MRS. NEENA SANDHU, MEMBER

1.         This is an appeal filed by the OPs against order dated 26.3.2010 passed by District Consumer Disputes Redressal Forum-I, UT, Chandigarh (for short hereinafter to be referred as District Forum) passed in complaint case No. 1587 of 2009.

2.         Brief facts of the case are that the complainant was buying shares of different companies by means of self-employment through the OPs and also paid the service charges to the OPs in the form of brokerage on purchase of shares. The complainant had availed the services of OPs No.1 and 2 through OP No.3 and for this purpose, she had opened an account No.CXC355. The complainant trades under trading code No.CXC355 issued by the company’s head office to purchase and sell shares. The complainant purchased 650 shares of HCL Tech Ltd. @ Rs.290.55  on 11.2.2008 but the OP sold the same @ Rs.262.90 on 15.2.2008 arbitrarily without the consent of the complainant. The complainant through her Father-in-law asked the operator to repurchase the said shares but he refused and told that the account of the complainant was closed by Sh.Dwarka Parsad, Zonal Incharge of the company i.e. SCO No.345-346, Sector 35, Chandigarh for which no record was given to the complainant who approached the Zonal Incharge but he refused to resume the trading work of the complainant. Due to the sudden suspension of the complainant’s account, the complainant suffered a loss of Rs17972.50. It was alleged by the complainant that earlier also on 8.1.2008 the operator of the OP purchased 500 shares of JCT @ Rs.18.75 instead of selling the same. The complainant through her father-in-law approached the Zonal Incharge as well as M.D Sh.Sanjay Vatash and he promised to refund the loss. The operator of Sector 35 Branch again purchased 500 shares of JCT Ltd. @ Rs.7.73 & 7.74 dated 20.5.2009 and debited Rs.3881.73 in the complainant’s account. The company accepting its default credited Rs.5500/- in the complainant’s account instead of total amount of 1000 shares purchased wrongly and arbitrarily. On 5.3.2009 company issued cheque for Rs.959.11 to complainant which the complainant received without prejudice. However the OP had not paid Rs.26,689/- and also overcharged excess brokerage plus ST heavily from 26.6.2007 to 31.12.2007. The complainant already approached the company’s M.D and Zonal Incharge through UPC, Registered letter and courier on 26.2.2008, 8.11.2008 and 14.11.2008 and also sent a legal notice through counsel to OPs but to no avail. The above said act of OPs amounts to deficiency in service and unfair trade practice. Hence, the complaint was filed.

3.         Reply was filed by OPs in which they took preliminary objections that the complainant is not a consumer within the meaning of Section 2 (1) (d) of the Consumer Protection Act, 1986. The complainant was purchasing and selling the shares for commercial purposes. She indulged in speculation in the sale and purchase of shares in order to make profit. The second objection taken by the OPs that the learned District Forum has no jurisdiction to entertain and try the complaint in view of the bar imposed by Sections 15Y and 20A of the Securities and Exchange Board of India Act, 1992. On merits, the OPs pleaded that the complainant indulged in speculation in the purchase/sale of shares and as such the complainant is not a consumer. All other allegations leveled by the complainant in the complaint were denied and pleaded that there was no deficiency in service or unfair trade practice on the part of OPs and prayed for dismissal of the complaint.

4.         The parties led their evidence in support of their contentions.

5.         The learned District Forum allowed the complaint and directed the OPs to pay to the complainant Rs.26,689/- as loss suffered by her and also paid Rs.20,000/- as compensation for mental tension, harassment and deficiency in service along with Rs.5,000/- as costs of litigation. The OPs were directed to paid the entire amount within 30 days from the date of receipt of copy of the order, failing which to pay the OPs would be liable to pay penal interest thereon @ 12% p.a. since the date of filing the present complaint i.e. 18.12.2009 till its payment to the complainant.

6.            Aggrieved by the order passed by the learned District Forum, the present appeal has been filed by the OPs. Sh.R.C.Bhalla, Advocate has appeared on behalf of appellants and Sh. Kasturi Lal, authorized representative has appeared on behalf of respondent/complainant.

7.         In appeal, it is submitted that the learned District Forum has erred in holding that the respondent was selling/buying shares for personal use and for supplementing her personal income and that she was not a trader nor indulged in trading activities. It failed to note that her own document showed that on a single day i.e. on 14.2.2008 she conducted 22 transactions worth lacs of rupees. The respondent was not a consumer because she was selling/purchasing shares for commercial purposes. The learned District Forum failed to appreciate that there was no deficiency in service rendered by the appellant. The father-in-law of the respondent was himself selling/purchasing the shares and he was gaining and making money in the speculation. The moment he started loosing, he invented a story, which has no basis to stand. The learned District Forum erred in holding that the appellant has done the transaction without the consent of the respondent and that they liable to compensate the respondent. The judgment relied upon by the learned District Forum in 2008 (1) CPC (para 12 of the impugned judgment) is not applicable to the facts of the present case. Hence, it is prayed that the appeal may kindly be accepted and the impugned order passed by the learned District Forum may kindly be accepted.

8.            Basically the ops have filed this appeal by assailing the impugned order dated 26.3.2010 passed by the learned District Forum on the ground that complainant is not a consumer within the meaning of Section 2 (1) (d) of the Consumer protection Act, 1986 because the complainant was doing trading and indulged in heavy speculation in the sale and purchase of shares for commercial purposes in order to make profit. In support of their contention, the OPs have quoted one instance that in one day i.e. 14.2.2008 the complainant had conducted 22 transactions worth lacs of rupees, like this the complainant had done other transactions also. Thus, it has been proved that the complainant is not selling/buying shares for her livelihood. The learned District Forum has wrongly allowed the complaint and erred in holding that the complainant was selling/buying shares for personal use and for supplementing her personal income and that she was not trader and not indulged in trading activities.  It was also submitted by the OP that while allowing the complaint the learned District Forum has also ignored this fact that all the transactions have been done by the OPs on behalf of complainant by taking prior consent of the complainant.

9.         The complainant placed written arguments on file and submits that this appeal filed by the OPs is frivolous, devoid of merit and is liable to be dismissed with costs. The law has already been settled on this point that a person selling/buying shares through some share broker for his livelihood is a consumer and the share broker is liable to pay the value of the shares with interest, if any, amount is not paid by the broker to the concerned person. It is further submitted that one solitary instance of a single day transaction quoted by the OPs cannot change the status of the complainant in any manner. However on that particular day, the complainant had to make many transactions of sale and purchase of the same set of shares again and again due to vide intra-day fluctuations of the share market in order to save herself from loss. Not only this, it has been rightly observed by the learned District Forum that the OPs have failed to adduce any evidence to suggest that a consent was given by the complainant for selling 650 shares of HCL Tech. Ltd. or buying 500 shares of JCT thereby causing her a loss of Rs.26,689/-.

10.       After going through the submissions made by both the parties and the impugned order passed by the learned District Forum, we are of the view that the complainant is a consumer and one instance of single day transaction for 22 times on 14.2.2008 will not lead us to conclude that the complainant is not a consumer and indulged in sale and purchase of shares for commercial purposes. Rather we will support the contention of the complainant that on this particular day the complainant had to do many transactions of sale and purchase of the same set of shares again and again due to vide intra day of fluctuation of share market in order to save herself from losses. Moreover there is nothing on record to suggest that the OPs have taken consent from the complainant for selling/purchasing the above-mentioned shares.    

11.       In this view of the matter the order passed by the learned District Forum is just, fair and proper, hence no interference is called for.  Consequently we dismiss the appeal and uphold the order passed by the learned District Forum without any order as to costs.

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

Pronounced.

9^th November, 2010.                                                          Sd/-

 [JUSTICE PRITAM PAL]

PRESIDENT

Sd/-

[MRS. NEENA SANDHU]

Rb/-                                                                                                                       MEMBER