State Consumer Disputes Redressal Commission
Sumit Kumar Moulik vs Amazan Capital Ltd. on 18 April, 2018
Cause Title/Judgement-Entry STATE CONSUMER DISPUTES REDRESSAL COMMISSION WEST BENGAL 11A, Mirza Ghalib Street, Kolkata - 700087 Complaint Case No. CC/118/2013 ( Date of Filing : 22 May 2013 ) 1. Sumit Kumar Moulik S/o Late Birendra Kumar Moulik, 79/3/1A, Raja Naba Krishna Street, Kolkata -700 005. ...........Complainant(s) Versus 1. Amazan Capital Ltd. Infinity Infotech Park, 2nd Floor, Tower-1, Plot-A3, Block-GP, Sector-5, Electronics Complex, Salt Lake City, Kolkata - 700 091. 2. Mr. Joydeb Garai, MD & CEO, Amazan Capital Ltd. Infinity Infotech Park, 2nd Floor, Tower-1, Plot-A3, Block-GP, Sector-5, Electronics Complex, Salt Lake City, Kolkata - 700 091. 3. Mr. Basudeb Garai, Director, Amazan Capital Ltd. Amdoba, Kalanpur, Mangalkot, Burdwan, W.B. 4. Mrs. Gargi Biswas, Director, Amazan Capital Ltd. 9/5A, East Mall Road, Dum Dum, Kolkata - 700 091. 5. Brickworks Ratings 3rd Floor, Raj Alkaa Park, 29/3 & 32/2, Kalena Agrahara, Bannerghatta Road, Bengaluru - 560 076, Karnataka. 6. IDBI Trusteeship Services Ltd. Asian Building, Gr. Floor, 17, R. Karnani Marg., Ballard Estate, Mumbai - 400 001. 7. Karvy Computer Share Pvt. Ltd. 46, Avenue, 4, Street No. 1, Banjara Hills, Hyderabad - 500 034, Andhra Pradesh. ............Opp.Party(s) BEFORE: HON'BLE MR. SHYAMAL GUPTA PRESIDING MEMBER HON'BLE MR. UTPAL KUMAR BHATTACHARYA MEMBER For the Complainant: Mr. M. P. Chakraborty, Advocate For the Opp. Party: Mr. Manas Dasgupta, Advocate Mr. R. C. Prusti, Advocate Ms. Tanusree Dhar, Advocate Dated : 18 Apr 2018 Final Order / Judgement Sri Shyamal Gupta, Member
In short, case of the Complainant is that, he represents the cause of 7 other family members.They altogether invested approx. a sum of Rs. 40,00,000/-into non-convertible debentures of the OP No. 1 company.By a letter dated 31-10-2012, the OP No. 1 was asked for early redemption of the same to which the Complainant did not receive any feedback; hence, the complaint.
By submitting a WV, the OP No. 5 submitted that it accepted a mandate from the OP No. 1 to conduct a rating of proposed structured Non Convertible debentures (NCD).The said company provided a Certificate of Registration issued by the RBI dated 22-03-2011.This OP, after going through several documents provided by the OP No. 1, assigned a rating "BWR A-(SO)" vide its letter dated 24-06-2011.Thereafter, press release and rating rationale were published in the public domain on 27-06-2011 to comply with applicable SEBI guideline.Such rating was conditional to the structure being put in place as per discussion held and was highlighted in the rating letter.As part of the surveillance process, this OP was following up with the OP No. 1 to ensure that all details specified in the structure were in place.Subsequently, the OP No. 1 informed this OP that Company's minimum Net Owned Fund (NOF) was not as per the guidelines of the RBI.Thereafter, vide an e-mail dated 28-09-2011, the OP No. 1 informed this OP that it had stopped placing the rated NCD.The OP No. 1 again vide email dated 05-12-2011 informed this OP that the entire amount collected by it from investors had been refunded to the Investors and provided an Auditor's certificate to buttress such claim.This OP, thereafter, vide email dated 13-12-2011 informed the OP No. 1 that the rating as assigned to the said company could not be considered as valid post repayment of the NCDs and that, no further instrument/issues could be raised on the basis of the said rating.Thereafter, the OP no. 1 was issued show cause to which it failed to provide satisfactory reply.So, this OP suspended the rating and necessary press release to that effect was issued on 04-05-2012.This OP denied any deficiency in service on its part.
On the other hand, defending its case, the OP No. 6 submitted that it was approached by the OP No. 1 to act as Debenture Trustee and accordingly, it evinced due interest vide letter dated 10-05-2011 which was subject to fulfillment of certain terms and conditions.However, ultimately no agreement was executed in between the OP No. 1 and this OP and thus, necessary trusteeship relationship never cropped up between them.
Be it mentioned here that notice was duly served upon all the OPs.However, save and except the OP Nos. 5 and 6, no other OP turned up to defend their respective cases.
Points for consideration Whether the instant case is maintainable under the Consumer Protection Act?
Whether there is any deficiency in service on the part of the OPs, as alleged?
Whether the Complainant is entitled to any relief?
Decision with reasons Point No. 1:
Undisputedly, the present dispute revolves over non-redemption of Non-Convertible Debentures.
Let us first see, whether 'debenture' can be considered as 'goods' as defined under the Sale of Goods Act, 1930. Goods' is defined as per Section 2 (7) of the 'Act' as. "Every kind of movable property other than actionable claims and money; and includes stock and shares, growing crops, grass, and things attached to or forming part of the land which are agreed to be severed before sale or under the contract of sale."
On thoughtful consideration, it appears to us that 'debenture' surely does not fits into the bill as they are, firstly, actionable claims, and, thus excluded from the meaning of "goods" as defined and, secondly, they are neither "shares" nor "stocks". Actually, they are, in the hands of the company offering them, an instrument of debt, acknowledging the obligation and liability of the company to repay the debt to the holder. Therefore, when a company issues capital through , it does not sell any property but merely acknowledges an obligation.
The Hon'ble Supreme Court, in R.D. Goyal v. Reliance Industries Ltd.:(2003) 1 SCC 81 [at page 87] has been pleased to held that, debentures, as ordinarily understood, would not come within the purview of the definition of goods.
Accordingly, it seems to us that the present dispute does not fall within the ambit of consumer dispute and the Complainant is not a consumer as defined u/s 2(1)(d) of the Consumer Protection Act, 1986.
Consequent thereof, the present case is not maintainable under the Consumer Protection Act.
Point Nos. 2&3:
In view of our findings that the present case is not maintainable under the Consumer Protection Act, it would not be proper for us to delve into these issues in any manner whatsoever and therefore, we are inclined to dismiss this complaint.
The complaint, accordingly, fails.
Hence, O R D E R E D The case stands dismissed being not maintainable. Complainant is, however, given due liberty to approach the appropriate Court of Law for proper relief, if he so desires. The Complainant may be entitled to the benefit of the observations of the Hon'ble Supreme Court in Laxmi Engineering Works v. P.S.G. Industrial Institute II (1995) CPJ 1 (SC) : 1995 3 SCC 583 for the purpose of exclusion of time spent in pursuing its case under the 1986 Act. [HON'BLE MR. SHYAMAL GUPTA] PRESIDING MEMBER [HON'BLE MR. UTPAL KUMAR BHATTACHARYA] MEMBER