1997 (8) TMI 421 - Commission - Companies Law

Summary

Issues:
1. Alleged non-receipt of share allotment advice.
2. Claim for compensation for deficiency in service.
3. Dismissal of complaint by District Forum-II.
4. Dispute regarding application submission.
5. Allegation of deficiency in service against State Bank of India.
6. Applicability of consumer dispute laws.
7. Compensation determination.

Analysis:

1. The complainant applied for share allotment but did not receive any advice, leading to a claim for compensation for deficiency in service. The District Forum-II dismissed the complaint due to lack of conclusive evidence of application submission.

2. The complainant contended that multiple applications were made, one of which was misplaced by the State Bank of India, resulting in deprivation of share allotment. The complainant presented original receipts with bank stamps as evidence, challenging the District Forum's decision.

3. The District Forum-II's approach was criticized for expecting conclusive proof of application submission and denying the existence of a service-for-consideration relationship. The complainant argued that the bank's commission for collecting forms indicated a service benefitting the applicant.

4. The Bank defended itself by stating that all received applications were duly processed, implying that the missing application was never submitted. However, the presence of stamped acknowledgment slips supported the complainant's claim of application submission.

5. After evaluating the evidence, the Commission found the Bank guilty of deficiency in service, emphasizing that the Bank's collection of application forms was not free service. The Bank was held liable for damages, and the complainant was awarded compensation of Rs. 2,500 for the service lapse.

6. The Commission differentiated between the applicability of consumer dispute laws to the Bank and the share issuer, ruling in favor of the complainant against the Bank. The judgment referenced relevant legal precedents to support the compensation award and the finding of deficiency in service.

7. The appeal was allowed, the District Forum's order was set aside, and the State Bank of India was directed to pay the compensation within four weeks. The compensation amount was deemed fair considering the costs incurred by the complainant throughout the legal proceedings. The complainant was granted the right to seek further legal action if the compensation was not paid timely.