Tamil Nadu

North Chennai

CC/62/2018

Mr.Sabaratnam ,S/o.meenakshi Sundaram - Complainant(s)

Versus

The Managing Director ICICI Bank - Opp.Party(s)

M/s.V.Anil kumar

06 Mar 2023

ORDER

Complaint presented on :05.02.2018              

 Date of disposal            :05.04.2023

                                                                                  

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION,

CHENNAI (NORTH)

@ 2^ND Floor, T.N.P.S.C. Road, V.O.C. Nagar, Park Town, Chennai – 600 003.

 

                PRESENT : THIRU. G. VINOBHA, M.A., B.L.,                          :PRESIDENT

                                      TMT. KAVITHA KANNAN, M.E.,                         : MEMBER-I

                           

C.C. No.62/2018

 

DATED WEDNESDAY THE 05^th  DAY OF APRIL 2023

 

M.Sabaratnam,

S/o.Meenakshi Sundaram,

New No.13, Old No.A 11,

Water Tank Road, MMDA Colony,

Arumbakka, Chennai-600 106.    

                                                             …..Complainant

 

 ..Vs..

 

1. The Managing Director,

ICICI Bank,

ICICI Bank Towers,

Bandra-Kurla Complex,

Mumbai-400 051.

 

2. The Manager,

ICICI Bank,

110, Prakash Presidium,

Nungambakkam High Road,

Uthamar Gandhi Salai,

Chennai, Tamilnadu-600 034.

 

3. The Manager ICICI Bank,

ICICI Bank,

Anna Nagar Branch,

A-78, Plot No.3211,

3^rd Avenue, Anna Nagar,

Chennai-600 102.                                                          …..Opposite Parties

 

 

Counsel for Complainant                          : M/s. V.Anil Kumar and 2 others

Counsel for  opposite parties                      : M/s. Shivakumar and Suresh

 

ORDER

 

 BY PRESENT : THIRU. G. VINOBHA, M.A., B.L.,  :PRESIDENT

This complaint has been filed by the complainant against the opposite parties under section 12 of the Consumer Protection Act, 1986 prays to direct the opposite parties to pay a sum of Rs.1102500/- as compensation towards the loss suffered by the complainant due to the negligence and deficiency in service of the opposite parties and to make payment of Rs.4832/- towards interest on the amount blocked from the date of blocking till the date of unblocking and to pay a sum of Rs.100000/-  as compensation towards mental agony caused to the complainant and costs.

1.THE COMPLAINT IN BRIEF:

          The complainant holds an LAS (Loan Against Securities) Account with the 3rd Opposite Party Bank's Anna Nagar Branch vide Account No: 602705039579 with ASBA facility. The complainant states that "APPLICATION SUPPORTED BY BLOCKED AMOUNT (ASBA)" is a process developed by the India's Stock Market Regulator SEBI for applying to IPO (Initial Purchase Offer), and that share can be bought directly through ASBA, with accounts associated with the 2^nd  Opposite Party. The 2^nd Opposite Party charges a considerable sum, being variable percentage on the nature of transactions, towards annual charges for providing the above services. The complainant state that during November, 2016 he and his family had applied to buy KARNATAKA BANK Rights Issue through the said ASBA feature of the 2^nd Opposite Party herein vide applications dated 18.11.2016. The details of applications along with the applicant’s name as follows

CAF No.	Name	No of shares Applied.
709003	M.Sabaratnam	500
709004	M.Sabaratnam	3324
708997	S.Visalakshi	2010
708993	S.Saravanan	3990
709002	S.Deepa	626
708994	S.Deepa	50

                    

          The complainant submits that applications for the Rights issue a sum of Rs.7,35,000/- (Rupees Seven Lakhs Thirty Five thousand only) was blocked by the ASBA Facility of the 2^nd Opposite Party from the complainant's account on 19.11.2016, after which there was no progress in the applications and no communication whatsoever was made by the 2^nd Opposite Party to the complainant with regard to the same in spite of several requests to the customer support of the opposite parties, while other applications of similar applicants were processed and the allotments were made. The complainant states that on 10.12.2016, to his surprise, the amount of Rs.7,35,000/- (Rupees Seven Lakhs and Thirty-Five Thousand Only) which was blocked for buying  Karnataka Banks Right Issue was unblocked and the said amount was credited back to his account only after an e-mail dt.09.12.2016 enquiring about the status of the Rights Issue. Subsequently, the complainant sent an email on 11.12.2016 to the integrated office at Bangalore asking for clarification for rejection of his applications. The complainant was merely intimated that his applications for the rights issue of Karnataka Bank was rejected and was further asked to enquire with the opposite parties for other details. Subsequently the complainant sent emails to Karnataka Bank and the opposite parties on 14.12.2016 enquiring about the rejection of his applications Karnataka Bank replied to the said e-mail stating that they we were not connected with the Issue since the applications were not received by them and requested the complainant to approach the opposite parties instead. The complainant states that, even after continuous enquiries and request for clarification there was no response from the opposite parties, which tantamount to deficiency in service. The complainant also personally visited the 2^nd Opposite Party seeking clarifications. In spite of waiting in the premises for almost 2 hours there were no proper response from them. The complainant states that, after repeated e-mails and personal visits, the customer support team of the Opposite Party replied to the complainant's e-mail and sought for all the details of the applications made by him. A reply was sent to the customer support vide e-mail dated 20.12.2016 with all the required information, after which the opposite parties replied claiming that the Relationship Manager will personally explain the situation to the complainant over the phone. The complainant states that, the Opposite Party being a renowned Bank had left him helpless in a situation of need. Since the beginning, right from failing to process the complainant's applications, to blocking his sum towards purchase of shares and later re-crediting it to his account without intimation, to failing to respond to his queries and making false statements, the opposite parties have been negligently handled the complainant's applications. The customer support didn't respond properly to the claims and e-mails of the complainant. They have been negligent in performing responsibilities and have failed to perform their duties as promised by them. Since there was no proper response from the 2^nd and 3^rd  Opposite Parties to the e-mails and repeated visits to their branches, the Complainant was constrained to issue a demand notice on 07.07.2017 calling upon the 2^nd opposite party to compensate the complainant for the loss suffered due to the negligence and deficiency in service on the part of the opposite parties. The 1^st opposite party through their Vadodara office replied on 06.09.2017 to the above demand notice, with a lame excuse for the first time, that only five applications can be made from a bank account per issue. The above defence of the opposite parties again exposes their deficiency in service and the negligent manner in which the account holder was dealt with. The complainant states that, total of six applications were made by him, it was only after receipt of the reply dt.06.09.2017, learnt by him that only five applications can be made from one account. No information regarding the same was furnished to the complainant by the 2nd Opposite Party. The 2nd Opposite Party had accepted all the six applications, without protest and any objection about the sixth application and blocked the said sum of                   Rs.7,35,000/- towards all the six applications. The complainant states that, the applications were submitted on 18.11.2016 and the final closing date for the submission of the applications was on 28.11.2016. That during this gap of 10 days the 2^nd Opposite Party could have advised about the limitation of 5 applications from one account and could have rejected the 6th application alone. That an ASBA known the rules of ASBA while accepting applications from customer. The opposite parties supported Bank should have committed serious deficiency in service in not informing the complainant about the alleged limitation of number of applications limited for an account and also by not processing the applications of the complainant despite blocking the amounts. Further states that, after much follow-up 13. The complainant also state the Deputy Branch Manager Mr Muthiah had accepted that the mistake was on the part of the 2^nd opposite Party bank and requested the complainant to give up the issue. The opposite parties without any communication have also committed deficiency of their services belatedly contending that the complainant had subscribed more than the permitted number of applications per account, in which event, the sixth application alone ought to have been rejected. In fact the opposite party orally admitted that the mistake occurred due to their staff's ignorance of the rules. The complainant submits that, the aforesaid acts and repeated follow-ups have caused mental agony to him, in addition to that the said money was blocked by the Opposite Party, the complainant was not in a position to use it from a different account to get the Rights Issue. The Rights issued by the Karnataka bank is an exclusive issue made to existing shareholders and the complainant being one among them has missed out on an opportunity to purchase the said shares at a discounted price because of the negligence committed by the 2^nd Opposite Party. The complainant states that, the Face value of the Rights Issue of Karnataka Bank when offered to him was Rs.70/-.  The complainant had applied for a total of 10500 shares at around Rs.735000/-. Subsequently the market price of each share grew up 150%. Hence prayed that to pay a sum of Rs.1102500/- as compensation towards the loss suffered by the complainant due to the negligence and deficiency in service of the opposite parties and to make payment of Rs.4832/- towards interest on the amount blocked from the date of blocking till the date of unblocking and to pay a sum of Rs.100000/-  as compensation towards mental agony caused to the complainant and costs.

2.WRITTEN VERSION FILED BY THE OPPOSITE PARTIES  IN BRIEF:

          The opposite party denies all the allegations and averments made in the complaint except those that are specifically admitted.  The complaint filed by the complainants was false, frivolous and vexatious and is as such liable to be dismissed.  The Opposite Parties submit that the present Written Version is filed without prejudice to file an Additional/Further/Supplemental Written Version upon better it particulars being made available to it by the Complainant in the above Complaint.  At the outset and without prejudice to the Opposite parties' submitted that the complaint itself is not maintainable as the complainant cannot within be considered to be a consumer the meaning of the Consumer Protection Act. The Hon'ble Supreme Court in the case of Morgan Stanley Mutual Fund vs.Kartick Das on 20/05/1994 has held that an investor is not a consumer and hence will not come under the purview of the Consumer Protection Act. The complaint is liable to be dismissed on this ground alone. In this case, the Hon'ble Supreme Court contemplated the issue of whether a prospective investor could be considered to be a consumer within the meaning of the Consumer Protection Act, 1986. With regard to the averments the complainant holds is an LAS Opposite Party vide Account No. made (Loan in para 3 of the complaint, it is true that the Against Securities Account) with the 3^rd opposite party bank A/c.No.602705039579 with ASBA (Application Supported by Blocked Amount) Facility. At the time of availing the ASBA facility in the year 2016, the Complainant s submitted the application form after being satisfied with the terms and conditions mentioned therein which governs the ASBA facility and its functioning. The Terms and conditions provide at Page 159 is reproduced below as follows Section "CAF", paragraph - 3. Line 1. The application form further states that "Customer while applying to the Rights Issue is thus deemed to have understood and accepted the terms of the issue." It is submitted that the Complainant has been routinely making use of the ASBA facility right from the time of availing the same and is well aware of the fact that the investor cannot submit more than five applications at a time. Further the Complainant had made six applications dated 18.11.2016 to the 2nd Opposite Party in respect of purchase of Kanataka Bank Rights Issue.  It is submitted that the process entitles that the Opposite Party receives applications from investors and based on the said applications,  a lien was then marked on the funds purchase of the shares mentioned in the said application. It is further submitted that on receipt of considerable applications from is marked on the amount held in the Complainant's account.  The mere scrutiny of the details contn the details and thereafter,  shares of the investors or in the name of the persons mentioned in the application(s) by the Opposite Parties. This is the normal procedure followed by the Opposite Parties for the purchase of shares. The Opposite Party further submits that in the above case, they had received the applications from the Complainant on 19/11/2016 and had blocked the requisite amount of Rs. 7,35,000/- from the Complainant's account Subsequently, on 10/12/2016, it was found that the were six applications instead of 5 thereby being contrary to the terms and conditions of the ASBA facility that had been accepted by the Complainant. As per terms and conditions, the presence of excessive applications above the limit of 5 constrains the Opposite Parties from entertaining the applications and as a result, the Opposite Parties had immediately credited the amount of Rs.7,35,000/- in back account of the Complainant. The complainant was very much aware of the said amount being credited account and the same was communicated to the Complainant by the Opposite Parties orally. It is further submitted that inspite of knowing that the amount was unblocked to his complainant has chosen not to meet the Opposite Parties and clarify know reasons for reversal of the amount. Further he is not aware that more than five applications should not be made from one account. Such assertions are wrong, the Complainant having previously submitted similar applications for the purchase of shares. The Application form itself clearly stipulates that an applicant  should not submit more than five application per issue. It is only after accepting terms and conditions of the ASBA process that the Complainant had signed the form. Having signed the form, the same constitutes a valid contract and the Complainant is bound to adhere to the same and cannot now back track and  claim ignorance of the terms contained therein. The Complainant is stopped from doing so and is legally bound by the agreement. It is denied that the Opposite party has committed a deficiency service. The Complainant had signed on the Application form and accepted the terms as stated supra. Furthermore, the Complainant has been engaging in ASBA transactions by availing of the facility for the past two years. The limit of five applications per bank account is not a term that would be unknown to him. Further submitted that the branch Manager of the Opposite Party had allegedly accepted the mistake is denied as wholly untrue and malicious. There was no alleged admission on the part of the Opposite Parties as falsely contended by the Complainant. At no point was such an admission made and the Opposite parties had only informed the Complainant about the ceiling limit as stipulated in the application forms even though the Complainant was aware of the same. It is submitted in view of the above reasons, the present complaint is not maintainable in law against the complainant. It is further submitted that the complainant is not entitled to claim any compensation from this opposite parties. It is further denied that there has been any deficiency of service on the part of the Opposite parties.

3. POINTS FOR CONSIDERATION:

1. Whether the complainant is a consumer ?

 

2. Whether there is any deficiency in service practice on the part opposite

parties as alleged in the complaint?

 

3. Whether the complainant is entitled for the reliefs prayed in the

    complaint.  If, so to what extent?

 

The complainant filed proof affidavit and documents Ex.A1 to A16 are marked on their side and written arguments.  The opposite parties filed written version, proof affidavit, written arguments and no documents are marked on the opposite party side.

4. POINT NO :1 and 2:-

          The fact that the complainant was having LAS account(Loan Against Securites) with the 3^rd opposite party bank in Account No: 602705039579 with ASBA facility and further fact that ASBA is a process developed by the India’s Stock Market Regulator through which shares can be directly bought through ASBA with accounts associated with the 2^nd opposite party for which a charge was collected by the 2^nd opposite party for providing the service and further the complainant applied to buy Karnataka Bank rights issue through the ASBA feature of the 2^nd  opposite party for himself and his family members by submitting application on 18.11.2016 and towards the same a sum of Rs.735000/- was blocked by 2^nd opposite party from the complainant’s account on 19.11.2016 and thereafter the said sum was credited to the account of the complainant on 10.12.2016 after sending email by the complainant on 09.12.2016 and the further fact that in between the period mentioned above there was no communication from the opposite parties with regard to non allotment of share and for recrediting the amount to the complainant’s account is not in dispute between the parties. But according to the complainant in spite of several request made by him to the customers support of the opposite parties there was no reply from the opposite parties as to why the shares which were applied by him was rejected and even the said Karnataka Bank has sent a email to the complainant has replied stating that they were no connected with the issue since the application were not received by them and directed the complainant to approach the opposite party and it is alleged by the complainant he was forced to issue a notice which is marked as Ex.A14 on 07.07.2017 for which a reply was issued by the opposite party which is marked as Ex.A16 stating that only five applications can be made from a bank account per issue and since the complainant has made six application knowing fully well about the terms and conditions mentioned in the applications and hence his application for issue of shares was not considered and consequently the blocked sum of Rs.735000/- was recredited to his account on 10.12.2016 and therefore the complainant alleged deficiency in service on the part of the opposite parties and claimed Rs.1102500/- as compensation which amount being the increase in share price at the time of filing complaint and claimed Rs.4832/- towards interest on the blocked amount during the period mentioned above and also claimed compensation for mental agony.

          5. But on the otherhand the opposite parties contended that the complainant having applied to purchase shares of Karnataka bank with an intention to earn profit is of a commercial nature and further he is only a prospective purchaser and the shares were not allotted to him and therefore there is no goods in existence and allotment of shares cannot constitute goods and there is no purchase of goods for a consideration and therefore contended that the complainant is not a consumer as defined in the CP Act 2019 and further contended that as per the terms and conditions provided at Page 159 in the application a customer while applying to the rights issue deem to  have understood the terms of issue and as per which no more than the five application  can be submitted per bank account in the issue and the applicant who has been engaging in ASBA transaction for the past two years very well know that he cannot submit morethan five application per account and hence the amount of Rs.735000/- which was blocked on the date of application was unblocked and recredited to his account and the same was communicated to the complainant orally by the opposite party and therefore denied the contention that his application was handled negligently and also denied the deficiency in service on their part.

          6. It is found from Ex.A1 that on 28.10.2016 the Karnataka Bank announced issue of shares to the value of Rs.70/- per share and invited application and it is found from Ex.A2 that on 18.11.2016 the complainant who was having an ASBA facility account with the 3^rd opposite party bank has applied through 2^nd opposite party for issue of shares to him and his family members and towards the same a sum of Rs.735000/- was blocked by the opposite party from his account and further it is found from Ex.A2 that he has submitted six applications on that day under Ex.A3 on 09.12.2016 the complainant sent an email to the Karnataka Bank that many of his friends have received allotment of shares but he has not received the same only after Ex.A3 mail admittedly on 10.12.2016 the blocked amount of Rs.735000/- was recredited to his account but without any letter, email or any message to the complainant as to why the shares were not allotted to him and the reason for recrediting the amount to his account.  For Ex.A4 mail, Ex.A5 reply  and Ex.A8 reply was sent by the opposite party on 27.12.2016 by simply asking the complainant to contact the relationship manager with details of application submitted by the complainant.  It is found from Ex.A11 reply by the opposite party dated 05.01.2017 the complainant was requested to visit the same branch were he has submitted his application for further assistance and it is further found on 06.01.2017 the complainant has forwarded to the customers support team of the opposite party the scanned copy of application submitted by him for Karnataka Bank rights issued.  It is found from Ex.A13 which is FAQs on ASBA IPO for investors that only five application can be made from a bank account per issue and it is further found from Ex.A16 dated 06.09.2017 the opposite parties replied that the complainant has submitted six application instead of five and hence his applications were rejected by the Registrar and further directed the complainant to take up the matter with registrar/non allotment.

          7. The counsel for the opposite party relied upon a decision reported in CDJ 2012 (Cons.) NCDRC Appeal No. 556/2010 Vijay kumar son of Sh.Jaswant Rai Vs The Branch manager Indusind Bank and contended that since the complainant is trading in shares which is a commercial transaction and hence he is not a consumer and further relied upon another decision SC Civil Appeal No. 4584 & 4587 of 1994 Morgan Stanley Mutual Fund Vs Kartick Das dated 20.05.1994 and contended that since the complainant is only a prospective investor there is no purchase of goods for consideration and hence he will not be a consumer as defined under the act. But the complainant counsel relied upon a decision reported in SCDRC Chandigarh Jatinder Singh Vs Bank of Baroda dated 15.07.2019 wherein it was held that the default on the part of Bank in processing the application for allotment of shares and later crediting the amount in the account of the complainant is a clear cut admission of deficiency in service on the part of the Bank.

          8. As per the definition of Sec.2(7) of the sale of goods act 1930 the term goods means every kind of movable property and includes stocks and shares also. In the present case the complainant has applied to buy Karnataka bank rights issue on 18.11.2016 by submitting application through 2^nd opposite party for himself and for his five other family members therefore such submitting of application to buy Karnataka Bank rights issue for his family members cannot be said to be a commercial purpose.  Further though shares were not allotted to the complainant admittedly the complainant was having LAS account with 3^rd opposite party with Account No: 602705039579 with ASBA facility for which the 2^nd opposite party charges certain amount for providing the above service and hence in respect of services rendered by the 2^nd and 3^rd opposite party to the complainant herein and for the deficiency or imperfection or the delay in rendering such service will naturally place the complainant in the position of a consumer and therefore it is found that the complainant will come under the definition of ‘Consumer’ as defined in the Act. Point No.1 is answered accordingly.

          9. On deciding the matter on merits there is no documentary proof filed by the opposite party to show that the complainant was given the terms and conditions contained in the applications and there is no proof to show that the terms and conditions were read over and understood by him and signed by him.  No person will submit six application knowing fully well that he can only submit five application per account and hence there is no force in the contention of the opposite party that the complainant submitted six application knowing fully well that he can submit only five applications.  Even for arguments sake if the complainant has submitted six applications wrongly it is the duty of the opposite parties 2 and 3 to immediately respond to the complainant by explaining the position and since the closing date for the issue is only on 28.11.2016 the complainant could have rectified such defects for which no opportunity was given to him by the opposite parties by sending any immediate reply by way of email or message and only after several email and request by the complainant the opposite party explain the reason for rejection of his application and for recrediting of the amount after a delay of 20 days which clearly amounted to negligence and deficiency in service on the part of the opposite parties. Though the complainant alleged that the value of share applied by the complainant raised from Rs.70/- per share to Rs.175/- per share and thereby he was put to loss of Rs.1102500/- there is no documentary proof filed by the complainant to prove such contention.  There is no valid explanation offered by the opposite parties for keeping the blocked amount of Rs.735000/- from 19.11.2016 to 10.12.2016 for about 20 days without even paying interest for the said amount during that period which will amount to unlawful enrichment on the part of the opposite parties and therefore it is found that the opposite parties 1 to 3 have committed deficiency in service in not providing interest for the blocked amount during the said period and also for the delay in recrediting the amount and for the delay in not communicating to the complainant immediately rejection of his application. Point No.2 is answered accordingly.

10. POINT NO :3 :-

          Based on finding given Point No.1 and 2 there is deficiency of service on the part of opposite parties 1 to 3  and hence the complainant is entitled for payment of Rs.4832/- towards interest on the amount blocked from 19.11.2016 to 10.12.2016 and to entitled for a sum of Rs.50000/- towards compensation for the mental agony caused to the complainant and Rs.5000/- towards cost of the complainant. Point No.3 is answered accordingly.

               In the result the Complaint is partly allowed.  The opposite parties 1 to 3 are directed to pay Rs.50,000/- as compensation for the deficiency in service and to pay Rs.4832/- towards interest on the amount blocked from 19.11.2016 to 10.12.2016 and Rs.5,000/- towards cost of complaint to the complainant.  The above amount shall be paid to the Complainant within two months from the date of receipt of the copy of this order, failing which the above said amount shall carry 9% interest from the date of order to till the date of payment. 

Dictated by the President to the Steno-Typist taken down, transcribed and computerized by him, corrected by the President and pronounced by us in the open Commission on this the 05^th day of  April 2023.

 

MEMBER – I                                                                                   PRESIDENT

LIST OF DOCUMENTS FILED BY THE COMPLAINANT:

Ex.A1	28.10.2016	Abridged letter of Karnataka bank ltd.
Ex.A2	18.11.2016	Acknowledgement slip for the complainant buy the shares of Karnataka bank.
Ex.A3	09.12.2016	Email sent to the Karnataka bank.
Ex.A4	14.12.2016	Email sent by the complainant to opposite party.
Ex.A5	19.12.2016	Reply mail sent by the opposite party.
Ex.A6	15.12.2016	Email sent by the complainant.
Ex.A7	20.12.2016	Reply mail sent by the complainant.
Ex.A8	27.12.2016	Reply mail sent by the opposite party.
Ex.A9	02.01.2017	Email sent by the opposite party.
Ex.A10	03.01.2017	Reply mail sent by the complainant.
Ex.A11	05.01.2017	Reply mail sent by the opposite party.
Ex.A12	06.01.2017	Email to the complainant.
Ex.A13	06.07.2017	FAQs on ASBA IPO for investors.
Ex.A14	07.07.2017	Notice to the 2nd opposite party.
Ex.A15	10.07.2017	Acknowledgement card.
Ex.A16	06.09.2017	Reply notice by the opposite party.

 

LIST OF DOCUMENTS FILED BY THE OPPOSITE PARTIES:

-NIL-

 

MEMBER – I                                                                                   PRESIDENT