2000 (8) TMI 1030 - Commission - Companies Law

Summary

Issues:
1. Interpretation of Consumer Protection Act, 1986 regarding conversion of debentures.
2. Allegation of deficiency in service by the respondents.
3. Discrepancy in the delivery of option letter for conversion.
4. Burden of proof on respondents regarding timely receipt of option letter.
5. Estimation of loss and compensation for the appellant.

Analysis:
1. The appellant filed a complaint under the Consumer Protection Act, 1986, alleging that the respondents converted her convertible debentures into equity shares without her consent. The appellant claimed to have sent the option for conversion via registered post, but the respondents argued that the option did not reach them in time. The District Forum dismissed the claim, stating that the appellant had opted for conversion into equity shares. However, the Commission found that the main issue was whether the appellant's option letter reached the respondents in time, not the rate of equity shares. The Commission directed the respondents to compensate the appellant for the loss incurred due to the conversion.

2. The respondents contended that the appellant's option letter did not reach them in time as per the conditions specified. The respondents admitted receiving the letter but claimed it was not within the stipulated time. The Commission noted that the onus was on the respondents to prove the letter's late arrival. Since the respondents failed to provide evidence of the delayed receipt, the Commission held them liable for not honoring the appellant's conversion option. The respondents did not dispute the appellant's loss estimation, further strengthening the appellant's case of deficiency in service.

3. The Commission scrutinized the evidence, including the appellant's affidavit, postal receipt, and the respondent's admission of receiving the option letter. Based on the available records and lack of contradictory evidence, the Commission concluded that the option letter must have reached the respondents in time. As a result, the Commission set aside the District Forum's order, ruling in favor of the appellant. The Commission directed the respondents to pay the appellant the estimated loss amount with interest and awarded costs for the legal proceedings.

In conclusion, the Commission allowed the appeal, emphasizing the importance of timely receipt of the option letter for conversion as per the Consumer Protection Act, 1986. The judgment highlighted the respondents' failure to prove the late arrival of the letter, leading to a ruling in favor of the appellant for compensation and costs incurred during the legal proceedings.