COMPLAINT FILED:27.11.2010

                                                                DISPOSED On:29.02.2012.

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM AT BANGALORE (URBAN)

29^th DAY OF FEBRUARY 2012

       PRESENT:- SRI. B.S.REDDY                 PRESIDENT                        

                         SRI.A.MUNIYAPPA                   MEMBER              

O R D E R

SRI. B.S.REDDY, PRESIDENT

The complainant filed this complaint U/s.12 of the Consumer Protection Act of 1986 seeking direction against Opposite Parties (herein after called as OPs) to return the amount of Rs.35,000/- with interest and to pay compensation of Rs.25,000/- along with cost of the litigation on the allegations of deficiency in service.

2. The case of the complainant to be stated in brief is that:

The OP is a Private Limited Company engaged in the business of dematerialization of shares and also into trading of shares ad other securities having head office at Mumbai. OP2 is the Branch of OP1 at Bangalore. The complainant at the request of OP2 became member of OP1 and paid an amount of Rs.5,555/- through cheque towards deposit in favour of OP1 in order to operate the account. On 12.06.2008, an account has been opened in the name of the complainant bearing account No.DPID 1204700 and client ID 03191022 through OP2. The complainant was also provided with an unique personal I.C bearing number LATHA965 to monitor the transactions of which she was the sole person other than the Ops representatives who can have access to the DEMAT account created by the Ops. Before opening an account with OP2 she had been informed by their representatives that the trading and other transactions will be operated only upon specific instructions given by the client. The complainant had specifically instructed to purchase 100 shares of Reliance Power and 100 Reliance Natural resources Ltd Company and paid a sum of Rs.30,000/- through her banker U.B.I. Bangalore and further instructed to retain them for a long period since the complainant anticipated that both the Company shares are golden gooses, and they will fetch her maximum profit if they are held for long period. The complainant was severally sick, she was advised total bed rest for a period of 6 months from the doctors and as such she was not involved in any physical activities. The complainant also instructed the representative not to trade her shares as she is unable to monitor the same due to her illness. The Ops representative assured that they will not trade with her account. After the recovery from illness the complainant checked the status of her account during the month of July-2009, she was shocked to notice that all the amount in her DEMAT Account has been disbursed/unauthorisedly and utilized and she was left with only a balance of Rs.48/- in her account. The complainant immediately enquired with OP2 office about the unauthorized disbursement of her stocks. She was asked to send a e-mail regarding the same and she has sent an e-mail complaint letter dt.01.10.2009 to the Head Office. Ops have replied attaching a ledger statement to it, however failed to answer the queries of the complainant. After going through the same the complainant could not understand as the details involved in it was in Greek and Latin to her and she was not all informed even about the detail in the statement. The ledger statement is concocted and the Ops have un-authorisedly traded complainant’s account causing loss to her. The ledger statement contains more of debit from complainant’s account rather than any credits and the complainant was never informed of any of such transactions. On careful perusal of the ledger statement she can only see the details of Bill raised by Ops in the guise of brokerage for such transactions without trading her shares. On another e-mail letter sent to the Ops to send the transaction report for which a representative from OP1 has sent an e-mail attaching a trade confirmation report. On perusal of the same, the complainant could not find the any of the trading details which were available in bill sent earlier. The complainant was dissatisfied by the above discrepancies in her account and the false replies sent to her in this regard and have asked Ops to return the deposit made by her along with interest on the same as the same was used by the Ops unauthorisedly. But all her efforts went in vein and the Ops are tactfully refusing to adhere to complainant’s demand. Legal notice was issued on 15.01.2010 to the Ops. The acts of Ops are clearly cheating the complainant without conducting any trading of shares by unnecessarily debiting the amount existing in her account towards the bill of their company. Ops are also deficient in service so far as unauthorisedly using the complainant’s amount in her DEMAT account. Hence, the complaint.

3. On appearance Ops filed version contending that the complainant became member to do stock trade business with the OP’s Head Office entered into agreement of Broking and depository services, combined Risk agreement, GPA etc, and signed the said documents on her own accord after going through them and with proper understanding. The complainant has executed the documents towards opening of her account. After knowing fully well about the terms and conditions, the complainant issued a cheque for Rs.5,555/- in favour of OP and opened her Demat account. The details of transaction (contract notes) has been sent to the complainant and also through e-mail and informed over phone to know about the day to day transaction and to confirm the same, which she has never disputed. Ops sent details of transaction from 17.06.2008 to 12.06.2009 to the complainant and also through e-mail and also to her unique client ID which is obtained by the complainant from the OP at the time of account opening. The complainant has studied the terms and conditions of the said agreements, GPA and other documents, signed the same and hence she has agreed about the Profit & Loss of the transactions in the share market. She also knows that if any dispute arises, in transaction, the dispute may be settled by referring to the sole Arbitration at Mumbai as per the Arbitration Act. As per Clause-19 of Client-Broker agreement all members who transactions and contracts are subject to the Rules and Regulations of the Exchange and shall be deemed to be and shall take effect as wholly made, entered into and to be performed in the city of the Mumbai and the Parties to such trade shall be deemed to have submitted to the jurisdiction of the Courts in Mumbai for the purpose of giving effect to the provisions of the Rules, Bye-laws and Regulations of the Exchange. Hence, the complaint has to be dismissed for want of jurisdiction to this Forum. The complainant has not approached the Arbitrator with respect to the dispute. Clause-18 of the Client-Broker Agreement provides of disputes arising out of or in connection with this Agreement of its performance shall be settled by Arbitration. The complainant has agreed to receive the digital contract notes through internet to his Unique Client ID. She also agreed to confirm all the transactions if the same has not been objected within 24 hours to the OPs.

              The complainant opened her Demat Account with the OPs on 12.06.2008 and the last transaction as per the complainant instructions was on 27.01.2009, Ops sent all the details of transactions to the complainant through e-mail ID and the mobile number of the complainant furnished at the time of opening Demat account. The complainant never raised any objection after receiving the details of the transactions done as per the instructions and she confirmed the same without any single objection. The complainant has agreed and consented with the Ops to sell stock or share in her account if she fails to deposit the additional margin amount by deadline or if an outstanding debt occurs in her account. Ops sent e-mail to the mail ID of the complainant and SMS to the mobile phone which is furnished by her at the time of opening the Demat account with regard to the day to day transactions which never objected by the complainant or disputed the same. The complainant has not clearly  specified what is the loss and what are all the shares were sold with out her consent and what is the Mental harassment occurred to her.

              The Hon’ble National Commission, in III (1992) CPJ 75(NC) held that shares transactions relating to orders placed with respondent, as share broker-proper remedy is only a regular suit. It is well settled law that where the complicated question of Law and facts were involved it cannot be concluded through summary proceeding. The complainant purchased the 100 shares of Reliance Power and 100 shares of Reliance Natural Resources Company Ltd, and paid sum of Rs.30,000/-. It is denied that she has instructed the Ops to retain the same for long period. It is pertinent to note that the share business is highly speculative in nature totally depending on the performance of the company which has issued the shares and also it is depending on the bullion market and it is fluctuating one and nobody can predict anything earlier. It is denied that the complainant had instructed the representatives of the Ops that not to trade her shares as she is unable to monitor the same and the Ops representatives assured her that they will not trade with her account. After receiving the e-mails from the complainant the Ops clearly explained the profit and losses in the share trading and also the Ops provided all the details of the transactions in the complainant’s account. E-mail and SMS’s will be sent daily after the trading hours to the e-mail ID provided from the complainant. All the details of the transactions daily made available in complainant’s I.D and mail sent to her e-mail I.D and SMS to her mobile number, which she never disputed, in all the mails and SMS, Ops requested the complainant to send a Mail or call to Head Office in case of any discrepancy, before next trading day. The complainant never disputed for any transactions. It is specifically denied as false that Ops have transacted without obtaining the consent of the complainant and those sales were not debited to the complainant’s account. It is the complainant who transacted in her account by givening specific directions to the Ops for which the Ops were sent the confirmation mails and SMS’s to the complainant E-mail ID and to the mobile phone number furnished by the complainant which she never objected. The complainant has not proved any deficiency of service on the part of the Ops. Hence it is prayed to dismiss the complaint with exemplary costs.

4. The complainant filed affidavit evidence in order to substantiate the complaint averments.  The Branch Manager of Ops filed affidavit evidence in support of the defence version.

5. Ops filed Written Arguments

6.Arguemnts on both sides heard with regard to maintainability of the complaint.

7. Point for consideration is:-

Whether the complainant is a ‘Consumer’ as defined under the Consumer Protection Act and complaint is maintainable.

8. We record our findings on the above point in the negative.

R E A S O N

9. Admittedly the complainant has availed the services of Ops for the trading shares and she has invested an amount of Rs.30,000/- by depositing the same in her Demat Account. The main grievances of the complainant is as per her specific instructions to purchase 100 shares of Reliance Power and 100 Reliance Natural Resources Ltd Company and paid a sum of Rs.30,000/- through her banker and instructed Ops to retain the said shares for a long period anticipating that both the company shares are golden gooses, and they will fetch her maximum profit if they are held for long period, but during the month of July-2009 the complainant was shocked to notice that all the amount in her Demat account has been unauthorizedly utilized by the Ops and she was left with only a balance of Rs.48/- in her account. It is alleged that the complainant’s account was used for trading in shares without her consent. Thereby Ops caused loss to the complainant.

            The defence of the Ops is all the share trading transactions are carried out with the consent and knowledge of the complainant, periodically account statements are submitted to the complainant, she has never raised any objection regarding the contract notes. In the Written Arguments submitted at Para-21, it is stated that the complainant had invested the money with various companies which clearly indicates that she has invested the money for the purposes of earning huge profit and purely not for her livelihood which again does not comes under the purview of Consumer Protection Act and within the definition of ‘Consumer’ as defined under its provision. Hence complaint is not maintainable.

            It may be noted that a person who avails services for any commercial purposes has been excluded from the definition of a ‘Consumer’ as per amendment added by Act 62/2002 with effect from 15.03.2003. The relevant portions of sub Section-(d) of Section-2(1) of the Consumer Protection Act 1986 provides.

            “(d) “Consumer” means any person who:

(i)         buys any goods…………..,or

(ii)      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 or avails of the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payment, when such services are availed of with the approval of the first mentioned person but does not include a person who avails of such services for any commercial purpose;

Explanation-For the purposes 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 purposes of earning his livelihood by means of self-employment;”

10.The complainant has invested an amount of Rs.30,000/- for the purpose of share trading by availing the services of Ops as such the share trading is a commercial activity, and the services availed for that purpose are to considered to have been availed for commercial purpose. The person availing such services cannot invoke the jurisdiction of ‘Consumer Protection Act’. In 2010 CTJ 1194 (CP)(SCDRC) Anand Rathi Securities Ltd and others V/s Smt.Rajshri Verma and another it was held that:

“Undoubtedly the share trading is a commercial activity and the services availed for that purpose are obviously to be considered to have been availed for commercial purpose, as such a person availing such services cannot be invoke the jurisdiction of the Consumer Protection Act”.

Further in 2010 CTJ 1092(CP)(SCDRD) Raghubir Singh V/s India Bulls Securities Ltd and others, wherein complainant opened a demat account with Ops-transactions in shares made by the Ops through the account allegedly without the complainant’s permission-loss of as much of Rs.3,45,000/- caused to him-complaint dismissed by the District Forum in Appeal it was held that evidently large scale trading in shares done through the account for earning huge profits-Definitely a commercial activity-complainant held to be not a consumer under the Act-where the complainant, Ops committed any fraud as alleged-the question could not be gone into by the Consumer Forums under their summary jurisdiction. The Appeal was dismissed. At Para-11 of the judgment it was observed that from the record it is evident that large scale of sale and purchase of shares had been done through the account of the complainant for earning huge profits. This activity is definitely commercial in nature and therefore the complainant is not a ‘Consumer’ as defined under the CPA, 1986. Further there are allegations of fraud committed by the Ops and these cannot be gone into by the Consumer Fora under its summary jurisdiction as per the settled law. In view of the above, we are of the considered view that the complaint is not maintainable before the Consumer Fora.

In this case, the main allegation is that complainant was severally sick and was advised bedrest for a period of 6 months and she instructed Ops representative not to trade her shares but the representative of the Ops without her consent traded in shares in her account and caused loss. The question as to whether OP played fraud by trading in the account of the complainant without her consent cannot be decided by this Forum under summary jurisdiction.

11.In view of the principles laid down in the above rulings, it becomes clear that the complainant has availed the services of Ops for commercial activity as such the complainant is not a ‘Consumer’ as defined under the CPA, 1986, the complaint is not maintainable. Accordingly, we proceed to pass the following:

O R D E R

The complaint filed by the complainant is dismissed as not maintainable.  However the complainant is at liberty to avail any other remedy that may be available under the law. Considering the nature of dispute no order as to costs.

        Send copy of this order to both the parties free of costs.

(Dictated to the Stenographer and typed in the computer and transcribed by her verified and corrected, and then pronounced in the Open Court by us on this the 29^th day of February-2012.)

MEMBER                                                    PRESIDENT

Cs.