PRESENT: SRI P.V. NAGESWARA RAO, M.A., LL.M., PRESIDENT      

 SRI S. ABDUL KHADER BASHA, B.Sc., MEMBER

Monday, 23^rd June 2008

CONSUMER COMPLAINT No.  42 / 2008

Sri T. Venkata Rayudu, 72 years,

S/o T. Subbarayudu, D.No. 3/684,

Raja Reddy Street,  Kadapa Dist                                         …….. Complainant.

Vs.

Franklin Templeton Asset Management (I) Pvt. Ltd.,

Plot No. 44, Ground Floor, Sagar Society, Road No. 2,

Banjara Hills, Hyderabad – 34.                                                ….. Respondent

This complaint coming on this day for final hearing on 20-6-2008 in the presence of Sri S.V. Seshadri, Advocate for complainant and Sri B. Siva Prasad Reddy, Advocate for respondent and upon perusing the material papers on record, the Forum made the following:-

O R D E R

(Per Sri P.V. Nageswara Rao, President),

1.                Complaint filed under section 12 of the Consumer Protection Act.

                The brief facts of the complaint is as follows:-  The complainant  had an account with respondent company vide folio No. 15365349 for purchase of sale of shares and units and additional share units.  The complainant sent a requisition for purchase of additional shares on 21-1-2008 along with a D.D. for Rs. 12,000/- in favour of the respondent sent by way of courier service.  It was received by the respondent’s office on 22-1-2008 at 1.02 p.m.  As per SEBI (Security Exchange Board of India) Rules and Regulations if any company would receive requisition for purchase of shares before 3.00 p.m of the day, the company should consider and give the holder the rate of share prevailing on that day.  If it would receive after 3.00 p.m it would be considered on the next day and the value of the units or shares prevailing on the next day had to be allotted.  Though the requisition of the complainant reached the  respondent before 3.00 p.m on 22-1-2008.  The respondent gave next day rate i.e. 23-1-2008.  Since the requisition was received by the respondent before 3.00 p.m i.e. at 1.02 p.m on     22-1-2008.  The complainant was entitled for the value of the share prevailing on 22-1-2008,  but not on 23-1-2008.   Since the value of the share allotted on the next day the complainant suffered a loss of Rs. 700/-.  The complainant wrote a letter to revise the statement of account by calculating the value of the units prevailing on the day of receipt of his requisition.  But there was no response.   The notice was issued on 17-2-2008.  Thus the complaint was filed to revise the statement of account by calculating rate of units prevailing on 22-1-2008 and pay compensation of Rs. 2,000/- and costs of Rs. 2,000/-.

                The respondent filed a counter that the complainant subscribed to the units of Franklin India High Growth Companies Fund – Growth plan on 26-7-2007 under Folio No. 15365349 with the respondent and he sent a requisition for purchase of additional shares along with D.D. for Rs. 1,2000/-, dt. 21-1-2008 sent through courier service.  It was delivered at the office of the respondent at 1.02 p.m on 22-1-2008 and as per SEBI Rules and Regulations, if the requisition would be received before 3.00 p.m for purchase of additional units,  the respondent ought to have considered the requisition for grant of additional shares as per value prevailing on that day.  If the requisition would be received after 3.00 p.m it would be considered for the value on the next day.  It was an admitted fact. 

                The investors service center of the respondent at Hyderabad had received the request through First Flight Couriers Ltd., along with D.D vide consignment No. A49337258, dt. 22-1-2008 at 15.02 hours i.e. 3.02 p.m after the cutoff time prescribed by the SEBI Therefore, the respondent allotted units as per the rate prevailing on 23-1-2008.  The complainant alleged that he was entitled to get Net Asset Value as on 22-1-2008 at the rate of Rs. 11.4969.  The run sheet of the courier service disclosed the alterations of the time of receipt of the courier by the investors service center at Hyderabad from 3.02 p.m to 1.02 p.m.  It was taken up with the First Flight Couriers Ltd, who confirmed in writing as per letter dt. 3-3-2008 that the time of delivery of the consignment was changed from 15.02 hours to 13.00 hours on account of oversight of the delivery staff.   Therefore, the show cause notice was sent to the courier service.  The respondent allotted the units as applicable in the value dt. 23-1-2008 as  per SEBI Rules.  Since, the requisition was received after cutoff time on 22-1-2008.   Therefore, there was no deficiency of service on the part of the respondent.  The company rightly allotted the units @ Rs. 12.0946 as on 23-1-2008.  The complainant had to seek redress of his grievance before a Civil Court in case of any dispute regarding authenticity of the letter issued by the courier service. 

                It was denied that the requisition was received before 3.00 p.m on  22-1-2008 i.e. before cutoff time.  There was no liability on the part of the respondent.   The respondent admitted the notice issued by the complainant dt. 17-2-2008 regarding difference of amount and units amounting to Rs. 700/-.  There was no liability on the part of the respondent.  The respondent was not liable to pay any compensation or damages because there was no deficiency of service.  Therefore, the complaint may be dismissed with costs. 

                On the basis of the above pleadings the following points are settled for determination. 

i.                   Whether there is any deficiency of service on the part of the respondent?

ii.                 Whether the complainant is entitled for the relief as prayed for?

iii.              To what relief?

7.                On behalf of the complainant Ex. A1 to A3 were marked and on behalf of the respondents Ex. B1 & B2 were marked.   

8.                Point Nos. 1 & 2.  The complainant sent one D.D for Rs. 12,000/- dt. 21-1-2008 through courier service to the respondent company for purchase of additional units in the respondent company and the same was received by the respondent at 1.02 p.m on 22-1-2008.  As per SEBI (Security Exchange Board of India) rules and regulations if any company would receive requisition for purchase of additional shares or units before 3.00 p.m of the day the company should consider and give the holder the rate of the share prevailing on that day.  If the company would receive the requisition after 3.00 p.m i.e. after cutoff time the requisition would be considered on the next day  had to be allotted to the holder.  In the present case the requisition of the complainant was received before 3.00 p.m i.e. before cutoff time on 22-1-2008.  But the respondent considered the requisition on the next day i.e 23-1-2008 and allotted the value of the shares as on 23-1-2008.  The respondent admitted the same but it was on account of mischief committed by the courier service staff, who had changed the time as 13.02 from 15.02 p.m on 22-1-2008.  It was found in the courier delivery run sheet.  The Xerox copy of delivery run sheet was Ex. B1 It was also admitted by the respondent and the respondent clearly mentioned in the counter that they questioned the courier service about misuse acts done by the courier staff.  In Ex. B1, the time was corrected as 13.02 to which the complainant was not responsible.  Ex. B2 was Xerox copy of letter from courier service to the respondent admitting the change of time.  The complainant filed Ex. A1 the courier receipt dt. 22-1-2008 at 1.02 p.m. as proof of delivery.   Ex. A2 was Xerox copy of notice and Ex. A3 was office copy of the notice to the respondent.   The NAV as on 22-1-2008 was Rs. 11.4969 but the NAV (Net Asset Value) as on           23-1-2008 was Rs. 12.0946.  Hence, there was much loss. 

9.                After filing of the complaint the respondent supplied the copy of revised statement of account calculating the rate of units prevailing as on  22-1-2008 to the complainant.  Since the entire counter disclosed that it was a mistake committed by the courier service and hence, the respondent was not liable.  The complainant sent the requisition and the same was received by the respondent before 3.00 p.m on 22-1-2008.  However, the respondent issued the account statement dt. 23-1-2008 with the  rate of Rs. 12.0946.  It was not mistake of the complainant.  It was completely mistake in view of Ex. B2 on the part of the courier service.   On account of mistake committed by the courier service, the complainant had a loss and suffered much to which the respondent was liable as they were silent even after receiving Ex. B2. In these circumstances the complaint is partly allowed directing the respondent to pay Rs. 1,500/- towards compensation and Rs. 500/- towards costs totaling Rs. 2,000/-.  Hence, the points are answered accordingly. 

10.              Point No. 3.  In the result, the complaint is partly allowed directing the respondent to pay Rs. 1,500/- (Rupees one thousand five hundred only) towards compensation and Rs. 500/- (Rupees five hundred only) towards costs totaling Rs. 2,000/- (Rupees two thousand only) payable within 30 days from the date of receipt of the order. 

Dictated to the Stenographer, transcribed by him, corrected and pronounced by us in the open forum, this the 23^rd June 2008

MEMBER                                                                                      PRESIDENT

APPENDIX OF EVIDENCE

Witnesses examined.

For Complainant    :       NIL                                            For Respondent :     NIL

Exhibits marked for Complainant  : -  

Ex. A1         Courier receipt dt. 22-1-2008 as  proof of delivery.

Ex. A2         X/c of notice from complainant to the respondent dt. 31-1-2008.

Ex. A3         Office copy of the notice from complainant to the respondent,

dt. 17-2-2008. 

Exhibits marked for Respodnents : -         

Ex. B1         X/c of delivery run sheet of courier service

Ex. B2         X/c of letter from respondent to courier service, dt. 3-3-2008.

MEMBER                                                                                    PRESIDENT.

Copy to :-

1)     Sri S.V. Seshadri, Advocate, Kadapa.  

2)     Sri B. Siva Prasad Reddy,  Advocate, Kadapa.  

         1) Copy was made ready on     :

2) Copy was dispatched on      :

3) Copy of delivered to parties :

B.V.P.                                               - - -