Delhi

New Delhi

CC/10/2010

Kulwinder Singh Chawla - Complainant(s)

Versus

M/S. Religare Securities Ltd. - Opp.Party(s)

24 Nov 2015

ORDER

CONSUMER DISPUTES REDRESSAL FORUM-VI (DISTT. NEW DELHI), ‘M’ BLOCK, 1^STFLOOR,

VIKAS BHAWAN, I.P.ESTATE,

NEW DELHI-110002.

 

Case No.CC/10/10                                Dated:

In the matter of:

Sh. Kulwinder Singh Chawla,

S/o Late Sh. Inder Singh Chawla,

R/o WZ-22, Gali no.2, 3^rd Floor,

Krishna Park, New Delhi-110018

……..COMPLAINANT

       

VERSUS

1. Religare Securities Limited,
2. Mr. Ashish Gulshan
3. Mr. Dinesh Kumar/Manoj Kumar

Off. N-36, Marina Arcade,

(Near Marina Hotel), Connaught Place,

New Delhi-110001

                                         ……. OPPOSITE PARTIES

 

ORDER

President: C.K Chaturvedi

               

The Complainant had dealings with OP who are sellers of stock/shares as brokers. The Complainant has certain shares for the management of which he had taken the service of OP. The Complainant alleges gross negligence on the part of OPs’ in not immediately selling the shares, as per authorization of complainant, to them to sell the shares, if these happens on debit in his account maintained with OP. It is alleged that OP’s deliberately & intentionally did not sell the stocks, before the prices of shares sell more & more and debit mounted. It is alleged that by failure of discharge of obligations, the complainant become bankrupt.

The facts on record show that complainant a Sr. Citizen had ID no.11672980, with booking code KC 417 with OP. The Complainant being illiterate depended on OP for operations in trust and gave an attorney to them as part of terms & conditions. It is alleged that as on 09.01.08, the total holding of complainant was Rs.32,89,570/- and future worth Rs.51,218/- on 22.01.08, the OP informed him that all stocks have been sold, as per instructions. The OP demanded more money. He was shocked to know that the stocks worth Rs.32 lakhs, were reduced to debit of Rs.11,45,376/- in five days time and became zero on 24.01.08. He went into depression. He has placed on record ledger amount of complainant as maintained by OP, and Annexure A (list of shares need by complainant on 09.01.08, their prices and entire value).

It is alleged that OP have failed to act in time and had been callous in the approach and complainant is victim of more penalty of OP. He alleges that OP sold the stock of complainant in favor of some persons, whose company wanted to favor, by selling his stocks at minimum value. Breach of agreement between the parties is alleged. Though according to him OP caused loss of Rs.28,67,970/-, the complainant has confirmed claim to Rs.17 lakhs, for the loss due to acts and norms of OPs and seek the shares of Rs.17 lakhs & compensation of Rs.2 lakhs.

The OP in its reply questioned the maintainability of complaint as stands in Para3 reproduced below:

“Para3: That the Complaint ought to be dismissed as the Hon’ble Forum has no jurisdiction to entertain it. It is submitted that it is an admitted fact that the Complainant was doing heavy trading activity in Future and Option (Derivative Segment as distinct from Cash segment) market.  It is pointed out here that the trading in shares/stocks and in Future and Options (F&O) market as distinguished from investment in stocks is held to be commercial/business activity. Vast number of judgments of Hon’ble High Courts and other Tribunals/Commission has undisputedly upheld that trading in shares, as differentiated from investment in shares and trading in F&O clearly falls within the ambit of business/commercial activity. Besides it can be stated that the income of F&O market is taxable compulsorily as business income under the Income Tax Act. It is submitted that the F&O trades are highly speculative, (can give substantial return or can wipe out the entire capital in matter of few hours/days) and is only settled in money terms on or before the expiry date which means that there is no delivery of shares but only the difference in prices is gained or lost. The Complainant himself has annexed list of 13 scripts of which he was holding large number of Future lots (Buy turnover amounting Rs.55 lac approx.) on 09.01.08. As the present Complaint basically/invariably disputes the losses incurred by the Complainant in F&O segment, a commercial business activity, therefore the respondent objects to the jurisdiction of the Hon’ble Forum and request for the dismissal of the complaint on this ground alone.”

 

“Para6: That the present complaint being highly technical in nature, as it involves the Derivative Segment (Future and Options segment), is liable to be dismissed. The SEBI and NSEIL provides ample forums to the clients like Complainant to place their grievance before the investor grievance cell and also to the Arbitration department of the Exchange where these matters are arbitrated upon by an expert appointed impartially by the Exchange from a Panel of Arbitrators selected jointly by SEBI and Exchange.”

 

On merits, it is stated that he is heavy stock trader and himself sold stocks, when there was debit, and that on 09.01.08 he never gave any instructions, and is relating all loss on 09.01.08, when the Sensex was highest.  It is submitted that had he sold the entire stock on 09.01.08, he would have asked the next day about his allowed credit of Rs.28 lacs and take a payout. But he waited till 21/22 Jan 2008, which no prudent will do’. It is alleged as made up complaint to blame OPs.

We have considered the written submissions made by the parties and heard the oral arguments & consider the material on record.

There is no denying of fact as reproduced above by OP that Complainant is dealer in stock/Futures a highly speculative activity for commercial gains. He does not answer the ‘Consumer’ as defined in the Consumer Protection Act. The judgment of National Consumer Redressal Commission in Revision Petition no.3986/2011, in the case of Vijay Kumar Vs. The Branch Manager, IndusInd Bank, pronounced on 15.02.12 leave no doubt, about the fact that this Forum has no jurisdiction in such cases.

In view of this Forum heaving no jurisdiction, in matter of shares, the complaint is ordered to be returned to the complainant, so that he can approach redressal agencies as stated in the reply or SEBI Exchange Arbitrator mechanism for proper adjudication of his grievance by the authorities on the subject. He is given liberty to approach there Forum/Arbitration, so that his complaint is not time barred.

The original complaint, be returned to complainant, for presenting before the redressal mechanism of SEBI/Arbitration. The Copy of complaint be retrieved as file and copy of National Consumer Commission judgment be also given to complainant.

File be consigned to record room.

Copy of the order be sent to the parties free of cost.

 

        Pronounced in open Court on 24.11.2015.

 

 

(C.K.CHATURVEDI)

PRESIDENT

 

 (Ritu Garodia)

MEMBER