1994 (11) TMI 312 - Commission - Companies Law

Summary

Issues: Alleged deficiencies in service by a share-broker firm, non-payment for shares transferred, claim for compensation due to loss of share value.

Analysis:
1. The complaint was filed by the complainants against a share-broker firm, alleging deficiencies in service. The firm, styled as Sif con, was managed by the opposite parties. The complainants hired the services of the firm to purchase shares of Associated Cement Co. Ltd. in 1987. The firm purchased 200 shares for the complainants, charging brokerage and registration fees. Despite payment, the shares were not transferred as per instructions, causing the complainants to claim a loss of Rs. 7,28,500 due to the appreciation value of the shares.

2. Notices were issued to the opposite parties under the Consumer Protection Act, 1986, but they failed to appear. Despite various attempts to serve notices, the opposite parties remained absent, leading to the proceedings going ex parte against them. The complainants supported their allegations with an affidavit and relevant documents, establishing the deficiencies in service by the share-broker firm.

3. The Commission, after hearing the advocate for the complainants and reviewing the documents, found that the allegations were substantiated. The bills issued by the firm, along with transfer forms and receipts of consideration, proved that the shares were entrusted for transfer but not returned or paid for. The complainants were deemed to have suffered a loss of Rs. 7,28,500 due to the firm's negligence. Consequently, the Commission ruled in favor of the complainants, directing the opposite parties to jointly and severally pay the compensation amount within 30 days, with interest at 18% per annum for any delay in payment.

This judgment highlights the legal recourse available to consumers for deficient services and the obligation of service providers to fulfill their commitments, emphasizing the consumer protection framework under the law.