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Issues: Whether the compensation application was maintainable under the Monopolies and Restrictive Trade Practices Act, 1969, in light of the objection that an applicant for rights shares before allotment is not a consumer and that shares before allotment are neither goods nor services.
Analysis: The application concerned a claim for compensation arising out of non-allotment of rights shares. The Commission applied the principle that a prospective investor who merely applies for shares before allotment does not purchase goods and does not hire services for consideration. Shares before allotment were held not to be goods, and the process of raising capital by way of rights issue was held not to amount to trade or a trade practice. On that basis, the alleged deficiency in service and restrictive or unfair trade practice could not be sustained, and the Commission held that it lacked jurisdiction to proceed further on the subject matter.
Conclusion: The compensation application was held to be not maintainable in law and was dismissed.
Ratio Decidendi: A prospective investor applying for allotment of shares before allotment is not a consumer, and shares before allotment are not goods or services for the purposes of a compensation claim under the Monopolies and Restrictive Trade Practices Act, 1969.
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