By Smt. Saji Mathew, Member:

The gist of the complaint is as follows:- One of the staff from the office of the 1^st Opposite Party namely one Suresh approached the Petitioners at their residence and introduced himself as working in the office of 1^st Opposite Party for the last many years and represented that the company had authorised him to canvas business and sell shares of the company. The issued brochures to the petitioners and assured them that if they deposit Rs.20,000/- each do the company, they will get Rs.2,000/- per month from the next month of the date of purchase of share. As per the assurance Mr. Suresh, the Petitioners enquired at the office of 1^st Opposite Party and 1^st Opposite Party also assured them that if they deposit Rs. 20,000/- each, they will get a monthly income of Rs.2,000/- as profits and the Petitioners paid Rs.20,000/- each to the company and 1^st Opposite Party issued a temporary receipt to the complainant and the Branch Manager assured them to issue original document after one month as it has to be issued by the 2^nd opposite party. They also paid Rs.400/- each to the company for opening the DP account. After one month when the petitioners asked for the payment of profit, the opposite Parties told them excuses and evaded. Till the date of complaint, the Opposite Parties had not made any payment. This is unfair trade practice on the part of the Opposite Parties and the Petitioners are liable to be compensated. Hence the petitioner pray for an order directing the Opposite Parties to pay Rs.20,000/- each as compensation and Rs.28,000/- each towards profits and 20,000/- each, the price of shares and Rs. 400/- each towards the amount collected for opening the DP account with interest from 12.08.2004.

2. On the above complaint, an exparte order was passed by this Forum on 18.04.2008. The Opposite Parties went on appeal and the case was remanded for reconsideration by the Hon'ble State Consumer Disputes Redressal Commission. Then the 2^nd Opposite Party filed version and appeared before the District Forum. For the 1^st vakalath was filed. But as version was not filed he was set exparte. In the version the 2^nd Opposite Party have disputed the maintainability of the case. The issue of maintainability was decided positively in I.A. No. 147/10.

3. The 2^nd Opposite Party contents that the complaint is bad for mis-jointer and non-jointer of necessary parties. The 2^nd Opposite party does not have any branch office in the address shown as 1^st Opposite Party in the complaint. The branch office of 2^nd Opposite Party is situated at 4/254 Aravindghosh Road, Calicut 673001. The documents submitted along with the Complainant are fabricated. The Manager at Calicut, one Mr. K. Ramakrishnan Nair in collusion with the Marketing Executives Sri. M.V. Babu, Srinath. M, and Suresh Kumar were found indulging in illegal and criminal acts. There services were terminated and legal proceedings initiated against them.

4. The 2^nd Opposite Party is registered stock broacking service provider engaged in the business of rendering stock broacking services only to the registered clients under the purview of Capital Market Regulatory Authority, SEBI and NSE. The company is only an intermediary between registered clients and the National Stock Exchange for trading activity. The company does not do any own trading.

5. When the client want to buy shares from the market, he places the buy order to the company and the order is placed through the online trading terminal and if executed, the client has to pay the total value of the share bought and the brokerage and other charges like service tax etc. only by way of account payee cheque in favour of the company. Cash transactions are strictly prohibited by SEBI/NSE and the company. The company never promised any kind of returns from any of the services offered through them. Whenever the client gives the cheque in favour of the company for the credit to his trading account, bank receipt in company stationery is issued immediately to the client by the branch, his trading account is credited with the cheque amount and the cheque is deposited in a separate non interest bearing client fund current account in the name of the company being maintained with a trading commercial bank. The only income of the company is nominal brokerage for the trade executed. The shares bought by the clients from the market are received and credited to the demand account (DP account) of the client. In the case of sale of shares also the payments are made only in cheques. None of the staff or employees of the company are entitled or authorised to receive any amount as deposit or in cash.

6. As per the company records, no payments were received by the company from the Complainants. The Complainants have not done any purchase or sale transactions in their trading accounts. If the 1^st Opposite Party has received any cash from the Complainants in violation of the direction of SEBI/NSE and this Opposite Party and if he has issued bogus receipts, the 1^st Opposite Party alone is liable. Hence the 2^nd Opposite Party prays for the dismissal of the case.

7. The Complainant was examined as PW1 and documents were marked as Ext.A1 to Ext.A8. The Branch Manager of 2^nd Opposite Party Calicut Branch was examined as OPW1 documents were marked as Exts.B1 to B3.

8. The matters to be decided are as follows:-

1. Whether there is any deficiency in service on the side of the Opposite Parties?

2. Whether the Complainant is entitled for any relief?

9. Point No.1:- Ext.A4 is the receipt for Rs.40,000/- given to the Complainants by the Opposite Parties. Ext.A1 bears the name of both Opposite Parties. Exts.A1 and A5 are the client master list of 2^nd Opposite Party. Ext.A2 is a printed form issued by 2^nd Opposite Party to the Complainants. Ext.A3 is the receipt for Rs. 400/- paid by the 1^st Complainant for opening DP account. From all these documents it is seen that Rs. 40,000/- is deposited with the Opposite Parties and there is business dealing between the Complainants and Opposite Parties. The 2^nd Opposite Party denies their relation with 1^st Opposite Party in their version. But in the same version, they contend that the 1^st Opposite Party alone is liable for any act against the direction of 2^nd Opposite Party and indirectly admit that 1^st Opposite Party is liable to act as per the direction of 2^nd Opposite Party. OPW1 admit that 1^st and 2^nd Opposite Parties are different parts of the same company. OPW2 has signed the version of 2^nd Opposite Party and he himself has signed the vakalath for 1^st Opposite Party. From all these, it is very clear that an amount of Rs. 40,000/- is received by the Opposite Parties. The 2^nd Opposite Party contend that the Manager of 1^st Opposite Party has received the account in his personal capacity. But from the documents, it is seen that the amount was received and receipt was issued by the Manager not in any personal capacity. Hence point No.1 is found against the Opposite Parties.

10. Point No.2:- The documents do not disclose any specific promise of profit. But the Complainants have made the deposit in anticipation of profit and even the deposit is not returned. The Complainants are entitled to get the amount back with interest. The 1^st Complainant paid Rs. 400/- also for opening DP account. This amount also is to be repaid.

Hence the Opposite Parties are directed to pay Rs. 40,400/- (Rupees Forty thousand Four hundred only) to the Complainant with 12% interest per annum from the date of complaint till payment. The Opposite Parties are jointly and severally liable to pay the amount within 30 days of the receipt of this order.

Pronounced in open Forum on this the day of 31^st December 2010.

Date of filing:15.02.2006.

PRESIDENT: Sd/-

MEMBER : Sd/-

MEMBER : Sd/-

A P P E N D I X

Witness for the Complainants:

PW1. P.P. Peter. Complainant.

Witness for the Opposite Parties:

OPW1. P.D. Rajan. Integrated Stock Brocking Area Service Manager, Calicut.

Exhibits for the Complainants:

A1. Client Master List.

A2. Letter. dt:04.08.2004.

A3. Cash Receipt Voucher dt:12.08.2004.

A4. Temporary Receipt.

A5. Client Master List.

A6. Letter. dt:04.08.2004.

A7. Copy of Letter.

A8. Copy of Letter.

A9. Acknowledgment.

Exhibits for the Opposite Parties:

B1. Copy of Letter.

B2. Branch Operations Manual.

B3. Circular.