07 June 2024 Consumer Protection Act >> Consumer Rights  

A shareholder's attempt to acquire right shares in M/s Trent Ltd. (Company) ended in disappointment after the National Consumer Disputes Redressal Commission (National Commission) dismissed a revision petition. The petitioner, a shareholder in the company, had applied for 50 right shares but faced rejection due to a missing PAN number.

The crux of the matter lies in the application process for right shares, which are additional shares offered to existing shareholders at a preferential price. The petitioner argues that they submitted the application through HDFC Bank and the company already possessed their PAN details. However, the company rejected the application citing the absence of a PAN number as the reason.

The petitioner felt this rejection along with the return of the application fee constituted a violation of consumer rights. They contended that the company should have allotted the shares despite the missing PAN number since their shareholder status was established.

The company, on the other hand, maintained its stance that the PAN number is a mandatory requirement for share applications. They further argued that the petitioner's purpose in acquiring the shares was commercial trading, disqualifying them from consumer protection.

The National Commission, exercising limited revisional jurisdiction, upheld the order of the State Commission which had concurred with the District Forum's decision. The Commission emphasized that both lower courts delivered well-reasoned judgments. It further solidified the company's position by stating that the absence of a PAN number renders the application incomplete, justifying its rejection.

Consumer Protection Act, 1986