1994 (8) TMI 204 - Commission - Companies Law

Summary

Issues:
1. Dismissal of complaint by District Forum
2. Dispute over purchase of shares and payment due
3. Allegation of loss suffered by complainant
4. Right of lien over shares by Opposite Party
5. Reliance on Sauda book and account statements
6. Interpretation of stock exchange settlement program
7. Allegation of deficiency of service by Opposite Party

Analysis:

The judgment revolves around an appeal against the dismissal of a complaint by the District Forum. The complainant, an investor, alleged that the Opposite Party, a share broker, falsely claimed he had ordered 100 shares of Reliance Industries on 25-3-1992. The complainant contended he only ordered 50 shares and sought delivery or refund. The Opposite Party argued that the complainant did order 100 shares and had a right of lien over the shares purchased. The District Forum relied on the Sauda book, contract notes, and account statements to support the Opposite Party's version. It found no deficiency of service and dismissed the complaint.

The key issue was the dispute over the purchase of shares and payment due. The complainant claimed he only ordered 50 shares, while the Opposite Party insisted on the order for 100 shares. The District Forum analyzed the evidence, including contract notes and account statements, to conclude that the Opposite Party's version was more credible. It found that the complainant's denial of the 100-share order was not substantiated, leading to the dismissal of the complaint.

Another significant aspect was the alleged loss suffered by the complainant. He claimed a loss of Rs. 28,000 due to missing an opportunity to apply for shares and debentures. However, the District Forum, based on third-party affidavits, determined that the complainant did not sustain any actual loss. This finding further supported the dismissal of the complaint.

The judgment also addressed the Opposite Party's right of lien over the shares purchased. By citing relevant stock exchange regulations and contractual obligations, the District Forum upheld the Opposite Party's right to withhold the shares until the outstanding amount was settled. This aspect reinforced the decision to dismiss the complaint.

Overall, the judgment emphasized the importance of documentary evidence, such as contract notes and account statements, in resolving disputes between investors and share brokers. It highlighted the need for clarity in transactions and the significance of adhering to contractual terms and stock exchange regulations to determine liabilities and rights in such matters.