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, 5th 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 his plaint that being impressed with an advertisement of O.P. company on T.V. channel he purchased some shares from the O.P.s valued at Rs. 11,34,167.67/-dated 17/06/2019 and 18/06/2019 in his “D” Mat A/C No 1201910300132516 corresponding to Trading A/C No. CAD 0773 with the O.P. No.2. 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 17/06/2019 and 18/06/2019 and mandatorily in case of any shortfall the shares so lying in the complainant’s D’ Mat A/C with the O.P. could be sold with an intimation to the complainant always but the O.P. 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 he could sustain loss lightly to be restricted to Rs. 10, 000/- or less and thereby he could save Rs. 20, 00000/- (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, 32,623.20/- in an irregular manner. The complainant also added that the O.P.s with their own interest had increased the position of the Pool Account and transferred the shares of the complainant from complainant’s D’ Mat A/C for availing margin facility from S.E.B.I.
The complainant argued in his plaint that on 02/12/2020 sent a letter with supporting statement to the O.P. No.1 mentioning his 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. 19,55,000/- - Rs. 4,33,000/-) 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, i.e., Rs 15,22,000/- or more; refund of penal interest of Rs. 1,32,623.20/- 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 and regarding this on 07/12/2020 the complainant sent a letter to the O.P. No.1 along with mention the compensation amount of Rs. 25,00,000/- .
The prayers of complainant are as follows: -
To pass an order directing the O.P.s to pay the complainant of Rs. 15,22,000/- rounded being difference between the values of shares purchased and value of selling out shares as per S.E.B.I. guidelines T+2 and T+5 days, i.e., (Rs. 19,55,000- Rs. 4,33,000) = Rs. 15,22,000/- rounded held in D’ Mat A/C of the complainant and the Pool A/C of the O.P.s
To pass an order directing the O.P.s for payment of Rs. 1, 32,623/- rounded from June, 2019 to March, 2020 as refund of penal interest.
To pass an order directing the O.P.s for making payment of Rs 3,60,000/- 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 O.P.s.
To pass an order directing the O.P.s for making payment of Rs. 25,00,000/- 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 as compensation.
Cost of litigation Rs 10,000/-.
Any other relief or reliefs which your complainant entitled to.
List of Documents filed by the complainant:
Photocopy of correspondence, dated 02/12/2020.
Photocopy of Total Interest Charged.
The photocopy of Track Consignment.
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, 5th 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 complainant executed the documents, (K.Y.C. Form), to carry out trades in the market wherein there exists an arbitration clause and hence, the complainant violated the relevant statutory procedures/ Guidelines/ Directives/ provisions of S.E.B.I. / N.S.E. Bye-Laws, Rules and Regulations etc. The O.P.s also argued that during entire trading tenure the complainant did not show any grievance against the O.P.s but as the complainant suffered losses in the normal course of business he shifted the burden of his own actions in-actions upon the O.P. The O.P.s also added that the transactions were executed by the complainant fall under the mandate of S.E.B.I. and Exchange’s guidelines and S.E.B.I. and Exchanges have been taken care, duly monitored and regulated all trading activities in the Stock Markets and have mechanism to take care for the grievance of the investor and specific arbitration mechanism had been already in place at the platforms of exchanges on the basis of the prescribed and provided guidelines of S.E.B.I. and it is relevant to point out that K.Y.C. which was duly signed by the complainant contain the arbitration clause. The O.P.s also argued that the complainant nowhere mentioned in his complaint that he was invested his money in shares not for profit and the same was not invested for his livelihood purpose which clearly indicated that the complainant was engaged in commercial activities and therefore, the complainant was not a consumer as per the C. P. Act, 2019.
The O.P.s also argued that the complainant approached the O.P. to avail services, buying and selling/ speculative trading in the market and opened an account with the O.P. by executing Client Registration Form (C.R.F.) with other requisites documents including Risk Disclosure Documents (R.D.D.), Policy and Procedures, Terms and Conditions etc. and became registered constituent of the O.P. after opening of the account the complainant was provided with Welcome Kit which included his mobile no., segment of registration, correspondence address, e-mail id and he was also asked to raise the discrepancy if any to which the complainant never pointed out any discrepancy and these credential were used to supply trade related information and the complainant never showed any grievance but when the things turned in opposite direction, he became invoked this complaint. The O.P. specifically denied in his W.V. that he deliberately allowed complainant to continue the debit balances in order to earn interest. The O.P. also argued that the levies made in the account of the constituent were based upon the documents duly executed by the constituent and as per the agreed rates and hence, the complainant was not entitled to get any relief from this Hon’ble Commission.
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.
List of Documents filed by the O.P.s:
Copy of Resolution passed by the Board of Directors. (Annexure: A)
Copy of relevant KYC documents, Docket B- part of KYC along with annexed documents. (Annexure: B)
Copy of Welcome Letter. (Annexure: C)
Copy of SMS Log, Contract Note, Sent Log/ Margin Statement/ Ledger Sent Log. (Annexure: D and E)
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 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.
The complainant argued in his plaint that being impressed with an advertisement of O.P. company on T.V. channel he purchased some shares from the O.P.s valued at Rs. 11,34,167.67/-1dated 17/06/2019 and 18/06/2019 in his “D” Mat A/C No 1201910300132516 corresponding to Trading A/C No. CAD 0773 with the O.P. No.2. 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 17/06/2019 and 18/06/2019 and mandatorily in case of any shortfall the shares so lying in t he complainant’s D’ Mat A/C with the O.P. could be sold with an intimation to the complainant always but the O.P. deliberately through their office in Kolkata allowed to continue the debit balance for months to earn interest to suit Trading Member benefit.
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. 09/2021 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. 09/2021 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.
