consumer case(CC) No. CC/07/209

Nitin K. Pandya
...........Appellant(s)

Vs.

M/s Sharepro Service (India) Pvt. Ltd. and another
...........Respondent(s)

BEFORE:

Complainant(s)/Appellant(s):

OppositeParty/Respondent(s):

OppositeParty/Respondent(s):

OppositeParty/Respondent(s):

ORDER

In the Court of the

Consumer Disputes Redressal Forum, Unit -I, Kolkata,

8B, Nelie Sengupta Sarani, Kolkata-700087.

CDF/Unit-I/Case No. 209 / 2007

1) Sri Nitin K. Panday

33/1, N.S. Road, 6th Floor,

Kolkata-700001. ---------- Complainant

---Verses---

1) M/s Sharepro Services (India) Pvt. Ltd.,

Satyam Estate, Chakla, Andheri (East),

Mumbai-400099.

2) M/s. Gujrat Ambuja Cement Ltd.,

86C, Topsia Road, Kolkata-46. ---------- Opposite Party

Present : Sri S. K. Majumdar, President.

Sri T.K. Bhattachatya, Member.

Order No. 2 6 Dated 2 0 / 1 1 / 2 0 0 9.


Complainant Nitin Kr. Panda by filing a petition of complaint u/s 12 of the C.P. Act on 9.7.07 has prayed for issuing direction upon the o.ps. to remove the tag of stop transfer of 500 equity shares as stated in the schedule and to issue all the benefits arising out of the said shares to the complainant and to pay compensation of Rs.1 lakh and to pass any such order as the forum may deem fit and proper.

It is the specific case of the complainant that he is a bona fide share holder of M/s Gujrat Ambuja Cement Ltd. in respect of 500 equity shares and those shares registered in the name of the complainant and as such, complainant is the registered holder of 500 equity shares of the o.p; company. Two title suits viz. 1055/2000 and 1056/2000 were filed by different claimants in the City Civil Court, Kolkata and both the suits were dismissed for default and those no other claimant remains except the complainant of the those shares in question. During the pendency of those title suits the petitioner filed a suit bearing no.7164/1999 before the High Court Judicature at Mumbai and during the pendency of that suit the o.p. stopped the movement of said shares and both the suits pending at City Civil Court were attempted to settle the dispute amicably and as the plaintiff did not take any steps in those two suits of City Civil Court they were dismissed for default. Except the present petitioner there was no other claimant of said 500 equity shares and the petitioner also had withdrawn suit no.7164/1999 pending before the Hon’ble Court at Mumbai by the permission of the Court. By a publication dt.6.6.05 the company fixed record date of 25th June, 2005 for stocks split from Rs.10/- per share to Rs.2/- per share. And it was required to be informed to the petitioner, but the o.p. did not do so. The petitioner is entitled to allotment of bonus share in the ratio one share for two shares as one of the registered Member, but it was not informed to him even in spite of several correspondences for lifting of stop tag from the lesser folio of the said company. But the o.p. no.2 wrongfully withheld the transmission of the said shares and its benefit was not given to the petitioner. This act of the company is violation of Section 206A of the Companies Act and also violation of Section 27 of Scrutinisation Contract Regulation Act, 1956 because the company is mere custodian of shares in question and in the beneficiary of the shares and as such the company cannot withhold the movement of the shares unless an order is passed by a court of competent jurisdiction. And as such, stopping of movement of shares is a violation of the provisions of Monopolies And Restrictive Trade Practice Commission.

Being questioned about the signature of the petitioner, the petitioner provided to the company the signature duly attested by his Bank Manager and he has provided all the necessary documents.

Legal notice dt.27.4.07 was sent to the company by the advocate but the company did not reply against the said legal notice sent from the end of the petitioner. The plea of the o.p. no.1 is that as they have received the certified copy of title suit no.1055/2000 and 1056/2000 they cannot release the benefit arising out of the said shares to the company because the matter was pending for decision. He has also stated that as the shares are speculative items as per the SEBI Rule, the company should have given redress within 18 days and in default of such redress, the company is liable to pay opportunity loss to the petitioner. He ventilated his grievances to M/s. Securities and Exchange Board of India and Stock Exchange, Mumbai in writing and also BSE approached the company and asked him to give redress to the petitioner, but the company is so much adamant as they did not release any benefit to the complainant and did not also remove the tag of stop transfer of the shares in question which amounts to deficiency of service and for such deficiency of serviced of the o.p., the complainant is entitled to get the amount of actual market price of the said shares. In view of this position the complainant has filed this case with the aforesaid prayer.

o.p. no.2 has contested this case by filing a w/v on 28.2.08 stating therein that it is a registered company under the Companies Act, 1956 and the registered Members of the share holders are being maintained at the registered office of the company. They have stated that the complainant is the holder of 500 shares having distinctive and corresponding certificate under folio no.10142. He filed police complaint on 15.10.1977 for the loss of said 500 shares before Borivili Police Station (E), Mumbai and he applied for issuance of duplicate share certificate in lieu of loss of the said 500 shares. And subsequently those 500 shares were lodged for transfer by different parties and transferees filed title suits before the City Civil Court, Kolkata. They further stated that since the shares mentioned in the petition of complaint are in circulation and as the complainant failed to obtain any order of court the o.p. no.2 denies the contents of the petitioner as per principle of law laid down by the Apex Court that court of law has got no jurisdiction to direct the matter to be governed by one statute without provisions of another statute is applicable and the complainant has liberty to raise this issue before the Company Law Board or to obtain any order directing the company to release the entitlement in favour of the complainant arising out of disputed 500 shares. So, there is no deficiency of service on their part and accordingly, the case is liable to be dismissed with exemplary cost in favour of o.p. no.2.

Decision with reasons :

Ld. Lawyer for the o.p. nos.1 and 2 in their written notes of argument has submitted before us that the complainant approached the forum praying for direction upon the o.p. no.1 for issuing duplicate share certificates in respect of 100 shares which were lost and shares are speculative shares as described by the complainant in paragraph 12 of the petition of complaint he is not entitled to get any relief from this forum as there is no provision under the C.P. Act to give relief to the complainant for dealing with speculative shares. And in this respect he has referred one decision reported in NC II (2000) CPJ 4 (NC) and he has also referred one decision reported in III (2001) CPJ 488 that if the shares are lost from the custody of the original owner, the o.p. cannot be held liable for deficiency of service of and the o.p. is not bound to issue the duplicate shares. He has also argued that the complainant has filed case at Mumbai and he cannot run from door to door for redress for the same relief and same cause of action. In this respect he has referred to us another decision reported in II (2002) CPJ 1. With regard to pilferage of shares and fraudulent dealings with the shares, if involved, the Consumer Disputes Redressal Forum is not the appropriate forum, but the remedy lies with the Civil Court and in this respect he has also referred another decision reported in West Bengal State Consumer Disputes Redressal Commission, Kolkata vide III (2002) CPJ 175. He has also argued that when the disputes in shares are governed under the Companies Act, 1956 SEBI and Stock Exchange guidelines are to be followed. And the disputes cannot be decided by this forum.

It is the specific grievance of the complainant that he approached M/s. Security and Exchange Board of India and the Stock Exchange, Mumbai in writing and also approached for relief by removing the tag of stock transfer of shares, they did not allow the free movement of shares in question and as a result, he has suffered loss because his 500 equity shares in stock split form Rs.10/- per share to Rs.2/- share is required to be sent by the company but the company failed to fulfill it and as a result, he suffered loss and allotment bonus share in the ratio of one share for two shares. But as the o.p. no.2 has wrongfully withheld the transmission of his shares and his benefits bonus shares, right issue dividend etc. and as the company is not providing him with the balance sheet and other documents of the o.p. shares in question which he is entitled to get and this act and activities of the company amounts to mismanagement resulting to deficiency of service as provided u/s 206A of the Companies Act and also violation of Section 27 of Scrutinisation Contract Regulation Act, 1956. According to him the company is the mere custodian of the shares in question and not the beneficiary of the shares.

Admittedly, the complainant is a bona fide share holder of 500 equity shares and those 500 shares were registered in the name of the complainant.

It is true that in paragraph 12 of his petition of complaint he has stated that ‘the shares are speculative items’. There is no denying of the fact that all the shares are speculative items. Complainant purchased 500 equity shares.

We have perused the affidavit of examination-in-chief sworn in by Ramkrishna Mahapatra, the principal officer of the complainant who had sworn in affidavit on behalf of he complainant and he has stated all about the facts as made out in the petition of complaint. We have also perused the reply filed on 19.5.08 and noted its contents. In his reply the complainant has denied all the material allegation against him and also stated there that as the title of share in question is not disputed as there is no other claimant in respect those shares there is no difficulty as we find on perusal of the record and the documents of both the sides that there is merit in the case of the complainant. Mumbai High Court has not pronounced its judgment and no decree whatsoever has been passed by the Mumbai High Court. In view of this position, it cannot be accepted that the complainant for getting relief is knocking from door to door i.e. from City Civil Court to Mumbai High Court. Further, it is also a fact that all those shares are not in circulation and not claimed by any other person. Obviously, the statutory duty of the company to issue duplicate shares to its bona fide owner namely here the complainant.

We cannot say that the complainant after loss of those shares in question are in hibernation because it appears on perusal of the record that he has taken up the matter with the company for issuing duplicate shares time and again. But the company did not pay any heed to it and thereafter, finding no other alternative the complainant has filed this case praying for redress as made out in the petition of complaint.

Whatever may the merit lies in the case of the complainant it cannot be denied that the statutory provision with respect to dealing controlling and regulating and movement of shares can only be decided by SEBI. The main allegation of the complainant is to remove the withdrawing the tag to stop transfer of 500 numbers of equity shares and as a result of such existence of tag of his 500 numbers of shares he has been suffering a lot and being aggrieved he has filed this case against the o.ps.

Settled principle of law is that when there is a specific statutory authority to deal in the questions related to shares in that event it is neither desirable nor permissible in law to interfere with the jurisdiction of that specific authority. And such exercise of against with the specific authority amounts to usurpation of jurisdiction. We have also perused the documents submitted by the o.ps. and noted their contents. We have also perused the written argument filed by the o.ps. and the order of the Judicature of Mumbai High Court. As we have already said that the transaction of share is speculative in nature it cannot come within the purview of Section 12 of the C.P. Act, 1986 and in this respect a decision reported in III (2001) CPJ 488 is worth mentioning. So, in view of the decision referred to above viz III (2001) CPJ 488 our observation is that SEBI is the competent authority to decide the claim of the complainant. And accordingly, we are of the opinion that we cannot usurp the power of a statutory body like SEBI in the instant case.

Having due regard to the facts, circumstances, and the legal position, we are of the opinion that the complainant cannot get any redress from this forum.

Hence,

Ordered,

That the case is dismissed on contest and no order is passed as to cost. In order to render equitable justice the complainant is given liberty to approach the specified body viz. SEBI or any other competent court or authority for his redress if any.

Fees paid are correct.

Supply certified copy of this order to the parties on payment of prescribed fees.