PBEFORE THE CONSUMER DISPUTES REDRESSAL FORUM, ERNAKULAM.
Dated this the 31st day of December 2011
Filed on :09/12/2009
Present :
Shri. A Rajesh, President.
Shri. Paul Gomez, Member. Member.
Smt. C.K. Lekhamma, Member
C.C. No.646/2009
Between
K.C. Joyson, : Complainant
S/o. late K.V. Cherunni, (By Adv. George Cherian
Kuttikkatt house, Karippaparambil, H.B. 48,
Nilambur R.S (P.O) Panampilly Nagar, Kochi
Malappuram-679 330. Pin-682 036)
And
1. V. Surendran, : Opposite parties
S/o. late V. Kannan, (1st O.P. absent)
Valiaparambil Veedu,
Manalodi, Nilambur,
Malappuram-678 329.
2. M/s. JRG Securities Ltd., (2nd O.P. by Adv. Joseph Sebastian,
JRG House, Ashoka road, Purayidam, IInd floor, Power
Kaloor, Ernakulam-682 017. house road, Kochi-18)
rep. by Managing Director.
O R D E R
A Rajesh, President.
The case of the complainant is as follows:
The complainant is an investor, who had availed the financial services of the opposite parties. First opposite party was the franchisee of the 2nd opposite party and was having office in Nilambur. The 2nd opposite party is a limited company engaged in the business of stock and share brokers. Believing the promises of the prompt services of the opposite party the complainant was dealing with the opposite parties in shares and in mutual funds. In September 2007 there were complaints that the 1st opposite party colluding with the officials of the 2nd opposite party adopted unfair trade practice and have committed deficiency of their service. In the meanwhile from 04/12/2006 to 25/09/2007the opposite parties have received Rs. 6,31,000/- from the complainant for purchase of shares and Rs.30,000/- for purchase of fidelity growth fund. In September 2007 the complainant found that the shares of 8 companies have been sold by the opposite parties from the account of the complainant without his knowledge or permission. The total costs of the share was Rs. 6,09,838.81. The opposite parties failed to invest the balance amount of Rs. 21,161.19 in shares as assured by them. In the meantime about 40 defrauded clients formed a Protection Counsil and on mediation it was agreed by the 1st opposite party that his residential property would be transferred in the name of the protection counsel. Accordingly the 1st opposite party’s mother transferred her property in favour of the Chairman of the Protection Counsel. Since the 2nd opposite party has agreed to discharge the entire liabilities of 40 persons the property was transferred in favour of one Mr. Biju Mathew, who is an employee of the 2nd opposite party. The complainant suffered a total loss of Rs. 6,61,000/-. However at the behest of the 2nd opposite party the complainant was forced to sign a consent letter stating an amicable settlement of the loss incurred by the complainant. The opposite parties have paid Rs.60,603/- vide cheque dated 17/01/2008. The complainant is entitled to get the balance amount of Rs. 6,00,397/- from the 2nd opposite party with its interest together with costs of the proceedings. This complaint hence.
2. Version of the 2nd opposite party.
This complaint is not maintainable in this Forum since the transaction between the parties are purely in commercial nature. Moreover the complaint is barred by limitation. The first opposite party is not a franchisee of the 2nd opposite party. The 2nd opposite party had not any occasion to deal with the complainant for having any transaction in mutual funds. The 2nd opposite party had not colluded with the 1st opposite party as alleged by the complainant. The 2nd opposite party is not having the practice of selling shares without the knowledge and permission of its clients. The 1st opposite party had been assisting the 2nd opposite party for business development and certain clients had independent transactions with the 2nd opposite party and they suffered loss in such transactions. When they complained regarding the same the 2nd opposite party took initiative to resolve their grievances and an agreement was executed with those clients alone. As per the agreement the residential house of the 1st opposite party’s mother was transferred to the name of the leader of the said investors. Later the said property was transferred in the name of one Mr. Biju Mathew. The 2nd opposite party had not in any manner agreed to discharge the liabilities of the clients. The complainant has voluntarily executed an undertaking and that is binding on him. There is no deficiency in service on the part of the 2nd opposite party. The receipt of payment subsequent to the undertaking shows the willingness on the part of the complainant. Further as per the agreement the portion of the profit generated from the Nilambur branch office of the 2nd opposite party distributed among the investors and a cheque for Rs. 4,835.27 was sent to the complainant. Since the business of the branch office was not running in profit, considerable amount could not be distributed among the complainant and others. The 2nd opposite party requests to dismiss the complaint.
3. In spite of service of notice from this Forum the 1st opposite party opted not to contest the matter for his own reasons. The complainant was examined as PW1 and Exts. A1 to A22 were marked on his side. The witness for the 2nd opposite party was examined as DW1. The 2nd opposite party filed argument note. Heard the counsel for the contesting parties.
4. The points that arose for consideration are
i. Whether the complaint is maintainable?
ii. Whether the complaint is barred by limitation?
iii. Whether the complainant is entitled to get a sum of Rs.
6,00,397/- with interest from the opposite parties?
iv. Costs of the proceedings
5. Point No. i. According to the 2nd opposite party the disputed transaction between the parties are commercial in nature and the complaint is not maintainable in this Forum. The learned counsel for the 2nd opposite party relied on the decision rendered by the Hon’ble National Consumer Disputes Redressal Commission in Amarnath Ramnath Javle Vs. Karvy Stock Broking Ltd & Anr (R.P.No. 3915 of 2010) which is as follows:
“Heard the petitioner who is present in person. The petitioner had already availed the remedy of arbitration and the Fora below have held that in view of the judgment of the Apex Court in Haryana Deveopment Authority & Anr. Vs. Satish Hans (2009) 7 SCC page 282, the complaint cannot be entertained by fora. In addition we find that the petitioner is trading in shares which is for commercial purpose and consumer complaint for commercial purpose cannot be entertained. We do not find any merit in this revision and the revision is, accordingly dismissed, with no order as to cost.”
However the Hon’ble National commission in Unit Trust of India Vs. Sri. Sankar Das (National Commission and Supreme Court on Consumer Cases 1986-2005 Part VI page 9306 FA No. 465/1995 decided on 13-02-2002) held in Para 4 reads as follows:
“Aggrieved by the order of the State Commission, appellant has come before us. It was submitted by Mr. Ghosh learned counsel for the appellant that since complainant was only prospective allottee of master shares and moreover he wanted to resell the master shares and moreover he wanted to resell the master shares, he could not be termed as a consumer. His further submission was that the complaint was barred by limitation as the allotment of shares closed on 29-05-1989 to the knowledge of all concerned. We are unable to accept any of these three contentions. It was not the case of new allotment of shares but that of right shares to which complainant was entitled to on the strength of his holding original shares, he would certainly be a consumer and the dispute raised would be consumer dispute. The objection that the respondent was to resell the shares would appear to be irrelevant as there is nothing on the record to support this contention. Even otherwise it is not the case of the appellant that complainant was indulged in sale and purchase of shares. Complainant came to know about non-allotment of shares to him by letter of the appellant on 9-7-1991 from which date he would have a cause of action to file the complaint. It was within the limitation.”
The latter decision has been rendered by the Hon’ble National Consumer Disputes Redressal Commission consisting of 4 members which overruled the decision in the Unit Trust of Inida Vs. Sri. Shakar Das (Supra). In view of the above authority we are of the opinion that this complaint is maintainable in this Forum.
6. Point No. ii. Even according to the 2nd opposite party they had entered into an agreement/undertaking with the complainant on 17-01-2008 as ascended. The said agreement was marked as Ext. A17. The agreement was executed for the settlement of the dispute between the parties and in consequence of the agreement an amount of Rs. 60,603/- was paid to the complainant by 2nd opposite party primarily which was accepted without demur. Even though the disputed transactions took place in 2007, the cause of action for this complaint arose from the date of execution of Ext. A17 agreement on 17-01-2008. In view of that matter the complainant has filed this complaint in this Forum on 09-12-2009 which is within the limitation period as contemplated in Section 24 A of the Consumer Protection Act. So this point is found against the opposite party.
7. Point No. iii. According to the complainant the first opposite party is the franchisee of the 2nd opposite party and he had entrusted a sum of Rs. 6,31,000/- for purchase of shares and Rs.30,000/- for purchase of Fidelity Growth Fund . It is stated that out of the above amount he had received a sum of Rs. 60,603/- only vide Ext. A18 cheque and a sum of Rs. 6,00,397/- is due from the 2nd opposite party still.
8. On the contrary the 2nd opposite party maintains that they have absolutely no relationship with the 1st opposite party and they had only tried to safeguard the interest of about 40 clients of which the complainant here in is only one.
9. Exts. A1 to A3, A6, and A8 to A13 go to show that the amount mentioned in those documents have been received by the Nilambur branch office of the 2nd opposite party. Admittedly the 2nd opposite party had also taken initiative to settle the dispute between the 1st opposite party and the clients. Further the 2nd opposite party admitted that they have executed Ext. A17 agreement to protect their goodwill and to continue with the trading of the clients. The complainant took a contention that he has executed Ext. A17 under compelling circumstances, but with no substantiating evidence. Since the complainant and the 2nd opposite party executed Ext. A17 and settled the dispute between them by mutual agreement and in furtherance the 2nd opposite party agreed to pay Rs. 3,40,000/- for the full and final settlement and the complainant received a sum of Rs. 60,603/- out of the agreed amount the rest is due so the complainant is estopped from demanding further amount from the 2nd opposite party, more than the amount mentioned in Ext. A17 which has a legal validity. Since the complainant had received a sum of Rs. 60,603/- as per Ext. A18 further he is only entitled to get a sum of Rs. 2,79,397/- from the 2nd opposite party as per Ext. A17 agreement as agreed upon him on his own will having forgone his original claim for Rs. 6,00,397/-.
10. Point No. iv. Since the primary grievance of the complainant having been entirely met without objection as seen from Ext. A17 costs of the proceedings is not called for.
11. In the result, we allow the complaint in part and direct that the 2nd opposite party shall pay the balance amount being Rs. 2,79,397/- to the complainant as per their Ext. A17 mutual agreement together with interest at the rate of 9% p.a. from the date of the agreement till realization.
The above said order shall be complied with within a period of one month from the date of receipt of a copy of this order.
Pronounced in the open Forum on this the 31st day of December 2011
Sd/- A Rajesh, President.
Sd/- Paul Gomez, Member
Sd/- C.K. Lekhamma, Member.
Forwarded/By Order,
Senior Superintendent.
