CONSUMER DISPUTES REDRESSAL FORUM-II
Udyog Sadan, C-22 & 23, Qutub Institutional Area
(Behind Qutub Hotel), New Delhi-110016.
Case No. 809/06
1. Col. N.L. Bareja (Retd.), Advocate,
Chamber No. 125, Patiala House Courts,
New Delhi – 110001.
2. Shri Sanjay Bareja,
S/o Col. N.L. Bareja (Retd.), Advocate,
R/o C-554, Phase-I, Sheikh Sarai,
New Delhi – 110017. -Complainants
Vs
1. The Standard Chartered Bank,
Consumer Banking – Depository Services
17, Sansad Marg,
New Delhi – 110001.
2. Montari Industries Ltd.
78, Nehru Place,
New Delhi – 110019. -Opposite Parties
Date of Institution: 14.04.2004
Date of Order: 09.09.2015
Coram:
N.K. Goel, President
Naina Bakshi, Member
O R D E R
Earlier the complaint was decided by our predecessors vide order dated 3rd May, 2007. The facts mentioned in that order are reproduced as hereunder:
“Persuaded by the solicitations of OP-1 bank the complainants opened six depositary accounts with the OP bank for the purpose of D-matting certain shares held by the complainants jointly with the family members. According to the complainants Mr. G.S. Mishra, an official of the OP bank, who had visited the residence of the complainants had assured the complainant that the depositary account in respect of small quantity of shares could be closed later on after transferring the D-matted shares to the main account and that no fee would be charged for such closure of the accounts. One of the grievances of the complainants is that when four of the six accounts were closed the OP bank charged the closure fee of Rs. 100/- for each account. The second grievance of the complainant is that 100 shares out of 150 shares pertaining to Consolidated Fibre Chem deposited in the client ID no. 11374657 were shown as pending D-matt and no action has been taken by the OP bank in this regard. Other grievance of the complainants is that shares of M/s Montari Industries Ltd., the OP-2 company, have not been D-matted. The complainant has claimed the following reliefs:
- Directions to the OPs to ensure D-matting of 100 shares of Montari Industries Ltd. on in alternative to deliver the share certificates back to the complainants.
- A compensation of Rs. 1 Lakh.
- Refund of various amounts/charges recovered by OP bank from the complainants towards the closure charges of the accounts and the maintenance charges levied for the account relating to Montari Industries.
OP-2 has filed a reply to the effect that the company has gone sick and the BIFR has already recommended its winding up. OP-1 has denied any assurance to waive the charges for the closure of the accounts. It has been further stated that the charges have been levied and recovered as per the tariff agreed to between the parties under the terms and conditions of the Account Opening Form signed by the parties, As to the shares of Consolidated Fibre Chem it has been stated that the company has undergone a capital reduction and for every 2 shares the company has allotted one new share. In the case of ID No. 11374657 in the name of Mr. N.L. Bareja originally 100 shares were allotted to the account holders. Subsequently against the said 100 shares 50 new shares were allotted. The new share certificates were issued without asking the share holders to submit the original share certificates and the old share certificates were treated cancelled by the company. The complainant deliberately deposited the entire 150 shares in his account for D-matting and out of these only 50 shares were credited by the company and one certificate for the 100 shares (already cancelled) has been retained by the company. As to account no. 11374683 relating to shares of Montari Industries Ltd., it has been stated that this account was treated as inactive/closed on Dec., 2001 in the books of the bank but the same could not actually be closed as the shares of Montari Industries were pending D-matting. It has been further stated that the system does not permit closure of account which has been pending D-matting. The remaining accounts were duly closed as per instructions of the account holders. It has been further stated that no service charges have been levied by the bank on this account from Dec. 2001. It has been further submitted that inadvertently service charges from Jan to March, 2004 were levied by the bank which the bank has always been willing to refund.”
Parties led their evidences.
We reproduce the concluding Para of the order dated 3.5.2007 as hereunder:
“Keeping in view the totality of the facts and circumstances of the case we hold that there is no deficiency in service on the part of the OPs and OP-1 bank specially except only to the extent that OP-1 bank should not have levied service charges in respect of account no. 11374683 for the period Jan. to March, 2004. Since no charges were levied against this account after December, 2001 till Jan., 2004, the plea of the OP bank that the charges were levied inadvertently is acceptable. We direct OP-1 bank to refund these service charges to the complainant within one month of the receipt of the order. The complaint is liable to be dismissed and the same is hereby dismissed.”
Complainant-2, Sanjay Bareja filed First Appeal No. 07/878 against the said order before the State Commission. The appeal was decided vide order dated 15.2.2008. The relevant portions of the order dated 15.2.2008 are reproduced as hereunder:
“1. Limited grievance of the appellant against the impugned order dated 03.05.2007, whereby he has been granted limited relief of refund of service charges charged by the Respondent No. 1, which was levied inadvertently, is that the District Forum has not dealt with or touched upon the relief sought by it by way of direction to the respondent to ensure demating of 100 shares of Montari Industries or in the alternative to deliver share certificates back to the appellant. 2. In order to appreciate the aforesaid contention of the learned counsel for the appellant the relevant facts need to be culled out in brief and are that persuaded by the solicitations of respondent No. 1 bank the appellant opened six depository accounts with the respondent No. 1 bank for the purpose of demating certain shares held by the appellant jointly with the family members. According to the appellant Mr. G.S. Mishra, an official of the respondent No. 1 bank who had visited the residence of the appellant had assured the appellant that the depository account in respect of small quantity of shares could be closed later on after transferring the demat shares to the main account and that no fee would be charged for such closure of the accounts. One of the grievance of the appellant was that when four of the six accounts were closed the respondent No. 1 bank charged the closure fee of Rs. 100/- for each account. The second grievance of the appellant was that 100 share out of 150 shares pertaining to Consolidated Fibre Chem deposited in the client ID No. 11374657 were shown as pending Demat and no action has been taken by the respondent No. 1 Bank in this regard. Other grievance of the appellant was that shares of M/s Montari Industries Ltd. the respondent No. 2 company have not
Demated. The appellant claimed the following reliefs:-
a) Direction to the respondents to ensure Demating of 100 shares of Montari Industries Ltd. or in alternative to deliver the share certificate back to the appellant.
b) Compensation of Rs. 1 Lacs
c) Refund of various amounts/charges recovered by respondent No. 1 Bank from the appellant towards the closure charges of the accounts and the maintenance charges levied for the account relating to Montari Industries.
3. We have perused the impugned order and find force in the contention of the counsel for the appellant. The observation of the District Forum as to the share of respondent No. 2 company Montari Industries Ltd. are as under:
As to the shares of OP No. 2 company, the company has already gone into liquidation. The OP No. 1 bank sent the share certificate to OP No. 2 for De-mating in due course. Now the company having gone under liquidation it is not possible for the OP bank to retrieve the same from the OP No. 2 company. The complainants being the share holders have to deal with OP No. 2 directly for retrieval of the share certificates and the OP Bank cannot be found fault with in this regard. As to the shares of Consolidated Fibre Chem we are satisfied with the explanation given by the OP Bank.
- Counsel for the appellant contended that respondent No. 1 has been a party to the liquidation process of respondent No. 2, which was in process long back and the company was declared sick sometime in the year 2001. So much so a notice dated 12.09.2002 was also issued whereas the shares for de-mating were deposited in June 2001. Thus to say that the account of the appellant was treated as negative in December 2000 in the record of the respondent Bank is not correct as the appellant has been receiving the statement of account from the respondent No. 1 as on date. The aforesaid contention of the counsel has not been dealt with by the District Forum in the right perspective particularly when it was duty of respondent No. 1 to inform the appellant.
- On this limited aspect, we allow the appeal at the outset and send back the matter to the District Forum for deciding it afresh without setting aside the order for refund of the service charges within one month from the date of receipt of this order, which was inadvertently and wrongful levied.
- The appellant shall appear before District Forum on 24.3.2008 for the aforesaid purpose.
- Bank Guarantee/FDR, if any, furnished by the appellant be returned forthwith.”
The case was accordingly remanded back to this Forum.
In order to decide this question it is necessary to advert to the reply of OP-1. The relevant portions of the reply of OP-1 are reproduced as hereunder:-
“It is submitted that transaction statement is sent to all the account holders on the agreed frequency for their records. Once the share certificates are deposited with the company / registrar, the process is entirely depended on the company / registrar and the Participant has no role in the process. Incase of rejection for any reason, the documents are returned by the registrar/company to the Participant (Bank) which are then forwarded to the account holders for rectification and re-submission.
It is reiterated that the role of the participant in the process of dematerialization is limited to the extent that the share certificates received from the account holders are duly processed and submitted to the respective companies/registrars within the stipulated timeframe. The dematerialization process is done by registrars/companies which are not under the control of the Bank or the Depository.
It is further submitted that shares pertaining to Montari Industries could not be Dematerialized for the reason that the Company has closed it’s office and has not been processing any Demat requests for a long period. The Share Certificates sent by the Bank have been withheld by the company and have not been returned. This fact was duly informed by the Bank to Sh. N.L. Bareja vide letter dt. 16.2.2002 and the said letter was admittedly received by the complainant.”
It appears that the complainants filed one rejoinder “in response to the reply filed by the Opposite Parties”.
The relevant portion of the rejoinder reads as under:-
“iii) That the O.P. No. 2, as is evident from its reply, was declared a sick company, sometime in the year 1997. The proceedings for its rehabilitation were going on before the BIFR, since 1999, wherein the O.P./Bank was also being represented. In fact, even the winding up proceedings, in respect of the O.P. No. 2, commenced only after the issue of show cause notice (SCN) in September, 2002. As such the O.P./Bank was fully aware of the antecedents of the O.P. No. 2 and ought to have accordingly advised the complainants while excepting the share certificates of O.P. No. 2. Notwithstanding the above, the share certificates were deposited with O.P./Bank for De-matting in June, 2001, the complainants ought to have been informed about the mis-management of the O.P. No. 2, which they failed to do so. And now the O.P. No. 1 can not be permitted to state that they were not in picture about the functioning of the O.P. No. 2, as has been set out in the reply.”
Complainants have not denied the fact that the OP-1 bank had sent the share certificates of OP-2 to OP-2 but the same were not returned by OP-2 and that OP-1 bank had informed complainant No. 2 in this regard vide letter dated 16.2.2002.
Undisputably, the OP-2 company was declared sick sometime in the year 2001. OP-1 bank had sent the shares of OP-2 for demating but the OP-2 company did not return the share certificates to OP-1 bank. As has been held in the order dated 15.2.2008, the OP-2 had gone under liquidation (and also had been declared sick) sometime in the year 2001 and it is for the complainants being the share holders to have to deal with OP-2 directly for the retrieval of the share certificates. According to the complainants themselves (rejoinder), OP-2 had been declared sick company sometime in the year 1997 and the proceedings for its rehabilitation had been going on before the BIFR since 1999. The complainants being the share holders of OP-2 company must also be supposed to possess knowledge about these facts. It was also their legal duty to update themselves about the latest status of OP-2 company. Everything should not have been left by them for the OP-1 bank though by accepting the shares of OP-2 company from the complainants for dematerialization, OP-1 bank was also negligent to some extent. Therefore, the complainants one of whom is a retired Colonel from the Army and are not thus illiterate persons should have also possessed knowledge about the status of OP-2 company while opening the accounts for de-matting of the shares of OP-2 company with the OP-1 bank. OP-1 bank had informed the complainant No. 2 about the non-return of shares of OP-2 by OP-2 company by OP-1 bank vide letter dated 16.2.2002. Therefore, we hold that the complaint is liable to be dismissed on this point.
In view of the above discussion, we dismiss the complaint so far as the said question/point is concerned.
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.
(NAINA BAKSHI) (N. K. GOEL) MEMBER PRESIDENT
Announced on 09.09.15.
Case No. 809/06
09.09.2015
Present – None.
Vide our separate order of even date pronounced, the complaint is dismissed. Let the file be consigned to record room.
(NAINA BAKSHI) (N.K. GOEL)
MEMBER PRESIDENT
