Research › Search › Judgment

Chhattisgarh High Court · body

2006 DIGILAW 297 (CHH)

VIRENDRA CHANDRA MAJUMDAR v. KARVY COMPUTER SHARE

2006-05-10

R.S.AWASTHI, V.K.AGARWAL, VEENA MISRA

body2006
ORDER As per Hon'ble Shri V.K. AgarWal, President :- 1. This appeal has been preferred under section 15 of the Consumer Protection Act, 1986, against the order dated 21.7.2005, passed in complaint No,54/05 by the District Consumer Disputes Redressal Forum, Raipur (hereinafter referred to as the "District Forum" for short) dismissing the complaint. 2. Brief facts necessary for disposal of this appeal are that the complainant had applied to OP No.3 for allotment of 730 shares in his name and had sent a sum of Rs, 13,870/- vide draft No. 858205 of the SBI dated 8,9.2004, It was alleged in the complaint that the bid application, together with the draft was submitted with the OP No,2 but due to negligence of the said OP neither shares were allotted in the name of the complainant not the money was returned, It was further alleged that even despite enquiry from the OP No, 1 and 2 complainant could not get proper reply hence he wrote a letter to the OP No.3 and 4 on 30.10.2004 but did not receive satisfactory compliance till 15.12.2004. Consequently the complainant got legal notice dated 15.12.2004 served through his counsel Ku. M.V. Deshpandey but as nothing concrete was done the complainant was constrained to file complaint before the District Forum for claiming relief as detailed in the complaint: 3. The opposite party/respondent NO.1 resisted the complaint and denied the allegations of deficiency in service and averred that the complaint is not maintainable as the present complainant had applied for shares for business! commercial purpose and as such does not come within the definition of 'Consumer' under S,2(1)( d) of the Consumer Protection Act; 1986. The OP had also challenged territorial jurisdiction of the Forum. The OP also raised the plea of non-joinder of proper parties as the complainant had failed to implead the Bank as a party. It was admitted in the written version that the complainant had applied for allotment of 730 shares of Book Building Issue of India Bulls Financial Services Limited and the OP had forwarded the draft of the complainant along with the application for allotment of shares but on presentation of the Demand Draft the same was returned by the Bankers of the complainant and after receipt of the said draft the OP had without any delay, forwarded the same to the complainant for cancellation of the same. It was further averred that the OP did not consider the application for allotment of shares because the draft was returned by the Bank but they had forwarded the draft returned by the Bank to the complainant. It was further averred that the complaint is liable to be the dismissed subject to costs. 4. The learned District Forum held that the deficiency if any was on part of the Bank and as the Bank was not a party to the proceedings the complaint cannot be allowed. The learned Forum dismissed the complaint. 5. Aggrieved by the aforesaid order the complainant has preferred this appeal. Final arguments heard and record perused. 6. During the course of final arguments, the learned counsel for the appellant assailed the impugned order and submitted that the learned District Forum has passed the impugned order without proper perusal of pleadings, complainant's affidavit as well as the documents. He further submitted that the learned District Forum erred in dismissing the complaint on the ground that the Bank has not been made a party. He reiterated that bank is not a necessary party in the matter. He further submitted that it is worth being noticed that the draft was returned to the complainant during pendency of the proceedings before the District Forum and just a few days before the date of order. This fact itself is sufficient to demonstrate that there was collusion between the opposite parties and the Bank. Learned counsel for the appellant further submitted that in their written version the opposite party No. 1 had averred that on receipt of the draft from the Bank, they had immediately forwarded the same to the complainant but the draft was actually sent to the complainant by the Bank. This also proves the falsity of the written version but the learned District Forum has failed to appreciate the same. The learned counsel prayed that the appeal be allowed in the interest of justice. 7. Written arguments in the form of written statement have been filed on behalf of the respondents 1 to 3. The representatives of the opposite parties respondents reiterated orally also the stand taken in the aforesaid written statement filed before us. They submitted that it is evident from the General Instructions that the Bank was liable to return the dishonoured cheque/draft to the applicant. The representatives of the opposite parties respondents reiterated orally also the stand taken in the aforesaid written statement filed before us. They submitted that it is evident from the General Instructions that the Bank was liable to return the dishonoured cheque/draft to the applicant. They submitted that there was nothing abnormal that during pendency of the case the demand draft was returned back to the appellant complainant since the respondents having been unjustifiably dragged into this unwarranted litigation were constantly following with the bankers ICICI Bank to ascertain the whereabouts of the draft to exculpate themselves. They have also placed on record a letter dated 20.3.2006 sent by the ICICI Bank addressed to the respondent No. 1 informing that the draft issued by the & COMPUTER PRINTED DRAFT DIFF. The representatives of the respondents 1 to 3 further submitted, that the order of the District Forum is just and proper and there is no reason for interference with the same. None appeared for the respondent No.4. 8. Since the learned District Forum had dismissed the complaint solely on the grourid that ICICI Bank was not a party to the complaint, we will decide the question as to whether the Bank is 'a necessary party? 9. Learned counsel for the-appellant submitted that the Bank was not a necessary party because the complainant / appellant had no knowledge of the arrangement between the Bank and the opposite parties. Representative of the respondents reiterated that as ph the General instructions it was the' duty of the Bank to return the dishonoured cheques/drafts to the investors hence the respondents cannot be held liable for the delay, if any, in returning the draft. 10. We have noted that the case of the complainant does not relate, to wrong return / dishonour of draft. Had it been so the bank would definitely be a necessary party. He has alleged that due to negligence of the opposite parties neither shares have been allotted nor the' draft has been returned. It is' a matter of common knowledge and settled banking practice that in case a cheque is dishonoured for any reason the drawee Bank returns the cheque to the collecting Banker together with cheque return memo assigning reason as to why the cheque could not be honoured. It is' a matter of common knowledge and settled banking practice that in case a cheque is dishonoured for any reason the drawee Bank returns the cheque to the collecting Banker together with cheque return memo assigning reason as to why the cheque could not be honoured. After the collecting banker so receives the returned cheque together with the cheque return advice / memo he intimates the person who had presented the cheque for collection is for the person in whose favour the cheque is drawn to issue notice to the drawer of the cheque that the cheque drawn by him has been returned for such and such reason. Neither the collecting bank nor the drawee Bank is under any obligation to return send the cheque to the drawer of the cheque. It is always for the drawee to do so. In the circumstances it cannot be said that ICICI. Bank was necessary party: General instructions issued by one party cannot change the settled and customary, procedure. Further on perusal of reply to legal notice sent by the complainant it appears that the Karvy Computer Share Pvt. Ltd. had informed the counsel that the instrument NO.858205 that accompanied the application in question has not been processed the Bankers and therefore the application in question has not been processed for allotment of shares. We are enclosing a copy of the cheque return statement received by us from the collecting Bank, ICICI Bank Ltd., for your perusal, wherein the details of the demand draft submitted by your client are figuring. There remains no doubt that the opposite party had received cheque / draft return memo / advice and as per legal practice such advice is always accompanied by the returned cheque or draft also. On the strength of the common banking practice and in view of the reply to notice we are of the considered opinion that the opposite party concerned was in possession of the returned draft as well as the return advice. In view of the aforesaid discussion, we are of the considered opinion that the learned District Forum was erred in holding that the Bank was a necessary party and in dismissing the complaint on this ground alone. A finding in this regard cannot be sustained and is set aside. 11. In view of the aforesaid discussion, we are of the considered opinion that the learned District Forum was erred in holding that the Bank was a necessary party and in dismissing the complaint on this ground alone. A finding in this regard cannot be sustained and is set aside. 11. However, it is noticed that the respondents / opposite parties had raised various other preliminary objections such as the complainant is not a consumer and the District Forum has no jurisdiction to decide a complaint regarding non allotment of shares. They have also relied on various case laws. We would like to refer to Morgan Stanley Mutual Fund Vs. Kartik Das wherein the apex court has held that a prospective investor is not a consumer under S.2(1)(d) of the Consumer Protection Act. We would like to reproduce latter part of para 16 of the aforesaid judgment and the same reads as under: "The share means a share in the capital. The object of issuing the same is for building up capital. To raise capital, means making arrangements for carrying on the trade. It is not a practice relating to the carrying on the trade. Creation of Share Capital without allotment of shares does not bring shares into existence. Therefore, our answer is that a prospective investor like the respondent or the association is not a consumer under the Act." 12. The Apex Court had further held that the forum has no jurisdiction in the matters of this kind. 13. In view of the aforesaid finding of the Apex Court, there is no point in dealing further with the merits of the case. 14. This appeal is disposed off with the observation that the complaint filed by the complainant before the District Forum is not competent as the complainant, being a prospective investor, does not come within the definition of consumer given under the Consumer Protection Act and the Consumer For a does not have jurisdiction to decide such cases. Hence, the complaint is liable to be and is dismissed, though on different counts. Appeal Rejected.