State Consumer Disputes Redressal Commission
Naveen Garg vs Trustline on 26 September, 2013
STATE CONSUMER DISPUTES REDRESSAL COMMISSION, STATE CONSUMER DISPUTES REDRESSAL COMMISSION, U.T., CHANDIGARH First Appeal No. : 267 of 2013 Date of Institution : 24.06.2013 Date of Decision 26.09.2013 Naveen Garg, Advocate son of O. D. Garg R/o 578, Sector 4, Panchkula through Mrs.Sudesh Kumari, Special Power of Attorney Holder. Appellant/Complainant. Versus 1. Trustline Securities Pvt. Ltd. (formally known as K&A Securities) SCO No.84-85, Madhya Marg, Sector 8-C, Chandigarh, through its Director. 2. Vikson Securities Pvt. Ltd. (earlier known as Vikson Commodities Pvt. Ltd.), SCO No.58-59, Sector 17-D, Chandigarh, through its Director. 3. Trustline Towers (Head Office) B-3, Sector 3, Noida, Gautam Budh Nagar U.P. through its director Mr.Vinay Gupta. ....Respondents/Opposite Parties. Appeal under Section 15 of the Consumer Protection Act, 1986. BEFORE: JUSTICE SHAM SUNDER (RETD.), PRESIDENT. SH. DEV RAJ, MEMBER.
Argued by: Sh. Karan Nehra, Advocate for the appellant.
Sh. Lalit Kumar, Advocate for respondents No.1 & 3.
Sh. P. K. Kukreja, Advocate for respondent No.2.
PER DEV RAJ, MEMBER
1. This appeal is directed against the order dated 16.5.2013, rendered by the District Consumer Disputes Redressal Forum-I, UT, Chandigarh (hereinafter to be called as the District Forum only) vide which, it dismissed the complaint, filed by the complainant (now appellant), with liberty to approach the Civil Court for redressal of his grievance.
2. The facts in brief, are that Opposite Party No.1, earlier known as K&A Securities was dealing in share trading. It was stated that the complainant became member of Opposite Party No.1, in the year 2003-2004, and purchased 02 shares of Reliance Industries, 24 shares of Reliance Power Ltd., and 315 shares of Indusind Bank, from it (Opposite Party No.1), under account No.NG-58 in the year 2005-06. It was further stated that in December, 2006, the complainant went abroad for further studies, but continued to pay annual subscription regularly, without any default. It was further stated that, in the year 2010, the complainant came back to India and visited the office of Opposite Party No.1, situated in Sector 17, Chandigarh for paying the subscription. However, he was informed by Opposite Party No.2, that in the year 2009, K&A Securities demerged from its original partners, and two different organizations were formed known as Trustline Securities Pvt. Ltd. (Opposite Party No.1) & Vikson Securities Pvt. Ltd. (Opposite Party No.2). It was further stated that, on asking about the status of his shares, by the complainant, it was informed by Opposite Party No.2, that his shares were lying in suspense account because the same were not claimed by anyone at the time of demerger. It was further stated that the complainant was advised that, in order to claim his shares, he needed to open fresh account. It was further stated that after completing all the formalities, a new account No.NG-7, was got opened. It was further stated that it was assured to the complainant, by Mr.Vinod Aggarwal, official of Opposite Party No.2, that they will liaise with Opposite Party No.1, in order to get the shares of different companies, transferred in account No.NG-7, and he was also asked to pay annual subscription to them, from then onwards. It was further stated that the complainant went back to UK, wherefrom, he sent two emails (Annexure A-2 & A-3) to Opposite Parties No.1 and 2, requesting them to unfreeze the account and confirmation of the same. It was further stated that Opposite Party No.2, replied vide Annexure A-4, that the matter had been solved and the statement would be sent when the shares were transferred. It was further stated that in August, 2012, the complainant came to India and visited the office of Vikson Securities Pvt. Ltd. (Opposite Party No.2), to pay annual fee, but he was surprised to see that only two shares were existing in his account, relating to Reliance Industries & Reliance Powers, and the holdings of Indusind Bank (315 shares) were not existing, which were valued at more than Rs.65,000/-. It was further stated that on enquiring about the same, from Opposite Party No.2, the complainant was informed to approach Opposite Party No.1. It was further stated that the complainant visited the office of Opposite Party No.1, on 8.8.2012, and also met its HR Officer, who informed that since it was a different Company, they were unable to find any record of Indusind Bank, and they had to verify the data from Noida Office i.e. Opposite Party No.3. It was further stated that the complainant went back to UK and sent two mails (Annexure A-6 & A-7) to Opposite Parties No.1 & 3, asking about the whereabouts of the major holdings but to no avail. It was further stated that the complainant also requested Opposite Parties No.1 and 2, to find out the status of the major holdings, but they also did not pay any heed. It was further stated that the complainant served a legal notice, upon the Opposite Parties, but to no avail. It was further stated that the aforesaid acts of the Opposite Parties, amounted to deficiency, in rendering service, as also indulgence into unfair trade practice. When the grievance of the complainant, was not redressed, left with no alternative, a complaint under Section 12 of the Consumer Protection Act, 1986 (hereinafter to be called as the Act only), seeking directions to the Opposite Parties, to intimate the status of major holdings of Indusind Bank i.e. 315 shares or in the alternative, to pay the value of the shares; to pay Rs.50,000/- as compensation, for mental agony and harassment and Rs.25,000/- towards litigation expenses, was filed.
3. Opposite Parties No.1 and 3, in their joint written version, stated that in Financial Year 2008-09, 315 shares of Indusind Bank (Scrip Code No.32187) were lying in the account of the complainant having client code No.R01NG58, but at the time of demerger of the Trustline Securities Ltd., from the Vikson Securities Pvt. Ltd., the said shares were transferred to the pool account of Vikson Securities Pvt. Ltd. having client code No.R01CV001. The financial statement of 2008-09 of the complainant, and that of Opposite Party No.2, pertaining to the year 2009-2010 were annexed as Annexure A & B. It was further stated that on 17.3.2010, Opposite Party No.2, sold the said shares of Indusind Bank (Scrip Code No.32187) and the credit of the same was given to Opposite Party No.2. It was further stated that it was categorically told to the complainant that the said shares were transferred to Opposite Party No.2, who was now fully answerable to his queries. It was further stated that it was Opposite Party No.2, which was liable to refund the amount of sale purchase of 315 shares of Indusind Bank. It was further stated that neither there was any deficiency, in rendering service, on the part of Opposite Parties No.1 and 3, nor did they indulge into unfair trade practice. The remaining averments, were denied, being wrong.
4. Opposite Party No.2, in its written version, raised a preliminary objection to the effect that the complainant was not its consumer as he did not pay any consideration to it and the complaint regarding shares purchased in December, 2006, was time barred. It was stated that the relationship existing between Opposite Parties No.1 & 3, on the one hand, and, Opposite Party No.2, on the other hand, was on principal to principal basis. It was further stated that it was settled between Opposite Parties No.1 and 3 that in case of dispute, the matter will be referred to arbitral tribunal. It was further stated that the complainant and Opposite Parties No.1 and 3, did not produce, on record, copies of the agreements/terms and conditions regarding the alleged trading account of the complainant. It was further stated that earlier Opposite Party No.2 was sub-broker of Opposite Parties No.1, and 3 but it (Opposite Party No.2) resigned from the sub-broker ship in the month of June, 2010 and, as such, had no nexus/business transactions with Opposite Parties No.1 and 3. It was further stated that after resignation, the entire records had been captured by Opposite Parties No.1 and 3, and Opposite Party No.2 was not having any records of the purchase of the said shares, by the complainant, from Opposite Parties No.1 and 3. It was further stated that Opposite Parties No.1 and 3 did not produce any of the documents of the alleged division/demerger. It was further stated that Opposite Party No.2, had neither merged nor demerged with Opposite Parties No.1 and 3. It was further stated that the shares could be transferred from the accounts under the terms and conditions of the agreements and/or SEBI/Stock Exchange Rules. It was further stated that neither there was any deficiency, in rendering service, on the part of Opposite Party No.2, nor did it indulge into unfair trade practice. The remaining averments, were denied, being wrong.
5. The parties led evidence, in support of their case.
6. After hearing the Counsel for the parties, and, on going through the evidence and record of the case, the District Forum dismissed the complaint, as stated above in the opening para of the instant order.
7. Feeling aggrieved, the instant appeal, has been filed by the appellant/complainant.
8. We have heard the Counsel for the parties and, have gone through the evidence, and record of the case, carefully.
9. The Counsel for the appellant/complainant submitted that out of the shares, purchased and deposited by the complainant with the Opposite Parties, 315 shares of Indusind Bank went missing and this fact was acknowledged by Opposite Party No.2. It was further submitted that on 17.3.2010, Opposite Party No.2, sold the shares and got the credit of the same. It was further submitted that Opposite Parties No.1 and 3, and Opposite Party No.2 being principals and Sub Broker, could not escape their liability and were liable to refund the sale proceeds of 315 shares of Indusind Bank.
10. The Counsel for respondent No.2/Opposite Party No.2 submitted that Opposite Party No.2 was a sub-broker and in June 2010, its relationship came to an end. It was further submitted that Opposite Parties No.1 and 3 continued to be the principals. It was further submitted that the District Forum held that the appellant/complainant was not a consumer and there was no averment, in the complaint of the complainant, that he was a consumer. It was further submitted that the appellant/complainant did not fall within the definition of a consumer. The Counsel placed reliance on Som Nath Jain Vs. R.C. Goenka & Anr., I (1994) CPJ 27 (NC), wherein it was held that elaborate evidence need to be taken regarding purchase and sale of shares. The Counsel for the respondent No.2/Opposite Party No.2, also submitted that if Opposite Parties No.1 and 3, were joining hands, the liability could not be fastened upon it. It was denied that the complainant was a consumer of Opposite Party No.2. It was further submitted that Opposite Party No.2, had never agreed to render any service. It was further submitted that Annexure A-4 is an incomplete document. As per SEBI/NSE Rules, proper record was required to be maintained. It was further submitted that the District Forum rightly dismissed the complaint on the ground that complicated questions of law and facts were involved.
11. The Counsel for Opposite Parties No.1 and 3 submitted that after demerger, Opposite Party No.2 executed a guarantee and indemnity bond in favour of Opposite Parties No.1 and 3. It was also submitted that the appellant/complainant was not a consumer within the meaning of Section 2(1)(d) of the Act. It was also submitted that the sale and purchase of shares did not come within the ambit of Consumer Fora.
12. The question, which falls for consideration is, as to whether the appellant/complainant fell within the definition of consumer as defined by Section 2(1)(d) of the Act. While the Counsel for the appellant/complainant submitted that the appellant/complainant was not trading in the shares regularly and the dispute related to the shares, which had been lying in his account since 2010, the Opposite Party No.2, argued that it being the sub broker of Opposite Parties No.1 and 3, had no liability and the appellant/complainant was not a consumer. The Counsel for Opposite Parties No.1 and 3 relied upon case V. K. Agarwal (Dr.) Vs. Infosys Technologies Ltd. & Ors. I (2013) CPJ 373 (NC),wherein the Honble National Consumer Disputes Redressal Commission, New Delhi in Paras No.15 to 18, held as under: -
15. The above said averments made in complaint clearly depict that the complainant has been trading in the business of shares.
The complainant has nowhere pleaded in the complaint that he is dealing with, shares business as self-employment for livelihood. Nor it has been alleged that the services provided by OP 1 were being availed of exclusively for the purpose of his livelihood, by means of self-employment by the complainant. It must be borne in mind that disputes between the parties relating to commercial purposes are excluded under the Act. This view stands fortified by a recent authority of this Commission, reported in Vijay Kumar v. Indusind Bank, II MANU/CFR/0175/2012: (2012) CPJ 181 (NC).
16. Again, such like question arose for consideration before National Commission in case of Som Nath Jain v. R.C. Goenka & Anr., reported in I (1994) CPJ 27 (NC). In that case, dealing with sale purchase of shares, National Commission expressed serious doubt whether the complaint qua it would be maintainable under the Consumer Protection Act. Because, qua such transactions, elaborate evidence need to be taken regarding purchase and sale of shares, their prevalent price in the market and evidence regarding passing of instructions by client to the broker. Resultantly, the complainants were relegated to get the dispute decided through civil Court.
17. West Bengal State Consumer Disputes Redressal Commission, Kolkata in case Ramendra Nath Basu v. Sanjeev Kapoor & Anr., reported in 1 (2009) CPJ 316, qua share trading has held that transactions between parties do not come under purview of Consumer Protection Act, 1986.
18. Similar view was taken by the Delhi State Consumer Disputes Redressal Commission, New Delhi in case Anand Prakash v. A. M. Johri & Ors., reported in III (2000) CPJ 291, by holding that sale purchase of shares are commercial transactions, so, complainant is not a consumer in such cases. In the result, it is clear that the present complaint is not maintainable, therefore, the complaint is dismissed. However, there shall be no order as to costs. However, nothing will debar the complainant to seek remedy in any other appropriate Forum, as per law.
The complainant did not aver in his complaint that he was dealing in the sale and purchase of shares, for earning his livelihood by way of self employment. The complainant, as is evident from the complaint, is an Advocate by profession. By no stretch of imagination, therefore, it could be said that he was dealing in the sale and purchase of shares for earning his livelihood by way of self employment. He, thus, did not fall within the definition of a consumer. Thus, the principle of law laid down in V. K. Agarwal (Dr.) Vs. Infosys Technologies Ltd. & Ors. (Supra), is fully applicable to the facts of this case. The complaint was, thus, not maintainable, before the Consumer Fora.
14. Not only this, in the instant case, as rightly held by the District Forum, disputed questions of facts and law are involved for adjudication. The shares were deposited with Opposite Party No.2, and subsequently on demerger, Opposite Party No.2 ceased to be sub-broker of Opposite Parties No.1 and 3. It was stated that after resignation of Opposite Party No.2, it was not having any records of purchase of shares, by the complainant, from Opposite Parties No.1 and 3. No cogent evidence regarding alleged division/demerger of Opposite Parties came on record. In the facts and circumstances of the case, examination of the witnesses and their cross-examination as also analysis of a number of transactions and scrutiny of voluminous documentary evidence, was required to decide the complaint. Such an exercise could not be undertaken by the District Forum, the proceedings before which are summary in nature. Thus, such complex and complicated questions of facts and law could only be adjudicated upon by a Civil Court of competent jurisdiction.
15. No other point, was urged, by the Counsel for the parties.
16. In view of the above discussion, it is held that the order passed by the District Forum, being based on the correct appreciation of evidence, and law, on the point, does not suffer from any illegality or perversity, warranting the interference of this Commission.
17. For the reasons recorded above, the appeal, being devoid of merit, must fail, and the same is dismissed, with no order as to costs. The order of the District Forum is upheld.
18. Certified copies of this order, be sent to the parties, free of charge.
19. The file be consigned to Record Room, after completion.
Pronounced.
26th September, 2013.
Sd/-
[JUSTICE SHAM SUNDER (RETD.)] PRESIDENT Sd/-
[DEV RAJ] MEMBER Ad STATE COMMISSION (First Appeal No.267 of 2013) Argued by: Sh. Karan Nehra, Advocate for the appellant.
Sh. Lalit Kumar, Advocate for respondents No.1 & 3.
Sh. P. K. Kukreja, Advocate for respondent No.2.
Dated the 26th day of September, 2013 ORDER Vide our detailed order of the even date, recorded separately, this appeal filed by the appellant/complainant, has been dismissed, with no order as to costs. The order of the District Forum has been upheld.
(DEV RAJ) MEMBER (JUSTICE SHAM SUNDER (RETD.)) PRESIDENT Ad