PER SHRI. S.B.DHUMAL - HON’BLE PRESIDENT :
1) In brief, consumer disputes between the parties is as under :-
According to the Complainant, the Opposite Party No.1 is a Registered under the Companies Act, 1956 and carrying on the business of stocks and shares in National Stock Exchange at Mumbai as a Trading Member as well as Principal Broker of the Opposite Party No.2. Opposite Party No.2 is a registered firm carrying on business of shares brokerage Financial and Investment Consultancy and Money Manager as a Sub-Broker of Opposite Party No.1 having its principal place of business at Hubli, Dist. Dharwad, Karnataka State.
2) On 25/01/1999, the Complainant hired the services of Opposite Party No.1 & 2 and placed the order to the Opposite Party No.2 to purchase 1,000 Equity Shares of SU-Raj Diamonds & Jewellery Ltd. at NSE at Mumbai, through its Principal Broker, the Opposite Party No.1, for his livelihood, by issuing a account payee cheque, bearing No.452432, dtd.13/10/1998 for Rs.70,000/- in favour of Opposite Party No.1 & 2 towards price of supra noted equity shares of Rs.12,950/- inclusive of brokerage of Opposite Party No.1 & 2. Accordingly Opposite Party No.2 issued Purchase Contract Note, bearing No.990/25/30, dtd.25/01/1999 to the Complainant and thereby confirming the purchase of above noted equity shares for the Complainant at NSE through Opposite Party No.1 @ Rs.12.95 per equity share, assuring that delivery of the said Share Certificate within 6-10 weeks from the date of issue of purchase contract note as per the Provision No.3 Sub-Clause-C of the terms and conditions of aforesaid purchase contract note.
3) It is submitted that by virtue of terms and conditions laid down in Sub-Clause C of para no.3 of purchase of contract note dtd.25/01/99, the Opposite Party No.1 & 2 were required to deliver aforesaid shares to the Complainant within 6/10 weeks from the date of purchase contract note, which neither of them delivered after the expiry of 6/10 weeks thereafter. Thus, Opposite Party No.1 & 2 violated the terms and conditions of contract note and it amounts to deficiency in service on the part of Opposite Party No.1 & 2.
4) The Complainant approached Opposite Party No.1 and 2 for delivery of aforesaid shares on many occasions, but Opposite Party No.1 & 2 avoided to deliver the said shares under one or the other pretexts and ultimately failed to deliver the said shares to the Complainant.
5) Due to non-delivery of aforesaid share by Opposite Party No.1 & 2 to the Complainant, the Complainant could not trade and sell them at any Stock Exchange when price of the said shares were high of Rs.114.90 as on 01/01/2008 and low of Rs.17.05 on 06/03/09 and thereby, the Complainant sustained loss of Rs.93.55 paise per equity share as shown in the NSE Historical Security-wise Price Volume Data, for which the Opposite Parties are jointly and severally liable to pay the compensation to the Complainant.
6) Non delivery of the aforesaid shares by the Opposite Party No.1 & 2 caused hardship, mental agony, harassment and inconvenience to the Complainant and therefore, Opposite Party No.1 & 2 are jointly and/or severally liable to pay to the Complainant Rs.1 Lac as a compensatory damages. The Complainant in complaint para no.8 has given details of loss and compensation. It is contended that cause of action for this complaint arose on 01/01/08 when the price of SU-Raj Diamonds & Jewellery Ltd. Equity Shares appreciated to Rs.114.90 and depreciated to Rs.17.05 as on 06/03/2009 and the cause of action also arose when the Complainant approached Opposite Parties and demanded delivery of the aforesaid shares.
7) It is submitted that Opposite Party No.1 has its Registered Office at Mumbai. The Opposite Party No.1 carries on business of Stock Brokerage at Mumbai. The Complainant had hired services of Opposite Party No.1 & 2 to purchase aforesaid shares for him at NSE at Mumbai and so this Forum has territorial jurisdiction to entertain and try this complaint.
8) The Complainant has requested to direct the Opposite Parties to pay to the Complainant Rs.97,850/- towards the loss sustained by the Complainant. He has requested to direct Opposite Parties to pay the Complainant Rs.1,00,000/- Lac as a compensatory damages and cost of this complaint. The Complainant has requested to direct Opposite Party No.1 & 2 to deliver shares of SU-Raj Diamonds & Jewellery Ltd. mentioned in the complaint. The Complainant has prayed for interest @ 2% p.m. on aforesaid amount till realization of entire amount. In support of complaint the Complainant has filed his affidavit and produced documents as per list of documents.
9) The Opposite Party No.1 has filed written statement and thereby resisted claim of the Complainant submitting that complaint deserves to be dismissed with cost. It is submitted that present Complainant has filed similar complaint on the same ground and on the same cause of action before District Consumer Forum, Dharwad and the complaint was rejected by the said Forum on 30/06/2008. Therefore, present complaint is not maintainable.
10) It is submitted by the Opposite Party No.1 that present complaint is barred by limitation. As there is no privity of contract between the Complainant and Opposite Party No.1, complaint against Opposite Party No.1 deserves to be dismissed.
11) It is submitted that the Complainant is not a ‘Consumer’ under the Consumer Protection Act, 1986. Transaction between Broker, Sub-Broker in respect of exchange of securities is governed by Rules and Regulations under SEBI. A business of stock trading is purely and exclusively commercial in nature and therefore, present complaint is not maintainable before this Consumer Forum.
12) It is submitted that cause of action for this complaint is not taken place within territorial jurisdiction of this Forum and on that ground also complaint is liable to be dismissed.
13) It is submitted that there is no deficiency in service on the part of Opposite Party. The Complainant has falsely alleged that the Complainant had approached Opposite Party No.1 for delivery of shares in-question. Opposite Party has denied each and every allegation made by the Complainant and submitted that complaint deserves to be dismissed with compensatory cost. Opposite Party No.1 has produced photo copy of judgement and order dtd.30/06/08 passed by District Consumer Forum, Dharwad, in Complaint No.97/2001.
14) Opposite Party No.2 has filed written statement and resisted claim of the Complainant on similar grounds raised by Opposite Party No.1. It is submitted that the Complainant has already filed Complaint No.97/2001 before the District Consumer Forum, Dharwad in respect of the same subject matter and said complaint was decided on merit by the Hon’ble District Consumer Forum, Dharwad, by order dtd.30/06/2008. Subject matter and Parties in Complaint No.97/2001 are the same. Complaint No.97/01 was dismissed by Consumer Forum, Dharwad. The Complainant had filed appeal before the Hon’ble State Commission, Bangalore and said appeal has been dismissed for non-prosecution.
15) The Complainant has suppressed material facts form this Forum and on this ground also complaint is liable to be dismissed. Present complaint is barred by limitation. No delay condonation application is filed alongwith complaint and therefore, present complaint is liable to be dismissed.
16) It is submitted by Opposite Party No.2 that the Complainant is not a ‘Consumer’ within the definition of Consumer under the Consumer Protection Act, and there is no pre-existing contract between the Complainant and Opposite Party No.1 & 2. The Complainant is only being a prospective buyer as there is no allotment of share certificate in respect of the said matter. The Complainant has not made payment as per the contract note and therefore, complaint is not maintainable before the Consumer Forum.
17) The Opposite Party No.2 has denied the allegations made in the complaint. According to the Opposite Party No.2, there was breach of contract by the Complainant by not making payment within stipulated period.
18) It is submitted that in the complaint the Complainant has shown false cause of action. Averment made in the complaint are misleading. Complaint is barred by law of limitation and no cause of action took place within territorial jurisdiction of this Forum and therefore, this Forum has no jurisdiction to decide this complaint and hence, complaint is liable to be dismissed. It is submitted that the Complainant is not entitle to any relief claimed and therefore, complaint be dismissed with heavy cost. Alongwith written statement the Opposite Party No.2 has produced documents as per list of documents.
19) The Complainant has filed rejoinder and thereby denied allegation made in the written statement of the Opposite Parties. The Complainant has filed affidavit of evidence and written argument. Opposite Party No.2 has filed affidavit of evidence. Both the Opposite Parties have filed their respective written arguments. Heard Complainant in person, Ld.Advocate Mr. A.S. Patil for Opposite Party No.1 and Ld.Advocate Mr. S.S. Desai for Opposite Party No.2.
20)Following points arises for our consideration and our findings thereon are as under -
Point No.1 : Whether the Complainant is a ‘Consumer’ under Sec.2(1)(d)(ii) of the Consumer Protection Act, 1986 ?
Findings : No
Point No.2 : Whether complaint is barred by law of limitation ?
Findings : Yes.
Point No.3 : Whether complaint is hit by Doctrine of Res-judicata ?
Findings : Yes.
Point No.4 : Whether the Complainant is entitled for reliefs as prayed for ?
Findings : No
Reasons :-
Point No.1 :- It is case of the Complainant that on 25/01/99, he hired services of the Opposite Party No.1 & 2 and placed order to the Opposite Party No.2 to purchase 1000 equity shares of SU-Raj Diamonds and Jewellery Ltd. at NSE, Mumbai, through its Principal Broker - Opposite Party No.1, for his livelihood by paying A/c. cheque dtd.13/10/98 for Rs.70,000/- in favour of Opposite Parties towards the price of aforesaid equity shares of Rs.12,950/-. The Opposite Party No.2 issued Purchase Contract Note bearing No.990/25/30, dtd.25/01/99 to the Complainant. It is alleged by the Complainant that Opposite Party had assured Complainant delivery of aforestated equity share certificate within 6/10 weeks from the date of issue of Purchase Contract Note. However, inspite of his repeated requests, till today the Opposite Parties have not delivered aforesaid shares to him and therefore, he has filed this complaint.
In the written statement Opposite Party No.1 & 2 have raised contention that the Complainant is not a ‘Consumer’ as defined under the Consumer Protection Act, and therefore, present complaint is liable to be dismissed. Ld.Advocate for the Opposite Parties have submitted that the Complainant has stated in the complaint that he has hired services of the Opposite Parties for purchase of 1000 equity shares of SU-Raj Diamonds & Jewellery Ltd. Trading in share is a commercial activity. The Complainant has availed services of Opposite Parties for commercial activity. As per the amended provision of Sec.2(1)(d)(ii) of the Consumer Protection Act, 1986, the Complainant is not a ‘Consumer’.
It is undisputed fact that the Complainant had filed Complaint No.97/2001 before the District Consumer Forum, Dharwad, against the both the Opposite Parties in respect of the same subject matter and said complaint was dismissed by District Consumer Forum, Dharwad, on 30/06/08. The Opposite Parties have produced photo copy of the aforesaid judgement and order passed by District Consumer Forum, Dharwad, dtd.30/06/08. The Complainant has admitted the fact that his complaint was dismissed by District Consumer Forum, Dharwad. Further, it is undisputed fact that appeal which was preferred by the Complainant against the District Consumer Forum, Dharwad, was dismissed by the Hon’ble State Commission, Banglore for want of prosecution. It is submitted that decision of District Consumer Forum, Dharwad, has attend finality. Ld.Advocate for the Opposite Party has referred copy of order dtd.30/06/2008 passed by District Consumer Forum, Dharwad, and its further submitted that in the order it is held that the transaction mentioned in the complaint is of commercial nature. Ld.Advocates for Opposite Parties pointed out that the Hon’ble Supreme Court in judgement reported in II (1994) CPJ 7 (SC) have held that “before allotment of shares, a purchaser cannot be called Consumer on the other he may prospective buyer of share.”
As mentioned above in the complaint para no.3, the Complainant has averred that he purchased 1000 shares for his livelihood. According to the Complainant he has purchased shares for his livelihood, therefore, he is a consumer as per the provision of Sec.2(1)(d)(ii) of the Consumer Protection Act. In this complaint according to the Complainant he had purchased 1000 equity shares of SU-Raj Diamonds & Jewellery Ltd. Besides this complaint, the Complainant has filed five other complaint bearing No.338/09, 339/09, 340/09, 341/09 and 342/09 before this Forum. In all these complaints the Complainant has claimed that he has purchased total 5,500 equity shares of SU-Raj Diamonds & Jewellery Ltd. So it is clear form the complaints filed by the Complainant before this Forum that the complainant is dealing/trading in shares on large scale, so it cannot be accepted that livelihood of the Complainant depending on purchase of shares as alleged by the Complainant.
The Hon’ble State Commission, Maharashtra in F.A.No.A/10/532, dtd.22/06/2011, have held that “the Complainant has not made out any case under explanation of Sec.2(1)(d)(ii) of the CPA, 1986 to the effect that such trading is for as employment to earn livelihood. Therefore, she being not a consumer and within the meaning of the Act, dispute before us is not a consumer dispute.” In another decision the Hon’ble State Commission in complaint case CC/11/60, dtd.10/08/2011 has held that “since hiring of another services for commercial purpose (investment in mutual fund is a earning either loss or profit), the Complainant is not a consumer within the meaning of Sec.2(1)(d)(ii) of the Act.” By the amended provisions of Sec.2(1)(d)(ii), a person who avails services for commercial purpose is not a consumer under Sec.2(1)(d)(ii). It is clear from the averment made in the complaint that the Complainant has availed services of Opposite Party for commercial purpose therefore, the Complainant is not a consumer as defined under Sec.2(1)(d)(ii) of the Consumer Protection Act, 1986. Hence, we answer point no.1 in the negative.
Point No.2 :- It is vehemently submitted on behalf of Opposite Parties that the complaint is barred by law of limitation and therefore, complaint is deserves to be dismissed with cost. In the complaint is it averred that about in the year 1999 the Complainant availed services of the Opposite Parties for purchase of equity shares of SU-Raj Diamonds Jewellery Ltd. He paid price of equity shares and then Opposite Party No.2 entered into Purchase Contract Note with the Complainant. As per the Purchase Contract Note, the Opposite Parties were supposed to deliver Share Certificate to the Complainant within 6-10 weeks from the date of Purchase Contract Note. However, till today the Opposite Parties have not delivered Share Certificate to him. In the complaint he has requested to direct Opposite Parties to handover the aforesaid shares to the Opposite Party. Present complaint is filed before this Forum in the month of December, 2009. As per Provisions of Sec.24(A) of the Consumer Protection Act, the complaint prosecution period of limitation upto 2 years and the Complainant is required to file complaint within period of 2 years from the date of cause of action. From the averments made in the complaint, it is clear that cause of action for this complaint took place in the year 1999. The Complainant has filed this complaint after expiry of period of more than 10 years i.e. after date of cause of action. It is admitted that the Complainant has filed complaint in respect of same subject matter against present Opposite Party No.1 & 2 before the District Consumer Forum, Dharwad, being Complaint No.97/2001 and it was dismissed on 30/06/2008. Appeal preferred against the same and the decision was also dismissed by the Hon’ble State Commission, Banglore.
According to the Complainant cause of action for this complaint arose as and when prices of shares SU-Raj Diamonds & Jewellery Ltd. goes up and down. The submissions made by the Complainant are misconceived and erroneous. In this complaint the Complainant has prayed for delivery of shares certificates of the said Company from Opposite Party No.1 & 2, which he was supposed to receive in the year 1999. Alongwith this complaint, the Complainant has not filed application for condonation. Considering aforesaid facts we hold that complaint is hopelessly barred by law of limitation. Hence, we answer point no.2 in the negative.
Point No.3 :- As discussed above, the Complainant had filed complaint under the Consumer Protection Act, in respect of same subject matter against the present Opposite Parties before the District Consumer Forum, Dharwad. The Opposite Parties has produced true copy of the order dtd.30/06/08 passed by District Consumer Forum, Dharwad. It is undisputed fact that after hearing both the parties, District Consumer Forum, Dharwad, has dismissed the complaint on merit. It is not disputed that the Complainant has preferred an appeal against the said decision before the Hon’ble State Commission, Banglore and it was dismissed for want of prosecution. As such, decision of District Consumer Forum, Dharwad, has attend finality. The Complainant has filed the present complaint in respect of the same subject matter against Opposite Party No.1 & 2 after the order of District Consumer Forum, Dharwad, has attend finality. Ld.Advocates for the Opposite Party have submitted that once the earlier complaint is finally decided by competent Consumer Forum, second complaint is not maintainable as it is hit by Doctrine of Res-judicata. In support of their contention, Ld.Advocates for the Opposite Parties have relied upon the decision of H.P. State Commission, Shimla, 2009(1) (CPR) 414, in which the Hon’ble Commission has held that “Finding given by the competent Court of Law on a particular points operate as Res-judicata against the appellant if it has attained finality.” Further they have relied upon the decision of the Hon’ble Supreme Court, reported in AIR 2003 (SC) 4701, in which the Hon’ble Supreme Court has held ‘Dispute raised about termination of services of temporary workman by way of writ petition - High Court passing in reasoned order on merits and after contested hearing – That order becoming final – Re-agitation of the same issue before Labour Court – Barred by res-judicata.
In the instance case, District Consumer Forum, Dharwad, has decided dispute between the same parties on métiers and said decision has attend finality thereafter present complaint which is filed by the Complainant against the Opposite Parties in respect of the same subject matter is hit by Doctrine of Res-judicata. Hence, we answer point no.3 in the affirmative.
Point No.4 :- For the reasons discussed above, the Complainant is not a consumer. The complaint is hopelessly barred by law limitation. The complaint is also hit by Doctrine of Res-judicata. The Complainant is guilty of suppression of material facts. Nowhere in the complaint Complainant has disclosed that earlier he had filed consumer complaint before District Consumer Forum, Dharwad, in respect of same subject matter against present Opposite Parties and his complaint was dismissed by the said Consumer Forum. Therefore, present complaint is liable to be dismissed and the Complainant is not entitled for any relief claimed. It is submitted by Opposite Parties that, with malafide intention to harass the Opposite Parties, the Complainant has filed false & frivolous complaint at Mumbai. It appears that present complaint is frivolous and vexatious. So we think it just to impose cost of this complaint on the Complainant and dismiss the complaint. In the result we answer point no.4 in the negative.
For the reason discussed above we pass the following order –
O R D E R
i. Complaint No.337/2009 is dismissed.
ii.The Complainant shall pay cost of this complaint of Rs.5,000/- (Rs. Five Thousand Only) each to Opposite Party
No.1 & 2 and bear his own.
iii.The Complainant to pay the aforesaid cost of this proceeding to the Opposite Parties within 30 days from the
date of receipt of this order.
iv.Certified copies of this order be furnished to the parties.
