A.P. STATE CONSUMER DISPUTES REDRESSAL COMMISSIONAT HYDERABAD
F.A. 104/2007 against C.C. 715/2004 , Dist. Forum-II, Visakapatnam
Between:
Visakha Mahine Spares Pvt. Ltd.
Rep. by its Managing Director
Plot No. 181, Autonagar
Visakapatnam-12. *** Appellant/
O.P. And
Smt. Dasari Sujatha Naidu
W/o. Sanyasi Naidu
R/o. Shirdi Sai Nagar
Vizianagaram. *** Respondent/
Complainant
F.A. 1695/2007 against C.C. 613/2004 , Dist. Forum-II, Visakapatnam
Between:
Visakha Mahine Spares Pvt. Ltd.
Rep. by its Managing Director
Plot No. 181, Autonagar
Visakapatnam-12. *** Appellant/
O.P.
And
Dasari Appalanaidu
S/o. Late Sanyasi Naidu
R/o. Kasipuram,
Devarapalli Mandal
Visakapatnam Dist. *** Respondent/
Complainant
Counsel for the Appellants: M/s. V. Gourisankara Rao
Counsel for the Resps: M/s. T.N.M. Ranga Rao.
CORAM:
HON’BLE SRI JUSTICE D. APPA RAO, PRESIDENT
&
SRI R. L. NARASIMHA RAO, MEMBER
TUESDAY, THIS THE TWENTY SECOND DAY OF DECEMBER TWO THOUSAND NINE
Oral Order: (Per Hon’ble Justice D. Appa Rao, President)
****
1) These two appeals are preferred by Opposite Party against the order of the Dist. Forum directing it, a private limited company to hand over the original share certificates with costs of Rs. 5,000/-
2) Though the Dist. Forum passed separate orders against the very same appellant on the complaints filed by the daughter and father-in-law for the self same relief and in the light of the fact that same questions of fact and law arise, between the complainants and the appellant, we are of the opinion that they can be conveniently disposed of by a common order.
3) The case of the complainants in brief is that Smt. Dasari Sujatha Naidu (Complainant in C.C. No. 715/2004) paid Rs.27,500, Rs. 10,000/-, Rs. 30,000/-, Rs. 17,000/-, Rs. 6,500/-, Rs. 7,000/- and Rs. 20,000/- commencing from 17.1.1994 to 7.12.1994 altogether Rs. 1,18,000/- while her father-in-law Sri Dasari Appala Naidu (complainant in C.C. No. 613/2004) paid Rs. 10,600/- on 11.1.1994 and Rs. 12,000/- on Rs. 21.2.1994 to the appellant for allotment of shares. The appellant paid Rs. 3,10,000/- towards dividend on the shares allotted to both of them viz., Rs. 10,000/- each on 23.5.1996, 29.5.1996, 28.8.2000, Feb, 2001, Rs. 20,000/- each on 26.12.1999, 8.6.2000, Rs. 30,000/- in July, 2000 and Rs. 50,000/- each on 18.5.2002, 23.5.2002, 9.7.2003 and 31.12.2003. Despite payment of these amounts the appellant did not hand over the share certificates. Later on insistence it had given blank share transfer form along with blank notice and blank letter requesting it to take necessary steps to effect transfer of shares in their name or in favour of any third party. They never intended to transfer the shares in the name of third parties. It was unfair trade practice on their part to issue blank share transfer form etc. Not handing over the share certificates amounts to deficiency in service. Therefore they filed the complaints to direct the appellant to hand over the original share certificates numbering 1180 and 226 together with compensation of Rs. 25,000/- and costs.
4) The appellant resisted the case. It alleged that they had delivered the shares certificates for the value of investments made by the complainants immediately on receipt of money in the year 1994. The claim was barred by limitation. There was no consumer relationship between them. In fact they have received the entire amount of Rs. 3,10,000/- towards full and final settlement of all the amounts due. In fact they were barely making any profits since inception. The allegation that they were paying dividends was totally false. The payments that were made during 2001 to 2003 were towards full and final settlement of all the transactions between them. When the entire amount was paid to them, they requested them to transfer the shares in their favour and supplied a copy of share transfer form. Having received the amounts they turned the tables and making these wrongful claims. They were bound to transfer the shares in their name. Having received the entire amount towards full and final settlement, now making the claim for issuance of original share certificates amounts to cheating, and therefore it prayed that the complaints be dismissed by awarding compensatory costs of Rs. 10,000/-.
5) The complainants filed their affidavit evidence in proof of their case and got Exs. A1 to A5 marked while appellant filed the affidavit evidence of Sri M. Sree Ramurthy, Director and did not file any documents.
6) The Dist. Forum after considering the evidence placed on record opined that the appellant did not file any documents to prove that an amount of Rs. 3,10,000/- was paid by them towards full and final settlement and that original share certificates were already issued. It opined that there was deficiency in service on the part of appellant and therefore directed it to handover the original share certificates to the complainants together with costs of Rs. 5,000/- each.
7) Aggrieved by the said order, the appellant preferred the appeals contending that the Dist. Forum did not appreciate the facts in correct perspective. The complaint was hopelessly barred by limitation. The entire dispute was amicably settled on payment of Rs. 3,10,000/- to them. Its gross profits for the years 2001-2002 and 2002-2003 was only Rs. 57,980/- and Rs. 26,552/- respectively. Their contention that they paid Rs. 1 lakh each towards dividend for the above years is false. It ignored the payments made by them. They could not have kept quiet all these years having paid the amounts on different dates in the year 1994 without demanding share certificates when they alleged that the father-in-law had received Rs. 3,10,000/- towards dividends for the years 1996, 1999 to 2003.
8) The point that arises for consideration is whether the order of the Dist. Forum is vitiated by mis-appreciation of fact or law?
9) It is an undisputed fact that the appellant is a private limited company received the amounts from the complainants towards shares. When the complainants alleged that they had been paid Rs. 3,10,000/- towards dividend, but the appellant did not hand over the share certificates. However the Managing Director of the company requested them to transfer the shares in his name and supplied share transfer form which they have submitted.
10) The appellant did not dispute the allotment of shares to the complainants. The defence is that there was settlement between them, wherein they paid Rs. 3,10,000/- towards full and final settlement of all claims. This amount was not paid towards dividends. Since the company was not earning any profits, payment of dividends would not arise. It was made towards full and final settlement of the all the claims.
11) The appellant did not file any documents or accounts to show that an amount of Rs. 3,10,000/- was paid by it towards full and final settlement of all the claims. The date of settlement was not mentioned. It is not known before whom such a settlement was made. If really the amounts were paid towards full and final settlement of the account since it is a private limited company, it would have been noted in its account books. It could have filed them to substantiate the said fact. In fact the very appellant admitted the supply of share transfer form etc. Having said so, it is the bounden duty to file it into the court in order to find out whether the share transfer form was utilized to transfer the shares either in its name or in the name of third parties. Nothing was mentioned about it. It looks as though the share certificates were not transferred but for which it would not have mentioned that the “The complainant is bound to transfer the shares issued in his name to the name of the opposite party as he has received the entire amount due towards full and final settlement of the dispute.” It went to the extent of stating that “ the complainant having received the entire amount towards the value of the shares and also the finance made by him to the opposite party, suppressing the same, making a claim for issuance of original share certificates amounts to cheating.”
12) At the cost of repetition, we may state that the appellant did not file any documents in order to substantiate that the amounts that were paid viz., Rs. 3,10,000/- was paid towards full and final settlement. In the light of the fact that the appellant has admitted that they have the share certificates with it, and when there is no proof of payment of amount, necessarily the appellant is bound to hand over the share certificates to the complainants. It cannot keep the share certificates and deny the subsequent dividends payable to them. The very appellant admitted that one of the complainants Sri Dasari Appalanaidu is a close friend and obviously taking advantage of it, the appellant did not return the share certificates. When it did not hand over the
share certificates but kept with it, even according to its own admission the amounts were paid up till 31.12.2003, for whatever reason, the complaints having filed the complaints on 5.5.2004 that too after issuing of registered notice under Ex. A4, it cannot be said to be barred by limitation.
13) The learned counsel for the appellant contended that the claim does not come under the purview of Consumer Protection Act. In support of his contention he relied upon a decision reported in Morgan Stanley Mutual Fund Vs. Kartick Das reported in II (1994) CPJ-7 SC. That was a case where the claim was towards allotment of shares by a prospective buyer. The Supreme Court held that the prospective investor before allotment of shares could not be called as consumer under the Consumer Protection Act. In the present case the shares were admittedly allotted. Keeping with them, amounts to deficiency. They have no right to hold it.
14) The Dist. Forum has rightly opined that the appellant had to hand over the share certificates to the complainants. We do not see any mis-appreciation of fact or law in this regard. We do not see any merits in the appeals.
15) In the result the appeals are dismissed with costs computed at Rs. 2,000/- each. Time for compliance four weeks.
1) _______________________________
PRESIDENT
2) ________________________________
MEMBER
Dt. 22. 12. 2009.
*pnr
“UPLOAD – O.K.”
