C.N.SUBRAMANIAM vs TATA SHARE REGISTRY LTD

BRIEF facts of the case are that the complainant held 494 shares of Tata Chemicals Limited. He had urgent need for money. He, therefore, sold the shares to M/s. Bharat Investments, OP 2, through a sub- broker and acquaintance of the complainant one Mr. K.K. Malhotra, arrayed as OP 3, on 24.9.93 for Rs. 1,50,487.10. Contract Notes No. 108 to 110 were executed. The share certificates were delivered alongwith duly signed transfer deeds. OP 2 issued three cheques of Rs. 50,000/- each dated 7.11.93 in favour of the complainant on account of price of the shares sold. The complainant had already paid Rs. 3.000/- as brokerage. The cheques were dishonoured by the Bank in November and December, 93. The complainant issued a legal notice dated 14.12.93 and filed the present complaint on 16.6.94 claiming Rs. 5,31,971.19 as per details mentioned at page 5 of the complaint. The amount included Rs. 1,50,487.10 on account of price of the shares, Rs. 1,00,000/- on account of difference in the price of the shares at the time of sale and at the time of institution of the complaint, Rs. 31.484/- as interest @ 21% and Rs. 2,50,000/- on account of financial loss and damages incurred by the complainant. Arrayed in the complaint besides the purchaser and the sub-broker was Tata Share Registry Limited, a unit of Tata Chemicals Ltd. to whom OP 2 had sent the shares for transfer in favour of the vendees.

MR. K.K. Malhotra, OP 3, appeared and filed his written version. None appeared on behalf of either OP 1 i.e. Tata Share Registry Ltd. or OP 2 i.e. Bharat Investments or the proprietor thereof, MR. Bharat Bhushan. In the written statement filed by Mr. K.K. Malhotra, OP 3, the material averments were admitted. It was, however, denied that he is a sub-broker. In other words, OP 3 supported the complainant''s case. The complainant filed his own affidavit as well as placed on record copies of delivery bills dated 24.9.93 bearing S. Nos. 108 to 110, photo copies of three cheques of Rs. 50,000/- each dated 7.11.93 issued by Bharat Bhushan on behalf of Bharat Investments, OP 2, the intimation of the Bank of Baroda regarding dishonour of the cheques. No evidence has been placed on record on behalf of any of the OPs.

We have heard Ms. Prashanti Prasad and have carefully gone through the records.

MS. Prashanti Prasad stated that the Tata Registry Ltd. had stayed further action for the transfer of the shares in favour of the vendees in view of the developments in this case and they were awaiting a decision of this Commission and they would hand over the shares to the complainant if a direction to this effect is given by this Commission. She further states that the complainant would be satisfied if he receives back the original shares and the complainant does not press claim for the recovery of damages. We find that the case of the complainant is clearly proved by the documents including the affidavit of the complainant. No material to the contrary has been placed on record by the OPs. We, therefore, hold that OP 2 was guilty of deficiency in service and is, therefore, liable to return the shares to the complainant. According to the complainant''s Counsel, the shares certificates are lying with M/s. Tata Share Registry Ltd. OP 1. The said OP is directed to return the share certificates to the complainant together with the benefits including dividend given by the Company from time to time on and after 24.9.93 till date of return (including dividend warrants bonus shares etc.) of the share certificates. The complainant shall furnish an indemnity bond to OP 1 undertaking to indemnify them in case a claim is raised on the basis of the said shares by OP 2. The distinctive number of the shares in question be also mentioned in Annexure to this order to help OP 1 to comply with this order without delay. OP 2 shall pay costs to the complainant. The same is quantified as Rs. 2,500/-. A copy of this order be conveyed to the parties. Complaint allowed with costs.