BEFORE THE A.P. STATE CONSUMER DISPUTES REDRESSAL COMMISSION
AT HYDERABAD.
F.A. 1533/2008 against C.C. 48/2007, Dist. Forum-I, Hyderabad
Between:
R. Siva Prasad, S/o. R. Guru Murthy
Age: 49 years, Professor
R/o. 6/645-C, New 6-4-63, 1st cross
Maruthinagar,
Ananthapur-515 001. *** Appellant/
Complainant
And
1) M/s. Satyam Computer Services Ltd.
Rep. by its Authorised Officer
Reg. Office: Mayfair Centre
1-8-303/36, S.P. Road
Secunderabad-500 003.
2) Ms. Sharddha Sridhar Algaonkar
R/o. 107, New Diamond Co-operative
Housing Society, Hajurai Road
Behind Murply Com,.
Thane West-400 604. *** Respondents/
O.Ps 1 & 2.
Counsel for the Appellant: M/s. S. Surya Prakash Rao
Counsel for the Resps: M/s. Deepak Deshpande (R1)
F.A. 1532/2008 against C.C. 48/2007, Dist. Forum-I, Hyderabad
Between:
M/s. Satyam Computer Services Ltd.
Rep. by its Authorised Officer
Reg. Office: Mayfair Centre
1-8-303/36, S.P. Road
Secunderabad-500 003. *** Appellant/
O.P1
And
1) R. Siva Prasad, S/o. R. Guru Murthy
Age: 49 years, Professor
R/o. 6/645-C, New 6-4-63, 1st cross
Maruthinagar,
Ananthapur-515 001. *** Respondent/
Complainant
2) Ms. Sharddha Sridhar Algaonkar
R/o. 107, New Diamond Co-operative
Housing Society, Hajurai Road
Behind Murply Com,.
Thane West-400 604. *** Respondent/Op2
Counsel for the Appellant: M/s. Deepak Deshpande
Counsel for the Resps: M/s. S. Surya Prakash Rao (R1)
CORAM:
HON’BLE SRI JUSTICE D. APPA RAO, PRESIDENT
&
SMT. M. SHREESHA, MEMBER
WEDNESDAY, THIS THE EIGTH DAY OF DECEMBER TWO THOUSAND TEN
Oral Order: (Per Hon’ble Justice D. Appa Rao, President)
*****
1) These cross appeals are preferred Viz., F.A. 1532/2008 by OP1 against the order of the Dist. Forum directing it to pay Rs. 7 lakhs with interest @ 12% p.a. together with punitive damages of Rs. 10,000/- and costs of Rs. 2,000/- while the other F.A. 1533/2008 by the complainant against the order declining in awarding bonus shares and shares purchased by him besides granting of Rs. 14 lakhs as claimed by him.
2) The parties are described as arrayed in the complaint in order to avoid confusion in narrating the facts.
3) The case of the complainant in brief is that he purchased 100 shares of Satyam Computer Services Ltd. (Op1) through an authorised sub-broker M/s. Siva Share Consultants, Ananthapur. He submitted necessary share transfer forms on 22.4.1999 for transfer of shares in his name. When he could not get any reply, when questioned, he was informed that it had issued a notice to Op2, original shareholder and it had received a reply that she never offered the shares to sell in open market and the original share certificate was lost. When it has directed him to furnish all original certificates he submitted the same. However, it did not transfer the shares and requested him to file a declaration suit in a civil court. In the correspondence it was revealed that they did not transfer on the ground that the signatures did not tally, and if no objections were heard it would transfer. Since no response was received from Op1 he filed a suit in O.S. No. 2/2001 on the file of Junior Civil Judge, Ananthapur for declaring that he was the owner of the shares and the said suit was decreed on 18.9.2002. A copy of which was sent to Op1. The entire exercise took about 2-1/2 years to get the shares transferred in his name. During the period the share value went up to Rs. 7,000/-. Had Op1 transferred the shares in time, he would have gained Rs. 14 lakhs. Alleging deficiency in service he claimed Rs. 14 lakhs together with liquidated damages and costs.
4) Op1 Satyam Computer Services Ltd. resisted the case. It alleged that it was not aware of purchase of shares by the complainant. He was not the original allottee. Unless and until the shares come to the company for transfer it would not know, as to where shares were lying, or with whom they were lying. Only when it comes to the company for transfer, it would be aware of the same. When it received a request from the complainant along with share certificate for transfer in April, 1999, as per the norms a seller confirmation letter was sent for confirmation before transfer by its letter dt. 27.5.1999 to Op2 original shareholder, marking a copy to the complainant. In response to it, Op2 raised objection alleging that she had lost the shares with her broker and claimed duplicate share certificates. Since a dispute was raised it directed the complainant to obtain declaration to that effect from a competent civil court. In the meantime, the concept of dematerialization of shares was introduced in the market around the period, and its shares were under compulsory demat segment trading. Once the shares were dematerialized tracing out the original shares would not be possible. It had no role to play as the nodal authorities for all the dematerialized shares was with respective depositories viz., National Security Depository Ltd. (NSDL), Central Depository Services Ltd. (CSDL). In order to avoid any unpleasant situation it had waited for the outcome of the dispute. In fact Op2 directly through regulatory authorities pursuing the claim over the shares for issue of duplicate shares. She has also filed FIR before the Station House Officer, Azaad Maidan, Mumbai. There was no delay in transfer of shares. The moment the complainant informed about the passing of decree it has transferred the shares on 28.3.2003, and despatched the shares to the complainant. It was not liable to pay any amount. No deficiency in service could be attributed against it and therefore prayed for dismissal of the complaint with costs.
5) Op2 did not choose to file any counter.
6) The complainant in proof of his case filed his affidavit evidence and got Exs. A1 to A16 marked while Op1 filed the affidavit evidence of its Company secretary and got Exs. B1 to B6 marked. In the appeal on an application filed by the complainant to receive additional documents they were received and assigned as Exs. A17 to A27.
7) The Dist. Forum after considering the evidence placed on record opined that by virtue of decree passed in favour of complainant, it is evident that the complainant was entitled to hold the share certificates and there was negligence on the part of Op1 Satyam Computer Services Ltd., in not transferring in his name. Presuming that the value of one share would be Rs. 7,000/- in the year 2000 it awarded Rs. 7 lakhs with interest @ 12% p.a., from 22.4.1999 together with punitive damages of Rs. 10,000/- and costs of Rs. 2,000/-.
8) Aggrieved by the said decision, Op1 Satyam Computer Services Ltd., preferred the appeal F.A. No. 1532/2008 contending that the Dist. Forum did not appreciate either facts or law in correct perspective. It ought to have seen that there was a bonafide dispute between the complainant and original shareholder. When the suit was decreed on 18.9.2002 immediately it had transferred the shares without any delay. It could not transfer the shares nor issue duplicate shares when there was title dispute pertaining to the shares. There is no proof that the share value was Rs. 7,000/- and the complainant had sustained loss of Rs. 7 lakhs. Op2 has claimed that she had lost the share certificates and when there was a bonafide dispute in regard to the shares in question, imputing deficiency in service on its part would not be correct and therefore prayed that the appeal be allowed dismissing the complaint.
9) Equally aggrieved the complainant preferred the appeal F.A. 1533/2008 contending that the Dist. Forum ought to have granted bonus shares amounting to Rs. 7 lakhs in addition to the shares purchased by him as the company has issued bonus shares in the year 1999. He was entitled to 100 shares besides 100 bonus shares and the value of which would come to Rs. 14 lakhs. It ought to have awarded the same besides compensation claimed by him together with interest @ 18% p.a.
10) The point that arises for consideration is whether the order of the Dist. Forum is vitiated by mis-appreciation of fact or law?
11) It is an undisputed fact that the complainant has purchased 100 shares of M/s. Satyam Computer Services Ltd (Op1) on 2.6.1995 from one Shiva Share Consultants, Ananthapur evidenced under Ex. A1 from Stock Exchange, Bangalore in secondary market through his stock broker M/s. Ravi Associates, Bangalore. It is also not in dispute that the complainant submitted transfer of shares by his application Ex. A21 dt. 22.4.1999. Op1 M/s. Satyam Computer Services Ltd. in turn on receipt of it referred the matter to Op2 registered shareholder, for confirmation before transfer of shares and for verification by its letter Ex. A22/Ex. B1 dt. 27.5.1999. It is also not in dispute that Op2 directly through regulatory authorities pursuing the claim over the issue of duplicate shares. She has also filed FIR before the Station House Officer, Azaad Maidan, Mumbai. In the light of protest made by the registered share holder Op1 by letter dt. 30.11.2000 under Ex. A10 & A11 directed the complainant to approach court of law. Equally the complainant informed Op1 through his legal notice Ex. A12 dt. 14.1.2001 that he was proceeding in a court of law. In fact the complainant approached the civil court and filed O.S. No. 25/2001 on the file of Junior Civil Judge, Ananthapur impleading the Satyam Computer Services Ltd., as D1 and registered share holder as D2. The complainant through his counsel has issued a legal notice Ex. A14 dt. 20.2.2003 stating that he had obtained declaration from theCivil Court directing it to transfer the shares in his name. Basing on the decree Op1 had transferred the shares on 11.8.2003 vide Ex. A25.
12) It may be stated herein that only declaration that was sought for was transfer of shares. He did not claim the value of the shares on the ground that in view of deliberate non-transfer of shares in his name loss was caused. We do not intend to consider the affect of Order II Rule 2 CPC or Section 11 CPC as OP1 did not raise it. Now the complainant imputes deficiency in service on the part of Op1 in not effecting or transferring the shares in his name and thereby he sustained loss to a tune of Rs. 14 lakhs.
13) At the outset, we may state that it is not known how the complainant could allege that non-transfer of shares by Satyam Computer Services Ltd. (OP1) in the light of protest by registered shareholder (Op2) amounts to deficiency in service. The complainant did not allege any motive or malice against Satyam Computer Services Ltd. (OP1) for non-transfer of shares. The very fact that the complainant had filed a suit and obtained decree itself would show that Satyam Computer Services Ltd. (OP1) has nothing to do with protest raised by Op2. If the complainant feels the protest raised by Op2 was unjust he could have claimed whatever loss sustained from her. By no stretch of imagination, it could be said that non-transfer of shares by Satyam Computer Services Ltd. (OP1) in favour of complainant was malafide or unjust.
14) The complainant did not sell the shares, after it was transferred to him, at least to mitigate whatever loss that was caused to him on the ground that share price was escalated. He filed Ex. A26 to show the price of each share existing on a particular day. Assuming without admitting that when he submitted 100 shares for transfer, the price was Rs. 1,185/-, it could not be said that moment, he applied for transfer, Satyam Computer Services Ltd. (OP1) had to transfer the shares ignoring the objections of R2 the registered shareholder. When the registered shareholder protested for transferring the shares in the name of the complainant, Satyam Computer Services Ltd. (OP1) had no other go than to direct the complainant to prove in a competent court. Might be his signature was tallied, however, Op1 was not authorised to transfer the shares. For the first time in the appeal, the complainant had claimed the bonus shares. He did not seek such relief in his complaint.
15) His plea is that the close price as on 7th & 8th March, 2000 was Rs. 7,081/- and Rs. 6,525/- respectively. Had the same been transferred he could have got the said amounts. He also contended that by 7.8.2000, one share was split into five and the price was Rs. 2,205 to Rs. 2,360/-. However, we may state that the suit that was filed by the complainant was decreed directing Satyam Computer Services Ltd. (OP1) to transfer the shares in his name and the transfer was made on 11.8.2003 and therefore the complainant could not have sold the shares at that price. He cannot claim the said amount. We reiterate that if Op2 has unjustifiably raised objection for transfer of shares in the name of the complainant, it is Op2 that was liable to compensate whatever loss that was occasioned to him. It is not known how M/s. Satyam Computer Services Limited (OP1) was responsible for this. Obviously as he could not have collected the amounts from Op2 he filed the complaint against Satyam Computer Services Ltd. (OP1). More over even now he is having the shares, which he does not want to part, nor sell it away. He never mentioned as to the amount for which he purchased the shares. Equally he did not mention as to when he intends to sell and in the process the amount that he could have realised in order to assess the loss for claiming compensation. Absolutely the complainant has no cause of action for filing a complaint against Satyam Computer Services Ltd. (OP1) for realization of amount claimed towards compensation for non-transfer of shares in his name when the registered shareholder protested for transfer of shares in his name. Satyam Computer Services Ltd. (OP1) cannot be made liable when it was not instrumental for not transferring the shares. It is not a deliberate act but occasioned due to the protest made by the registered shareholder.
16) The concept of dematerialization of shares was introduced in the market around the period and company’s shares were under compulsory demat segment trading. Once the shares were dematerialized tracing out the original shares would not be possible. It had no role to play as the nodal authorities for all the dematerialized shares was respective depositories viz., National Security Depository Ltd. (NSDL), Central Depository Services Ltd. (CSDL). In order to avoid any unpleasant situation Op1 had waited for the outcome of the dispute. In fact Op2 directly through regulatory authorities pursuing the claim over the shares for issue of duplicate shares. The moment the complainant informed about the passing of decree it has transferred the shares on 28.3.2003 and despatched the shares to the complainant. We do not see how the Op1 could be held liable for the so called delay even if any. The Dist. Forum did not consider any of these aspects, however simply directed Op1 to pay Rs. 7 lakhs together with punitive damages without giving any reasons. We not agree with the opinion expressed by the Dist. Forum in this regard. We do not see any merits in the complaint.
17) In the result the appeal preferred by Op1 in F.A. No. 1532/2008 is allowed consequently the complaint is dismissed. As a corollary F.A. No. 1533/2008 filed by the complainant is dismissed. However, in the circumstances of the case each party to bear its own costs.
1)
_______________________________
PRESIDENT
2) ________________________________
MEMBER
Dt. 08. 12. 2010.
*pnr
“UP LOAD – O.K.”
“UP LOAD – O.K.”
