1993 (10) TMI 271 - Commission - Companies Law

Summary

Issues: Delay in transferring shares by Unit Trust of India; Compensation for the delay

In the case before the Punjab State Consumer Disputes Redressal Commission, the complainant alleged an unwarranted delay by the Unit Trust of India in transferring shares to her name. The complainant had purchased 500 shares from a seller in 1990 and sent them for transfer, but due to an error in the computer program, the shares were not registered in her name until 1992. The respondent admitted to the mistake caused by the computer program's inability to differentiate between two individuals with similar names. The Commission noted the delay of over two years in transferring the shares and found both respondents deficient in their service to the complainant. The Commission acknowledged the difficulty in quantifying the loss but awarded compensation of Rs. 15,000 to the complainant, considering the market fluctuations and the delay suffered. The compensation amount included interest and litigation costs. The Commission directed the Unit Trust of India to pay the compensation within two months, warning of consequences under the Consumer Protection Act, 1986 if the payment was not made promptly. The complaint was allowed in favor of the complainant.

This judgment primarily addresses the issue of delay in transferring shares by the Unit Trust of India to the complainant's name. The complainant faced an unjustifiable delay of over two years due to an error in the computer program of the respondent, which failed to differentiate between two individuals with similar names. Despite the complainant sending the shares for transfer in 1990, the shares were only registered in her name in 1992. The Commission found both respondents at fault for this delay and deemed their service deficient. The Commission recognized the challenge in precisely calculating the loss incurred by the complainant but awarded compensation of Rs. 15,000, considering the prolonged delay and market fluctuations. The compensation amount included interest and litigation costs, aiming to address the inconvenience caused to the complainant. The decision to award compensation was based on the principle of ensuring justice and rectifying the harm suffered by the complainant due to the delay in transferring the shares.

The judgment also emphasizes the importance of prompt and efficient service by entities like the Unit Trust of India in handling share transfers. The Commission highlighted that delays in such processes can have financial implications for consumers, especially in a volatile market environment. By awarding compensation, the Commission sought to uphold consumer rights and hold the respondent accountable for the delay experienced by the complainant. The directive to pay the compensation within a specified timeframe underscores the Commission's commitment to ensuring timely redressal for consumer grievances. Overall, the judgment serves as a reminder to service providers to exercise diligence and accuracy in their operations to prevent unnecessary delays and inconvenience to consumers.