DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-II

Udyog Sadan, C-22 & 23, Qutub Institutional Area

(Behind Qutub Hotel), New Delhi-110016.

Case No.38/2008

Sh. Rajkumar Singh

S/o Sh. Devi Singh

R/o Type-V, Flat No.-36,

Delhi College of Engineering,

Bawana Road, Delhi-110032                                      ….Complainant

Versus

1.      Chief General Manager

          IDBI (now known as IDBI Bank Ltd.)

          Indian Red Cross  Society Building-1,

          Red Cross Road, New Delhi-110001

2.      Chairman

          IDBI (now known as IDBI Bank Ltd.)

          IDBI Tower, Cuffe Parade,

          Mumbai-400005

3.      Managing Director

          IDBI Bank Ltd., IDBI Tower,

          WTC Complex, Cuffe Parade,

          Mumbai-400004                                          ….Opposite Parties

                                                          Date of Institution        : 23.01.08              Date of Order                 : 07.06.17

Coram:

Sh. N.K. Goel, President

Ms. Naina Bakshi, Member

ORDER

Complainant’s case, in brief is that he had purchased 25600 shares of face value of Rs.10/- each from IDBI (now known as IDBI Bank Ltd.) during 1995-96 by making part payment of Rs.6,10,321/- from the secondary market as per the practice prevalent in the market.  After the transfer of IDBI in IDBI Bank Ltd. the OPs should have reissued fresh shares in lieu of the old shares but, however, the OPs did not do so. It appears that according to the Complainant the shares in question were forfeited by the OPs without giving any advertisement in the newspaper for the equity buyers who bought the shares from the secondary market. According to him, the original equity seller had endorsed the transfer deed in favour of the complainant. Hence, pleading deficiency in service on the part of the OPs, the complainant has filed the present complaint with the following prayers:-

“1.     To direct the opposite parties to annul the forfeiture of 25600 shares and collect the balance amount payable by the complainant and transfer the shares in the name of the complainant without any further delay or reissue 25600 shares in the name of the complainant at the same price when the Public issue was announced.

2.      To direct the respondents No.1 to 2 to pay compensation for Rs.1,00,000/- towards harassment of the complainant and valuable time of the life wasted by the complainant.

3.      To direct respondents to pay legal expenses of Rs.50,000/- for engaging the advocate for redressing the complaint.”

In the replies the OPs have inter-alia stated that the complainant is not a consumer of the OPs in respect of the transaction in question as he had purchased the shares in question from the secondary market. It is further stated that in case No.54/2007 filed by the complainant against the IDBI Ltd. before this Forum which vide its order dated 03.07.07 observed as under:-

“ (i)    The complainant will make representation to OP with original share certificate, valid transfer deed duly endorsed by the Registrar of Companies and other required documents for consideration under section 41 and 42 of IDBI Regulation.

(ii)      OP will pass speaking order as per its discretion under section 41 and 42 of IDBI regulations within 90 days of the submission of the representation.”

Accordingly, in compliance with the said order the Board of Directors of the OP held a meeting on 11.12.07, considered the complainant’s representation and passed the speaking order.  It is stated that only after lapse of nearly 10 years after acquiring the said shares the complainant had forwarded the shares either for full endorsement of shares in his name against the partly paid shares purchased by him or annulment of the forfeiture.  Denying any deficiency in service on their parts the OPs have prayed for dismissal of the complaint.

The complainant has filed a rejoinder to the written statement of OP.

Complainant has filed his own affidavit in evidence. On the other hand, affidavit of Sh. Rethy Gopakumar, AGM (legal) has been filed in evidence on behalf of the OPs.

Written arguments have been filed on behalf of the parties.

None has come forward to advance oral arguments on behalf of the complainant despite number of opportunities given in this behalf.  We have heard the oral arguments on behalf of the OPs. We proceed to decide the matter on merits.

       It is an undisputed fact that after purchasing the shares in question from the secondary market the complainant did not apply for transfer of the said shares in his name till the order of the forfeiture was passed and thereafter he filed C.C. No.54/2007 against the OPs and vide order dated 03.07.07 this Forum passed the above stated order. The copy of the order dated 03.07.07 has been filed on the record as Mark A1. The then Ld. President made a reference to sections 28 to 48 of IDBI Regulations, 1994. Sections 41 & 42 of these regulations were considered. For appreciation of the controversy, Sections 41 & 42 are reproduced in the order dated 03.07.07. We also think it necessary to reproduce the said Sections for the proper disposal of the present complaint which are as follows:-

“Section 41

The Board may, at any time,  before any share so forfeited under Regulation 38 shall have been sold, reallotted or otherwise disposed of, annul the forfeiture thereof upon such conditions as it may think fit.

  Section 42          

  Any shareholder whose shares have been forfeited shall notwithstanding the forfeiture, be liable to pay and shall forthwith pay to the Development Bank of all calls, installments, interest, expenses and other moneys owing upon or in respect of such shares at the time of forfeiture with interest thereon from the time of forfeiture until payment at such rate as may be specified by the Board and the Board may enforce the payment of the whole or a portion thereof.”

          Accordingly, vide the said order the complainant was directed to make the representation to the OPs with original share certificate, valid transfer deed duly endorsed by the Registrar of Companies and other required documents for consideration under section 41 and 42 of IDBI Regulations and the OPs were directed to pass a speaking order as per its discretion under sections 41 and 42 of the IDBI Regulations within 90 days from the submission of the written intimation. Copy of the speaking order has been filed as Annexure A-2. Each and every contention of the complainant has been considered in the speaking order. 

          In view of the above discussion, we are of the considered opinion that since the complainant’s representation has been duly considered by the Board of Directors of the OPs, the complainant has failed to prove any deficiency in service on the part of the OPs.

In view of the above discussion, we do not find any merit in the complaint and dismiss it with no order as to costs.

Let a copy of this order be sent to the parties as per regulation 21 of the Consumer Protection Regulations.  Thereafter file be consigned to record room.

Announced on 07.06.17.