1995 (5) TMI 215 - Commission - Companies Law

Summary

Issues:
1. Alleged deficiency in service by the Unit Trust of India (UTI) regarding non-issuance of units under UGS-2000 despite payment.
2. Responsibility of UTI for the actions of its agent, Shri S.G. Godse, in accepting payment in cash and cheque contrary to prescribed procedures.
3. Determination of vicarious liability of UTI for the actions of its agent.

Analysis:
1. The complainant, an investor under the Units Scheme-64 of UTI, applied for UGS-2000 by submitting 5 applications and paying Rs. 10,000 through cheque and cash to Shri S.G. Godse, UTI's chief representative. UTI did not issue the units despite payment, leading to the complaint of deficiency in service and a request for share certificates or refund with interest.

2. UTI contested the complaint, stating that its agents are only authorized to collect applications with cheques/demand drafts payable to UTI, not cash. UTI claimed that the cheque for Rs. 20,000 by Shri Godse was returned unpaid, leading to cancellation of applications. The District Forum found Shri Godse at fault for accepting payment and not providing the service, holding UTI jointly liable to pay Rs. 10,000 compensation with costs to the complainant.

3. The judgment highlighted that UTI's agents are not permitted to collect cash or have cheques drawn in their names for remittance to UTI. Shri Godse's actions were deemed unauthorized, as he accepted cash and a cheque in his name, contrary to UTI's instructions and the mode of payment specified in the UGS-2000 application. The complainant's negligence in issuing the cheque to Shri Godse was also noted. The judgment concluded that UTI did not have vicarious liability for Shri Godse's actions, as he acted beyond his limited authority. Consequently, the complaint against UTI was dismissed, and each party was directed to bear their own costs.

Conclusion:
The revision petition was accepted, modifying the orders of the State Commission and District Forum to dismiss the complaint against UTI, absolving it of liability for the actions of its agent. The judgment emphasized the importance of adhering to prescribed procedures and highlighted the distinction between an agent's individual liability and the principal's vicarious liability in cases of service deficiency.