DISTRICT CONSUMER DISPUTES REDRESSAL FORUM: BHADRAK
Dated the 16th day of July, 2018
Present 1. Shri Raghunath Kar, President
2. Shri Basanta Kumar Mallick, Member
3. Afsara Begum, Member
C.D Case No. 72 of 2017
Sri Rajesh Kumar Singh
S/o Sri Awadh Behari Singh
At: Laxmi Bhawan
Po: Kuans
Ps/Dist: Bhadrak
……………………. Complainant
(Versus)
1. The Managing Director
Bezel Group Corporate Office
33, 1st Floor, Maharsi Dayananda Marg
Corner Marner Mrket, Blok- P
Shivalik Colony
Malaviya Nagar,
New Delhi- 110017
2. The Managing Director
Bezel Group Regd. Office
D-6/16, Vasanta Vihar
New Delhi- 110057
…………………………..Opp. Parties
For Complainant: Sri Pradyumna Kishore Sahoo, Authorized Representative
Advocate for O.Ps: Sri Sudarsan Das, Advocate, Nayagarh Bar Association
Date of hearing: 20.03.2018
Date of order: 16.07.2018
SRI BASANTA KUMAR MALLICK, MEMBER
This dispute arises out of a petition/complaint filed by the complainant alleging deficiency of service.
The background facts as narrated in the complaint are to the effect that the complainant is an investor of opposite parties company and signed a mutual agreement by virtue of which complainant deposited some money in the O.Ps account giving them liberty to invest the same in the stock market for trading and to get the profit from the company regularly. As such the complainant is a consumer under the O.Ps as defined in section 2 (i)(d) of CP Act, 1986. Since the date of signing agreement with the O.Ps (Bezel Group), the complainant had been enjoying the service uninterruptedly till 27.06.2016 when the O.Ps stopped payment of benefits of the investment to the complainant although all charges and commissions for providing service were realized by the O.Ps for the whole period of three years but before expiry of the agreed period O.Ps, all of a sudden, stopped providing service and stopped on line payout system without any prior notice violating the terms of agreement as a result of which complainant sustained huge financial loss of more than Rs 15,00,000/- which amounts to deficiency of service and unfair trade practice. In spite of repeated requests when the O.Ps did not respond to pay the loss caused due to violation of terms of agreement as intermediary of the investment as an alternative remedy , complainant filed this dispute for proper adjudication with a prayer to direct the O.Ps for augmentation of loss sustained by the complainant.
O.Ps resisted the claim and contested the case. In the written version submitted, the O.Ps have raised the question of maintainability on the ground of jurisdiction, status of consumer and deficiency of service. It is submitted by the O.Ps that none of the respondents/O.Ps are having their business office at Bhadrak jurisdiction nor the cause of action either fully or partly arose within the territorial jurisdiction of Bhadrak Consumer Forum. In addition to above ground the O.Ps have also questioned how the deficiency was caused on the part of O.Ps in providing service to the complainant. It is further stated that the complainant approached the O.Ps for opening of a trading account with Bezel Stock Brokers Pvt. Ltd. doing it’s Trading business in stock market and has signed Know Your Client (KYC) application form of declaration for Electronics Contract Notes (ECN), authority letter for running account etc. The O.Ps have further stated that the complainant has concealed the important material facts from the Forum for unlawful gain. The KYC submitted by the complainant bears the address of complainant in Delhi but the dispute has been filed in Odisha and therefore the present complaint is not maintainable. Secondly the complainant is not a consumer as he has been using the services of the O.Ps for commercial purpose to make profit by buying and selling of shares in stock market. Furthermore the complainant is working in a Private Limited Company with handsome salary per month and that is why the complainant cannot claim as to he was doing his stock market business in order to earn his lively hood. Therefore the complainant is not a consumer within the meaning of Sec- 2(1) (d) of AP Act, 1986. In order to substantiate their contentions, O.Ps have submitted the circulars issued by National Stock Exchange (NSE) wherein it is distinctly mentioned that “as per settled position of law, regular trading of shares to earn profits are in the nature of commercial transactions”. Where a person engages a broker for the purpose of regular purchase and sale of shares, it falls within the scope of ‘commercial purpose’. Hence any dispute arising solely out of such commercial transactions may not fall within the scope of CP Act, 1986 for the purpose of seeking relief there under. In addition to above circular of SEBL and NSE, opposite parties have also submitted the decisions of State Commission Meghalaya pronounced on 14th September, 2013 and a decision of National Commission pronounced on dt. 03.02.2014 wherein it is held that “Regular trading in the sale and purchase of shares is purely commercial activity and only motive is to earn profit”. Finally it is submitted that the complainant was frequently doing trading since 2013 for buying and selling of shares to gain profit. In view of the circular issued by the National Stock Exchange on 13th July 2015 which reveals that “where a person engages a broker for the purpose of purchase and sale of shares, it falls within the scope of ‘commercial purpose’. Hence any dispute arising solely out of such commercial transactions may not fall within the scope of CP Act, 1986”. As the O.Ps have communicated notice to the complainant in the address available in KYC form much before discontinuing service with reason and refunded residue balance in the trading account of the client/complainant on 29.06.2016, it is absolutely unfair to dispute the matter in the Consumer Forum due to lack of cause of action and merit. Hence the dispute so filed by the complainant is liable to be dismissed with heavy cost.
We have gone through the complaint, subsequent rejoinder to original complaint, the written version of the opposite party, perused materials on record and observed as narrated here under.
1. Admittedly the complainant is a client-cum-investor in the stock market of the opposite parties as stock brokers and had been transacting purchase and sale of shares investing out of the funds made available in the trading account maintained with the O.Ps/stock broker. It is an admitted fact that the investor/complainant is a resident of Malabiya Nagar, New Delhi and presently working as a senior officer of FACOR, Madhab Nagar, and Bhadrak with handsome salary and other perks. The complainant was also having a trading account with the OP for trading shares in the stock market. Apart from above facts the other allegations made in the complaint are disputed by O.Ps.
2. The O.Ps, first of all, raised the objection of maintainability of the case on the ground of jurisdiction and also on the ground that the complainant is not a member within the meaning of CP Act, 1986 with reference to the circular issued by National Stock Exchange vide letter No. 210/2015 dt. 13.07.2015 which reveals that the persons engaged in investing money for purchase and sale of shares in stock market shall not be a consumer as the transactions made in the stock market are commercial in nature. On the other hand complainant stated in objecting the contentions of opposite party that both the complainant and O.Ps have entered into and signed an agreement for investing the surplus income in stock market and the O.Ps have to receive the service charges and commission for the service to be rendered to payout the benefits of such purchase and sales by way of crediting the bank account of the complainant. In this manner the trading in the stock market went on smoothly from 2013 to last week of June, 2016. But all of a sudden, the opposite party stopped online payout on 27.06.2016 without any prior intimation violating the terms of the agreement which amounts to deficiency of service. The complainant has, time and again intimated the OP in his official mail to let him know the reason as to why the trading and online payout was stopped and also requested the OP to continue trading in stock market which was also not responded by the OP. Furthermore the OP raised that the complainant should have to prove where the terms of the agreement between the parties were violated by the opposite party depriving the OP to get his legitimate claim. Furthermore it is submitted by the opposite party that the complainant had failed to comply with the rules and regulations and relevant circulars of National Stock Exchange of India and accordingly intimated the complaint on 04.09.2015 requesting him to comply as per NSE which was responded by the complainant negatively. Such act of the complainant also inflicted shock to the OP but without caring went on carrying business till the date of issue of intimation 13 April, 2016 and finally stopped trading on dt. 27.06.2016, after 2 months from the date of issue of notice through mail. Apart from the submissions of OP the complainant has also cited the Civil Appeal No. 8610 of 2011 decided on 12 October, 2011 to substantiate his claim about the maintainability of dispute in Consumer Forum.
Perused the materials on record and observed that the opposite party has served notice upon the complainant before 2 months from the date of discontinuance of service which does not amount deficiency of service and there is no violation of the terms and conditions of the agreement. Secondly in spite of notice on 04.09.2015 by OP, the complainant failed to comply the requirements as per NSE Rules and Regulations which compelled the OP to deny service to the complainant. In addition to above, the SEBI and NSE have issued circular which reveals that the persons investing in stock market for trading are the traders and such trading of buying and selling of shares in a regular manner is treated as commercial. Further the address mentioned in the know your client form reveals that complainant is the inhabitant of New Delhi and the online payout was credited to the account of the bank situated in Malabiya Nagar, New Delhi. Hence the complaint filed by the complainant suffers from various anomalies and the decision of Hon’ble Supreme Court cited by complainant is not found appropriate to the present case.
In view of the above discussions, it is finally concluded that the complainant has utterly failed to substantiate the allegations brought in the complaint and it is finally held by the Forum that the dispute lacks merit and liable to be dismissed on the ground of jurisdiction and maintainability.
ORDER
In the result, the present complaint be and the same is dismissed on contest and in the circumstances without cost.
This order is pronounced in the open Forum on this day of 16th July, 2018 under my hand and seal of the Forum.
