Order No.                 .

This is an application u/s.12 of the C.P. Act, 1986.

          Complainant by filing this complaint submitted that complainant purchased 1900 shares from M/s. Eastern Stockman Consultants Pvt. Ltd. on 01-07-1994, 04-07-1994 and 05-07-1994 but fact remains on 26-07-1994 Income Tax Department seized the share certificate and taken into custody of the Income Tax Department. 

          So, on 05-12-1994 the solicitor and Advocate of the complainant informed the same to the OP and requested them not to allow any benefits to any third party except the complainant who purchased the same. 1900 shares against consideration.

          Income Tax Department also requested the OP to provide all benefits out of the shares to the complainant. 

          But the OP informed on 08-01-2010 that in furtherance of the complainant’s letter dated 26-12-2009 the OP gave effect of revalidation of transfer deeds of 1800 shares and the same has been transferred in the name of the complainant under folio no.3081107, however, the OP is silent in respect of 100 shares of the complainant. 

          In the above situation complainant through their Ld. Advocate requested the OP to give effect of 1900 shares and not 1800 shares as stated by the OP and also to provide all benefits arising out of said 1900 shares since 1994 as the purchase of the shares by the complainant were duly communicated to the OP.

          The OP did not given effect of balance 100 shares as yet so, OP acts negligently and in deficient manner rendered such service and at the same time complainant’s 100 shares had been otherwise dealt by the Bank and for which complainant has prayed for all benefits of 1900 shares from 1994 and also compensation etc. for negligent and deficient manner of service and unfair trade practice.

          Against this complaint OPs by filing written statement submitted that the present complaint is not maintainable because complainant has no registration of share transfer and non-payment of dividend in respect of certain share certificate in favour of the third party and the share certificate for which complaint as filed were attached by the Income Tax Department vide their Notice dated 07-07-2008 for recovery of the Income Tax arrears due from their assessee, Shri Kailash Prasad Jain and no doubt Income Tax Authority reported the above fact to assist the OP in recovering the income tax arrears due from the above Shri Kailash Prasad Jain, by transferring and crediting the said shares to the demat account of Shri Kailash Prasad Jain and also to credit the unpaid dividend, if any, due to Shri Kailash Prasad Jain to the Bank account of Shri Kailash Prasad Jain and as per above notice issued by the by the Income Tax Dept, the aforesaid demat account and bank account of Shri Kailash Prasad Jain are under the attachment of order of the Income Tax Dept.

          Fact remains complaint is filed against non-registration of the above share transfer request in respect of two share certificates (out of those shares received from Income Tax Department) in favour of Shri Kailash Prasad Jain and non-payment of the dividend to Shri Kailash Prasad Jain.  As the complainant is neither the transferee nor the beneficiary of the share transfer request given by the Income Tax Dept., the complainant has no locus standi or cause of action to file this complaint.  So, this complaint should be dismissed.

          It is specifically submitted that complainant has no privity in the share transfer request received from the Income Tax Department.  The complainant is a total stranger and complainant is neither interested party in the above transaction nor an affected party in respect of the action taken by the OP on the share transfer request received from the Income Tax Department for which the complaint is not maintainable. 

          Further it is submitted in respect of transfer of shares, dividend payment and ownership thereof are disputes of civil nature and the reliefs can be granted only by a civil court after adjudication of title between the registered holders, transferee and the complaint.  As adjudication of title or title disputes do not fall within the purview of the Consumer Protection Act, 1986, so, the Hon’ble Forum has no jurisdiction to entertain this case.  It is further submitted that practically cause of action arose on 20-10-2009 when OP informing about rejection of the transfer request, whereas this complaint was filed by the complainant only on 10-02-2012 after expiry of the limitation period as stipulated for filing of complaint u/s.24A of C.P. Act, 1986.  Fact remains complainant had filed a civil suit before the Hon’ble City Civil Court, Kolkata against this OP on the above subject matter and the said suit was dismissed by the Court for non prosecution.  The complainant is, therefore, barred under the Code of Civil Procedure and so, it may kindly be dismissed.  It is further submitted that payment of dividend, Registration of Share Transfers and distribution of dividend and other benefits do not come under the purview of “service” as defined under C.P. Act, 1986 and for payment of dividend thereof to its share holders and fees or charges are levied on the shareholders/transferees for the above facility are given free of cost so, under any circumstances it cannot be treated as service.

          Further it is submitted that the complainant had not provided to OPs neither an order from a Court of competent jurisdiction nor a specific direction from Income Tax Department to the OPs declaring complainant’s ownership in respect of the shares and to hold the shares and benefits accrued thereon under stop or in abeyance.  As there was no such order, the OPs were not bound to hold the shares and the benefits thereon under abeyance.

          Further it is submitted that the Income Tax Department vide their Notice dated 07-07-2008 had requested the OPs to transfer the shares in favour Shri Kailash Prasad Jain and not in the name of the complainant, as wrongly claimed by the complainant.  Further it is submitted that based on the request for share transfer received form the Income Tax Department vide their notice dated 07-07-2008 the OPs had transferred the 1800 shares in name of Shri Kailash Prasad Jain and not in the name of the complainant. 

          Further it is submitted that OP2 informed Shri Kailash Prasad Jain vide their letter dated 20-10-2009 about rejection request in respect of 100 shares and Shri Kailash Prasad Jain on 30-10-2009  has accepted the receipt of ‘the above letter of the OP2.  Copy of the letter has already filed by the OP and practically share certificate lodged by the Income Tax Department in respect of 100 shares were not transferred in the name of Shri Kailash Prasad Jain as the said certificates were invalid and not in existence in the share register of the OP.  So, the aforesaid two share certificates were cancelled, one in the year 1998 and the other in the year 2002, by the OP and duplicate share certificate were issued to its respective registered as the registered holders of these certificates had reported that the aforesaid shares certificates were lost by them.  So, complainant has no locus standi to claim these shares as it is neither the transferee nor the beneficiary of the share transfer request received from the Income Tax Department and as regards the issue of duplicate certificates in respect of the 100 shares to its registered holders, it is respectfully submitted that in the absence of any restrainment or prohibitory order issued to the OP for keeping the ownership of the shares in abeyance, by a Court or Statutory Authority competent to issue such orders, the OPs cannot refuse to accept the request of the registered holders for duplicate certificate.  As there was no such restrainment or prohibitory order, their request was acceded to by the OPs at the material time when the request was received.  As regards the dividend in respect of the shares, it is submitted that the dividend in respect of shares for any accounting year should be paid only to the person whose name is registered in the Share Register of the OP as the registered holder of the shares and complainant is not the registered holder in respect of the 100 shares.  So, he is not entitled for any dividend or benefits thereof.  Further it is submitted that 1800 shares in the name of Shri Kailash Prasad Jain in the accounting year 2009-2010, the dividends declared in respect of the said shares from the accounting years 2009 to 2010 onwards have been paid to Shri Kailash Prasad Jain by the OP.   As regards the dividend in respect of the above 1800 shares for the accounting years prior to the registration of the said shares in the name of Shri Kailash Prasad Jain.  OP submitted that the persons in whose name the shares were registered at the respective accounting years are entitled for the said dividend.  It is further submitted that complainant is neither the transferee nor the beneficiary or registered holder of the shares.  The complainant is a total stranger in the above transaction and it has no right, title or interest in respect of the aforesaid shares or dividend thereof.  And in view of the above circumstances, complainant is not entitled to get any share of 100 or any other benefit of the total shares.  But he is entitled to get dividend etc. with effect from the date of registration is named under the OP.

Decision with Reasons

On proper consideration of the entire materials on record and also considering the argument as advanced by the Ld. Advocates of both the parties and also vital document of the Income Tax Department on the basis of which share certificate has been seized by the Income Tax Department during the course of such on 26-07-1994 and since then the share certificates were under the seizer of the Income Tax Department and the said share certificates were 38 share certificates (1900 shares in face value of Rs.10/-) and from the letter of the Income Tax Department to the Director, State Bank of India dated 07-07-2008 it is found that Shri Kailash Prasad Jain having PAN Card No.PAN-ACVPJ2349C of 9, Rawdown Street, Flat No.17, Kolkata – 17 is the assessee of the Income Tax Department and practically there was a due of Rs.214 crores from the assessee and so Income Tax Department u/s.226(3) of Income Tax Act, 1961 directed the bank authority to forthwith seize any amount due from complainant and it was also reported that the said assessee Shri Kailash Prasad Jain has bank account No.200002391509 in SBI Main Branch, Strand Road, which was under attachment under statutory provision of Income Tax.  So, Bank was requested to do following operations to assess Income Tax Office cheques in demand. 1) Transfer the shares held in others name, in the name of the assessee Shri Kailash Prasad Jain who is the beneficial owner and all original share certificates along with transfer deed duly executed. 2) Do the necessary process of dematerialization of the shares so transferred.  3) Credit the same shares, shares allotted on its splitting, bonus shares, if any, and unpaid dividend, if any, to the Demat Account number mentioned above. 4) Transfer any other amounts due to the assessee to the above mentioned Demat Account/Bank Account.  It was further directed to the Bank, the Bank assures responsibility of dematerialization and credit to the Demat Account of the assessee Shri Kailash Prasad Jain also served an order u/s.281(1) of the Income Tax Act, 1961 debarring him from transferring his assets held in any form and from that letter it is found that 38 original share certificates were duly executed to the banking authority by transferring and for taking necessary process of dematerialization of process of transfer and entire amount shall be deposited to the Demat Account of the assessee Shri Kailash Prasad Jain but in this case it is found that complainant is M/s. Ruchi Finance but all the share certificates are in the name of Shri Kailash Prasad Jain not in the name of Ruchi Finance.  Further it is found that in respect of the same same instant complainant filed a civil suit against the Bank before the City Civil Court and that has been dismissed for non-prosecution and that has not been challenged by the complainant.  So, we find that there is no document before us to prove that M/s. Ruchi Finance (the present complainant) purchased those share certificates and the Income Tax Authority did not seize this certificate of Ruchi Finance as assessee.  And further Tax it is found that Shri Kailash Prasad Jain is the assessee whose PAN Card No. is PAN-ACVPJ2349C and nowhere in the complaint complainant has alleged that Shri Kailash Prasad Jain is the proprietor of the Ruchi Finance or not.  Moreover, complainant has failed to prove by producing any document that in the name of Ruchi Finance said share certificates were transferred by the OP on the other hand from the letter of Income Tax it is clear account was taken against Shri Kailash Prasad Jain the assessee keeping all his share certificate in the name of Shri Kailash Prasad Jain but not in the name of M/s. Ruchi Finance.  So, considering those facts we find that the present Ruchi Finance is not the shareholders of those certificates but those certificates were issued in the name of Shri Kailash Prasad Jain but the complainant is not filed by Shri Kailash Prasad Jain.  Another factor is that complainant filed a civil suit at City Court as against of OP for the same issue but that was dismissed for non-prosecution long back then question is whether complainant is entitled to file any case but in this regard we have gathered that there is no share certificate in the name of Ruchi Finance but it is issued in the name of Shri Kailash Prasad Jain but Shri Kailash Prasad Jain is not the complainant in this case and relationship in between Shri Kailash Prasad Jain and Ruchi Finance is not disclosed in the complaint and in the above circumstances, we are convinced to hold that this complaint is not tenable in the eye of law.  In view of the fact that no share certificate was transferred in the name of Ruchi Finance and complainant Ruchi Finance has failed to produce any document of the Income Tax Department that any document of Ruchi Finance is attached or seized by the Income Tax Authority which are within the custody of the OP.  Moreover, about transfer of shares by the purchasers is completely covered by the Companies Act and registration of shares is controlled by and if there is any grievance against the OP it must be submitted before Company Tribunal or registering authority and if any person is dissatisfied about the registering authority regarding transfer of shares in that case it shall be submitted to the Company Tribunal and in this regard the provision of Section 108 to 112 of the Companies Act are applicable and practically in this regard Section 108A, 110, 111,111A and 112 are applicable in this respect but anyhow all these statutory provisions are not complied with by the complainant and so the present claim is not tenable in view of the fact that the present complainant M/s. Ruchi Finance Pvt. Ltd. has no legal right to establish before this Forum that he is the shareholders of those shares but it is found that Shri Kailash Prasad Jain is not the complainant in this case and for which the complaint is not tenable and in the result complaint fails.

Hence,

Ordered

That the case be and the same is dismissed on contest without cost against the OPs.

Dictated & Corrected

      by me