1997 (2) TMI 409 - Commission - Companies Law

Summary

Issues:
1. Frivolous appeal challenging order of the district forum.
2. Failure to transfer shares and make endorsements.
3. Lack of specific instructions for returning shares.
4. Consumer status under the Consumer Protection Act.
5. Consideration for rendering service in share transfers.

Analysis:
The judgment addresses a frivolous appeal challenging an order of the district forum regarding the failure to transfer shares and make endorsements. The complainants had sent 2,800 shares for endorsement, but only 700 shares were transferred back. The remaining shares were not returned, leading to a legal complaint. The district forum passed an order based on evidence and replies from the parties involved, directing the return of the remaining shares. The appellant argued that since there were no specific instructions, the shares were returned to the original holders. However, the court found this argument flawed as no written statement was filed by the appellant, and the shares should have been returned to the complainants who submitted them for endorsements and transfers. The court emphasized that in share transfers, the company is obligated to make endorsements and return the shares to the rightful owners, rejecting the appellant's argument.

Regarding the consumer status under the Consumer Protection Act, the appellant contended that there was no contract of service between the parties, thus the complainants were not consumers. Citing previous judgments, the appellant argued that the complainants lacked locus standi to file the complaint. The court disagreed, stating that in share transfers, a separate transaction occurs between the shareholder and the transferor, and making endorsements is part of the service provided by the company issuing the shares. The court clarified that consideration need not come directly from the complainants but should be for the service transaction. The court dismissed the appeal, affirming the district forum's order and imposing costs on the appellant for failing to transfer the shares and make endorsements, thereby upholding consumer status in share transfer transactions.