Order Name: Glaxo Smithkline Pharmaceuticals Ltd. Vs Dr Rajendra Ghiya
Case No.: R.P. No. 3213/2012
The National Consumer Disputes Redressal Commission, led by Justice A.P. Sahi and Dr. Inder Jit Singh, recently issued an important ruling. They clarified that while trading in shares is typically a commercial activity, a company’s failure to properly transfer shares can be considered a deficiency in service.
Key Facts of the Case
The complainants bought around 250 shares of Glaxo SmithKline Pharmaceutical Company. They submitted these shares, along with a transfer deed, to have them transferred into their names. Despite the transfer being completed, the share certificates were not returned. Frustrated, they filed a complaint with the District Consumer Disputes Redressal Commission in Jaipur. The District Commission ruled in their favor. The company then appealed to the State Commission of Rajasthan, but the State Commission upheld the District Commission’s order. Not satisfied, the company took the matter to the National Commission.
Company’s Arguments
The company claimed that they had informed the complainants that the share certificates were never received. The central question was whether the share certificates were transmitted, which would indicate if there was a deficiency in service. Additionally, the company questioned whether the consumer forum had jurisdiction over this matter, arguing that it should fall under the Companies Act. However, the company did not submit any response before the District Commission, leaving the complainants’ allegations unanswered.
National Commission’s Observations
The National Commission examined whether the complaint was maintainable under the Consumer Protection Act, 1986, based on the definitions of “consumer” and “service.” Citing the Supreme Court’s judgment in Shrikant G. Mantri Vs. Punjab National Bank, the Commission discussed how the term “consumer” excludes those who purchase goods for resale or commercial purposes but includes those who hire or avail of services for personal use or earning a livelihood through self-employment.
In this case, the primary issue was whether the company’s failure to return the share certificates constituted a deficiency in service. The company argued that such disputes should be addressed under the Companies Act, questioning the Consumer Forum’s jurisdiction. However, both the District and State Commissions found that the company had not taken adequate steps to transfer the shares, which amounted to a deficiency in service.
The National Commission noted that the company’s claim of not receiving the share certificates was insufficient to challenge the allegations under the limited revisional jurisdiction of the Consumer Protection Act. The Commission upheld the lower forums’ findings, noting that the company had mostly complied with the State Commission’s order to compensate the complainant, except for a pending amount related to mental harassment and litigation costs.
The Commission decided that awarding ₹10,000 for mental agony was not justified as the dispute had been largely resolved through previous payments. Thus, the ₹10,000 award for mental agony was set aside. The revision was partially allowed, and the company was ordered to pay ₹2,000 in litigation costs to the complainants within a month.
Takeaway
This ruling underscores that even in commercial activities like share trading, companies have a duty to provide proper service. Failure to do so can lead to legal consequences under the Consumer Protection Act. If you face issues with service deficiencies, consumer forums remain a viable avenue for redressal.
