STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

Trustline Securities Ltd. (Formerly known as K & A Securities Pvt. Ltd.) having its registered office at C-633, New Friends Colony, New Delhi -110025.

……Appellant

V e r s u s

Krishan Kumar Dubey s/o Sh. Kamal Kant Dubey r/o H.No.116, Village Behlana, U.T., Chandigarh

              ....Respondent

Appeal under Section 15 of the Consumer Protection Act, 1986.

BEFORE:     JUSTICE SHAM SUNDER, PRESIDENT.

                   MRS. NEENA SANDHU, MEMBER.

Argued by:  Sh. Sumit Kalra, Adv. for the appellant

                   Sh. Harish Sharma, Adv. for the respondent

PER  NEENA SANDHU, MEMBER

                    This appeal is directed against the order dated 17.11.2011, rendered by the learned District Consumer Disputes Redressal Forum-I, UT, Chandigarh (hereinafter referred to as the District Forum) vide which it allowed the complaint filed by the respondent/complainant and directed the appellant/OP as under :-

“10.   In view of the above discussion, we are of the considered opinion that the present case has lot of merit, substance and weight and it richly deserves acceptance.  We, therefore, allow this complaint and direct Opposite Parties to refund Rs.1,05,000/- to the complainant. They are also directed to pay compensation of Rs.25,000/- apart from litigation cost of Rs.7000/-.

11.     This order be complied with within a period of 30 days from the date of receipt of this order, failing which, the OPs shall be liable to pay the awarded amount, along with penal interest @12% per annum, from the date of filing this complaint i.e. 10.2.2011 till the amount is actually paid to the complainant, besides paying litigation cost of Rs.7,000/-.”

2.                      The facts, in brief, are that on the representation of opposite party No.2, the complainant opened a Demat account and an online trading account with opposite party No.1 on 24.07.2010. It was stated that as per the representation of opposite party No.2, any of the transactions relating to sale or purchase of shares were to be executed on the complainant’s specific instructions. The complainant deposited Rs.1,05,000/- in order to earn his livelihood in the form of profit by way of online trading and instructed the opposite parties to specifically invest in the shares of Bajaj Financial Service and, other than that, no transaction, relating to the sale or purchase of the shares, was to be done without his instructions. It was further stated that, while opening the account, the opposite parties agreed to install/provide trading software in his computer for carrying out the trading, but the same was not installed despite his repeated requests, and rather they started trading, in his account of their own, without his consent and thereby caused financial loss to him.  The opposite parties even did not supply the statement of account, despite his requests. It was further stated that subsequently, the opposite parties started demanding Rs.60,271/-, from him, being debit balance, whereafter, he served a legal notice dated 13.12.2010 upon them, but to no effect. When the grievance of the complainant was not redressed, left with no alternative, a complaint under Section 12 of the Consumer Protection Act, 1986 (hereinafter referred to as the Act) was filed.

3.                In its written reply, Opposite Party No.1 stated that opposite party No.2 was no more its employee and had left the job way back in December, 2010. It was further stated that the complainant signed the Member Client Agreement with it, and there was no provision in it, which mandated that any of the transactions, relating to sale or purchase of shares, was to be executed on specific written instructions of the complainant.  It was denied that the complainant had instructed it, to invest only in the shares of Bajaj Financial Services and, other than that, no transaction, relating to sale or purchase of the shares, was to be done without his specific instructions.  It was further stated that whatever transactions were carried out, in the trading account of the complainant, the same were done either by himself or solely on the basis of instructions given by the complainant and he was duly intimated about each and every transaction.  It was denied that any request for installing the software was ever received, from the complainant. It was further stated that the complainant suffered losses, due to his erroneous trading decisions. The remaining averments, were denied, being wrong.

4.                Opposite party No.2 did not appear, despite due service, hence he was proceeded against exparte.

5.                      The parties led evidence in support of their case. 

6.                      After hearing the Counsel for the parties, and, on going through the evidence and record, the learned District Forum, allowed the complaint, as stated above.

7.                      Feeling aggrieved, the instant appeal, has only been filed by the appellant/opposite party.

8.                      We have heard the Counsel for the parties, and have gone through the evidence and record of the case, carefully. 

9.                      It was submitted by the learned Counsel for the appellant/Opposite Party that all the transactions, in the account of the complainant, were done, as per his oral instructions, on the basis of Member Client Agreement, which was signed by him.  It was further submitted that the complainant gave the first cheque of INR 5000 in August, 2010 and the second cheque of INR Rs.1,00,000/- in September, 2010.  During this period, the Opposite Party, had carried out various transactions of sale/purchase of shares and the complainant earned profit from the same, but he never raised any objection, with regard to validity and legality of the same. It was further submitted that if the complainant had any objection, regarding those transactions, then he would have raised protest, but he did not do so.  It was further submitted that he raised objection, for the first time, only, when the Opposite Party asked him to clear the debit balance of his account. 

10.                  On the other hand, the Counsel for the respondent/ complainant, submitted that the Opposite Party, ignored the instructions of the complainant, regarding investment in shares of Bajaj Financial Services.  He further submitted that, other than that, no transaction, relating to the sale or purchase of the shares, was to be done, by the opposite parties, without his instructions. It was further submitted that there was no document on record from which it could be concluded that the complainant ever instructed the Opposite Party specifically to invest in the shares of any other Company.  He further submitted that, in the absence of same, the contention of Counsel for the opposite party could not be considered. 

11.                  The authorization given by the complainant under the heading  “Authority Letter for Order Instructions” Annexure I (page no.101 of District Forum file), reads as under :-

                             “I/We understand that you require written instructions for receiving/modifying/cancelling orders.  However, since it is not practical to give written instructions for order, I hereby authorize you to kindly accept my/my authorized representatives’ verbal instructions/orders in person or over phone and execute the same. I/We understand the risk associated with verbal orders and accept the same, and agree that I/we shall not be entitled to disown orders under the plea that same were not under mine/our instructions.”

                             Please treat this authorization as written ratification of my/our verbal directions/authorizations given and carried out by you earlier.  I/we agree to indemnify you and keep you indemnified against all losses, damages and actions which you may suffer or face as a consequence of adhering to and carrying out my/our directions given above. 

From the perusal of the above extracted clause of the Member Client Agreement, it is evident that the complainant had authorized the opposite parties to accept his or his authorised representatives’ verbal instructions/orders in person or over phone and execute the same. He also appended his signatures, on the Authority Letter, in token of acceptance of the same.  In pursuance of the said authorization, the Opposite party, had carried out various transactions of sale/purchase of the shares and the statements of account were duly furnished to the complainant, from to time.  However, the complainant never raised any objection, with regard to the validity/legality of those transactions. In our view, if the complainant, was dis-satisfied with any of the transactions, done by the Opposite Party, which, according to him, were without his consent, then he should have immediately approached it, by writing a letter, in this regard, to stop the transactions, and should have withdrawn the Authority Letter, but he did not do so. In the absence of any tangible evidence, to the contrary, the plea of the complainant, in this regard, cannot be accepted and the same is rejected.  However, the District Forum by overlooking all these facts erroneously allowed the complaint, and, thus, the order impugned is liable to be set aside.

12.                  For the reasons recorded above, the appeal is accepted and the order of the District Forum is set aside.  The parties are left to bear their own costs. 

13.                  Copies of this order be sent to the parties free of charge.

Pronounced.

23.4.2012

[JUSTICE SHAM SUNDER]

PRESIDENT

[NEENA SANDHU]

MEMBER

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