When the banker to the issue makes a mistake that does not show up in accounts in view of its offsetting character by refunding excess amount to a wrong person at the expense of the right person, the company making the public issue is not responsible for compensating the latter, but the banker and the Registrar to the issue jointly and severally are. In Maruti Suzuki India Ltd v. B.P. Gayatri, the NCDRC was seized of a matter involving comedy of errors. The Respondent in 2003 had paid Rs 1, 15,000 with her application for 1,000 shares of Maruti at the rate of Rs 115 a share. The banker to the issue had by mistake credited her account with only Rs 11,500 and credited another investor who had applied for only 100 shares with Rs 1, 15,000, whereas he had actually paid only Rs 11,500 and rightly given the fact that he was applying for only 100 shares.
The company decided Rs 125 as the allotment price and those who had applied for 1,000 shares were entitled to 350 shares. But since the complainant’s account showed a credit of only Rs 11,500, she could be allotted only 50 shares and she got a refund for Rs 5,250 after debiting her account with Rs 6,250 being the allotment price for 50 shares at Rs 125 each. The gravamen of the complainant were two — short allotment of 300 shares thus depriving her the opportunity of making profits from these number of shares and refund of a shorter amount. She should have got a refund of Rs 71,250 after debiting her account with Rs 43,750 for 350 shares at the rate of Rs 125 each.
The NCDRC, while absolving Maruti Suzuki India Ltd of any guilt, called upon the banker and registrar to the issue to compensate the complainant with the following amounts.
Refund of Rs 66000 or Rs 71,250 that ought to have been refunded reduced by Rs 5,250 that was actually refunded with interest at the rate of 6 per cent per annum reckoned from the date of allotment.
In addition, she was asked to be compensated by them for the difference between the market price on the date of allotment (Rs 230 a share) and the issue price of Rs 125 on 300 shares she was not allotted towards compensating her for the opportunity profit lost by her due to their combined deficiencies in service together with interest of 6 per cent per annum from the date of listing.
(The author is a New Delhi-based chartered accountant)