D.O.F. 31.07.2009
D.O.O.30.03 .2011
IN THE CONSUMER DISPUTES REDRESSAL FORUM KANNUR
Present: Sri. K.Gopalan : President
Smt. K.P.Preethakumari : Member
Dated this the 30th day of September 2011.
C.C.No.203/2009
Porayil Manoharan,
Porayil House,
Pappinissery Amsom Desom,
Kannur. Complainant
(Rep. by Adv. C.K. Rathnakaran)
1.Manger,
Kotak Securities,
Nirlon House,
4th floor,
Dr.Annie Besant Road,
Mumbai 400 025.
2.Manager,
Kotak Securities Ltd.
40/1400, Ensign enclave,
2nd floor, M.G.Road,
Jose Junction,
Kochin.
3.Manager,
Kotak Securities,
Fort Road, Kannur. Opposite Parties
(Rep. by Adv.M.K.Santhosh for OPs 1 to3)
O R D E R
Smt. K.P. Preethakumari, Member.
This is a complaint filed under Section 12 of Consumer Protection Act for an order directing the opposite parties to pay an amount of `1,53,500 with 15% interest per annum and to pay `10,000 as compensation and cost.
The complainant’s case is that he is working as a branch in charge of a money exchange firm at Kannur. One Mr.Jijith, the field officer of 3rd opposite party approached the complainant during 2007 September and induced him to invest money in share market. As inspired by the representation the complainant had opened a demat account with the 3rd opposite party as ID.NoVMY 98 on 11.9.07 and handed over a cheque worth `1, 00,000. The complainant went through the share market rates during that time and advised 3rd opposite party to purchase shares of Hotel Leela, TVS Motors and IDBI Bank etc. subsequently on 25.3.08 and on 5.5.08 the complainant handed over cheques for `42,000 and `11,500 respectively with written instruction to 3rd opposite party to purchase some shares. The complainant never gave written or oral instruction to 3rd opposite arty to sell the shares purchased in the complainant’s account.
On 10th March 2009, the complainant approached 3rd opposite party and want to sell shares worth `1, 00,000 from his account. To the utter dismay the 3rd opposite party informed him that majority of the shares in his account were sold by 3rd opposite party and there was only shares worth nominal value remaining in his account when the complainant enquired the matter in details, he could learn that without the knowledge and consent, the 3rd opposite party sold several shares and purchased a few shares through his account, causing huge monetary loss. The complainant never gave instructions to sell shares from his account and he was not even informed about the transaction done in his account. The complainant could know that 3rd opposite party had done derivative trade in the account of the complainant without the knowledge or consent of the complainant and against the undertaking made by 3rd opposite party. The complainant neither gave any margin money for doing derivative trade. The complainant had invested a total amount of `1, 53,500 with the opposite parties. Complainant is entitled to get the amount with 15% interest and also entitled to get `10,000 towards his mental agony. The opposite parties are levying 0.5% brokerage for each and every transaction done in the account of their clients irrespective of loss or profit to their clients. 3rd opposite party did all unauthorized transactions in the account of the complainant only for appropriating the brokerage and for getting incentive. The acts of the opposite parties amount to unfair trade practice and deficiency in service and 3rd opposite party is refusing to provide statements of accounts showing the transaction done in the complainant’s account. The acts of the 3rd opposite party caused severe mental agony to the complainant for which he assess `10,000 as compensation. The cause of action for the complaint arose on 11.9.07, the date on which the complainant handed over a cheque of `1, 00,000 to 3rd opposite party and there after. So the opposite parties are liable to compensate the complainant. Hence this complaint.
In pursuance to the notice issued by the Forum all opposite parties appeared and filed their version admitting that 2nd opposite party is the Member in NSE and acting as share broker obeying guidelines of SEBI. The opposite party contended that the complainant is not a consumer since the trades were executed with speculative motive to earn profit and hence the complainant falls under the exception to the general rule under section 2(1)(d) of Consumer Protection Act 1986 and hence the complaint is not maintainable before this Forum. According to the opposite parties the complainant have not furnished any details of the claim amount as there is no break up or calculation as to how the complainant has arrived at the claim of `1,53,500 which the complainant is allegedly entitled to receive from opposite party. The opposite party states that the complainant is claiming loss and the relevant details such as scrip, quantity, segment, price etc. are not disclosed by the complainant and hence the claim is not maintainable. According to opposite party the complainant has not furnished the details regarding period, quantity, price, scrip etc. in the compliant. F & O trade was never executed in the account of complainant and hence the question of confirmation does not arise. The complaint is not maintainable before the forum. Since as per the agreement the court in Mumbai have jurisdiction.
The complainant is the Manger of a financial Institution and hence it is not correct to say that he is not aware of the risks involved in the share market. The opposite party admits that the complainant had approached them to open and operate trading and demat account and had entered into an agreement. It is not correct to say that officials of the opposite parties were made believe to complainant that he need not know anything about the stock market and they will do the trading on behalf of the complainant. It is also not correct to say that the complainant was told that the share value will be on a hike and if the complainant is purchasing shares, he can earn good profit by selling them at a higher rate etc. It is also not correct to say that opposite party did trade in account of the complainant without informing him. It is also not correct to say that on 10.3.09 the complainant had approached the opposite party to sell shares worth `1, 00,000 and then informed that majority of his shares were sold out by 3rd opposite party and there is only shares worth nominal value. The opposite party denies the statement that opposite party sold out several shares and purchased few shares through his account. Causing huge monetary loss without his consent. The complainant is not entitled to get 15% interest and `10000 as compensation. If the complainant has lost any amount as trading loss, it is solely due to the act of the complainant. There is no deficiency of service or unfair trade practice on the part of the opposite parties. The complainant has not subjected to any mental agony by the opposite party. The sale proceeds of all securities liquidated are duly credited in the ledger account of the complainant and he is not entitled to any relief and hence the complaint is liable to be dismissed.
Upon the above contentions the following issues have been
raised for consideration.
1. Whether the complainant is a consumer?
2. Whether there is any deficiency of service on the part of
opposite parties?
3. Whether the complainant is entitled to any relief?
4. Relief and cost.
The evidence in the above case consists of oral testimony of
PW1 and Ext. A1 to A3.
Issue No.1
The opposite party contend that the complainant cannot be treated as a consumer since the trades were executed with speculative motive to earn profit so the complainant falls under the exception to the general rule and cannot be termed as consumer under section 2(1)(d) of consumer protection Act 1986. Admittedly the complainant in this case is working as a branch in charge of a money exchange firm at Kannur.
The Sec 2(i)d(ii) of Consumer Protection Act defines a consumer as a person who “hires or avails of any services for a consideration which has been paid or promised or partly paid and partly promised or under any system of deferred payment and includes any beneficiary of such services other than the person who hires the services for consideration. Paid or promised or partly paid and partly promised or under any system of deferred payments, when such services are availed of with the approval of the 1st mentioned person (but does not include a person who avails of such services for any commercial purpose).
Explanation :- For the purpose of this clause, “commercial purpose” does not include use by a person of goods bought and used by him and services availed by him exclusively for the purpose of earning his livelihood, by means of self-employment). But in this case admittedly the complainant is working as branch in charge of a money exchange firm at Kannur and had invested a total amount of ` 1,53,500 with the opposite party and is maintaining a dematt account. As per the explanation to Sec 2 d(ii) of the Consumer Protection Act, a person can be included in the purview of consumer, only when the services availed by him is exclusively for the purpose of earning his livelihood by means of self-employment. The complainant in this case has no case that he is engaged in the trading share business for getting additional income so as to enable himself for his livelihood by means of self-employment. In Laxmi Engineering Works Vs P.S.G Industrial Institute which was reported in 1995(3) SCC 583 the Hon’ble Supreme Court pointed out that “commercial purpose” shall be governed by the facts of each case. The Hon’ble National Commission in Punjab Agricultural University Vs U.T.I and another observed that “the word ‘commercial purpose’ would cover an undertaking, the objective which is to make a profit”. In the instant case also, while going through the pleadings, it is seen that objective of trade business of the complainant is to make profit. So from the above discussion we are of the opinion that the complainant is not a consumer as per Sec 2 d(ii) of Consumer Protection Act. Since he is engaged in business for commercial purpose and hence the issue No.1 is found against the complainant. Since issue No.1 is found against the complainant, we are not going deep into the other issues. So the complaint is liable to be dismissed and order passed accordingly. The parties have to bear their own cost.
In the result the complaint dismissed.
Sd/- Sd/-
President Member
APPENDIX
Exhibits for the Complainant
A1 to A3. Receipts dt.11.9.07, 25.3.08 and 5.5.08 issued by 3rd OP
Exhibits for the opposite parties: Nil
Witness examined for the complainant
PW1. Complainant
Witness examined for opposite parties: Nil
/forwarded by order/
Senior Superitendent
Consumer Disputes Redressla Forum, Kannur
