FINAL ORDER/JUDGEMENT
SHRI ASHOKE KUMAR GANGULY, MEMBER
This is an application U/s.12 of the C.P. Act, 1986.
The brief fact of the case is that the complainant is having 8000 fully paid up equity shares of Karnataka Bank Ltd., being the proforma OP being the OPNo.3 herein. On or about 28.10.2016 the proforma OP announced the issuance of Right Equity Shares wherein the existing share holders were offered a price of Rs.70/- per share in the ratio of 1;2 i.e. for every two shares held by the share holders the Karnataka Bank Ltd. would offer one share at a purchase price of Rs.70/- per share. The right issue opening date was 07.11.2016 and closing date was 28.11.2016. Accordingly the complainant applied for 4000 shares for holding 8000 equity shares and applied also for 1000 additional shares under ASBA (Application supported by Blocked Amount ). Such application was made before the Camac St. Br of the OP Bank which was one of the Syndicate Banks eligible to receive application under ABSA process. The complainant also mentioned one Savings Bank Account being No. 55139419379 of the OP 1 Bank of Camac St. Branch and as such OP1 Bank was the natural choice for applying for the aforesaid Right Issue. By an e mail dated 06.11.2016 addressed to the OP1 Bank the complainant applied for the right issue of 5000 equity shares. The complainant maintained the balance of Rs 3,50,000/- in the said Bank account which was supposed to be blocked by the OP1 Bank. As per advice of the OP1 Bank the complainant sent a hard copy of the application along with requisite documents to the Wode House branch of the OP1 Bank at Mumbai on or about 12.11.2016 where the said processing was supposed to be done. Thereafter the e mail application of the complainant was forwarded to the Wode House Branch by the OP1 Bank on 11.11.2016. But on the date of allotment of right issue shares i.e. 08.12.2016 the complainant was not allotted the said shares. Later, it was understood that neither the OP1 Bank nor the Branch at Wode House Branch, Mumbai tendered the application to the proper authorities and for that no right issue of Karnataka Bank was allotted to the complainant. Thereafter the complainant by a letter dated 22.12.2016 asked the OP1 Bank to reimburse Rs.2,21,000/- being the loss incurred by the complainant. The complainant also sent complaint to the Wode St. Branch and demanded the aforesaid loss. The said Branch issued an SMS to the complainant on 20.12.2016 stating inter alia – “ Need some time to figure out the issue, please bear with us, will get to you tomorrow afternoon.” But no reply was received by the complainant. The complainant had availed of the services of the OP 1 Bank for processing and tendering the application of the complainant for allotment of right issue for which the OP1 & 2 Bank was to receive the consideration amount from the proforma OP Bank. The OP1 & 2 Bank neither processed the application nor tendered the same for consideration before the appropriate authorities. Hence there is deficiency in service on the part of the OP1 & 2 Bank.
The OPs have contested the case by filing WV contending inter alia that the complaint is false, malafide,, motivated and misconceived which is liable to be dismissed. The OPs submit that the complaint has been filed on false and frivolous pretext to take away relief as a chance case. The OPs dispute and deny that the complainant applied for issuance of 4000 rights equity shares and an additional 1000 shares under Right Issue under ASBA. They also stated that the rights equity shares application should be supported by blocked amount and the amount was not blocked by the bank which is very much clear from the bank statement of the complainant. The OPs further state that the Bank did not block the amount in the case when the application for right equity shares be rejected or somehow cancelled.
The Right Issue Opening date was 07.11.2016 and the closing date was 28.11.2016 but during the period the complainant neither checked his Bank Statement nor gave any intimation to the Bank whether the amount is blocked by the Bank or not. The whole episode of alleged complaint was happened when the State Bank of Patiala was in existence and was working till the date on 31.03.2017. Immediately on 01.04.2017 the SB of Patiala got merged with the SBI and all papers and documents were taken over by the SBI including the administration and management. There was no immediate action being taken by the complainant during the tenure of the existence of State Bank of Patiala..
The complainant served notice dated 27.06.2017 and filed the complaint on 17.04.2018 when there was no existence of State Bank of Patiala since merged with the SBI. Knowing fully well the fact of no existence of State Bank of Patiala on the day of filing the complaint, complainant made State Bank Of Patiala as OP 1. The undated letter issued by the OPs was to intimate why the application was rejected. If the complaint is allowed then it will be at the cost of Public Exchequer where the Bank is simply the custodian of Public Money.
Points for Determination
In the light of the above pleadings, the following points necessarily have come up for determination.
1) Whether the OPs are deficient in rendering proper service to the Complainant?
2) Whether the OPs have indulged in unfair trade practice?
3) Whether the complainant is entitled to get relief or reliefs as prayed for?
Decision with Reasons
Point Nos. 1 to 3 :-
The above mentioned points are taken up together for the sake of convenience and brevity in discussion.
We have travelled over the documents placed on record. Complainant has filed Evidence, BNA and replies to the respective questionnaire set forth by the OP1 & 2 and the Proforma OP3 as per usual procedure. But the OP1 & 2 have tendered their Evidence & BNA along with their WV. The Proforma OP 3 have filed their Wriiten Statement, questionnaire and replies to the questionnaire set forth by the complainant.
While perusing the records it is observed that the complainant had applied for Right Issue offered by the OP 3 Bank through his Banker State Bank of Patiala, Camac Street Branch, Kolkata which has already been merged with the State Bank of India w.e.f. 01.04.2017. The undisputed fact is that the complainant is the owner of 8,000(Eight thousand) Equity Shares of the OP3 Bank on as the date of offering of Right Issue i.e.07.11.2016.. As per the said offer the complainant was entitled for right issue in the ratio of 2:1. i.e. for every two original shares one share on right issue will be allotted subject to payment of cost of Rs.70/- per share and fulfillment of other requirements as per the offer document. For that purpose the complainant had applied for 5000(Five thousand ) shares., i.e.,4000 for right issue and another1000 additional shares under ASBA (Application supported by Blocked Amount ). In fact, for 5000 share the amount of Rs.3,50,000/- was kept in his Savings Bank Account of the complainant maintained by the OP1 Bank. By an e mail dated 06.11.2016 addressed to the OP1 Bank the complainant applied for the right issue of 5000 equity shares. As per advice of the OP1 Bank the complainant sent a hard copy of the application along with requisite documents to the Wode House branch of the OP1 Bank at Mumbai on or about 12.11.2016 where the said processing was assumed to be done. . But on the date of allotment of right issue shares i.e. 08.12.2016 the complainant was not allotted the said shares. Later, it was understood that neither the OP1 Bank nor the Branch at Wode House Branch, Mumbai tendered the application to the appropriate authorities and for that no right issue of Karnataka Bank was allotted to the complainant. The complainant had availed of the services of the OP 1 Bank for processing and tendering the application of the complainant for allotment of right issue to the appropriate authority which seems to have not been done by the OP 1 & 2. As a consequence of which no share out of Right Issue was allotted to the complainant. Accordingly the complainant has incurred a loss of Rs.2,21,000/- as on 16.12.2016 which has been mentioned in the complaint petition.
Now the pertinent question is whether the OP1 & 2 are in any way responsible for the loss incurred by the complainant. Is there any deficiency on the part of the OP 1& 2 in the matter of processing of the papers related to the issuance of share on Right Issue ? Now let us concentrate our attention to the undated letter issued to the complainant by the OP1 &2 Bank which was sent by Registered Post to the complainant.
The 1st reason mentioned in the said letter was : Applications should have been submitted by the individual to the designated branch of SCSB whose account details were mentioned in common application form. In this case Erstwhile State Bank of Patiala, Camac Street Branch.
Against the above, the reply of the Law Firm on behalf of the complainant is “ The physical application was also attempted to be deposited at such Branch only when our client were directed and advised by the officers of such Branch that such physical application should be deposited with the Branch at Wood House, Mumbai and thus based on such advise such application was deposited at Wode House at Mumbai.”
From the above reply it is established that the subject application was not submitted to the concerned Branch Office of the OP1 & 2 where the account of the complainant is being maintained.
Reason No.2. As per the general instructions printed on the application
form, Applicant residing at places other than those places where bank collection centers are located and applicants who wish to send their application by registered post must send their application /CAF directly to registrar of the issue /lead manager to the issue together with their cheques /DDs crossed A/C Payee only and not the any other Branch.
Reason No.3 ;- Applications through mail should not be sent in any other manner except as mentioned in point no. 2 above.
The reply of the Law Firm on behalf of the complainant is that the application for issue of Right Shares were correctly mailed at State Bank of Patiala, Camac Street Branch. From the said reply it is established that instead of physical application, the complainant sent application through mail to the concerned Branch which was not according to the General Instructions. Moreover, the directive of sending their application /CAF directly to registrar of the issue /lead manager to the issue together with their cheques /DDs crossed A/C Payee only and not the any other Branch has also been not followed and complied.
Reason No.4.;- If physical applications are submitted at branch, cancelled cheques are mandatory for processing which were not attached with the application forms.
Against the above cited reason there is no submission on the part of the complainant that they had enclosed the cancelled cheque along with the application form which was mandatory in this regard. One Xerox copy of receipt issued by Blue Dart Courier dated 12/11 for sending items to State Bank of Patiala, Wode House Road, Mumbai is enclosed from which it seems that the papers have been delivered to the address on 15.11.2016. Though the said Branch has not been proved to be the appropriate Branch for submission of documents in respect of Right Issue whereas as per the general instructions the appropriate branch was supposed to be the branch where the account is being maintained but even for argument sake if is taken granted that the Wode House Branch is the appropriate Branch then the mandatory requirement of enclosing one cancelled cheque was not there with the application form. This has been clearly mentioned by the OP1 & OP2 Bank in their undated letter. The issue of non submission of the cancelled cheque along with the application form has been willfully avoided by the Law Firm on behalf of the complainant. The complainant has never and nowhere whispered the submission of the cancelled cheque to the OP1 & 2 Bank along with the application form. In absence of that mandatory requirement the application was rejected by the OP1 & 2 Bank as per rules. The complainant knowingly or unknowingly had committed mistake in tendering mandatory document at the appropriate place as per instruction for which he is not entitled to the relief/reliefs as prayed for in the complaint petition.
In the light of the above discussion and from the facts and circumstances of the case we are of the considered view that the complainant has not been able to establish the case against the OPs.
All the points under determination are answered accordingly.
In the result, the Consumer Complaint fails .
Hence,
Ordered
That the Complaint Case be and the same is dismissed on contest against the OPs with a direction to the complainant to pay a sum of Rs.10,000/- to the Consumer Legal Aid Account, Unit II within a period of 60 days from the date of the order for wastage of time of the Commission, in default, appropriate legal action will be initiated for realization of the cost.
The judgment be uploaded to the website of the Commission forthwith for perusal of the parties. Copy of the Judgement be supplied to the parties free of cost as per C.P.Act.
