1996 (1) TMI 342 - Commission - Companies Law

Summary

Issues: Jurisdiction of Consumer Disputes Redressal Forum based on the location of the complainants and the cause of action.

Analysis:
The judgment by the National Consumer Disputes Redressal Commission addressed the issue of jurisdiction concerning complaints filed by respondents against a company for not receiving share certificates. The revision petitions were consolidated as they shared common legal and factual questions. The State Commission had ruled in favor of the complainants, stating that the District Forum at Rajanand Gaon had jurisdiction as part of the cause of action arose there. The petitioner contested this decision, arguing that only the High Court where the company's registered office is located has jurisdiction over such matters. The District Forum had initially ruled in favor of the complainants based on their residence, leading to the State Commission's decision.

The Commission, after reviewing the arguments, found that the State Commission erred in determining jurisdiction based on the location of the complainants. It was clarified that the Consumer Protection Act specifies the local limits of the District Forum where a complaint can be filed. In this case, the clauses related to the opposite parties did not apply, as the petitioner had no branch office at Rajanand Gaon. The jurisdiction cannot be solely based on the complainants' residence as per Section 11 of the Act.

The State Commission's reasoning that part of the cause of action arose at Rajanand Gaon due to the share certificates not being received there was deemed incorrect by the National Commission. It was highlighted that the receipt or non-receipt of share certificates at a particular place does not automatically establish cause of action for the applicant. The location of the company's registered office and the place of acceptance of share applications are crucial in determining jurisdiction. As the petitioner company had its registered office in Chandigarh and no branch office at Rajanand Gaon, the District Forum at Rajanand Gaon was held to lack jurisdiction.

Consequently, the National Consumer Disputes Redressal Commission allowed the revision petitions, setting aside the orders of the District Forum and the State Commission. All complaints related to the issue were dismissed, with no costs imposed on either party. The judgment clarified the legal principles governing jurisdiction in consumer dispute cases, emphasizing the significance of the company's registered office location and the place of acceptance of applications in determining the appropriate forum for complaint resolution.