DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, PALAKKAD
Dated this the 22nd day of October 2012
Present: Smt.Seena.H, President
: Smt.Preetha.G.Nair, Member
: Smt.Bhanumathi.A.K, Member Date of Filing :24/12/2011
CC No.200/2011
K.K.Prabavathy,
1/37, “chaithanya”,
A.R.Nair Colony,
Kunnathurmedu,
Palakkad – 678 013 - Complainant
(By M.Ramachandran,Gen.Secretary,
Consumer Protection Council of Palakkad)
Vs
1.Regional Manager,
JRG Securities Limited,
“JRG House”,Ashoka Road,
Kaloor, Kochi – 682 017
(By Adv.N.N.Azad)
2. Manager,
J.R.G.Securities Limited,.
Western Hall No.11-2,
Municipal Complex,
Opposite Dist.Hospital,
Palakkad – 678 001 - Opposite parties
O R D E R
By Smt.BHANUMATHI.A.K.
The brief facts of the complaint is as follows:
The complainant is having a trading account with 1st opposite party from 11/7/06. The account code of the said trading account is KTRN 4009. The above account was operated through the 2nd opposite party in Palakkad. When the complainant left for Bangalore on Septemebr 2006, the 2nd opposite party was given Power of Attorney to deal with the company’s account. When the complainant received a final summary dated 7/8/09 from the 1st opposite party through the 2nd opposite party it has came to know that 1000 shares of Bellary Steels & Alloy which were held by the complainant was sold out for much loss. Similar cases can be seen on going through the Ext.A1 and A2 document. In the month of Septemebr complainant requested the 2nd opposite party to sell some shares. Then the complainant got a list dated 30/9/2009 from the 2nd oppsoite party from which the complainant came to know that only a few shares were left on the complainant’s behalf. Seeing the list dated 7/8/09 the complainant was under the impression that there were sufifcient number of shares to sell. On enquiry with 1st and 2nd oppsoite parties the complainant was given another list dated 9/6/2010 which contained a few shares. So it is clear that the opposite parties purposfully sold the shares at loss without intimating the complainant. The complainant sent two letters to the opposite parites to recoup the complainant’s loss. But these letters were not replied.
The opposite parties sent a reply notice to the lawyer notice sent by the complainant. But the contents of the said reply notice is not correct. The complainant was not informed regarding the transactions executed in the trade account by the opposite parties. The transaction were done by the opposite parties without the instruction from the complainant. The act of opposite parties caused mental agony and financial loss to the complainant.
So the complainant seeking an order directing the opposite parites to the following:
1. Regain the shares sold on loss with higher market rate during the period of 7/8/2011 to 30/9/2011.
2. A compensation of Rs.5,00,000/-for mental agony.
3. Rs.10,000/- towards cost
4. Interest at the rate of 10% for the loss suffered by the complainant.
1st opposite party entered appearance and filed version. 2nd opposite party remained exparte.
Opposite party raised a specific contention that the complaint is not maintainable before the Forum for the reason that the transactions between the parties are purely commercial in nature. 1st opposite party admits that there was a member-client agreement in connection with share broking business for functioning JRG Securities Ltd. as the stock broker of the complainant. The complainant had executed a risk disclosure document which clearly states and contains the risks involved in carrying out the business transactions and possibility of incurring loss or profit. The complainant had requested to accept her verbal instruction or order over phone and execute the same and confirm to her by sending contract notes. The complainant was informed of all transactions regularly by delivering contracts notes through e-mail. The complainant is duty bound to verify the correctness of the transactions immediately after receiving the e-contract notes within 24 hours of the receipt of those contract notes. The complainant had not raised any disputes for that purpose. It is not correct to say that the complainant was not informed about the selling of the shares. The purchase and sale of shares includes a lot of risks. The share market is binding on several factors and depending on these, the values of shares either move up or down and the prospects of the transactions done in share business are quite unpredictable. The complainant had never explained the loss occurred. There is no deficiency of service on the part of opposite party and the complaint is liable to be dismissed with cost to the opposite party.
Both parties filed their respective affidavits and Ext.A1 to A7 and Ext.B1 to B6 marked. Complainant was cross examined as PW1.
Matter heard.
Issues to be considered are;
1. Whether the complaint is maintainable before the Forum ?
2. Whether the opposite parties are deficient in their service ?
3. If so, what is the relief and cost?
Issue No.1
Opposite party has raised a specific contention that the complaint is not maintainable as the transaction between the complainant and the opposite parties are purely commercial. As it is submitted, the complainant is a pensioner, who entrusted her retirement benefits with opposite parties to fetch some money to meet the living expenses. So the complaint is maintainable before the Forum.
Issue No.2 & 3
The complainant is a pensioner, retired from the post of Price Supervisor Office in Statistics Department. To meet the expense of living, she had entrusted her retirement benefits with opposite party to purchase and sell the shares. The account code of the said trading account is KTRN-4009. When the complainant left for Bangalore the 2nd opposite party was given Power of Attorney to deal with the complainant’s account. When the complainant received a final summary dated 7/8/09 and 30/9/09 (Ext.A1 & A2) the complainant came to know that a large number of shares were sold out for in much loss. From Ext.A2 the complainant came to know that only a few shares were left to the complainant. All these shares are sold by the opposite parties without intimating the complainant. The transactions were done by the opposite parties without the complainant’s instruction, consent and knowledge. In the version it is stated that the complainant had requested to accept her verbal instruction or order over telephone and executing the same and confirm to her by sending contract notes. But opposite party has not produced any documents to show the same. While cross examining the complainant admitted that she had given Power of Attorney to deal with the complainant’s account to the 2nd opposite party. But the complainant also submitted that to sale the shares the delivery instruction slip must be signed by the complainant. But it is not done. The opposite parties also stated that the complainant was informed of all transactions regularly by delivery contract notes through e-mail as per an agreement executed by the complainant. That agreement also not produced. 1st opposite party had been sending SMS to complainant’s mobile phone number which was registered by the complainant with the 1st opposite party. But in the Ext.B5 Account opening form, two mobiles numbers can be seen. According to the complainant she did not get any type of contract notes and SMS alerts. Opposite party states that the complainant had executed a risk disclosure documents which clearly states and contain the risks involved in carrying out the transactions and possibility of incurring loss or profit. But the said risk disclosure document is not produced before the Forum. Regarding the prayer, the complainant herself admits that the shares already been sold. So it is not possible to regain the same. The complainant is not aware about how much money she had spent for purchasing the shares and how many shares have been purchased. The complainant authorized the opposite parties to utilize the shares in prudently to fetch more profit. But opposite parties sold the shares in much loss without the instruction from the complainant.
From the above discussions we are of the view that the opposite party made the transactions without the instructions or consent from the complainant.
In the result complaint partly allowed. Opposite parties are jointly and severally directed to pay an amount of Rs.5,000/- (Rupees Five thousand only) as compensation and Rs.1,000/- (Rupees One thousand only) as cost of the proceedings.
Order shall be complied within one month from the date of receipt of order, failing which the complainant is entitled for 9% interest per annum for the whole amount from the date of order, till realization.
Pronounced in the open court on this the 22nd day of October 2012.
Sd/-
Seena.H,
President
Sd/-
Preetha.G.Nair,
Member
Sd/-
Bhanumathi.A.K,
Member
APPENDIX
Exhibits marked on the side of the complainant
Ext.A1 – Final Summary dated 7/8/09
Ext.A2 – Final summary dated 30/9/09
Ext.A3 – Final summary dated 9/6/2010
Ext.A4 – Copy of letter dated 6/4/2011 addressed to 2nd oppsoite party
Ext.A5 – Copies of letter dated 17/5/11 with AD and receipt to opposite parties
Ext.A6 – Copy of lawyer notice addressed to opposite parties
Ext.A7 – Reply from the 1st opposite party
Witness examined on the side of the complainant
PW1 – K.K.Prabhavathy
Exhibits marked on the side of the opposite party
Ext.B1 – Photocopy of financial statement 2008-09 of 1st opposite party
Ext.B2 – Photocopy of financial statement 2009,2011 of 1st opposite party
Ext.B3 – Photocopy of SMS details sent by 1st opposite party to the complainant
from 1/4/10 to 30/9/11
Ext.B4 – Photocopy of SMS details sent by 1st opposite party to the complainant
from 1/4/10 to 31/3/11
Ext.B5 – Notary attested copy of Account Opening form
Ext.B6 – Agreement between opposite parties 1 & 2
Cost
Rs.1,000/- allowed as cost of the proceedings
