1994 (3) TMI 309 - Commission - Companies Law

Court dismisses petition under Consumer Protection Act due to lack of negligence; claim for compensation rejected as damages were remote.

Pawan Kumar Sharma Versus Nagarjuna Fertilizers & Chemicals Ltd.

The court dismissed the petition filed under the Consumer Protection Act, ruling in favor of the respondents. The delay in sending share certificates was ... Deficiency in service, Compensation Issues:1. Allegation of delay in sending share certificates with necessary endorsement.2. Claim for compensation due to alleged negligence of respondents.3. Assessment of deficiency in services by respondent Nos. 1 and 2.4. Evaluation of fluctuation in share value and entitlement to compensation.Analysis:The judgment pertains to a petition filed under section 17 of the Consumer Protection Act, 1986 by two individuals who were allotted equity shares by the respondent company. The petitioners alleged that despite timely payment of allotment money and calls, the share certificates with necessary endorsement were not sent promptly, resulting in a delay that prevented them from selling the shares when the market value was high. The petitioners sought compensation for the alleged negligence of the respondents.During the proceedings, the respondent bank clarified that as there was no claim of deficient services against them, they reserved the right to file additional statements if required. The primary issue before the court was to determine whether there was indeed a deficiency on the part of the respondents in sending the share certificates with proper endorsement, considering the timely payments made by the petitioners.The court noted that although the share certificates were sent by the petitioners in May 1991, they were received back only in July 1992, indicating a significant delay in the process. However, the court acknowledged that dealing with a large number of certificates could lead to delays, and in this case, such delay was not indicative of negligence or deficiency on the part of the respondents.Furthermore, the court addressed the petitioners' claim for compensation based on the fluctuation in share value, highlighting that the stock market is inherently speculative, and fluctuations are common. The court reasoned that even if the share value dropped after initially rising, the petitioners could have made a profit had they sold the shares at the lower value. Therefore, the court concluded that the petitioners were not entitled to compensation at the rate claimed as the alleged damages were considered too remote.Ultimately, the court found no merit in the petition and dismissed it, ruling in favor of the respondents. The complaint was consequently dismissed, and the petitioners' claim for compensation was rejected based on the court's assessment of the circumstances and legal principles involved.