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1994 (11) TMI 309 - Commission - Companies Law
Issues:
1. Failure to transfer shares in the complainant's name. 2. Applicability of compensation under the Companies Act. 3. Correctness of the compensation amount awarded. Issue 1: Failure to transfer shares in the complainant's name The complainant purchased 100 equity shares of a company and requested their transfer to his name. Despite multiple reminders, the company failed to effect the transfer, initially claiming not receiving the transfer deed and later issuing duplicate certificates in the wrong name. The District Forum found the company at fault for not transferring the shares or providing the complainant with the correct certificates. Issue 2: Applicability of compensation under the Companies Act The District Forum relied on the Companies Act, empowering the Company Board to impose a fine for non-transfer of shares. It directed the company to pay compensation to the complainant at a rate of Rs. 50 per day from a specified date until the complaint was filed. The company contested this, arguing that only the Company Board could impose such fines, not the consumer forum. Issue 3: Correctness of the compensation amount awarded The company challenged the high compensation amount awarded by the District Forum, arguing that the complainant was not a consumer and that the shares were sent to the wrong address. However, the forum found that the company had knowledge of the transfer request, as evidenced by their acknowledgment of receiving the share certificates and subsequent correspondence. The forum reduced the compensation amount to Rs. 1,000, considering the face value of the shares and lack of evidence of market value appreciation. In conclusion, the State Consumer Disputes Redressal Commission modified the District Forum's order, directing the company to pay Rs. 1,000 as compensation to the complainant and confirming the costs awarded. The Commission found the company at fault for the delayed transfer of shares and determined the reduced compensation amount based on the share's face value. The appeal was allowed, with the company instructed to make the payment within one month.
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