Chandigarh

StateCommission

A/111/2022

Anju Kakkar - Complainant(s)

Versus

Stock Holding Corporation Ltd. - Opp.Party(s)

In Person

17 Nov 2022

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

 

Appeal No.	:	111 of 2022
Date of Institution	:	08.08.2022
Date of Decision	:	17.11.2022

 

 

 

 

 

 

Anju Kakkar (1^st shareholder) alongwith her mother Krishna Wanti (2^nd holder) R/o House No.1056/18-C, Chandigarh.

……Appellants/Complainants.

Versus

1]      The Branch Manager, Stock Holding Corporation Ltd., SCO 154-55, 2^nd Floor, Sector 17, Chandigarh.

2]      the Manager-DP Retail (Demat), Stock Holding Corp., Plot No.P-51 TTC, Industrial Area MIDC, Mahape Navi Mumbai – 400710.

3]      Sh. J. Shiv Kumar, Dy. Gen. Manager, Karvy Fintech Pvt. Ltd., Karvy Selenium Tower B, Nanakramguda, Hyderabad – 500032.

 …..Respondents/Opposite Parties.

 

BEFORE:  JUSTICE RAJ SHEKHAR ATTRI, PRESIDENT

                MRS. PADMA PANDEY, MEMBER

              MR. RAJESH K. ARYA, MEMBER

                MR. PREETINDER SINGH, MEMBER

 

ARGUED BY :-   

 

Sh. Rishi Raj, Authorized Representative of the appellants.

Sh. Alankrit Bhardwaj, Advocate for Respondents No.1 and 2.

Respondent No.3 exparte vide order dated 27.10.2022.

 

PER  RAJESH  K. ARYA, MEMBER

                This appeal has been filed by the complainants, namely, Anju Kakkar and Krishna Wanti (appellants herein), against order dated 01.07.2022 passed by the District Consumer Disputes Redressal Commission-I, U.T., Chandigarh (in short ‘District Commission’), whereby their consumer complaint bearing No.105 of 2020 has been dismissed by the Ld. District Commission on two grounds, firstly, there was a name mismatch of Anju Arora and secondly, the complaint was not maintainable as the complainants were held to be not consumers.

2.             Briefly, stated the facts before the Ld. District Commission were that equity shares of various companies were allotted from time to time to the appellants under public issue and in lieu of dividend also. They opened Demat Account with respondent No.1 in their names. Consequent to her marriage on 17.01.1991, appellant No.1 started writing her name as Anju Kakkar. She approached respondent No.1 for change of her name by submitting requisite documents and accordingly, her name was changed from Anju Arora to Anju Kakkar. She submitted various share certificates for dematerialization before respondent No.1 alongwith affidavit. As such, all shares certificates were dematerialized, however, 24 shares of Reliance Infrastructure and 16 shares of Reliance Home Finance Companies were not accepted for dematerialization as these were not found listed in the stock market. Again, when found to be listed in the stock market, these shares were presented before respondent No.1 on 14.11.2019 for dematerialization alongwith requisite prescribed affidavit for onward transmission to concerned company but the same were returned back by respondent No.2 on 19.11.2019 with the remarks ‘Name Mismatch’ of holder No.1. As per the complainants, the objection was unwarranted as earlier shares of Reliance Industries, Ultratec Cement and L & T had already accepted for dematerialization. The complainant resubmitted affidavit on 28.11.2019 but she received back share certificates only of Reliance Infrastructure on 05.12.2019 with the same remarks. Left with no other option, the complainants served legal notice upon respondent No.2.

3.             On the other hand, it was the case of respondents No.1 & 2 before the Ld. District Commission that respondent No.1 was well aware that to get the share certificate dematerialized, she was required to get her name changed on the share certificates for which, she ought to have followed the procedure and provide the mandatory affidavits/documents in the form required. It was further stated that due to mismatch of signatures, the share in question were not dematerialized. It was further stated that the services were utilized by the appellants for trading in shares as investors with ultimate objective of making profits through trading and as such, they were not consumers. It was further stated that appellant No.1 is Government employee and thus, the act of trading in shares was not for her livelihood.

4.             Opposite Party No.3 was proceeded against exparte vide order dated 21.06.2021 by the Ld. District Commission as on the said date, neither anybody appeared on its behalf nor written statement filed.

5.             We have heard the authorized representative of the appellants and the Ld. Counsel for respondents No.1 & 2 and have also gone through the material available on record.

6.             To assail the order of Ld. District Commission, the appellant argued that despite submitting an affidavit testifying that Anju Arora and Anju Kakkar is one and the same person and fulfilling the requisite formalities, the act of the respondents in not dematerializing the shares in question and withholding them, was illegal and arbitrary and an act of deficiency in rendering service on their part. He further argued that the main defaulter in this case is respondent No.3 (M/s Karvy Fintech Pvt. Ltd.) for rejecting the dematerialization of share certificates without assigning any cogent reason and by ignoring the contents of the affidavit. He further argued that the complainants very much consumers as they were not indulging in trading of shares on large scale.

7.             On the other hand, supporting the impugned order passed by the Ld. District Commission, Ld. Counsel for respondents 1 & 2 made two fold submissions, firstly, that appellant No.2 failed to fulfill the procedure for dematerialization of share certificates by getting her name changed post marriage on the share certificates and secondly, they were not consumers as they were trading in shares for making profit out of it.

8.             After considering the rival contentions of the parties and going through the material available on record, we are of the considered opinion, that the appeal filed by the complainants is liable to be dismissed as the Ld. District Commission has failed appreciate the facts on record and wrongly dismissed the complaint, for the reasons to be recorded hereinafter.

9.             As regards the objection raised by the respondents that the appellants were not consumers as they were trading in shares for making profit out of it, it may be stated here that the respondents have failed to show that the appellants were trading in shares at a very large scale, so as to term it as a commercial transaction. No doubt, respondent No.1 is a Government Employee but it does not debar her to buy share certificates, which cannot be said to be for any commercial purpose. Every trading in share certificate at a small scale cannot be termed as commercial activity or for generating profits out of it. It can be said to be for earning livelihood or say to support the family needs as the complainants are mere retail applicants and not indulged in trading at large scale or on daily basis. It may be stated here that Hon’ble National Consumer Disputes Redressal Commission, New Delhi in case titled “Bank of Baroda & 2 Ors. Vs. Jatinder Singh & 4 Ors.”, Revision Petition No.2062 of 2019 decided on 09.01.2020, while addressing similar objection with regard to the complainants having applied shares for speculative purpose, categorically held in Para 6 as under:-

“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.”

In the instant case also, the respondent have to establish on record that the appellants were engaged in large scale commercial activities so that she could be excluded from the purview of the term ‘consumer’. In the instant case, the complainant has requested for dematerialization of only 24 share certificates of Reliance Infrastructure and 16 share certificates of Reliance Home Finance Limited, which shows that they are retail consumers/investors and not at all traders. Therefore, this objection raised by the respondents is rejected being not tenable.

10.           Now coming to the merits of the case, it is not out of place to mention here that the respondents had earlier accepted the shares of Reliance Industries, Ultratec Cement and L & T for dematerialization as submitted by the appellants. Now, they cannot reject the share certificate, in question, by taking a U-turn that there was mismatch of name of appellant No.1. It is the specific case of appellant No.1 that whatever was required of her to get the share certificate dematerialized, was done by her and she even submitted the requisite affidavit testifying that Anju Arora and Anju Kakkar is one and the same person but despite that the respondents, specially, respondent No.3 refused to dematerialize the said share certificate and did not consider the said affidavit submitted by appellant No.1. Considering all this, we are of the concerted view that the respondents are trying to usurp the amount of the share certificates in question, which is the hard earned money of the appellants. Thus, deficiency in rendering service on the part of the respondents is writ large and they also indulged into unfair trade practice by not dematerializing the share certificate in question despite the appellants submitting all the requisite documents and the affidavit, as discussed above. The appellants are also held liable for adequate amount of compensation for deficiency in rendering service and indulgence into unfair trade practice on the part of the respondents. Therefore, in our view, the order passed by the Ld. District Commission dismissing the complaint of the appellants is perverse and illegal, which is liable to be set aside.

11.           For the reasons recorded above, the appeal is accepted. The impugned order dated 01.07.2022 passed by Ld. District Commission-I, U.T., Chandigarh is set aside. Consumer Complaint No.105 of 2020 is partly accepted with cost. The respondents/opposite parties, jointly and severally, are directed   as under:-

1. to dematerialize the share certificates, in question, i.e. 24 share certificates of Reliance Infrastructure and 16 share certificates of Reliance Home Finance Limited and credit the amount thereof in the Demat Account of the appellant(s), within a period of 30 days from today.
2. to pay an amount of Rs.10,000/- (as       prayed  for   in  the complaint) to           the appellants/complainants towards compensation for deficiency in rendering service, unfair trade practice and mental agony within a period of 30 days from the date of receipt of certified copy of this order failing which, the said amount shall carry interest @9% per annum (simple) from the date of passing of this order till actual realization.
3. to pay an amount of Rs.1,000/- (as       prayed  for   in  the complaint) to the appellants/complainants towards litigation expenses within a period of 30 days from the date of receipt of certified copy of this order failing which, the said amount shall carry interest @9% per annum (simple) from the date of passing of this order till actual realization.

12.           Certified copies of this order be sent to the parties free of charge.

13.           File be consigned to Record Room after completion.

Pronounced.

17.11.2022.

 [RAJ SHEKHAR ATTRI]

PRESIDENT

 

 

 

(PADMA PANDEY)

MEMBER

 

 

 

(RAJESH K. ARYA)

MEMBER

 

 

 

(PREETINDER SINGH)

MEMBER

 

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