PER SHRI. S.B.DHUMAL - HON’BLE PRESIDENT :
1) In brief consumer dispute is as under –
The Complainant is a Captain of India Army (retired) and permanent resident of Mumbai. Opposite Party had introduced a Systematic Investment Plan (hereinafter referred as SIP for the sake of brevity) and contacted the Complainant and explained him benefits of SIP. Relying upon the representations made by the Opposite Party’s Relationship Manager, Mr. Tanveer Monga, the Complainant decided to open SIPwith Opposite Party. The Complainant issued and handed over to the Opposite Party two cheques for amount of Rs.2,00,000/- and Rs.50,000/- Banking Account No.198032791 and Account No.19803212006 came to be opened. The Complainant in the month of June, 2006 made several investments with the Opposite Party as per table given in complaint para no.5. It is submitted that the arrangement of collecting monthly cheque worked efficiently for the initial period of 5 to 6 months. Thereafter not a single representative of the Opposite Party turned up to collect cheque from the Complainant. Therefore, the Complainant called Opposite Party’s Relationship Manager Mr. Tanvee Monga. But inspite of several reminders Mr.Tanveer Monga neither answer the Complainant’s call nor did he follow the general courtesy to revert back to the Complainant. Then Complainant addressed a written complaint by way of e-mail to Opposite Party’s Customer Care Help Desk. Thereafter one Mr. Babu contacted the Complainant on 19/04/2007 and assured of removing lacuna in the services of Opposite Party. The Complainant being disappointed and tired because of slack services of the Opposite Party, instructed Mr. Babu to close the account. Mr. Babu helped the Complainant with all the papers for closing the account and informed that account would be closed within 7 to 10 days after completion of formalities. But till today Opposite Party has not informed the Complainant as to whether his account is operative or closed.
2) According to the Complainant, he has invested total amount of Rs.5,50,000/- in the said SIP Account and Opposite Party has refunded an amount of Rs.4,64,671.65 paise only. As per the Complainant, the Opposite Party was bound to refund total amount of Rs.6,00,000/- with interest and profit as per terms and conditions of SIP. The Complainant was shocked when he received an account statement showing the balance of only Rs.11,815.32 paise to his credit. So he contacted Mr. Tanveer Monga and Mr. Babu, but there was no response. Then the Complainant tried to redeem the said amount of Rs.11,815.32 paise though his another bank account but was informed by the Customer Cell of the Company that as the Opposite Party is the broker of the said investments, a letter from Opposite Party was essential for changing the bank mandate. Then the Complainant repeatedly approached Mr. Tanveer Monga of the Opposite Party with the said request and he was advised with a letter from Complainant to the effect would do on which the said Tanveer Monga of Opposite Party agreed to endorse stamp of Opposite Party. However, said letter was not entertained by the Company. The Complainant addressed several e-mails to Opposite Party since April, 2007 to September, 2007, but there was no proper response. The Complainant was made to run from pillar to post to get his own hard earned money back. The Complainant was forced to issue a legal notice on 27/12/07 and called upon the Opposite Party to pay Complainant the compensation to the extent of Rs.5 Lacs for mental agony, trauma and for the loss suffered by the Complainant to the extend of Rs.1,35,328.35 paise with 9 % interest. Inspite of service of notice the Opposite Party failed to comply with the notice. According to the Complainant there is deficiency in service on the part of Opposite Party and therefore, he was compelled to close SIP Account. Opposite Parties supplied false and incorrect statement of account hence, he has filed this complaint before this Forum.
3) The Complainant has requested to direct Opposite Party to inform the Complainant the status of his account and furnish him Annualized Return Report (ARR) of his account till date. The Complainant has requested to direct Opposite Party to pay to the Complainant an amount of R.1,35,328.35 paise with interest @ 9 % p.a. from the date of closure of his account till realization of entire amount. The Complainant has claimed Rs.5,00,000/- as compensation for mental agony and Rs.50,000/- towards expenditure and cost of this proceedings from the Opposite Party.
4) The Complainant has filed affidavit in support of this complaint and has produced copies of documents as per list of document.
5) Opposite Party has filed written statement and thereby resisted claim of the Complainant contending that averment made in the complaint are contrary to or inconsistent with what is stated therein. The allegations made are frivolous and baseless and therefore, complaint deserves to be dismissed.
6) According to the Opposite Party, the Complainant is an investor of mutual funds duly registered with SEBI and SEBI has sole jurisdiction to try and entertain the complaints relating to the investor. Grievance of the Complainant is relating to the loss caused to the investor/Complainant who has made investments in various mutual funds. As per Sec.24A of Securities and Exchange Board of India Act, 1992, “no Civil Court shall have jurisdiction in respect of any matter which the Board or the Adjudicating Officer is empowered by, or under, this act to pass any order and injunction shall be granted by any Court or other authority in respect of any action taken or to be taken in pursuance of any order passed by the Board or the Adjudicating Officer by, or under, this act.” Therefore, present complaint is not maintainable before this Forum.
7) The Opposite Party raised contention that the Complainant is not a ‘Consumer’ within the definition given in the Consumer Protection Act, 1986. It is submitted that the Complainant is high profile investor and intended to invest money in mutual funds schemes which is of commercial purpose and not for self livelihood. It amounts to business activity on the part of the Complainant. The Complainant’s investment/business activities are subject to capital market risk and hence, the Complainant was never guaranteed of the returns by the designated mutual funds in whose scheme/funds the Complainant’s money was invested. Merely because the Complainant is an account holder of Opposite Party bank does not make him ‘Consumer’ under the Consumer Protection Act. In the instant case, the investment instructions executed on behalf of Complainant are totally different from the banking services availed by him. All the instructions were for commercial purpose and not for self livelihood. All the services of Opposite Party were rendered as agent to the principal which has nothing to do with the banking service. Strictly speaking no service is rendered by the Opposite Party bank in as much as the Complainant’s investments are concerned. The Complainant’s problem relating to his bank account has been addressed by Opposite Party. There is no deficiency in service on the part of Opposite Party. The Opposite Party has denied the allegations made by the Complainant and submitted that as the Complainant is not a Consumer. So, present complaint deserves to be dismissed.
8) Opposite Party has stated about the particulars of transactions took place with the Complainant submitting that Opposite Party has provided wealth management scheme to the Complainant (WMS). While operating the WMS Account the Complainant deposited money from time to time in the said WMS account and the said amounts were further invested in various mutual funds/schemes of HSBC. The Opposite Party has acted only as an authorized agent of the Complainant to co-ordinate with the mutual funds to convey the investment decisions of the Complainant and nothing else. Profit was credited and loss was debited in Complainant’s account. Therefore, Opposite Party is not liable to pay any amount to the Complainant. The Complainant is trying to extract money from the Opposite Party. According to the Opposite Party bank, the Complainant is not entitled to get any relief against them.Therefore, complaint may be dismissed with cost.
9) The Complainant has filed affidavit of evidence. Opposite Party has filed affidavit in support of written statement. The Complainant as well as Opposite Party has filed their respective written arguments. Heard oral submissions of Ld.Advocate Swati Sagvekar for the Complainant and Ld.Advocate Mr. Ashutosh Marathe for the Opposite Party.
10) Following points arises for our consideration and our findings thereon are as under -
Point No.1 : Whether the Complainant is a Consumer as defined under Sec.2(1)(d) (ii) of the Consumer Protection Act,
1986 ?
Findings : No
Point No.2 : Whether the Complainant has proved deficiency in service on the part of Opposite Party ?
Findings : Does not survive.
Point No.3 : Whether the Complainant is entitle to relief as claimed against Opposite Party ?
Findings : As per final order.
Reasons :-
Point No.1 :- In the written statement the Opposite Party has raised specific contention that the Complainant is not a ‘Consumer’ as defined under the Consumer Protection Act, 1986. It is submitted that the Complainant had opened SIP. The Complainant was intending to invest money in SIP and therefore, the Complainant has opened account with the Opposite Party. From time to time, the Complainant invested money in SIP. As per instructions of Complainant Opposite Party’s invested the amount. Opposite Party acted as an agent for the Complainant for investment in various mutual funds as per instructions of the Complainant. Ld.Advocate Marathe has submitted the opening of WMS account for investment in SIP in various mutual funds is investment for commercial purpose. It is submitted that investment in mutual funds is a speculative investment. Investment in mutual funds is always subject to market risk. Whenever the Complainant earn profit, the profit was credit in Complainant’s account and whenever there was loss it was debited in the Complainants account. The Opposite Party has merely acted as an agent. The nature of transactions is of commercial nature and therefore, Complainant is not a Consumer.
On the contrary Ld.Advocate Swati Sagvekar has submitted that Opposite Party bank is a service provider. The Complainant had opened SIP account with Opposite Party. However, due to the negligence and deficiency in service on the part of Opposite Party, the Complainant was constrained to close his SIP account. The Complainant in aforesaid transactions has suffered loss due to deficiency in service on the part of Opposite Party. It is submitted that as per provision of the Consumer Protection Act, the Complainant is a ‘Consumer’.
Ld.Advocate for the Opposite Party Mr.Marathe has relied upon resent judgement of the Hon’ble State Commission in Complaint No.CC/11/60 dtd.10/08/2011 in which the Hon’ble State Commission has observed that “Furthermore, case as presented by the Complainant reflects that it is a case of investment and for which services, if any, of the Opponent No. I – Indusland Bank were hired, then under these circumstances, since hiring of any service is for commercial purpose (investment in the mutual fund is for earning either loss or profit), the Complainant is not a ‘Consumer’ within a meaning of section 2(1)(d)(ii) of the Act. A useful reference on the point can be made to the decision of the Apex Court in the matter of Economic Transport Organization V/s. Charan Spinning Mills Pvt. Ltd. & Anr., 2010 CTJ 361 (SC)(CP).
In another judgment of the Hon’ble State Commission in Complaint No.77/2010, dtd.07/06/2010, it is held “Thus the complaint was made ultimately disposed of by BSE. Therefore, he has approached to this Commission. What we find that Complainant is admittedly an investor and he desires to trade in the shares and for the trading purpose services of the opponents are hired. Thereby the transaction between the Complainant and the Opponent is a commercial transaction or a trading transaction. Such transaction is not covered within the definition of ‘consumer’. Complaint therefore, stands rejected.”
The Complainant is a retired Captain of Indian Army. He has made huge investment in SIP which was ultimately made in the various mutual funds to earn profit. Nowhere in the complaint is it averred that the Complainant’s livelihood is depending on the transactions mentioned in the complaint. As discussed above, aforesaid transactions are of commercial nature. In view of aforesaid judgements and amended provision of Sec.2(1)(d)(ii) of that the Complainant who has availed services of the Opposite Party for commercial purpose is not a ‘Consumer’ under the Consumer Protection Act, 1986. Hence, point no.1 is answered in the negative.
Point No.2 & 3 :- As the Complainant is not a ‘Consumer’ under the Consumer Protection Act, 1986, therefore, point no.2 does not survive and the Complainant is not entitled to any relief as prayed for from the Opposite Party. Hence point no.2 & 3 are answered accordingly.
For the reasons discussed above, complaint deserves to be dismissed. Hence, we pass the following order -
O R D E R
i.Complaint No.91/2008 is hereby dismissed.
ii.No order as to costs.
v. Certified copies of this order be furnished to the parties.
