FINAL ORDER/JUDGEMENT

SHRI ASHOKE KUMAR GANGULY, MEMBER

            This is an application u/s12 of the C.P. Act,1986. The fact of the case in brief is that the complainant Sri Krishnendu Bagchi transferred all his shares and Mutual Fund from a  third party to the OP 1 in the month of November, 2016 with an impression of getting good and proper service and accordingly necessary formalities were completed and the complainant was registered as a member and provided the DP Id. No. : 12019103, Client Id. : 00581285, DP Id. reference No. 0300051417 and the account opening date was 28.11.2016. The OP 1 mismanaged the fund of the complainant and invested the money of the complainant to Yes Bank, IDFC Bank etc. and the complainant suffered financial loss of about Rs.1,39,152.18 and the complainant lost his faith and trust on the OP 1 and finally decided and instructed the OP 1 to sell ten number of mutual funds lying with the OP 1 on 05.04.2017. The details of the ten number of mutual funds are appended hear in below.

            The OPs also issued mutual fund service system transaction confirmation slip dated 06.04.2017 through the OP 3 showing sale of 10 number of mutual funds on 06.04.2017 but the OPs failed to furnish the documents containing the statements of accounts of sale, showing to the complainant that what was the actual amount obtained by selling the 10 number of mutual funds keeping the complainant in dark.

            The OP 1 transferred the amount of Rs. 4,27,445.73 to the bank account of the complainant without showing any breakup of the sale details of 10 number of mutual funds even after repeated claims made by the complainant for issuance of the breakup of the sale of 10 numbers of mutual funds. On query the OP 1 Informed that 09 number of Mutual funds have sold and 01 MF of SBI Magnum Global Fund was not sold due to the reason best known to the OP 1. But thereafter from MFSS Transaction Slip it has been revealed that 10 Mutual Funds have been sold out on 06.04.2017 but the OP 1 did not transfer the sale amount of the said Mutual Fund and tried to grab the money of the complainant. On repeated follow up the OP 1 intimated to the complainant that the SBI Magnum Mutual Fund of 671.938 Unit has not been sold where as the OP 3 confirmed for redemption of the said Mutual Fund on 06.04.2017 at 12:12:35 hours. Being aggrieved by and dissatisfied with the services of the OP 1 the complainant approached the OP 2 on 10.08.2017 for taking steps and redressal of the complaint but the OP 2 failed and neglected to do the needful. The complainant lodged the complaint to the OP 3 for redressal of the grievances on 18.08.2017 and the OP 3 registered a complaint No. 1708230771401182 and the matter has been referred to IGRP for disposal of the complaint and the OP 1 filed their reply to the IGRP by denying the allegation made against them and filed one account statement to the IGRP authority. But the account statement was not according to the complaint and there are so many anomalies. The IGRP proceeding was concluded  on 13.09.2017 by the IGRP Member Mr. Sanjay Chandra Sarkar.  The complainant thereafter through e mail dated 22.11.2017 asked the OP 1 to implement the order of IGRP dated 13.09.2017. The OP 1 vide email dated 25.11.2017 replied that they will redeem the SBI Magnum Global MF Growth and will send the value to the complainant. The complainant vide email dated 04.12.2017 and 05.12.2017 again asked the OP 1 to implement the order of the IGRP authority but the OP 1 did not do the needful.

However Rs. 1,08,320.25 was transferred to the  bank account of the complainant on 12.02.2018 long after 63 days from the date of communication of false statement to the OP 3. A legal notice was issued by the complainant against the OP 2 & 3 dated 20.12.2017 for implementation of the order of the IGRP authority  but no result has been cropped up. However one IGRP Member Mr. S.C.Sarkar vide letter dated 27.12.2017 to the OP 3 clarified the earlier order dated 13.09.2017 by mentioning that the proceed of around Rs. 3,00,000/- will comprise of total sale proceeds of all mutual funds inclusive of the SBI Mutual Funds of 665.1820 units to be sold as per the instruction of the complainant. The OP 3 vide letter dated 02.01.2018 communicated to the complainant the clarification of the IGRP authority and by a further letter dated 03.01.2018 to the complainant the OP 3 asked the complainant to seek for Arbitration mechanism against the OP 1, if interested. The complainant vide mail dated 26.01.2018 again intimated the OP 1 to implement the order of the IGRP dated 13.09.2017. After so many communications the representative of the OP 3 called the complainant on his mobile on 18.04.2018 and expressed that the para 7 of the IGRP order 13.09.2017 will be changed as under “ the proceeds of around Rs.3,00,000/- will comprise of total sale proceeds of All Mutual Funds and Holdings inclusive of the SBI Mutual Funds of 665.1820 units to be sold as per the instruction of the complainant.” The OP 3 vide letter dated 18.04.2018 intimated to the complainant that the clarification sought for  is done by the IGRP Member  and the grievance is closed and again by a letter dated 03.05.2018 to the complainant stating the complaint is closed and instructed to avail the Arbitration Mechanism if so desire.  During the pendency of the clarification sought for by the OP 1 to the OP 3 the OP 1 transferred an amount of Rs.1,08,320.25 to the bank account of the complainant on 12.02.2018 and Rs.9000/- on 16.04.2018 as per their will and wish. As per submission of the complainant the OP 1 refused to issue the statement of account to the complainant as regard the sale of 10 number Mutual Fund and not transfer of the sale proceeds to the bank account of the complainant and the OP 1 all along committed foul play with the assistance of the OP 2 & 3 and ultimately succeeded to deprive the complainant from his legitimate claim. Finding no justice from the OP 2 and 3 the complainant has knocked the door of the Commission with the prayers as mentioned in the petition.

The OP 1 has contested the case by filing W/V contending inter alia that the said petition is motivated, vexatious and harassing. The complainant is not a consumer as per section 2(d) within the meaning of the C.P. Act, 1986. The  OP 1 is a Public Limited Company registered under the Company’s Act, 1956 and duly registered  with SEBI and a member of National Stock Exchange of India. The complainant opened a Demat Account with the OP 1 dated 28.11.2016 and on 30.11.2016 a cheque of Rs.50,000/- was paid by the complainant. After opening of the account the complainant executed couple of trades and transactions. As per submission the OP 1 follows the rules and regulations of the Exchange in the matter of Trading. The complainant continued trading with the OP 1  till July 2016 without  objecting any trades and without registering any grievances. The complainant lodged a complaint to the National Stock Exchange and on 13.09.2017 IGRP proceedings were conducted and the order of IGRP was in favour of the OP 1. Share Market are wider in nature and commercial transaction are the main process & the complainant is not falling within the purview of definition under 2(d) of the C.P. Act, 1986.

The OP 2 has also filed their W.V. As per submission, SEBI is a statutory body established by Securities and Exchange Board of India Act, 1992, passed by the Parliament. As outlined in the SEBI Act, SEBI has been established as a regulator of the securities market in India. SEBI takes measures to protect the interest of investors and for the development of the securities market, in performance of its statutory functions. It is also stated that the complainant is not a consumer under the definition of section 2(d) of the C P Act, 1986 as neither any service for consideration was rendered to the complainant by SEBI nor he hired the services of SEBI for consideration and therefore no complaint is maintainable against SEBI. They have cited the case law of Hon’ble NCDRC in the Guwahati Co-operative Urban Bank Ltd. and Anr. VS  Santosh Kumari Tewari and Ors., III( 1997) CPJ 68 (NC) where it has been decided that hiring of service for consideration is a condition precedent to make a person  consumer. Moreover it is settled law that officers appointed to implement provisions of statute like Stamp Act, registration Act are only performing statutory duties and they do not render any service within the meaning of C P Act. Similarly SEBI is also performing statutory duties under the SEBI Act and while acting as such, it does not render any service for consideration. As such the present complaint is not maintainable against the OP 2 I.e. (SEBI). The performance of statutory functions cannot be construed as service as defined under C P Act. More over SEBI does not collect any fees or other charges from the investors for the functions being performed by it under the Act for protecting the interests of the investors and as such the complaint should be dismissed against the OP 2. The OP 2 had received 3 grievances from the complainant on 17.08.2017, 02.01.2018 & 16.03.2018. The same were duly forwarded to the OP 3 for resolution and post satisfactory reply by the OP 3. The same were closed as resolved in exercise of the statutory duty and functions of the OP 2. The OP 2 has also enclosed a letter of the OP 3 dated 14.09.2017 issued to the complainant.

The OP 3 has also contested the case by filing WV contending inter alia that the case is not maintainable for the following reasons. The complainant is a holder of 10 Mutual Funds issued by the OP 1.The complainant instructed the OP 1 to sell 10 number of M.F. lying with the OP 1 on 05.04.2017. The OP 3 also issued the MFSS Transaction Confirmation Slip on 06.04.2017 showing sale of 10 number of Mutual Funds. The complainant lodged a complaint to the OP 3  against the OP 1 on 18.08.2017 which was accordingly registered  and  the matter was placed before the IGRP which was held on 13.09.2017.  The OP 3 took up the complaint with the OP 1 for redressal and the OP 1 vide their replies dated 24.08.2017 and 25.08.2017 responded accordingly. The OP 3 in turn sent their reply to the complainant vide letter dated 30.08.2017. The complainant thereafter submitted his comments to the OP 3 vide his letter dated 01.09.2017. The IGRP proceedings was taken up on 13.09.2017 by the IGRP member and concluded with the order that the claim is not admitted. Thereafter the complainant sought clarification to the OP  3 on point no. 7 of the IGRP Order dated 13.09.2017 which was subsequently forwarded to the IGRP member for necessary action. On receipt of the reply from the IGRP member the same was sent to the complainant. Against the said clarification the complainant raised objection through SEBI SCORES which was forwarded to the IGRP member and the IGRP member provided clarification through email dated 18.04.2018 which was communicated to the complainant.

As per submission the complainant never complained during his entire trading tenure and he was well aware of all the trades done in his account through SMS of each and every trade executed in his account and the same were regularly sent to him on his registered mobile number along with the E contract Notes, Combined Margin Report, Qly. Settlement Report which were regularly sent on his registered email Id. Finally it is stated that even it is assessed (which in fact is denied) that the application of the complainant is valid in that case also the OP 3 has rightly closed the grievance of the complainant after observations and facts of the case.

Points for Determination

On the pleading of all the parties, the following points have necessarily come up for determination.

1) Whether the OPs are deficient in rendering proper service to the complainant.
            2) Whether the OPs have adopted any unfair trade practice.

3) Whether the complainant is entitled to get relief or reliefs as prayed for.

Decision with Reasons

Point Nos. 1 to 3:-

All the points are taken up together for the sake of convenience and brevity in discussion.

The complainant has tendered his evidence on affidavit. The OPs have also filed their evidences. All have filed the replies set forth by their adversaries. BNAs have also been filed by the parties. 

Facts remain that the complainant Mr Krishnendu Bagchi had a trading account with the OP 1 vide Client Id. No.00581285 and the account opening date was 28.11.2016. As evident from the records that the complainant desired to sell all the 10 number of Mutual Funds which were under the custody of the OP 1 and necessary instruction was given by the complainant to the OP 1 to execute the sale transaction on 05.04.2017. As per system the OP 3 issued the MFSS ( Mutual Fund Service System ) Transaction Confirmation Slip dated 06.04.2017 showing sale of 10 number of Mutual Funds. The complainant received a sum of Rs.4,27,445.73 in his bank account from the OP 1 against the said sale as per his submission.

 But it appears from the records that the complainant has got some grievances against the OP 1 in respect of the said sale proceeds. Being dissatisfied by the actions and reply of the OP 1 the complainant put his complaint to the OP 2 on 10.08.2017. The complainant also put his complaint to the OP 3 vide his letter dated 18.08.2017. As per established procedure the OP 2 sent the complaint  letter to the OP 3 for proper adjudication.  The OP 3 in accordance with SEBI Circular dated 26.09.2013 arranged for IGRP( Investor Grievance Resolution Panel ) proceedings and IGRP proceeding was taken up on 13. 09.2017 where the claim of the complainant was not admitted. Accordingly the OP 3 vide letter dated 14.09.2017 intimated the complainant about the same with a copy of the IGRP order. In the said letter the complainant was further informed as under

“ Further, we wish to inform you that the Exchange provides arbitration mechanism which is a quasi judicial process for redressal of complaints between investors and trading members / sub brokers. In case you wish to pursue the matter further, you may opt for arbitration against the trading member / sub broker. Copy of the arbitration application form along with the list of arbitrators are enclosed for your perusal.

The Complainant did not avail of the opportunity as advised by the OP 3 as mentioned above rather asked for a clarification on point no. 7 of the IGRP order dated 13.09.2017  from the OP 3. The said clarification was given by the IGRP Member which in turn was forwarded to the complainant by the OP 3 vide their letter dated 03.01.2018 . In the said letter also  the complainant was advised to utilize the arbitration mechanism as provided by the OP 3  for redressal of his complaint. The complainant seems to have not availed of the said option as suggested by the OP 3.

Now let us examine the actions of the OP 2 and the OP 3. On receipt of the complaint against the OP 1 the OP 2 directed the complaint to the OP 3 for proper adjudication as per their usual procedure. The OP 3 also acted in accordance with rules and regulations and as per their set procedure. In the said process we don’t find any irregularity on the part of the OP 2 and the OP 3. Moreover the OP 2 and the OP 3 are the statutory authorities established under certain acts passed by the Parliament. The complainant has not paid any consideration to the OP 2 as well as to the OP 3 for rendering service to the complainant. As such as per Section 2(7) of the C.P. Act, 2019 the complainant is not coming under the definition of consumer to the OP 2 and to the OP 3. Against the said consideration the OP 2 has cited so many case laws which are very relevant in this context and in support of their contention. In view of the said observation the attempted allegation made out in the complaint petition against the OP 2 and the OP 3 are beyond the scope of adjudication of this Commission.

The main allegation as envisaged from the petition is against the OP 1 who as per submission has not rendered proper service to the complainant  and is liable for unfair trade practice.  The complaint was put forward to the competent authority for proper adjudication. The adjudication was done in the framework of established procedure laid down before the OP 2 and the OP 3 the result of which has gone not in favour of the complainant ultimately. The OP 1 has not been  adjudicated guilty for the actions taken by them in the entire episode. The technical issue has been adjudicated by the competent authorities as per their usual rules and regulations. Moreover the complainant was offered to ventilate his grievance further to the appropriate platform for further consideration of his complaint and redressal if any, which he has not availed of for the reason best known to him. As such we do not find any reason to interfere in the process and result of the adjudication conducted by the competent authorities as per their established procedure.

In view of the above we are of the considered view the allegations against the OPs have not been proved.

As such all the points under determination are decided negative.

In the result, the complaint fails.

Hence, 

Ordered

That the complaint case be and the same is dismissed on contest against the OPs without any cost.