JUSTICE V.K.JAIN, PRESIDING MEMBER (ORAL)

          The complainants applied for allotment of the shares of HDFC Standard Life in an IPO.  Three applications for allotment of 650 shares each were submitted by them through their banker Dena Bank.  Though the IPO was under subscribed, no allotment was made to the complainants.  On exchange of correspondence with the Stock Holding Corporation of India Ltd., registrar to the issue Karvy Computer Share Pvt. Ltd. and Dena Bank, it transpired that the applications of the complainants had not been processed by the bank as per the prescribed norms and therefore, the said applications were not considered for allotment.  Realizing its mistake, the bank credited a sum of Rs.40,950/- in the account of the complainants in order to compensate them.  Being dissatisfied, the complainants approached the concerned District Forum by way of a Consumer Complaint. 

2.      The complaint was resisted by the petitioners which admitted the applications submitted by the complainants through it, as well as the fact that the said applications had not been considered for allotment.  No explanation was given in the written version filed by the petitioner as to why they had not processed the applications of the complainants as per the prescribed norms/procedure. 

3.      The District Forum, vide its order dated 08.04.2019, dismissed the complaint holding that the complainants had been duly compensated by paying a sum of Rs.40,950/- to them. 

4.      Being aggrieved from the order passed by the District Forum, the complainants approached the concerned State Commission by way of an appeal.  Vide impugned order dated 15.07.2019, the State Commission set aside the order passed by the District Forum and allowed the Consumer Complaint with a direction to the petitioner to pay a sum of Rs.1,50,000/- to the complainants alongwith interest @ 9% per annum on that amount from the date of institution of the complaint.  Being aggrieved from the order passed by the State Commission, the petitioner bank is before this Commission by way of this Revision Petition.

5.      It is submitted by the learned counsel for the petitioners that the complainants having applied for shares for speculative purpose, they cannot be said to be consumers within the meaning of Section 2(1)(d) of the Consumer Protection Act.  In support of this contention, the learned counsel for the petitioner relies upon the decision of this Commission in Unit Trust of India Vs. Sabitri Devi Agarwal RP No.55/1997 decided on 09.05.2000.

6.      It has nowhere been pleaded in the written version filed by the petitioner that the complainants were not consumers they having submitted the applications for allotment of shares as speculators.  In Sabitri Devi Agarwal (supra), the complainant had purchased 500 units of Master shares and sent the same for transfer in her name.  During the pendency of the transfer sought by her, she entered into an agreement with another person to sell those Master shares on receipt of the Transfer Certificate.  She approached the concerned District Forum with a grievance that since the Transfer Certificates were not received by her in time, she was unable to resell the shares, as a result of which, she had suffered a loss.  It was also pleaded by her that the gain which she would have been made by selling the shares, would have been invested by her in purchase of the shares of several companies and she would have made further profit by selling those shares.  It was on these facts that this Commission observed that she had indulged into a speculative transaction, she having sold the shares even before the same having been registered in her name.  The facts of this case are however, altogether different.  The complainants applied for allotment of shares in an IPO.  There is no evidence or even allegation that the complainants were engaged in the business of buying and selling shares on a regular basis.  Therefore, it cannot be said that they had hired or availed the services of the petitioner Dena Bank for commercial purpose.  This issue recently came up before a Three-Members Bench of this Commission in Tosoh India Pvt. Ltd. (Formerly Lilac Medicare Pvt. Ltd.) Vs. Ram Kumar & Ors. RP/2833/2018 decided on 06.01.2020 and the following view was taken:

(a)     Only a person engaged in large scale commercial activities for the purpose of making profit is not a consumer;

(b)     There should be a direct nexus between the large scale commercial activities in which a person is engaged and the goods purchased or the services hired or availed by him, before he can be excluded from the purview of the term ‘consumer’.  Therefore any goods purchased or the services hired or availed even by a person carrying on business activities on a large scale for the purpose of making profit will not take him out of the definition of the term ‘consumer’, if the transaction of purchases of goods or hiring or availing of services is not intended to generate profit through the large scale commercial activity undertaken by him and does not contribute to or form an essential part of his large scale commercial activities.

(c)     What is crucial for the purpose of determining whether a person is a ‘consumer’ or not is the purpose for which the goods were purchased or the services were hired or availed and not the scale of his commercial activities.

7.      Coming to the merits of the case, it is submitted during the course of hearing that the closing price of the shares of HDFC Standard Life on the date of listing was Rs.361/- whereas the allotment price was Rs.290/-.  Therefore, the complainants would have gained about Rs.1,50,000/- had they sold the shares at the closing price of the first day of the trading.  In fact, the submission of the complainant no.1 who appears in person is that he would not have even sold the shares on the first day of trading as he wanted to retain them for long term benefits and the current market price is more than Rs.600/-.  Therefore, the compensation awarded by the State Commission cannot be said to be unreasonable or unfair. 

8.      For the reasons stated hereinabove, I find no merit in the Revision Petition which is accordingly dismissed with no order as to costs.  The conveyance charges having not been paid so far to the complainants, shall be paid to them within four weeks from today alongwith payment in terms of the order of the State Commission.  The Revision Petition stands disposed of.