JUDGEMENT

          ComplainantGhanashyam Das Thakurby filing this complaint has submitted that he has a Demat Account holder of the ops share Broker and share Depository participants, having trading account No. 601722, Demat Account No. 22762851 (I.D. No.) and DPID No. IN301151 and complainant opened this demat account along with on line trading facilities.

          Ops are share broker and depository participants and for the purpose of act on behalf of their customers for share trading the ops have demat accounts facilities and complainant opened one demat account on payment of consideration by way of service charges brokerage interest to them along with annual fees.

          It is further mentioned that complainant maintained this depository account for share transaction.  It is not for commercial purpose and maintained this account for investment purpose and complainant has no other source of income except the share trading and an investment and share trading is only engagement at as complainant’s self employment.

          Further it is alleged that rights and duties of the ops to act on behalf of him on line traders and demat account holder and act as per their direction/instruction and it is also the duty of the ops to send ledger statements of account as per transaction made and/or conducted by them.

          Since inception of the online trading and demat account complainant made several transactions through his online trading facilities i.e. the ops but the ops inspite of several requests did not furnish ledger statements, bill from transaction accounts, share holding statements etc. and ops did not furnish the contract notes of accounts regarding transaction from September-2010 and till to date, bills cum transaction statements from September-2010 till date, month wise shareholding statements for the year 2010 – 2011 and 2011 – 2012, yearly Debit Note (2010 – 2011) and ledger statements of accounts regarding transaction from September 2010 till date etc.

          Surprisingly the complainant came to learn that the ops without consent and instructions of complainant sold the following shares – a) 100 shares of Hyderabad Industries @ 489.00 per each, total Rs.48,900/-, b) 200 shares of the Scrip Orchid Chemicals @ 302.00 each total Rs.60,400/- and c) 3 lot of shares of Rcom 150 Call Option Rs.7,723/-, total Rs.23,169/-.

          Ops may sell the other shares of complainant beyond his knowledge which presently complainant could not be able to find out until and unless the aforesaid statements received from the ops.

          Complainant opened his Demat A/C in company, and transferred about Rs.7 lacs shares from Reliance Money and about Rs.3 lacs shares from Kotak Securities in April-2008 and complainant told to Mr. BiswajitChakraborty to sell all his shares thrice in the last week of April 2008 but he advised him that market would be increased, so, he did not sell his shares and after 8 months in December – 2008 the value of his shares became decrease about Rs.3 Lacs instead of Rs.7 lacs and the company and its dealer misguided him and so he faced huge loss.

          Practically ops adopted careless and arbitrary attitude in respect of sending particular statements to complainant which is a compulsory one otherwise complainant cannot detect the present position of his shares investments and it is the duty of the ops to send each and every particulars with monthly statements of their D.P. account holder, contract note as per request made by the complainant and ignoring or neglecting all the duties and responsibilities the ops committed gross deficiency in service on their part and for which they are amendable under the provisions of the C.P. Act 1986.

          As per terms and conditions the ops are to act on behalf of the account holder and as per their instructions and as and when the account holder will instruct the ops to make any transaction with any particular shares, the op Bank will act.  But herein this case without showing proper accounts and the consent and instructions, at their own will and discretion the ops sold numbers of shares of different companies from 30.12.2010which was illegal, arbitrary and unfair trade practice.

          Complainant after considering all these fact asked the op by sending letters dated 20.09.2008,20.02.2010, 18.08.2011 and 29.08.2011 and requested them to furnish all the particulars as stated herein above within 15 days from the date of receipt of the letters but the op inspite of receipt of those letters kept silent and till date did not send any particulars to complainant and due to illegal acts committed by the ops complainant has suffered huge monetary loss to the tune of Rs.1,42,469/- which the ops are liable to pay by way of compensation to complainant and for which for proper relief the complainant filed this complaint when the op did not pay it and did not respond.

          On the other hand ops by filing written statement submitted that the entire complaint is false and fabricated and there is no merit in this case and for some purpose this case has been failed.  Further it is submitted that the complaint is not maintainable as member client agreement executed between the present parties and there is arbitration clause and as such the present Hon’ble Forum has no jurisdiction to try the instant complaint.

          Moreover complainant has a trading account with HDFC Securities Ltd. (Account No.601722) registered on 15.10.2007 and further complainant has executed a Member client agreement with the op and is bound by the said agreement.  In fact complainant provides personal gain by trading activities through the ops and as such he is not a consumer according to law.

          It is further submitted that op is a company incorporated under the provisions of the Companies Act, 1956 and op Company is registered with SEBI under section 12 of SEBI Stock broker and Sub-broker regulations and since its inception, the op has been a pioneer in online trading and has established itself as a ‘Preferred’-trading platform (both NSE & BSE) for customers with its unique 3-in-1 integrated account (Savings-Demat-Trading) backed by state-of-the-art technology, providing a blend of safety, transparency and convenience, which is unparalleled in the industry.

          Trading in the stock market through the op required an opening of one bank account and (ii) a demat account by the client with HDFC Bank Ltd. and opening of a trading account with the op and the client gives a power of attorney to HDFC Bank authorizing HDFC Bank to transfer funds from the bank account to the trading account under instructions from the op.  Further the flow of moey/shares is only with the bank/demat account linked with the said trading account and the above system has the advantage of providing adequate safety and cross checking to the client and under the above system the bank statements and the demat account statements are sent directly by HDFC Bank to the client independent of this op and similarly this op sends the Contract Notes and the trading account statements to the client independent of HDFC Bank and in this manner the client is able to receive the 3 different statements from HDFC Bank and from this op.  Even if the client fails to receive any one of the statements, the client can easily cross check and monitor the transactions through the other statements and online.        

Further it is submitted that the share transaction under the account is not for commercial purpose which clearly suggests that the complainant is not a consumer of the ops and so does not fall under section 2 (O) of Consumer Protection Act, 1986 and the entire complaint is baseless that the complainant had no other source of income and admittedly that complainant in paragraph 10 of the plaint stated that the transaction was started between the parties before September, 2008 and the transaction means the complainant through writing engaged the ops to act on his behalf to carry all his trading activities via his relationship manager and at the time of registration/account opening the applicant had provided the email id viz. ghanashyam_das@yahoo.com and also a copy of KYC from, Contract notes/statement of accounts/margin statements etc were sent to complainant on the said registered email id on a regular basis as per the transactions executed in his trading account and that confirms that the complainant was being informed about the transactions (sample dispatch logs attached).

Additionally the funds and securities were transferred to/from his linked back/demat account maintained with HDFC Bank Ltd. and the complainant cannot act ignorant to the statements as received from HDFC Bank and HDFC Securities Ltd. independently.  Further it is submitted that amount of consideration for selling shares has been deposited in the complainant’s bank account and the statement of account confirming the same is also enclosed and the complaint after receiving the differentiate amount of the shares had come forward with the complaint after enjoying the benefit.

Op does not recognize the complainant’s allegations and practically if there was any grievance in that case complainant may prefer for appointment of an arbitrator for settlement of the alleged dispute, although there was no duty prevails upon ops but since 2008 till date each and every particular along with benefit money was enjoyed by the complainant otherwise the complainant would have cancelled his authorization much before in 2008 and in spite till 2012 it is till inforce and practically for which the entire complaint is false and fabricated.  Ops did not act illegally, arbitrarily and never adopted unfair trade practice and practically if op adopted unfair trade practice in that case complainant ought to have cancelled the relationship in between the complainant and ops on and from 30.12.2010 but that has not been done.

Moreover, ops always complied the statement of paragraph 6 of the complaint but complainant has enjoyed the benefit then how it can be come under the purview of consumer dispute and in the above circumstances op has prayed for dismissal of this case.

Decision with reasons

In the present case after hearing the argument of the Ld. Lawyers both the parties and also considering the vital fact that the complainant himself opened securities trading account and entered into an agreement with the op by executing the said agreement for trade and that was done by the present complainant Ghanashyam Das Thakur and further from his letter issued to HDFC Securities Ltd. it is found that complainant sent a letter informing – instruction in respect of his or their client account with the said authority in relation to purchase and sale securities of cash or derivative segment of NationalStock Exchange of India Ltd., Bombay Stock Exchange of India Ltd. and from client equity derivative ledger for the period 1^st Sept. 2010 to August 2012 it is found that he is the proprietor of plastic pen factory MakhlaUttarpara and as per said agreement the above client equity derivation ledger for the period as stated above it is found that he invested the said money for trade and he purchased so many shares and of different companies and for the purpose of the selling at a high rate he invested that amount and statements were also sent to him but complainant never raised any objection to SEBI who is authority to decide the entire dispute in between the complainant and the ops.

Undisputed fact is that op is a pioneer online trading and has established itself as a prefer trading platform (NSE & BSE) for customers with its unique 3-in-1 integrated account (Savings-Demat-Trading) backed by state-of-the-art technology and it is also a fact that from 14.01.2011 to 02.06.2011 transaction statement was given by HDFC Bank to the complainant pertaining to his demat account No.22762851 and since Sept. 2008 relationship between the parties started but there was no difference or dispute.  Further it is found that the relationship manager was assigned to assess the complainant for executing the orders but final decision always lies with the complainant and RM cannot hold accountable for profit and loss made therein and admittedly the orders for buy and sale of securities are executed only on the instruction and authorizing of the complainant and in all cases the amount for consideration for selling shares had been deposited in the complainant’s bank account and statement of account confirms the same and complainant after receiving the differentiate amount of the shares and enjoyed the benefit no doubt and practically complainant has failed to deny that he received from HDFC Bank and the op the statement regularly and so considering that fact it is clear that complainant was informed about the transaction (sample dispatch logs) as already filed in this case.

Most interesting factor is that in this case there is an agreement and no doubt share selling and purchasing is a trade for benefit and the profit but question is whether the agent is liable for any loss or not.  So, in this regard, we have gone through the agreement wherefrom it is found that in clause 2(b) it is specifically agreed by the complainant that he shall be wholly responsible for all his investment decision and trades and as per clause 2(c) the failure of the client to understand the risk involved shall have rendered as a contract void and vital and client and shall be and continued to be responsible for all risks and consequences for entering in the trades in the segments in which the client chose to trade. 

Considering this agreed terms and we find that we cannot go beyond the terms of agreement of the said trade what was executed by the complainant in favour of the op HDFC Securities Ltd. and as per said agreement it is found that there is another clause wherefrom it is found there is another part of the agreement with holding combined risk disclosure document for capital market and from that part it is found that there is clause 1.2 and as per said clause and upon shareholders risk the entire amount paid for the option in a relatively short period of time the risk reverse nature and option as wasting assets which becomes worthless when it expires and for the price of the underline does not change in the anticipated direction before the option expired to an extent sufficient to cover the cause of the option and the investors may lose or all significant part of investment in option.  Further as per clause 2.3 risk of option writers – if price emolument of the underline is not in the invested direction the option writer risk losing substantial amount.  So, considering this two clause it is clear that complainant entered in to such selling and purchasing of shares trade with the op no.1 through his bona fide agent the other ops knowing fully well about the risk factor of investment of money in share trade.

Moreover as per said agreement it is specifically mentioned in clause 1.3.11 that in case of a complaint against a member/registered sub-broker the client should address the complaint to the office as may be specified by NSE or BSE from time to time and as per clause 6 claims of any such investors shall be decided as per rules by laws of NSE or BSE under the claim under investors protection fund and power is vested to the said authority for settlement of claim and fact remains that complainant cannot go beyond that terms and conditions of the said agreement and as per agreement complainant must have to place his dispute before the SEBI or the authorities appointed by NSE or BSE.  But complainant has not adopted that procedure. 

Further considering the entire materials it is found that Ghanashyam Das Thakur is the proprietor of plastic pen factory and runs a plastic pen business and he invested the money for more profit in the share trade in market.  So, under any circumstances this investment made by the complainant was not for his earning but it was invested for the business purpose for more profit even after running his plastic pen factory business.  Moreover as per clause 51 it is specifically mentioned that any claim dispute or differences arising between the parties in respect of agreement or any contract, dealings or transaction pursuant her to or any right/obligation terms and conditions as contained in this agreement or interpretation of the contraction of the agreement shall be subject to the grievance redressal procedure and in such a subject to the arbitration procedure as prescribed by the applicable exchange provision.  About plan programme and client are aware by laws rules and regulations of the Exchange including those of various segment of the exchange relating to arbitration.

So, considering that fact it is clear that as per SEBI’s rule such a dispute shall be always decided by their authority for redressal of the grievance of the client in all respect.  But complainant did not adopt such procedure.  So, considering all the above facts and materials and the clause of the contract it is clear that complainant was wholly responsible for all his investment decision and trades and at the same time the complainant as investors was well aware of the fact about the risk of investment in the share trading because it depends upon the fluctuation of the market and also other factors.  Moreover, as per clause 1.1 & 1.2 of the combined risk disclosure document for capital market it is specifically mentioned that there is risk of higher volatility risk and lower liquidated and also risk of wider spread and risk reducing orders and everything were not known to the complainant when he executed the same and as per contract it is specifically mentioned that client should be aware of or may get acquainted with the risk factor always.

Further as per contract it is specifically mentioned that when the risk factor is involved in such trade, client should undertake transaction only if he understands the nature of the contractual relationship into which complainant is entering and understand of his exposure to risk and in the contract it is specifically mentioned there are varying ailment of risk and client should therefore carefully considered whether such trade is suitable for him in the light of his financial condition or knowledge and it is also specifically mentioned that if any client trade on NSE or BSE suffered adverse profit or loss he shall be solely responsible for the same because NSE or BSE are clearing corporation, clearing house and in any manner whatsoever for the same it will not be opened to customer to take a plea regarding the risk involving or made client shall not understand the full risk involved by the concerned member.

If all the above declaration of the complainant in the contract – more and more cautions clause are there in the contract we are convinced that complainant practically entered into the share broking business in share trading in purchasing and selling knowing fully well of the risk factor of the investment and it is specifically mentioned that chance of loss in share trade is high because there is market volatility.  So, if any one wants to invest money for share trading (selling and purchasing) it is his risk and under any circumstances the agent or SEBI or BSE or NSE are not responsible.  So, considering the entire fact and circumstances we are convinced to hold that complainant is a big business man having plastic pen factory and for more profit invested money in share trade.  It is additional business and it was no doubt for commercial purpose and there was no cause to believe that it was his only source of income and it is to be mentioned that the said trading is like a commercial business.  Though he is a proprietor of pen factory but he has suppressed it.

In this regard we have gone through SEBI’s laws wherefrom it is found that share trading is a trading business where no customer is safe.  But it is the option of the customer (client) whether he shall have to purchase or sale considering the volatility of the market and in this regard SEBI or BSE or NSE have no role and members have no deficiency.  In such a business no surety is given out by the BSE, NSE or SEBI to the purchaser and as per SEBI’s rule in such market risk factor is always high and chance of loss of investment is always high.  So, client or customer must have to realize that terms and conditions, then one customer or client must have to enter into such trade when protections are not here and there from the agreement from first page to last page and even after that if any client enters into such trade he cannot blame anyone when the authorized agent has introduced him as investors in the trade and agent only looks after his account etc. whether it is being properly done etc but not more than that.

It is to be mentioned in this regard that as per definition of service hired complainant did not hire service and SEBI or NSE or BSE are not service provider.  It is an office who shall have to maintain the details of the transaction in such a trade by the complainant and for maintaining such accounts etc. some commission is deducted and paid to the agent except there is no relationship in between the complainant and the op as consumer and service provider.  Moreover in the agreement and the features of the claims of the option clause it is specifically mentioned facility of trade verificationis available on NSE or BSE website where the detail of trade may be verified by the customer or the client day to day moreover general clause as noted in 3.1 that before beginning to start trade client should obtain knowledge of all commission fees and other charges for which he shall be liable and this charges will affect the complainant’s net profit if any or increase his loss and fact remains as per agreement the rules and obligation of the clients are also enclosed with the document as segment and features and option segment which is also found signed by the complainant.  So considering all the above facts and circumstances we are convinced to hold that it is not a banking business but it was a hire trading and complainant knowing fully well about all clause and agreed that he was responsible for such trading for his loss or profit and agent, there is NSE or BSE or SEBI are not responsible.  So, we are confirmed to hold that complainant is not a consumer to the op and as per agreement there is no assured authorization for giving profit and fact remains as per wish of the client (complainant) he entered into the trade knowing fully well the volatility of the market and lower risk orhigher volatility of the market and higher risk of loss including other risk factors.  So, complainant has failed to prove by any cogent and material document that he was assured by the op that in all respect he shall have to get profit for his share trading business (selling and purchasing) and for which being guided by the client agreement – NSE we are confirmed that complainant has failed to prove the negligent and deficient manner of service on the part of the op and for which the complaint fails.

Hence, it is

ORDERED

That the complaint be and the same is dismissed on contest without cost against all the ops.