1997 (1) TMI 421 - Commission - Companies Law

Summary

Issues:
1. Delayed delivery of unit certificates by Unit Trust of India causing financial loss to the respondents.
2. Entitlement of the respondents to compensation under the Consumer Protection Act, 1986.
3. Calculation of actual loss suffered by the respondents due to non-delivery of unit certificates.
4. Determination of compensation amount and interest payable by Unit Trust of India to the respondents.

Analysis:

1. The case involves a dispute regarding the delayed delivery of unit certificates by Unit Trust of India (UTI) to the respondents, leading to financial losses. The respondents had applied for 5,000 units each of the master gain scheme in 1992 but did not receive the certificates for a prolonged period, resulting in a loss when they attempted to sell the units through a stockbroker. The District Forum directed UTI to deliver the unit certificates or refund the amount with interest. The State Commission later awarded compensation to the respondents for the loss suffered due to the delay in delivery.

2. The main contention raised by UTI was that the transaction was of a commercial nature and not covered under the Consumer Protection Act, as the sale of units was speculative and part of a capital growth scheme. On the other hand, the respondents argued that they had the right to sell the units for profit after listing in the stock exchange and blamed UTI for the delayed delivery, which deprived them of potential gains.

3. The judgment analyzed the nature of the master gain scheme and the rights of unit owners to engage in sale transactions. It concluded that the respondents' actual loss was limited to the cancellation charges they had to pay and the missed opportunity to earn a profit by selling the units in time. The court rejected the claim for compensation based on presumptive losses due to subsequent price fluctuations, emphasizing the need to quantify the actual financial impact suffered by the respondents.

4. Considering all facts and circumstances, the court determined that the respondents were entitled to compensation for the actual loss incurred due to non-delivery of unit certificates. The judgment modified the State Commission's order and directed UTI to pay Rs. 8,500 each to the respondents, along with interest, as a fair and just compensation. Additionally, the respondents were required to refund any excess amounts received promptly. The judgment highlighted the importance of assessing tangible financial losses rather than speculative or presumptive damages in such cases.