By Jayasree Kallat, Member:

            This complaint is filed by Sri. P.A. Govindankutty Menoky alleging deficiency of service on the part of opposite parties and seeking the return of an amount of Rs.1,00,000/- which he had deposited with the opposite parties along with interest and compensation.  The first opposite party is a company registered as trading member of National Stock Exchange of India (NSE), which is also registered with the Securities and Exchange Board of India (SEBI).  The first opposite party is doing business of Share broking by trading shares/securities on behalf of the clients and distributing the profits out of which to the clients.  The second opposite party is the Branch Manager of the branch office of the first opposite party.  Complainant was attracted by the several advertisements of the first opposite party inviting deposits from the general public for share trading activities.  On 11-3-05 the complainant submitted an application for opening a D.P. account with the first opposite party, remitted Rs.450/- towards documentation and account maintenance charges.  The second opposite party informed the complainant that the registration formalities of D.P. account was completed and requested the complainant to deposit the amount with them for share trading.  Complainant on 9-4-05 approached the second opposite party and deposited Rs.1,00,000/- with the first opposite party.  The second opposite party issued a receipt in the name of first opposite party.  Complainant approached the second opposite party several times to collect the documents of deposits.  But the second opposite party did not furnish the documents.  As the second opposite party failed to furnish the documents of deposit, the complainant demanded second opposite party to refund the amount deposited.  Opposite parties have not refunded the deposit amount till this date.  The complainant has suffered much loss and hardships due to the irresponsible acts of the opposite parties.  Hence this complaint.

            The first opposite party filed a version denying all the averments in the complaint.  The first opposite party contents that being a registered stock broking company, first opposite party never accepts any deposit from anybody.  No advertisement in any media forever given by the company for acceptance of any deposits from public for share trading activities.  The first opposite party has never given any promise  of any kinds of returns or profits from any of the service offered by the company.   First opposite party denies the allegation that the complainant deposited Rs.1,00,000/-with first opposite party in lieu of which the second opposite party issued a receipt in the name of first opposite party and second opposite party assured the complainant that the pass book accounts statement and other documents could be issued to the complainant within one week.  The First Opposite party contents that all the statements are falsehood and baseless.  As per the  records of the company no such amount as stated in the complaint was received by the company.  The receipt alleged to have been issued by the second opposite party is an unauthorized receipt which is a bogus one.  The company never receives money from any of its clients by way of cash except for opening D.P. account.  All the transaction between company and clients are through accounts by way of D.D. and other methods.  There is no practice of issuing receipts.  The signature seen in the alleged receipt is not the signature of the authorized signatory of the company.  Hence the receipt invalid, fabricated and manipulated for the purpose of this case.  One Mr. Ramakrishnan Nair had been working as the Manager of the first opposite party in its Eranhipalam branch.   He had misused the letter pads of the company.  It  came to the notice of the first opposite party that Mr. Ramakrishnan Nair who had been working as the Manager of the branch office of the company at Eranhipalam borrowed money personally from  various persons and cheated them against which the Nadakkavu Police had registered a Crime as Crime No. 151/05 U/S 420 IPC against the said Ramakrishnan Nair.  At the instance of the complaint lodged by the company, he was dismissed from the employment of the company.  At that time he had already misappropriated the letter pads of the company from the companies’ office.  The first opposite party denies the allegation in Para-4 of the complaint that first opposite party did not refund the amount nor sent a reply to the letter dated 26-7-05.  First opposite party did not send a reply due to the fact that the complainant is not a registered client of the company.  The averments in the notice makes it clear that complainant’s business with the then Manager was personal business by paying cash for which company is not liable.  First opposite party states that the complainant did not have any trading account with the branch and he was not a registered trading client.  First opposite party imparts services only to the registered clients under the purview of capital market regulatory authorities.  First opposite party is only and intermediary between registered clients and the stock exchange. As far as the first opposite party is concerned the complainant was not a consumer of first opposite party.  First opposite party prays to dismiss the complaint with cost.

            Notice was sent to second opposite party. It was returned with the endorsement ‘unclaimed’. Hence second opposite party called absent and set exparte.

            The only point for consideration is whether the complainant is entitled to get any relief?

            PW1 was examined and Exts.A1 to A3 were marked on complainant’s side.  RW1 was examined and Ext.B1 was marked on first opposite party’s side.

            The case of the complainant is that attracted by the advertisement of first opposite party inviting deposits from the general public,for share trading activities which promised good profits, the complainant agreed to start a D.P. account with the first opposite party.  On 11-3-05 complainant submitted application in opening a D.P. account with the first opposite party and remitted Rs.450/- towards documentation and account maintenance charges.  The second opposite party informed the complainant that registration formalities of D.P. account was completed and requested the complainant to deposit the amount with them for share trading.  On 9-4-05 complainant visited the office of the second opposite party and deposited Rs.1,00,000/-.  The second opposite party issued a receipt in the name of first opposite party.  The second opposite party assured the complainant to make available the pass book account statements and other documents to the complainant within one week.  The complainant approached the second opposite party several times for the document but in vain.  The second opposite party did not furnish the document details.  So the complainant demanded the second opposite party to refund the deposit amount.  The amount was not refunded till date.  On 26-7-05 complainant sent a registered letter to the opposite parties requesting the refund of the amount.  There is no reply.  Hence the complainant issued a Lawyer notice dated 17-12-05 to both the parties.  The first opposite party replied alleging that the second opposite party along with a couple of marketing executives have collected deposit from several persons it was not remitted in the company’s account and those officials have been suspended from the service of the company.  Ext.A1 produced by the complainant in the letter pad of first opposite party shows a temporary receipt for a sum of Rs.1,00,000/- received from P.A. Govindankutty Menoky.  According to the complainant he had deposited this amount of Rs.1,00,000/- for share trading.  After depositing the amount the complainant did not get any documents regarding the deposit.  He could not do any trading in share.  Hence he has requested refund of the deposit amount along with interest and compensation from the opposite parties.  The definite case of opposite party-1 is that the complainant was never a registered trading client of the first opposite party.  He does not have any trading account with the branch and no money was received from him by the branch hence the company cannot return back any money to the complainant, which the company never received.  According to the version of the first opposite party one Mr. Ramakrishnan Nair had been working as the Manager of the first opposite party in its Eranhipalam branch who had misused the letter pads of the company, misappropriated money using the letter pads of the company.  The company had dismissed this Ramakrishnan Nair, the manager of the Eranhipalam branch.  Company also lodged a complaint against Ramakrishnan Nair who had been working as the manager of the branch of the company at Eranhipalam.  In Ext. A3 the reply to the notice sent by the complainant opposite party-1 clearly states that the complainant is not a registered client of the first opposite party.  The company has not accepted or received any money from him.  For share trading the company accepts only D.D. or other methods.  As the complainant is not trading client the opposite paprty-1 is not liable to have any trading contracts with this complainant.  Opposite party-1 produced Ext.B1 integrated stock broking services Pvt. Ltd. Branch Operation Manual.  In Ext.B1 Page-21-5- Statutory Requirements   ( C ) Cash receipt from clients shows that ‘ SEBI and NSE compulsorily prohibit receiving cash from the clients for settlement towards trading activity obligation.  The penalty for cash acceptance, for trading activity, is Rs.10000/- for the first offense and stiffer penalties for persisting offenses.  Hence, branches must note not to accept cash from any client for trading activity.  Only cheques or D.Ds can be accepted.  In case if there is any compulsion, due to collection of long over dues, then such cash receipts can not in any way exceed Rs.10,000/-‘.   This shows that the company cannot accept cash from any client.  From the evidence of PW1 the complainant, it has come out that he had received a temporary receipt Ext.A1 from opposite party-2 manager Ramakrishnan Nair.  In Page-2 deposition of PW1 he has stated that “ Ramakrishnan Nair has not signed in Ext.A1 as the authorized signatory.”  Page-3 the complainant has stated that Ramakrishnan Nair, manager  of the Eranhipalam branch had approached him in his house requesting to have an account with the opposite parties.  He had approached the complainant at his house and also contacted over phone.  Again Page No.5 of the deposition the complainant has admitted that he had visited Ramakrishnan Nair while he was in the Nirmala Hospital from where Ramakrishnan Nair has given a cheque to the complainant to ICICI bank calicut branch.  The complainant further states that ‘

Complainant further stated that that cheque was returned.  From the evidence and the Exts. it Goes to show that the complainant has deposited Rs.1,00,000/- with the second opposite party Branch Manager The Forum has come to the conclusion that the second opposite party has done unfair trade practice by misusing the letter pad of first opposite party and has been deficient in the service in the capacity of manager by accepting money promising interest for the deposit and profits.   As the second opposite party has practiced in an unfair negligent and deficient manner while he was the Manager of the branch of the company, the complainant is entitled to get back the amount from the second opposite party along with interest and compensation.  In this instance the Forum has been convinced that first opposite party has no contracts with the complainant, as the complainant is not the trading client of first opposite party.  Hence the second opposite party the branch manager who has received the money from the complainant is only liable to refund the amount to the complainant along with interest and compensation.

            In the result the petition is allowed and the second opposite party is directed to refund Rs.1,00,000/- to the complainant along with 10% interest from 25-5-06 the date of filing of the complaint till realization  along with compensation of Rs.10,000/-.

Pronounced in the open court this the 27th day of November 2008.

        Sd/-                                                                                          Sd/-

PRESIDENT                                                                           MEMBER

APPENDIX

Documents exhibited for the complainant

A1.  Photocopy of Temporary receipt dt. 9-4-2005.

A2.  Photocopy of Lawyer notice dt. 17-12-2005.

A2(a) Photocopy of acknowledgement.

A3.  Photocopy of reply notice dt. 31-12-2005.

Documents exhibited for the opposite party.

B1.  Branch Operation Manual of Integrated Stock Broking services Pvt. Ltd.

Witness examined for the complainant

PW1.  P.A. Govindankutty Menoky ( Complainant)

Witness examined for the opposite party.

RW1.  Ravindranath.K.P., Kaikott Kavil, Kuthiravattom-P.O., Calicut-673 0176.

                                                                        Sd/-

                                                                  PRESIDENT

                                                // True copy //

                                    (Forwarded/By order)

                                                                                    SENIOR SUPERINTENDENT.