the same and informed the respondent, through e-mail, on 04.02.2003, 17.02.2003 and 20.02.2003 and the above said cheque was returned by the complainant company to the respondent company. The complainant company sent a letter/Notice dated 22.02.2003 to the respondent company for depositing back the 116 Demat Start Lite Industries Ltd.s shares in the CDLL Demat Account of the complainant company. Complainant Company also stated that it may deposit the above said debentures in the account of the respondent. The respondent company neither gave the reply nor returned the 116 shares to the complainant. Thereafter, a legal notice was sent on 16.10.2003, but the respondent company did not respond. It is alleged that the respondent has committed deficiency in service by not returning the 116 shares of Demat to the complainant and by not replying to the letter dated 22.02.2003 and notice dated 16.10.2003, and this act of respondent caused unnecessary mental harassment and financial losses to the complainant company.
3. The petitioner accordingly filed the complaint under Section 12 of the Consumer Protection Act, with the prayer that respondent be directed to give 116 shares of Sterlite Industries Limited of Demat account of the complainant company so that the complainant company may deposit the debentures in the account of the respondent. It was further prayed that compensation in the sum of Rs. 10,000/- and costs amounting to Rs. 2,200/-, be also awarded.
4. The District Forum dismissed the complaint. It was held:
Complainant has not stated anything in his complaint with regard to Option Form nor has stated in the affidavit that Option Form was not received by him. Despite filing of reply to the affidavit on behalf of the non-applicant, complainant has neither filed affidavit in rebuttal nor denied the above averments of the non-applicant that he had received the Option Form, as desired under the approved Scheme. Therefore, there is no reason to discard this averment mentioned in the reply of the non-applicant that the Option Form was received by the complainant, under the Scheme. In such circumstances, when according to the Scheme, non- applicant had the right to buy back the share under the Scheme, in case option form of the complainant was not received and in exercise of the above right, cheque of Rs.
11,600/- at the rate of Rs.100/- per share, towards 116 shares held by the complainant was sent to him and 580 Non-Convertible Debentures were deposited in his De-mat Account. Thus, complainant is not entitled to any relief, as sought in the complaint.
5. Aggrieved by this order, the complainant filed First Appeal before the State Commission. The State Commission allowed the complaint. It was held:
In our opinion, respondent, without sending the Option Forum, cannot convert the shares into debentures. Thus, complaint of the complainant is liable to be allowed against the respondent.
Thus, after allowing the appeal and complaint, respondent is directed to deposit 116 shares of the complainant again and provide Demat account to him and also pay the dividend and bonus accrued on it, from time to time. He is further directed to pay Rs. 5000/- as compensation and Rs. 1000/- towards costs of proceedings. Accordingly, appeal and complaint are allowed.
6. In this revision petition, we have heard the counsel for the parties. The main question which falls for consideration is, Whether the complainant is a Consumer?. Learned counsel for the complainant/respondent vehemently argued that the revisional jurisdiction is limited. The National Commission can decide the legal question, if any, but should not interfere into facts, which have already been adjudicated by the Fora below. It was also submitted that this issue was never raised. The OP did not raise any objection on this point. This is explained that there is no dispute between the parties. He submitted that shares are goods and there is deficiency on the part of the petitioner/OP.
7. Counsel for the respondent has cited few authorities reported in the cases of Lakshmi Engineering Works V. P.S.G. Industrial Institute [AIR 1995 Supreme Court 1428], Kalpavruksha Charitable Trust versus Toshniwal Brothers (Bombay) Pvt. Ltd. [(2000) 1 Supreme Court Cases 512], Saurashtra Oil Mills Association, Gujarat versus State of Gujarat & Another [AIR 2002 Supreme Court 1130] & Subhadra Rani Pal Choudhary versus Sheirly Weigal Nain and others [AIR 2005 Supreme Court 3011]. In the first two authorities, it was held that whether purpose for which person has bought goods is a commercial purpose within the meaning of the definition of expression consumer in Section 2 (d) of the Act is always a question of fact to be decided in the facts and circumstances of each case. In the last two authorities, it was held that dismissal of Special Leave Petition is a non-speaking order, what remains a dismissal simplicitor, in which permission to file the appeal to this court is not granted, it would not mean to be the declaration of Law by the Apex Court.
8. The above said authorities are not of much help to the respondent. We have perused the reply and affidavit filed before the District Consumer Disputes Redressal Forum, Shriganganagar. In para No. 6, the petitioner/OP clearly, specifically and unequivocally, made the following averments:
Non-applicant again submits in reference to paras 1 to 6 of the complaint and saves its above averments and whichever is contrary and irrelevant, they are denied. No comments in regard to Para 1.
As per the definition given under CP Act, in reply to para 2, it is not admitted that the complaint is a consumer complaint ...
9. It is clear that the objection was raised by the respondent at the earliest possible opportunity. It must be borne in mind that the Complainant is a Private Limited Company, which is registered under the Companies Act 1986. The shares were purchased by the Complainant Company and not by any individual. It was not established that these shares were not purchased for any commercial purpose. It must be borne in mind that the disputes between the parties relating to commercial purposes are excluded under the Act. This view stands fortified by a recent judgment of this Commission, reported in Vijay Kumar Vs. Indusind Bank, II 2012 CPJ 181 (NC), wherein it was held:
10. 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.
10. 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.
11. 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, the complainant is not a consumer, in such cases.
12. The same view was also taken in A. Asaithambi Vs. Company Secretary Satyam Computer Services Ltd. & Ors. by this Bench. The Honble Supreme Court, vide order dated 14.12.2012, in Special Leave to Appeal (Civil) No. 36840 of 2012 (A. Asithambi Vs. Company Secretary Satyam Computer Services Ltd. & Orts.), dismissed the case in limine.
13. This view is further supported by the case of Dr. V.K.Agarwal Vs. M/s Infosys Technologies Ltd. & Ors. in OP No. 287 of 2001, decided on 24.07.2012, by this Bench .
14. In Morgan Stanley Mutual Fund vs. Kartick Das (1994) 4 SCC 225, paras 26, 27, 33, 34 & 35, are relevant. However, paras 33, 34 and 35, are reproduced, as under :
33. Certainly, clauses (iii) and (iv) of Section 2(1) ( c) of the Act do not arise in this case. Therefore, what requires to be examined is, whether any unfair trade practice has been adopted.
The expression unfair trade practice as per rules shall have the same meaning as defined under Section 36-A of Monopolies and Restrictive Trade Practices Act, 1969.That again cannot apply because the company is not trading in shares. The share means a share in the capital. The object of issuing the same is for building up capital. To raise capital, means making arrangements for carrying on the trade. It is not a practice relating to the carrying of any trade. Creation of share capital without allotment of shares does not bring shares into existence. Therefore, our answer is that a prospective investor like the respondent or the association is not a consumer under the Act.
34. From the above discussion, it is clear that the question of the appellant company trading in shares does not arise.
35. In view of our answers to questions 1 and 2, it follows that the Consumer Disputes Redressal Forum has no jurisdiction, whatsoever.
15. In a recent authority in the case of Ganapati Parmeshwar Kashi & Anr. Vs. Bank of India & Anr. First Appeal No. 362 of 2011, the National Commission, headed by Honble Justice Ashok Bhan, was pleased to hold :
Apart from this, State Commission also held that since the appellants had alleged that they had suffered loss as they could not trade due to suspension of accounts, were not consumers as the dispute related to loss and profit from the share business of the appellants.
We agree with the view taken by the State Commission. Bank could not continue the Demat Account, in violation of the terms and conditions laid down by the NDSL and RBI.
Appellants had admittedly failed to furnish the identity proof by submitting copies of PAN cards, etc., as per directions of NDSL and RBI. For Demat Accounts, Respondent Bank is bound by the directions issued by NDSL and RBI. Dismissed.
16. The aggrieved party went to the Supreme Court. The Apex Court dismissed the Special Leave Petition on 14.01.2013 and held, as under :
ii) The concurrent finding recorded by the State Consumer Disputes Redressal Commission, Maharashtra and the National Consumer Disputes Redressal Commission that the petitioners cannot be treated as consumer within the meaning of Section 2(d) of the Consumer Protection Act, 1986, is based on analysis of the pleadings filed by the parties. The DMAT Account was opened by the petitioners purely for commercial transactions. Therefore, they were rightly not treated as consumer so as to entitle them to claim compensation by filing complaint under the 1986 Act.
17. Consequently , we accept the revision petition and dismiss the complaint. However, there shall be no order as to costs.
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(J. M. MALIK,J.) PRES IDING MEMBER .
(DR.S.M. KANTIKAR) MEMBER Jr/2