This complaint U/S 35 of C.P. Act, 2019 was initially filed against the Opposite Parties (O.P.s)- 1) THE Chairman, S.M.C. Global Securities Ltd., At 11/6 B, Shanti Chamber, Pusa Road, P.S.- Karol Bagh, P.O.- Karol Bagh, Dist.- Central Delhi, Pin Code- 11005 and 2) The Manager, S.M.C. Global Securities Ltd.,At Poddar Court, Gate No. 04, 5^th Floor, 18 Rabindra Sarani, P.O.- Rabindra Sarani, P.S.- Lalbazar, Dist.- Kolkata, Pin Code- 700001 who contested the case by filing Written Version (W.V.).

The case of the compliment as per her complaint is as follows-

The complainant argued in her plaint that being impressed with an advertisement of O.P. company on T.V. channel she purchased some shares from the O.P.s valued at Rs. 14,60,345.12 paisa between 18/06/2019 and 20/06/2019 in her “D” Mat A/C No 1201910300448599 corresponding to Trading A/C No. CAD 1384 where from the complainant also sold some shares valued at Rs. 16,842/- on 25/06/2019 and 27/06/2019 and thus a clear Debit Balance was showing Rs 14,62,816.45 paisa including  penal interest 7,622,91 paisa in the ledger as on 30/06/2019. The complainant also added that as per the S.E.B.I. guideline the debit balance should be cleared within a week or latest by at the end of the month by selling out the shares purchased between 18/06/2019 and 20/06/2019 and mandatorily in case of any shortfall the shares so lying in the complainant’s D’ Mat A/C with the O.P. No.2 could be sold with prior intimation to the complainant always but the O.P. No.2 deliberately through their office in Kolkata allowed to continue the debit balance for months to earn interest to suit Trading Member benefit.

The complainant also argued that the O.P. did not adjust the debit balance in times as per S.E.B.I. guideline or latest by the end of June, 2019 and thus she could sustain loss lightly to be restricted to Rs. 10, 000/- or less and thereby she could save Rs. 20, 000/- (approx) only and according to the complainant, the O.P. had charged penal interest @15% per annum on debit balance from June, 2019 to March, 2020 amounting to Rs. 1, 75, 175/- in an irregular manner. The complainant also added that the O.P.s with their own interest had increased her shares from her D’ Mat A/C for availing margin facility of shares covering debit balance by keeping the shares in their pool A/C against interest of the complainant for their wrongful gain.

The complainant argued in her plaint that on 30/10/2020 sent a letter to the O.P. No.1 mentioning her grievances related to the difference between the value of shares purchased and the value of selling out shares as per S.E.B.I. guideline T+2 or T+5 days, i.e., (Rs. 17, 23, 775/-  - Rs. 1, 97, 440/-) = Rs. 15, 26, 335/- held in the D’ Mat A/C of the complainant and Pool A/C/ of the O.P.s after selling out shares of the complainant forcefully in the month of March, 2020 along with the penal interest of Rs. 1, 75, 175/- from June, 2019 to March, 2020, interest @3% per month for the shares held in the Pool A/C of O.P.s in excess of debit balance to suit the convenience of the O.P.s for which in reality the complainant had been entitled accordingly. 

The prayers of complainant are as follows: -

1. To admit the plaint.
2. To pass an order directing the O.P.s to pay the complainant of Rs. 15, 26, 335.00 rounded being difference between the values of shares purchased and value of selling out shares as per S.E.B.I. guideline T+2 or T+5 days, i.e., (Rs. 17, 23, 775/-  - Rs. 1, 97, 440/-) = Rs. 15, 26, 335/- rounded held in D’ Mat A/C of the complainant and the Pool A/C of the O.P.s
3. To pass an order directing the O.P.s for payment of Rs. 1, 75, 175/- rounded from June, 2019 to March, 2020 as refund of penal interest.
4. To pass an order directing the O.P.s for making payment of 3,25,382/- rounded as interest @3% per month of the shares held in the pool A/C of the O.P.s from June, 2019 to March , 2020 in excess of debit balance as shown in the ledger A/C of the complainant with the ops.
5. To pass an order directing the O.P.s for making payment of Rs. 25,00,0000/- only

to yourcomplainant on account of mental pain, trauma, agony, harassment, financial loss, sustain by the complainant by way of misrepresentation, deficiency in service and unfair trade practice adopted by the O.P.s.

6. Cost of litigation Rs 20,000/-.
7. Any other relief or reliefs which your complainant entitled to.     

             List of Documents filed by the complainant:

1. Photocopy of correspondence, dated 30/10/2020.
2. The complainant reference D’ Mat A/C No. CAD 1384 with enclosure stated of position of A/C (collectively).The photocopy of e-mail sent by the complainant to the O.P. No.1 on 30/10/2020.
3. The photocopy of reply on behalf of O.P. No.1, dated 125/11/2020 as the superior of O.P. No.2 being addressing to the complainant against commission of complainant, dated 30/10/2020.

             On behalf of the O.P.s, 1) THE Chairman, S.M.C. Global Securities Ltd., At 11/6 B, Shanti Chamber, Pusa Road, P.S.- Karol Bagh, P.O.- Karol Bagh, Dist.- Central Delhi, Pin Code- 11005 and 2) The Manager, S.M.C. Global Securities Ltd.,At Poddar Court, Gate No. 04, 5^th Floor, 18 Rabindra Sarani, P.O.- Rabindra Sarani, P.S.- Lalbazar, Dist.- Kolkata, Pin Code- 700001 who contested the case by filing W.V. and as per his W.V. the O.P.s categorically denied all the allegations made by the complainant and also referred some case laws in their respective W.V.    

The O.P.S in his Written Version (W.V.) has argued that the margin facility was provided to the complainant was only on the basis of the collateral lying in her Demat Account and the complainant never disputed at the relevant time despite having knowledge of the same rather she enjoyed that facility and the exposure given to the complainant was only to the extent of T+2+5 days after that no exposure was given towards the purchase of securities and all has been done according to the guidelines of the regulatory. The O.P.s also added that as far as Delay Payment Charges (DPC), if any, levied to the trading account concerned, it was as per the agreement executed by the complainant at the time of opening an account (Execution of KYC Documents) wherein, it had been categorically stated that ‘if there is a debit balance in the client’s ledger account at any time after posting of all operations, the company may levy interest on such debit balance at a rate up to 24% per annum calculated on daily basis during the continuation of any debit balance’.

The O.P.s also argued that the share trading is a commercial transaction which is beyond of the purview adjudication of Consumer Courts/ Forums instead the same is guided and could be adjudicated by the specified laws/ bye-laws/ guidelines and at this point the complainant and the O.P.s are bound by the Bye-Laws of the statutory authority, i.e., S.E.B.I. followed by the respective exchange bye-laws/ circulars/ guidelines issued from time to time and in view of the laws/ bye-laws, any and all disputes will be referred to the Arbitration in consonance with the Exchange Bye-Laws.

In support of his statement, the O.P.s referred some judgments, e.g.- (i) MORGAN STANLEY MUTUAL FUND v. KARTICK DAS (1994) 4 Supreme Court Case 225, Civil Appeal No. 4587 of 1994, (ii) In VIJAY KUMAR versus INDUSIND BANK-  (II (2012) CPJ 181 (NC), (iii) In STEEL CITY SECURITIES LTD. versus G P RAMESH & ORS (2014) 1 CPJ 576 (NC), (iv) VISHWANIDHI DALMIA V. INDIA INFOLINA COMMODITIES LIMITED 2017 (1) CPR 153 (NC), (v) In BAIDYANATH MONDAL V. KANAHAYA LAL RATHI (2022 SCC Online NCDRC 62), (vi) V.K. Agarwal (Dr.) vs. Infosys Technologies Ltd. and others; I (2013) CPJ 373 (NC), (vii) Som Nath Jain vs. R.C. Goenka and another; I (1994) CPJ 27 (NC) 1993 SCC Online NCDRC 75.

The prayers of O.P.s are as follows: -

1. Dismiss the Consumer Complaint No. 83 of 2022 filed on behalf of the complainant with exemplary costs, and/ or;
2. Refer the matter to the Arbitration as per the previous of Section 8 of the Arbitration and Conciliation Act, 1996, and/ or;
3. Pass any other/ further orders in favour of the O.P.s and against the complainant in the interest of Justice which this Hon’ble Commission deems fit and proper.    

List of Documents filed by the O.P.s:

1. Copy of Letter vide Reference No. MIRSD-2/OW/DB/SD/19296/2015, dated 09/07/2015. (Annexure: B)
2. Copy of Circular of NSEIL vide Circular No. NSE/COMP/30227, dated 13/07/2015. (Annexure: C)
3. Copy of SEBI Circular vide Circular No. CIR/MIRSD/2/2012, dated 15/02/2012. (Annexure: D1 & D2).
4. Copy of List of Judgments.  

Points for consideration

1) Whether the complainant is a consumer?

2) Whether the case is maintainable under the CP act 2019?

3) Whether this Commission has its jurisdiction to decide this case? 

4) Whether there is any deficiency in service in the part of the O.P. as alleged by the complainant?

5) Is the complainant is entitled to get any award and relief as prayed for? If so, what extent?    

Decision with reason:-

All the points are taken up together for consideration and decision.

Seen and perused the complaint petition and Written Version (W.V.) filed by the parties which are supported by the affidavit, documents filed by the parties. We are also heard arguments of both the parties in full length.

The complainant resides in the jurisdiction of Jalpaiguri and thus, this Commission has its territorial jurisdiction to decide this case.

In this case, the complainant purchased some shares from the O.P.s valued at Rs. 14, 60, 345. 12 paisa between 18/06/2019 and 20/06/2019 in her “D” Mat A/C No 1201910300448599 corresponding to Trading A/C No. CAD 1384 where from the complainant also sold some shares valued at Rs. 16,842/- on 25/06/2019 and 27/06/2019 and thus a clear Debit Balance was showing Rs 14,62,816.45 paisa including  penal interest 7,622,91 paisa in the ledger as on 30/06/2019 and as per the S.E.B.I. guideline the debit balance should be cleared within a week or latest by at the end of the month by selling out the shares purchased between 18/06/2019 and 20/06/2019 and mandatorily in case of any shortfall the shares so lying in the complainant’s D’ Mat A/C with the O.P. No.2 could be sold with prior intimation to the complainant always but the O.P. No.2 deliberately allowed to continue the debit balance for months to earn interest to suit Trading Member benefit but the share trading is a commercial transaction which is beyond of the purview adjudication of Consumer Courts/ Forums instead the same is guided and could be adjudicated by the specified laws/ bye-laws/ guidelines.

In this instant case, to determine whether the complainant will fall within the definition of Consumer under the Consumer Protection Act 2019 or not, we can refer the decision of the Hon'ble Supreme Court, MORGAN STANLEY MUTUAL FUND v. KARTICK DAS (1994) 4 Supreme Court Case 225, Civil Appeal No. 4587 of 1994, decided on May 20, 1994 where it held that-

A. Consumer Protection Act, 1986- Ss. 2(1)(d)(i), 2 (1)(i) and 2(1)(c)- “Consumer”- Meaning- Who is- Prospective investor in future goods not a consumer- Applicant for allotment of shares of company, being a prospective investor, not a consumer

In this situation the Commission always follows the decision of the Hon’ble Apex Court of India and this Commission has no right to ignore the decision of the Hon’ble Apex Court of India.

            So, as per the above discussion it is very much clear that the complainant is not a consumer and the Consumer Case No. 83/2022 be and same is dismissed in contest against the O.P.s (S.M.C. Global Securities Ltd.) without cost.

Hence, it is therefore,

ORDERED

That the Consumer Case No. 83/2022 be and same is dismissed  in contest against the O.P.s, S.M.C. Global Securities Ltd without cost.

 Let a copy of this judgment be given to the parties directly or through their representative Ld. Advocate for compliance free of cost.