Date of Filing : 27.02.2009
Date of Order : 14.03.2016.
DISTRICT CONSUMER DISPUTE REDRESSAL FORUM, CHENNAI(SOUTH)
2nd Floor, Frazer Bridge Road, V.O.C.Nagar, Park Town, Chennai-3
PRESENT: THIRU. B. RAMALINGAM M.A.M.L., : PRESIDENT
TMT. K.AMALA, M.A. L.L.B., : MEMBER I
DR. T.PAUL RAJASEKARAN, M.A PGDHRDI, AIII,BCS : MEMBER II
C.C.NO.250/2009
MONDAY THIS 14TH DAY OF MARCH 2016
1. Mr. V.Sundararaman,
2. Mrs. Uma Sundaraman,
Both residing at
No.21/30, 2nd Main Road,
Kottur Gardens,
Chennai 600 085. ..Complainants
..Vs..
1. M/s. Kotak Securiteis Limited,
Rep. by its Managing Director,
5th Floor, Nirlon House,
Dr. Anne Besant Road,
Orli Mumbai – 25.
2. Brach office at
The Branch Manager,
GRR Business Center,
New 36, Vaidyaraman Street,
T.Nagar,
Chennai 600 017. ..Opposite parties
For the Complainant : M/s. S. Sethurqamar & another
For the Opposite parties : M/s. K.Harish.
Complaint under section 12 of the Consumer Protection Act 1986. The complaint is filed seeking direction against the opposite parties to pay a sum of Rs.18,00,000/- of pecuniary loss suffered by the complainant and also to pay a sum of Rs.1,00,000/- towards mental agony and cost of the complaint to the complainant.
ORDER
THIRU. B. RAMALINGAM PRESIDENT
1.The case of the complainant is briefly as follows:-
The complainants submit that they are being the husband and wife for the purpose of having good investment potentials and return for the investments they have engaged the service of opposite parties and agreed to make their personal investments through avenue of Portfolio Management Scheme known as select Jan Scheme formulated by opposite parties and initially invested a sum of Rs.25 lakhs in two installments Rs.15 lakhs and 10 lakhs on 17th Feb 2007 and 10th March 2007 respectively and have executed the agreement dated 22-02-2007. Further appointed a discretionary Portfolio Manager to provide Portfolio management service for the funds/service in accordance to the provisions of the agreement and supplementary agreements on the same date. As per their assurance and the terms and conditions of the agreement the opposite parties were not properly handling the said Portfolio of the investment of the complainants and their litigation which caused heavy loss to the complainants, as such the complainants have called upon the opposite parties to close the portfolio during Mar 2007, whereas the opposite parties have not closed immediately but closed on 25.07.2007 . The act of the said opposite parties that the non closure of account called for by the complainant immediately, but closed after 25.07.2007 was also caused a loss for the complainants to the extent of Rs.18 lakhs the said act of the opposite parties amounts to deficiency of service in providing service to the complainants which caused mental agony and hardship to the complainant. As such the complainant has filed this complaint claiming a compensation of Rs.18 lakhs towards loss caused by the opposite parties and also claiming a sum of Rs.1 lakh towards mental agony and sufferings.
Written Version of opposite parties are briefly as follows:
2. The opposite parties denies all the averments and allegation contained in the complaint except those that are specifically admitted herein. The opposite parties denies the alleged deficiency of service and stated that the opposite parties have acted in accordance to the terms and conditions of the agreement. Further state that agreement signed by the parties is governed by Exchange Board of India (Portfolio Managers) Rule 1992 and thus any complaint in respect of Portfolio Management should be adjudicated before the SEBI, as per the agreement signed between the parties has empowered the Portfolio Manager to appoint Arbitrators as per Arbitration and Conciliation Act 1996, without adopting such procedure the complaint filed by the complainant before this forum is not maintainable. The opposite parties also submit that the complaint is also not filed in time, as per the sec 24 A of the C.P. Act 1986. Further the complaint is not maintainable under sec. 2 (i) (d) of C.P. Act 1986. Therefore this complaint is liable to be dismissed.
3. Complainants have filed their Proof affidavit and Ex.A1 to Ex.A10 were marked on the side of the complainant. Proof affidavit of Opposite parties are filed and Ex.B1 to Ex.B3 were marked on the side of the opposite parties.
4. The points that arise for consideration are as follows:-
1) Whether there is any deficiency in service on the part of the opposite parties?
- Whether the complainant is entitled to the reliefs sought for?.
5. POINTS 1 to 2 : -
Perused the complaint filed by the complainant, written version filed by opposite parties, the proof affidavits filed by both the parties and the documents Ex.A1 to Ex.A10 filed on the side of complainant and Ex.B1 to Ex.B3 filed on the side of opposite parties and considered both side arguments.
6. There is no disputes between the parties, that the complainants being the husband and wife for the purpose of having good investment potentials and return for the investments they have engaged the service of opposite parties and agreed to make their personal investments through avenue of Portfolio Management Scheme known as select Jan Scheme formulated by opposite parties and initially invested a sum of Rs.25 lakhs in two installments Rs.15 lakhs and 10 lakhs on 17th Feb 2007 and 10th March 2007 respectively and have executed the agreement dated 22-02-2007. As per Ex.A1, appointed as discretionary Portfolio Manager to provide Portfolio management service for the funds/service in accordance to the provisions of the agreement and supplementary agreements Ex.A3 and Ex.A4, on the same date.
7. The complainants have raised grievance against the opposite parties as per their assurance and the terms and conditions of the agreement the opposite parties were not properly handling the said Portfolio of the investment of the complainants and their litigation which caused heavy loss to the complainants, as such the complainants have called upon the opposite party to close the portfolio during Mar 2007, whereas the opposite parties have not closed immediately but closed on 25.07.2007 by taking letter Ex.A5 from the complainants on the same day, even by the act of the said opposite parties that the non closure of account called for by the complainant immediately, but closed after 25.07.2007 was also caused a loss for the complainants to the extent of Rs.18 lakhs the said act of the opposite parties amounts to deficiency of service in providing service to the complainants which caused mental agony and hardship to the complainant, as such the complainant has filed this complaint claiming a compensation of Rs.18 lakhs towards loss caused by the opposite parties and also claiming a sum of Rs.1 lakh towards mental agony and sufferings.
8. Whereas the opposite parties have raised objections in their written version, denying the allegation made by the complainant about the alleged deficiency of service and stated that the opposite parties have acted in accordance to the terms and conditions of the agreement and further state that agreements signed by the parties is governed by Exchange Board of India (Portfolio Manager) Rule 1992 and thus any complaint in respect of Portfolio Management should be adjudicated before the SEBI, as per the agreement signed between the parties as empowered the Portfolio Manger to appoint Arbitrators as per arbitration and conciliation Act 1996, without adopting such procedure the complaint filed by the complainant before this forum is not maintainable. The complaint is also not filed in time, as per the sec 24 A of the Consumer Protection Act 1986, whereas at the time of arguments the learned opposite parties counsel have raised another point of law relating to maintainability of complaint under sec 2 (1) (d) of Consumer Prorection Act 1986 stating that the complaint mentioned dispute is relating to the trading of share, as such the dispute is relating to the commercial transactions, as such the complaint filed by the complainants is not maintainable as the complainants are not considered to be a consumer under the said act.
9. Therefore we are of the considered view that though the above said point raised by the opposite parties was not mentioned in their written version or in the proof affidavit filed by the opposite parties, since the said points relating to question of law, can be raised at any point of time in the proceedings is acceptable. Therefore the said question which raised for consideration in the present case as to whether the complainants are consumers or not? as per the sec 2 (i) (d) of the Consumer Protection Act 1986 is to be decided by giving foremost importance, considering the facts and circumstances of the case.
The provision of Act in sec reads as follows:
“consumer” means any person who-
(i) buys any goods for a consideration which has been paid or promised or partly and partly promised, or under any system of deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of deferred payment when such use is made with the approval of such person, but does not include a person who obtains such goods for resale or for any commercial purpose; or
(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 service for consideration paid or promised, or partly paid or 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 purpose 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 purpose of earning his livelihood by means of self employment)”
As per the above provision of law it is clear that the service availed for the purpose of commercial purpose cannot come under the purview of the Consumer Protection Act and the person who avails such service cannot be considered to be a consumer. According to the present complaint filed by the complainants as per their own averment in the complaint the complainants has stated that in relation to their personal investments and avenues available to them having good investment potential on return on and investment, they were looking out for a good investment consultant with integrity and well verse equity marking investment, they have found out the opposite parties and they have invested the amounts in the “selected Jan Scheme” which is the purpose of share trading. The said transactions is of the commercial nature, further the complainants in their complaint have nowhere stated that they are doing the said share trading for self employment nor it has been pleaded, that the service provided by the opposite parties are being availed exclusively for their purpose of earning their livelihood, by means of self employment. Therefore we are of the considered view that the said dispute raised by the complainants in this complaint against the opposite parties relating to the commercial purpose are excluded under the above said provision of Consumer Protection Act 1986.
10. The citation relied upon by the opposite parties in support of their contention rendered by Hon’ble National Consumer Disputes Redressal Commission, New Delhi in
Vijayakumar
–vs-
Indusind Bank
II (2012) CPJ 181 (NC) has held
“Since petitioner has been trading regularly in the shares which is a commercial transaction and for which he has also availed the over draft facility from the respondent, as such he would not be a consumer as per Section 2 (1) (d) (ii) of the Act. Moreover, regular trading in the purchase and sale of the shares is a commercial transaction and the only motive is to earn profit. Thus, this activity is purely commercial one and is not covered under the Act.”
The Hon’ble Delhi, State Commission in case III (2000) CPJ 291
Anand Prakash
–Vs-
A.M. Johri & ors
held that “sale purchase of shares are commercial transactions and complainant does not fall within the purview of Consumer”
11. Therefore we are of the considered view that the complaint mentioned dispute raised by the complainant against the opposite parties is of the fact relating the share trading which is commercial in nature as such as contended by the opposite parties the complainants are not considered to be a consumer under Section 2 (i) (d) of the consumer protection Act 1986, As such the complaint filed by the complainants against the opposite parties is not maintainable and liable to be dismissed. Accordingly the points is answered in favour of opposite parties and against the complainants.
In the result, this complaint is dismissed. No cost.
Dictated directly by the President to the Assistant, transcribed and computerized by her, corrected by the President and pronounced by us in the open Forum on this the 14th day of March 2016.
MEMBER-I MEMBER-II PRESIDENT.
Complainant’s side documents:
Ex.A1- 22.2.2007 - Copy of Account opening form along with
Relevant annexure.
Ex.A2- 22.2.2007 - Copy of submission of Permanent account number
U/S 139 Rule 114 B.
Ex.A3- 22.2.2007 - Copy of Supplementary agreement.
Ex.A4- 22.2.2007 - Copy of Supplementary agreement.
Ex.A5- 25.7.2008 - Copy of letter from opposite party to the complainant.
Ex.A6- 25.7.2008 - Copy of minutes of discussion.
Ex.A7- 23.9.2008 - Copy of reply letter.
Ex.A8- 8.8.2008 - Copy of letter from complainant to the opposite party.
Ex.A9- 31.8.2008 - Copy of legal notice with Ack. card.
Ex.A10- 27.12.2008- Copy of report on review of Portfolio Management Account.
opposite parties’ Exhibits:-
Ex.B1- 22.2.2007 - Copy of Portfolio Management agreement.
Ex.B2- 22.2.2007 - Copy of Supplementary agreement.
Ex.B3- 3.10.2007 - Copy of supplementary letter- Select Portfolio
Series II 2007.
MEMBER-I MEMBER-II PRESIDENT.
