PANKAJ KAPAHI vs BENZO PETRO INTERNATIONAL LTD

BRIEF facts of the case giving rise to this appeal are that Mr. Pankaj Kapahi, complainant for short, an NRI applied on 25.10.1994 for 40,000 shares and deposited Rs. 4.00 lacs as application money. After waiting for 10 weeks he wrote to the Registrar, opposite party (OP) No. 2. The complainant was advised to contact the Company directly as RBI had not by then given permission for allotment of shares to the complainant. The Company was addressed directly but there was no response. Legal notice dated 14.8.1995 was sent. The complainant took up the matter with SEBI and instructed Counsel to file a suit. For the purpose, he paid Rs. 11,000/- fee to the Advocate and Rs. 5,985/- for purchasing Court fee stamps. The suit was prepared by the Counsel on 8.1.1996. Two days earlier on 6.1.1998, Registered A.D. was received with 14,100 equity shares and a refund order for Rs. 2,59,000/-. In view of the receipt of the shares and refund order, the proposed suit was not filed. The grievance of the complainant was that the complainant was made to spend for filing the suit and had not been paid interest beyond 10 weeks from the date of closing of the issue. On a consideration of the matter, the District Forum partly allowed the complaint and directed the opposite party to pay interest @ 15% per annum on Rs. 2,59,000/- from 29.7.1995, the date when RBI permission was given till 2.1.1996, the date of the refund order, along with Rs. 5.000/- as costs. Dissatisfied with the order, the complainant has preferred this appeal. Inspite of the notice sent under Registered cover, the respondent failed to appear. We have accordingly heard Mr. G.N. Kapahi, Authorised Representative of the appellant and have carefully gone through the records.

THE closing date in the present case was 29.10.1994. THE period of 10 weeks expired on 6.1.1995. THE appellant was clearly entitled to interest on the sum of Rs. 2,59,000/- @ 15% from 6.1.1995 i.e. from the expiry of 10 weeks from the closing of the issue. As per guidelines of SEBI the amount representing unallotted shares is required to be refunded within 10 weeks of the date of closing. In this case, there is no manner of doubt that the amount kept lying with the Company. THE delay in RBI giving permission did not debar the Company from refunding the amount. THE above reasoning must have prevailed with the Company because the refund order was got prepared bearing the date 6.1.1995 by the Company itself. THEre is no reason why the complainant should not be awarded interest for the period 6.1.1995 to 29.7.1995 when RBI informed the extent to which permission had been given. The appellant has claimed charges under several other heads. We have carefully gone through the same. According to SEBI guidelines, the refund cheque should have been sent to the complainant at some local branch of the Bank at Delhi but the refund cheque was made payable at Baroda and the complainant had to spend Rs. 658/- as collection charges. There is no reason why the appellant should not have been granted the said amount. The appeal is partly allowed. The respondent is further directed to pay interest on the sum of Rs. 2,59,000/- for the period 6.1.1995 to 28.7.1995 @ 15% per annum besides Rs. 658/- on account of collection charges paid to the Bank. There should be no order as to costs. A copy of this order be conveyed to the parties as well as DF-II. Appeal partly allowed.