CONSUMER DISPUTES REDRESSAL FORUM (CENTRAL)
ISBT KASHMERE GATE DELHI
CC/17/2019
No. DF/ Central/ Date
Dheeraj Pratap Sirohi
H. No. 629, PKT-2
Sector A-10, Narela, Delhi-110040. …..COMPLAINANT
VERSUS
Reliance Securities Limited
First Floor, 1001 Faiz Road,
Karol Bagh, New Delhi-110005. …..OPPOSITE PARTY
Quorum : Ms. Rekha Rani, President
Mr. R.S. Nagar, Member
Ms. Manju Bala Sharma, Member
ORDER
Ms. Rekha Rani, President
1. Instant complaint has been filed by Dheeraj Pratap Sirohi (in short the complainant) under Section 12 of the Consumer Protection Act, 1986 as amended against Reliance Securities Limited (in short OP) alleging therein that on being overcharged and on refusal to sell the scripts in his DMAT account he registered a complainant against OP with SEBI in response to which he was called on BSE Office at Rajinder Place on 31.05.2018. At BSE office he was under impression that Investor Grievance Redressal Committee had provided him desired relief but he felt cheated when he saw their judgment dated 31.05.2018.
He informed BSE that OP is denying share certificate due to suspension of K.S. Oil. BSE asked for details of communication complainant had with OP which was made available to the BSE but BSE did not initiate any action against OP. Complainant has prayed for direction to OP to provide for share certificate of K.S. Oil.
3. We have heard complainant in person.
4. He submitted that he filed a complaint against Reliance Securities with SEBI as a result whereof he was called at BSE Office situated at Rajinder Place, New Delhi where they waived off all the charges imposed but acted cleverly and somehow managed to get an impractical judgment signed by him dated 31.05.2018 which was objected by email dated 08.06.2018. He further stated that with 100 shares of KS Oil he is facing threat of imposition of penalty and is not being provided re-materialized shares of K.S. Oil. He referred to order of Investor Grievance Redressal Committee dated 31.05.2018 which reads as follows:
“The complainant stated that he closed all his transactions with the respondent on 18.01.2018 and intended to close the trading and demat account with the respondent. The complainant further stated that he had one share of 7seas Enter and 100 shares of KS Oils limited which he wanted to sell and asked the respondent several times to dispose them off but in spite of repeatedly reminding the respondent the stated shares were not sold. Further, the respondent had charged him to the extent of Rs.1,000/- for maintaining demat account. The complainant had contested when he was not dealing with the respondent since January 2018, the respondent should not have made these charges. Accordingly, the complainant demanded damages of Rs.10,000/- for the sufferings sustained by him for non compliance by the Respondent.
The respondent had stated that one share of 7seas Enter and 100 shares of KS Oils limited could not be sold in the market as there are no buyers for the same and has suggested the complainant to transfer those shares to an account of his known person so that the trading and the demat account could be closed as desired by the complainant. The respondent further stated that charges of Rs. 1,000/- are for maintaining a demat account with it and the same are on minimum charges basis as agreed at the time of opening of demat account. The respondent has agreed to review the charges of demat account and try to waive them off.
I have heard the arguments of the parties and have gone through the documents submitted by them in support of their respective claims. The complainant has agreed to transfer his one share of 7seas Enter and 100 shares of KS Oils limited to some of his known person by signing DIS slip. The respondent has agreed to close the trading and demat account of the complainant after transfer of the above stated shares from the account of the complainant. The respondent has agreed to consider to waive off the demat account charges levied to the complainant. The claim of the complainant for damges is not maintainable in the circumstances of the case where the proposed sale of share is not selling in the market and the claim is accordingly declined.”
5. Here it is relevant to note that National Commission in Vijay Kumar vs. Indusind Bank Revision Petition No. 3986 of 2011 in First Appeal No. 556 of 2010 observed:
“regular trading in the purchase and sale of the shares is a commercial transaction and the only motive is to earn profit.”
6. In A. Asaithambi vs. M/S Satyam Computer Services Ltd. & Ors. Revision Petition No. 1179 of 2012, National Commission vide its order dated 01.08.0212 observed:
“It must be borne in mind that disputes between the parties relating to commercial purposes are excluded under the Act. This view stands fortified by a recent authority of this Commission, reported in Vijay Kumar Vs. Indusind Bank, II 2012 CPJ 181 (NC).
10. Again, such like question arose for consideration before National Commission in case of Som Nath Jain Vs. R.C. Goenka & Anr, reported in 1 (1994) CPJ 27 (NC). In that case, dealing with sale purchase of shares, National Commission expressed serious doubt whether the complaint qua it would be maintainable under the Consumer Protection Act. Because, qua such transactions, elaborate evidence need to be taken regarding purchase and sale of shares, their prevalent price in the market and evidence regarding passing of instructions by client to the broker. Resultantly, the complainants were relegated to get the dispute decided through civil court.
11. West Bengal State Consumer Disputes Redressal Commission, Kolkata, in case Ramendra Nath Basu Vs. Sanjeev Kapoor & Anr., reported in 1 (2009) CPJ 316 qua share trading has held that transactions between parties do not come under purview of Consumer Protection Act, 1986.
12. Similar view was taken by the Delhi State Consumer Disputes Redressal Commission, New Delhi in case Anand Prakash Vs. A.M. Johri & Ors., reported in III (2000) CPJ 291, by holding that sale purchase of shares are commercial transactions, so, complainant is not a consumer in such cases.”
National Commission referred to judgment of Supreme Court in Morgan Stanley Mutual Fund vs. Kartick Das (1994) 4 SCC 225 wherein it was observed that a prospective investor is not a consumer under the Act.
7. In Steel City Securities Ltd. vs. G.P. Ramesh, I (2014) CPJ 576 (NC), National Commission held that trading in shares is purely commercial activity and only motive is to earn profits. Therefore the complainant is not a consumer.
8. In Balvantkumar Gyanchand Mittal vs. Networth Stock Broking Ltd., II (2015) CPJ 535 (NC), National Commission held that trading in shares and speculative business are outside purview of consumer. Therefore the complainant is not a consumer.
9. In Gautam Das (Dr.) vs. Sun Pharmaceuticals Industries Ltd., II (2010) CPJ 276 (NC), Equity shares were allotted. Duplicate shares were transferred to third person. Shares were subsequently dematerialized. Shares were never sold by share holder. Alleging deficiency in service complaint was filed. National Commission observed that shareholders are not consumers under Section 2(1)(d)(ii) of the Act. Complaint is not legally maintainable.
10. In Ashok Dogra vs. India Bulls Securities Limited, II (2010) CPJ 61 (Chd.) Complainant alleged that shares were traded by OP officials without authority. He alleged deficiency in service and unfair trade practice. Complaint was dismissed holding dispute did not fall under Consumer Protection Act. Contention of the complainant that he invested in shares for earning livelihood was rejected. It was held that purchase of shares is done for earning huge profits which is commercial in nature and therefore complainant was not a consumer. It was also held that allegations of fraud cannot be gone into by the Consumer Fora.
11. In Anit Properties Pvt. Ltd. vs. HDFC Bank Ltd., I (2014) CPJ 168(NC), National Commission held that Consumer Fora has no jurisdiction to decide case of shares.
12. In Ashutosh Pankajbhai Desai vs. Bharatkumar Ranchhoddas Rana, I (2014) CPJ 324 (NC), R.R. Equity Brokers Pvt. Ltd. vs. Dinesh Kumar Jaiswal, III (2014) CPJ 396 (NC), Krishan Lal Lalra vs. Religare Securities Ltd., II (2015) CPJ 338 (NC) and V.K. Agarwal (Dr.) vs. Infosys Technologies Ltd. & Ors., I (2013) CPJ 373 (NC), National Commission held that regular trading in sale and purchase of shares is purely commercial activity and only motive is to earn profits.
13. In view of the aforesaid judgments the transaction carried on by the complainant is purely commercial and is beyond the jurisdiction of the Consumer Fora. The complaint is therefore dismissed. File be consigned to record room.
Announced on 21st Day of February 2019.
