Case Summary
The National Consumer Disputes Redressal Commission, chaired by Justice A.P. Sahi and Dr. Inder Jit Singh, ruled that although trading in shares is typically a commercial activity, a company’s failure to transfer shares as required constitutes a deficiency in service.
Case Overview
The complainants had purchased approximately 250 shares of Glaxo SmithKline Pharmaceutical Company and submitted them along with a transfer deed to have the shares transferred into their names. Despite completing the transfer, the company did not return the share certificates to the complainants. This led to a complaint filed with the District Consumer Disputes Redressal Commission in Jaipur. The District Commission ruled in favor of the complainants, and the State Commission of Rajasthan upheld this decision on appeal. Subsequently, the company filed a revision petition with the National Commission.
Opposite Party’s Arguments
The company contended that it had informed the complainants that the share certificates had not been received. The key issue was whether the share certificates had been transferred, which would determine if there was a deficiency in service. The company also questioned the jurisdiction of the consumer forum, suggesting that the matter fell under the Companies Act. However, the company did not respond to the District Commission’s proceedings, leaving the complainants’ claims uncontested.
National Commission’s Observations
The National Commission examined whether the complaint was maintainable under the Consumer Protection Act, 1986, considering the definitions of “consumer” and “service.” Referencing the Supreme Court’s decision in Shrikant G. Mantri Vs. Punjab National Bank, the Commission clarified that while “consumer” excludes those purchasing goods for resale or commercial use, it includes those seeking services for personal use or self-employment. The central issue was whether the company’s failure to transfer share certificates constituted a deficiency in service under the Act. The company’s argument that such disputes should be addressed under the Companies Act and questioning the consumer forum’s jurisdiction were rejected. Both the District and State Commissions found that the company’s inadequate steps to transfer the shares amounted to a deficiency in service. Although trading in shares is generally commercial, the complaint focused on the company’s failure to fulfill its duty of transferring shares. The company’s denial of receiving the share certificates was deemed insufficient to counter the allegations in the limited scope of the Consumer Protection Act’s revisional jurisdiction. The Commission upheld the findings of the lower forums but noted that the company had complied with the order to compensate the complainant, except for pending amounts related to mental harassment and litigation costs. The Commission did not find it necessary to delve further into the complaint’s maintainability but allowed the company to pursue legal remedies under applicable laws.
Decision
The National Commission decided that the ₹10,000 awarded for mental agony was unwarranted, given that the dispute had largely been resolved through prior payments. Consequently, the ₹10,000 compensation for mental agony was overturned. The revision was partially allowed, with the company directed to pay ₹2,000 in litigation costs to the complainants within one month.
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