AT HYDERABAD.

F.A.  757/2007  against C.C. 410/1999, Dist. Forum, Karimnagar     

Between:

Smt. B. Vijayalakshmi

W/o. Rajesham

Age: 35 years,

C/o.  S. Satyanarayana

H.No. 2-2-3, Bolwada

Karimngar Dist.                                           ***                         Appellant/

                                                                                                Complainant.

                                                                   And

1)  Sri Satya Sai Investments

Shop No. 17, Madeena Complex

Karimnagar Dist.

2)  B. N. Rathi Securities Ltd.

R/o. 4-5-173, Hasmath Gunj

Sultan Bazar, Hyderabad.                          ***                         Respondents/

                                                                                                Ops.

Counsel for the Appellant:                          M/s. P. Raja Sripathi Rao.

Counsel for the Resp:                                 None.  

CORAM:

HON’BLE SRI JUSTICE D. APPA RAO, PRESIDENT

&

                 SMT. M. SHREESHA, MEMBER

WEDNESDAY,  THIS THE SEVENTH DAY  OF APRIL TWO THOUSAND TEN

Oral Order: (Per Hon’ble Justice D. Appa Rao, President)

                                                          *****

1)                 Appellant is unsuccessful complainant.    

2)                 The case of the complainant in brief is that  she purchased 100 shares of  Saw Pipes Ltd., New Delhi  on 19.8.1997 for Rs. 4,850/- through R1  share broker.    Since she came to know that they were bad in delivery they were returned through note  No. 1258 Dt. 3.1.1998 to the company.    The company while returning the share certificates directed her to take action against the broker in case of refusal to transfer the certificate  in her name.     R1 refused to transfer  the share certificate,   and informed her that it could  do nothing.    R2 being the main broker is jointly responsible with R1 to transfer the share certificate in her name.    Therefore she sought the share certificate. 

3)                R1 resisted the case.    While admitting that  he had purchased 100 shares of  Saw Pipes Ltd., New Delhi  in the name of the complainant  as per her request  on 19.8.1997 it alleged that  it had delivered the share certificates  and share transfer deeds in time.  She had lodged an application for transfer of certificate to the company on 2.9.1997 and it was sent back,  on the ground that it was  a bad  delivery.    The company refused to transfer the share certificate  by its letter Dt. 23.12.1997  as the shareholder had obtained stay order prohibiting the transfer of shares.    Further date of hearing was posted to  8.12.1997.    Thereupon it requested the complainant  to obtain fresh no objection memo .  In fact it had addressed a letter through its share broker  to the complainant to furnish fresh no objection memo  to issue  fresh share certificate or to rectify the same.    Instead of complying the same  she has approached the Dist. Forum.    There was no fault on its   part.   There was no deficiency in service.  It was not liable to pay any compensation.    Therefore, it prayed for dismissal of the complaint with costs. 

4)                 R2 also resisted the case.    While  reiterating  the most of the facts mentioned by R1  it alleged that the transfer of shares could not be made due to  stay order that was obtained by the shareholder.    In the light of above  facts  it  had directed the complainant to obtain fresh no objection memo to issue fresh share certificate or rectify the same which she did not do so.      Instead of making  M/s. Gagan Trading Company  as a party she has un-necessarily  impleaded  it,  and therefore prayed for dismissal of the complaint with costs. 

5)                The complainant in proof of her  case  filed her  affidavit evidence and got Exs. A1 to A5 marked while the respondents did not file any documents. 

6)                The Dist. Forum after considering the evidence placed on record opined that  admittedly shares were purchased through respondents  and in fact they had issued Ex. A5 certificate  in her name.    She has applied for transfer of shares on  3. 1. 1998 and since then she was deprived of selling the shares,   the prices of which,  might have gone up.    Since the complainant had opted for refund of the amount covered  under the shares and in view of their failure to transfer the share certificate  in her name she could not sell the shares, therefore she was entitled to  refund of Rs. 4,850/-  with interest @ 9% p.a. from 3.1.1998 till payment together with costs of Rs. 1,000/-.  

7)                Aggrieved by the said decision, the complainant preferred the appeal contending that the Dist. Forum did not appreciate  the facts  in correct perspective.   It ought to have seen that there was deficiency in service on the part of respondents.    The Dist. Forum having found that share prices might have gone up, an amount of Rs. 50,000/- ought to have been awarded.    Therefore she prayed that said amount be awarded. 

8)                At the outset, we may state that  the complainant had purchased 100 shares of Saw Pipes Ltd., New Delhi  on 19.8.1997 for Rs. 4,850/- through R1  share broker.   When she came to know that  they were bad in delivery the complainant had sent it through a note  No. 1258  on  3.1.1998 to the company.  The company in its turn sent a letter Dt.  27.9.1999  under Ex. A1 informing that “  The transferor has filed a suit  No. 170-C/97 in the court of  Shri S.K. Goel, Civil Judge, at Hissar complaining that the shares were not sold  by them but given as security to some person.   A stay has been granted by the said court prohibiting the company for transfer of the shares and the stay is still operative to the next day of hearing on 3.1.2000.”

Under the circumstances the company regretted  its inability to transfer the shares.  It advised the complainant to take legal action against the broker.    Subsequently  on  24.11.1999  under  Ex. A2  Saw Pipes Ltd.  addressed a letter  to SEBI by mentioning that  100 shares were lodged by the complainant for transfer, however, there was a stay and the said fact was informed to her and that there was no default on their part.    The complainant could not prove that  R1 & R2 knew that  there was stay order  and despite the said fact  shares were sold  and delivered to the complainant.    Neither the respondents nor the company  could be found fault for not transferring the shares to her.    The Dist. Forum after considering the  fact that the amount was paid, and R1 & R2 having purchased the shares, they were directed to refund the amount together with interest @ 9% p.a., from 3.1.1998 till payment together with costs.  Evidently the said amount was paid.

9)                 The complainant though preferred the appeal did not seek any compensation in the complaint filed by her.  What all she sought was that she was entitled for transfer of share certificates  in her name.     In view of the fact that there was stay neither the company nor the brokers  could be found fault for not transferring the shares in her name.    The complainant could not prove that the value of above shares have gone up and would have fetched Rs. 50,000/- had she sold them.    There is no evidence whatsoever to that effect.      We do not see any justification to award compensation.  We do not see any merits in the appeal.

10)               In the result the appeal is dismissed.  However, no costs.

1)       _______________________________

      PRESIDENT           

2)      ________________________________

          MEMBER           

                                                                   Dt.   07. 04. 2010. .

*pnr

“UP LOAD – O.K.”