Date of Filing      10.03.2006

                                                                                                             Date of Disposal: 14.05.2024

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION

THIRUVALLUR

BEFORE TMT. Dr.S.M. LATHA MAHESWARI, MA. ML, Ph.D (Law),                                          …….PRESIDENT

               THIRU.P.VINODH KUMAR, B.Sc., BL.,                                                                              …….MEMBER-I

               THIRU.P.MURUGAN,M.Com, ICWA(Inter), BL.,                                                             ……MEMBER-II

RBT/CC.No.34/2024

THIS TUESDAY, THE 14^th DAY OF MAY 2024

Mr.R.Jayaprakash,

No.81, Thiru-Vi-Ka Nagar,

3^rd Street, New Teachers Colony,

Erode- 638 011.                                                                                       .....Complainant.

                                                                              //Vs//

1.The Managing Director,

    Bonanza Portfolio Limited,

    Block No.19, Ground Floor,

    Raghuvanshi Mills Compound,

    Senapati Bapat Marg.

    Lower Parel (West), Mumbai 400 013.

2.The Managing Representative,

   Bonanza Portfolio Limited,

   360, Old No.644,

   1^st Floor, Anna Salai, Chennai 600 006.                                       …..Opposite Parties.

Counsel for the complainant                                         : Party in Person

Counsel for the opposite parties                                  : M/s.S.Jayashankar, Advocate.

This complaint has been filed before DCDRC, Chennai (North) as CC.No.158/2018 and transferred to this commission by the administrative order in RC.No.J1/3145/2023 dated 09.11.2023 of the Hon’ble State Consumer Disputes Redressal Commission, Chennai and taken on file as RBT/CC.No.34/2024 and this complaint coming before us finally on 07.05.2024 and upon perusing the documents and evidences of both sides this Commission delivered the following:

ORDER

PRONOUNCED BY Tmt. Dr.S.M. LATHA MAHESWARI, PRESIDENT

1. This complaint has been filed by the complainant u/s 24 of the Consumer Protection Act, 1986 alleging deficiency in service against the opposite parties in the matter of share trading along with a prayer to direct the opposite parties to pay a sum of Rs.20,00,000/- towards compensation to the complainant.

Summary of facts culminating into complaint:-

2. Present complaint was filed by the complainant aggrieved by the act of the opposite parties in the matter of share trading.

3. The complainant invested Rs.50,000/- on 24.12.2005 with the opposite parties for Share Trading with at most faith that the opposite parties would act in a genuine manner in purchasing and selling the shares. However while downloading the Statement of Account dated 19.01.2006 he found that 2 transactions dated 20.01.2006 and 23.01.2006 in his account causing debit balance nearly Rs.1681.26/- and Rs.45,603.69/- as the balance amount for the transaction. Immediately the complainant contacted the Chennai Office and they contacted the Agent Office at Tirupur, the opposite parties at Tirupur Office modified the account by including a transaction showing credit of Rs.2830/- .  There was every possibility that the opposite parties entire dealings could be only be misconceived.  Therefore the complainant suspects the opposite parties genuineness in share trading business as the opposite parties making debit in the account without doing any business. Thus after issuance of legal notice the account was closed with a final settlement amount of Rs.50,261/- later showing a transaction for a credit of Rs.1,318.13/-.  Thus aggrieved by the act of the opposite parties the present complaint was filed to direct them to pay a sum of Rs.20,00,000/- towards compensation to the complainant.

The crux of the defence put forth by the opposite parties:-

4. The opposite parties filed version disputing the complaint allegations contending interalia that the complaint is not a consumer as per the definition of consumer and the business of share trading could not come under the purview of the Consumer Protection Act and there was no deficiency in service as contemplated under the purview of Consumer Protection Act to initiate the consumer proceedings. The 1^st opposite party was a registered trading member of the National Stock Exchange of India limited with SEBI Registration number INB 230637836 for cash market and INF 230637838 for derivatives market. The complainant had understood, appreciated and assumed all the risks associated with purchasing , selling and trading in various kinds of derivatives segment of the exchange from time to time in accordance with rules, bye-laws and regulations of derivatives segment of the exchange and approached the 1^st opposite party to invest/trade in those securities admitted for dealings on the exchange and agreed to be bound by all the rules, bye-laws and regulations issued by Securities and Exchange Board of India and invested a sum of Rs.50,000/- as margin for the business of the trading on 24.12.2005 and entered into an agreement dated 20.12.2005. There are two types of trading one is called Cash Market which is called "Normal' and another is called Derivatives Market which h called 'Future' and opposite parties as per agreement had dealt with Future and Normal Trading for and on behalf of the complainant from 29.12.2005 till 26.01.2006. In the Normal trading, credit or debit in the statement of account as per gain or loss when the securities were sold or purchased. In the Future trading, the trading is done in respect of securities in accordance with margin amount of the complainant and if there was any increase in price, then there would be a credit entry and similarly if there was a fall in price, there would be a debit entry in the account of the complaint and the same would be reflected in the statement of account with Bill number and settlement number and the same cannot be altered by anybody. This has been done by the opposite parties since the date of investment of the amount by the Complainant. The transaction done on 19.01.2006, relating to Normal trading under Bill No. 013/1106 dated 23.01.2006 has been reflected in the statement as per the Exchange rules and bye-laws. In the said transaction there was a credit for Rs.60.17 and the same has been reflected in the statement. Likewise the transaction done on 19.01.2006, relating to Future trading under Bill No.0119/1798 dated 20.01.2006 has been reflected in the statement as per the Exchange rules and bye-laws. In the said transaction there was a debit for Rs.1681.26 and the same has been reflected in the statement. Though the above said two trading were done 19.01.2006, as per Exchange rules and bye-laws, the Bill for Normal trading was reflected on 23.01.2006 and the Bill for Future trading was reflected on 20.0 2006. Further it is pertinent to point out here that there was no debit balance of Rs.45,603.69/- as alleged by the Complainant, but only a credit balance. The transaction done on 20.01.2006, relating to Future trading under Bill No. 0120/1811 dated 23.01.2006 has been reflected in the statement as per the Exchange rules and bye-laws. In the said transaction there was a credit for Rs.2380. In this transaction, the date 20.01.2006 was Friday, the next day Saturday, being the Holiday for Exchange the said bill was reflected only on 23.01.2008, being Monday as per Exchange rules and bye-laws. With the above clarification, the opposite parties deny the allegations contained in the complaint. The entries were made in the Statement of Account as per Exchange rules and bye-laws and in the alleged entries there was only a credit entry and no debit entry as alleged by the complainant. Hence there was no loss but gain in his account.  It was submitted that all the transactions were computerized transactions and the opposite parties had no control over the same. The difference in the Statement of Account could not be construed as a deficiency in service and hence the complaint is not maintainable in law or in facts. Complainant received the entire amount from the opposite parties on 27.01.2006 on his own volition without any whisper with regard to the alleged Statement of Account, however issued a legal notice on 28.01.2006 with intention to make a wrongful gain from the opposite parties. Complainant received the full and final settlement amount of Rs.50,621/- from the opposite parties on 27.01.2006.  The averments contained in the notice dated 28.01.2006 were utter false and self contradictory. Thus they sought for the dismissal of the complaint. 

Points for consideration:-

1. Whether the complaint is maintainable before this Commission as the transactions and issues involved between the parties relates to Share Trading?
2. If so whether the complaint allegations has been successfully proved by the complainant?
3. To what relief the complainant is entitled?

 Point No.1:-

5. The opposite parties had raised a preliminary issue with regard to the maintainability of the consumer complaint before this Commission stating that the complainant could not be brought under the purview of definition for “Consumer” under the Consumer Protection Act 1986.  Therefore this Commission decided to discuss the said issue at the first instance before going into the merits of the complaint.

6.   Though the complainant had filed documents no proof affidavit was filed in support of complaint allegations.  Inspite of several opportunities given to him no proof affidavit was filed by him until this stage. It is not in dispute that the complaint allegation relates to Share Trading.  The main contention of the complainant is that he invested Rs.50,000/- as per the Share trade usage and custom of the opposite parties.

7. In the recent decision rendered by the National Consumer Disputes Redressal Commission in Baidyanath Mondal vs Kanahaya Lal Rathi dated 29.04.2022, the issue as to whether Share Trading could be brought under the Consumer Protection Act was discussed and it was held as follows;

12.     Reading of the above makes it clear that a consumer is a person who buys goods or hires or avails of services for a consideration. The section, however, carves out an exception by providing that the person who purchases goods or hires/avails services for commercial purpose, shall not be included in the definition of Consumer. Explanation to Section 2 (1) (d), however, provides that if such services are availed exclusively for earning livelihood, he will be considered as a "Consumer." It is not the case of the Complainant that he had invested the money in share market exclusively for earning his livelihood. In this regard the State Commission observed as follows: -

"The above facts and circumstances clearly indicate that the transactions involved in the case on hand are commercial activities and such commercial activities are not exclusively for the purpose of self-employment of the Appellant/Complainant and thus the Appellant/Complainant is not covered by inclusive explanation appended to Section 2 (1) (d) of the Consumer Protection Act, 1986 and hence, the Appellant/Complainant does not fall within the definition of "Consumer" as defined u/s 2 (1) (d) of the Consumer  Protection Act, 1986."

13.     The State Commission relied on the judgment of this Commission in M/s Steel City Securities Ltd. vs. G.P. Ramesh & Anr. Revision Petition No.3060 of 2011 dated 03.2.2014 and dismissed the Complaint with the observation that the transaction was commercial in nature and the Complainant was not a "Consumer." Hon'ble Supreme Court in Morgan Stanley Mutual Fund vs. Kartick Das (1994) 4 SCC 224 held as follows: -

"33. Certainly, clauses (iii) and (iv) of Section 2(1)(c) of the Act do not arise in this case. Therefore, what requires to be examined is, whether any unfair trade practice has been adopted. The expression 'unfair trade practice' as per rules shall have the same meaning as defined under Section 36-A of Monopolies and Restrictive Trade Practices Act, 1969. That again cannot apply because the company is not trading in shares. The share means a share in the capital. The object of issuing the same is for building up capital. To raise capital, means making arrangements for carrying on the trade. It is not a practice relating to the carrying of any trade. Creation of share capital without allotment of shares does not bring shares into existence. Therefore, our answer is that a prospective investor like the respondent or the association is not a consumer under the Act. Q. 2: Whether the appellant company trades in shares?"

14.     Law laid down by Hon'ble Supreme Court in Morgan Stanley Mutual Fund (supra) still holds good. Petitioner has not produced any case law contrary to the above. In view of the aforesaid discussion and the law laid down by the Hon'ble Supreme Court, I find that the Complainant is not a Consumer. The State Commission has passed a well-reasoned order. The Petitioner failed to point any illegality or material irregularity in the impugned order, warranting interference in the revisional jurisdiction. Revision Petition is dismissed. There will be no order as to costs.

Thus, relying upon the above binding precedent wherein it has been clearly stated that a prospective investor or the association is not a consumer which principle squarely applies to the present facts of case, we have no hesitation to hold that the present complaint is not maintainable before this Commission.  Thus we answer the point accordingly in favour of the opposite parties and as against the complainant.

Point No.2&3:-

8. As we have held above that the complaint is not maintainable before this Commission we do not delve into the merits of the complaint and we left it open to be decided by the proper forum having jurisdiction.  

In the result, the complaint is dismissed.  No costs.

Dictated by the President to the steno-typist, transcribed and computerized by him, corrected by the President and pronounced by us in the open Commission on this 14^th day of May 2024.

        Sd/-                                                      Sd/-                                                                Sd/-

 MEMBER-II                                        MEMBER-I                                              PRESIDENT