Consumer jurisdiction over share allotment claims rejected where non-delivery was treated as a sale transaction, not deficiency in service.

Private placement or purchase of shares, where the complainants alleged that the shares were not allotted or not delivered, was treated as a sale transaction rather than hiring of services. On that basis, non-delivery of shares could not amount to deficiency in service under the Consumer Protection Act, 1986. Relying on prior precedent, the Commission noted that unsuccessful applicants for allotment of shares in a public issue are not consumers, and that a sale of shares without defect does not create a consumer dispute. The complaints and appeals were therefore held not maintainable within consumer jurisdiction.

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Issues: Whether private placement or purchase of shares of a public limited company and their non-delivery gives rise to a consumer dispute and makes the complainants consumers under the Consumer Protection Act, 1986.

Analysis: The amounts were deposited for allotment of shares, but the complainants' own case was that the shares were either not allotted or not delivered. On those facts, the matter did not involve hiring of services, and the alleged non-delivery could not be treated as deficiency in service. The transaction was treated as one of sale of goods, and the authorities relied on earlier precedent holding that unsuccessful applicants for allotment of shares in a public issue are not consumers. The cited National Commission reasoning further held that a transaction of sale of shares with no defect in the goods sold and no hiring of service does not create a consumer dispute. Mere non-delivery of shares was also held not to convert a sale transaction into a service deficiency.

Conclusion: The complainants were not consumers, the matter did not fall within consumer jurisdiction, and the complaints as well as appeals were not maintainable.

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