Full Judgment
Oral Order( Per Smt.M. Shreesha,Honble Member)
Aggrieved by the order in C.D.No.1/2002 on the file of District Forum-I, Hyderabad, the complainant preferred this appeal.
The brief facts as set out in the complaint are that upon the representations of the promoters of the opposite party company on 25-8-1995 and 14-9-1995 respectively, the complainant made an application for allotment of 2,500 equity shares of Rs.10/- each and remitted an amount of Rs.25,000/- towards share capital. On 16-10-1995, the opposite party allotted 2500 equity shares and promised to send the share certificates during the month of December 1995 and represented that the company would go for a public issue in the month of January, 1996 and the first phase of production would begin in the month of February, 1996. Thereafter the opposite parties did not send the share certificates as represented by them and kept postponing the matter on one pretext or the other inspite of the complainant making several requests for refund of the amount of Rs.25,000/- with interest. The complainant submitted that he visited opposite parties during December, 1999 and several times in 2000 but the opposite parties kept postponing the matter on one pretext or the other and therefore he got issued a legal notice on 10-2-2001 for which there was no reply. Hence the complaint seeking direction to the opposite parties to refund Rs.25,000/- with interest at 24% p.a. from 25-8-1995 and 14-9-1995 respectively together with compensation of Rs.15,000/- and costs of Rs.5,000/-.
Opposite party filed counter stating that the Managing Director by name, K.V.Surender Rao was not impleaded and therefore the complaint was not maintainable and they deny that on representations of the promoters, the complainant made an application for allotment of 2,500 equity shares. They contend that the complainant never approached them and in the absence of purchase of share certificates, the sending of share certificates does not arise. They deny that the complainant made several visits and representations and contend that the complainant never invested any amount or was allotted any share certificates and that they never received any legal notice dt.16-2-2001. They contend that the complaint is barred by limitation since it was filed two years after the date of original cause of action.
The District Forum based on the evidence adduced i.e. Exs.A1 to A4 dismissed the complaint.
Aggrieved by the said order, the complainant preferred this appeal. It is the case of the complainant that he applied for allotment of 2,500 equity shares of Rs.10/- each and remitted an amount of Rs.25,000/- towards share capital. On 16-10-1995, the opposite party allotted 2500 equity shares and promised to send the share certificates during the month of December 1995 and represented that the company would go for a public issue in the month of January, 1996 and the first phase of production would begin in the month of February, 1996. It is the further case of the complainant that the opposite party did not send any share certificates and kept on postponing the matter on some pretext or inspite of several representations, personal requests and also legal notice which was issued on 10-2-2001. It is the case of the opposite party that the complainant never invested any amount of Rs.25000/- with them and that no shares were allotted in favour of the complainant and that the complaint is barred by limitation since it was filed beyond two years from the date of cause of action.
First we address ourselves to the question of limitation. Ex.A1, letter dated 16-10-1995 issued by the opposite parties which is not in dispute in which the opposite parties have stated as follows:
Date 16-10-1995
HYDERABAD
To
Mr/Ms.Darapuneni Vijay Kumar
H.No.5-8-50/2, F.S.Lane,
Nampally Stn. Road,
Hyderabad-500 001.
Dear Sir/Madam,
We thank you for your interest shown in our project by investing in the equity. Your application No.0828 dated 14-9-95 bearing an amount of Rs.25,000/- only has been allotted 2,500 equity shares. You will receive the share certificates in the month of December 95 and the company is going for the public issue in the month of January96. The company will go into the 1st phase of production in the month of February96. Progress of the company will be intimated to all the investors regularly.
Thanking you,
Yours Sincerely,
Sharat Nalamothu.
(Executive Director)
Ex.A2 is the legal notice dated 10-2-2001 addressed by the complainant to the opposite party calling upon them to refund Rs.25,000/- with interest and other costs. We observe from the record that this legal notice is also sent by registered post to the address where the Executive Director was having his corporate factory. There is no dispute about the addressed furnished, however, the letter was returned unserved. Taking into consideration that the opposite parties in their letter Ex.A1, stated that the company would be going for public issue in the month of January, 2006. Ex.A1 also falsifies their contention that they have not allotted the shares nor received the amounts and the company never went for public issue, and that Ex.A1 establishes that an amount of Rs.25,000/- has been paid by the complainant and 2,500 equity shares have already been allotted and that the opposite parties have not replied to the legal notice, we are of the view that there is continuing cause of action.
The contention of the opposite party that Managing Director is not made a party is unsustainable since the company is represented by its Executive Director. Therefore, we are of the considered view that the complainant established that the opposite parties received an amount of Rs.25,000/- and failed to refund the same and this act of the opposite parties amounts to deficiency in service. Hence we direct the opposite parties to refund Rs.25,000/- with interest at 9% p.a. from the date of complaint till realization together with costs of Rs.3,000/-.
In the result the appeal is allowed and the order of the District Forum is set aside directing the opposite parties to refund Rs.25,000/- with interest at 9% p.a. from the date of filing of complaint till the date of realization together with costs of Rs.3,000/-. Time for compliance four weeks.