State Consumer Disputes Redressal Commission
Stock Holding Corporation Of India Ltd vs Smt. Vimal Raosaheb Chougule,& Ors on 6 June, 2011
BEFORE THE HON BEFORE THE HON'BLE STATE CONSUMER DISPUTES REDRESSAL COMMISSION, MAHARASHTRA, MUMBAI First Appeal No. A/07/1622 (Arisen out of Order Dated 20/10/2007 in Case No. 277/06 of District Sangli) 1. STOCK HOLDING CORPORATION OF INDIA LTD. BRANCH OFFICE GOMTESH, 111, MAHAVEER NAGAR, SANGLI. ...........Appellant(s) Versus 1. SMT. VIMAL RAOSAHEB CHOUGULE, POST-ASHTA, TAL-WALVA, DIST-SANGLI. 2. HEMANT NATWARLAL SHAH, BLOCK NO.4, 1ST.FLOOR, PREETI APARTMENTS, MEHTA HOSPITAL RD.,TIMBER AREA, SANGLI. 3. NATWARLAL MANILAL SHAH, BLOCK NO.4, 1ST.FLOOR, PREETI APARTMENTS, MEHTA HOSPITAL RD., TIMBER AREA, SANGLI. ...........Respondent(s) First Appeal No. A/07/1623 (Arisen out of Order Dated 23/10/2007 in Case No. 278/06 of District Sangli) 1. STOCK HOLDING CORPORATION OF INDIA LTD. BRANCH OFFICE GOMTESH, 111, MAHAVEER NAGAR, SANGLI. ...........Appellant(s) Versus 1. DR. RAOSAHEB SIDDHAPA CHOUGULE, POST-ASHTA, TAL-WALVA, DIST-SANGLI. 2. HEMANT NATWARLAL SHAH, BLOCK NO.4, 1ST.FLOOR, PREETI APARTMENTS, MEHTA HOSPITAL RD.,TIMBER AREA, SANGLI. 3. NATWARLAL MANILAL SHAH, BLOCK NO.4, 1ST.FLOOR, PREETI APARTMENTS, MEHTA HOSPITAL RD., TIMBER AREA, SANGLI. ...........Respondent(s) First Appeal No. A/07/1624 (Arisen out of Order Dated 23/10/2007 in Case No. 279/06 of District Sangli) 1. STOCK HOLDING CORPORATION OF INDIA LTD. BRANCH OFFICE GOMTESH, 111, MAHAVEER NAGAR, SANGLI. ...........Appellant(s) Versus 1. SMT. VIMAL RAOSAHEB CHOUGULE POST-ASHTA, TAL-WALVA, DIST-SANGLI. 2. HEMANT NATWARLAL SHAH, BLOCK NO.4, 1ST.FLOOR, PREETI APARTMENTS, MEHTA HOSPITAL RD., TIMBER AREA, SANGLI. 3. NATWARLAL MANILAL SHAH, BLOCK NO.4, 1ST.FLOOR, PREETI APARTMENTS, MEHTA HOSPITAL RD., TIMBER AREA, SANGLI. ...........Respondent(s) First Appeal No. A/07/1625 (Arisen out of Order Dated 23/10/2007 in Case No. 280/06 of District Sangli) 1. STOCK HOLDING CORPORATION OF INDIA LTD. BRANCH OFFICE GOMTESH, 111, MAHAVEER NAGAR, SANGLI. ...........Appellant(s) Versus 1. SMT. VIMAL RAOSAHEB CHOUGULE POST-ASHTA, TAL-WALVA, DIST-SANGLI. 2. HEMANT NATWARLAL SHAH, BLOCK NO.4, 1ST.FLOOR, PREETI APARTMENTS, MEHTA HOSPITAL RD., TIMBER AREA, SANGLI. 3. NATWARLAL MANILAL SHAH, BLOCK NO.4, 1ST.FLOOR, PREETI APARTMENTS, MEHTA HOSPITAL RD., TIMBER AREA, SANGLI. ...........Respondent(s) First Appeal No. A/07/1626 (Arisen out of Order Dated 23/10/2007 in Case No. 282/06 of District Sangli) 1. STOCK HOLDING CORPORATION OF INDIA LTD. BRANCH OFFICE GOMTESH, 111, MAHAVEER NAGAR, SANGLI. ...........Appellant(s) Versus 1. SMT. VIMAL RAOSAHEB CHOUGULE POST-ASHTA, TAL-WALVA, DIST-SANGLI. 2. HEMANT NATWARLAL SHAH, BLOCK NO.4, 1ST.FLOOR, PREETI APARTMENTS, MEHTA HOSPITAL RD., TIMBER AREA, SANGLI. 3. NATWARLAL MANILAL SHAH, BLOCK NO.4, 1ST.FLOOR, PREETI APARTMENTS, MEHTA HOSPITAL RD., TIMBER AREA, SANGLI. ...........Respondent(s) BEFORE: Hon'ble Mr. S.R. Khanzode PRESIDING MEMBER Hon'ble Mrs. S.P.Lale Member PRESENT: Mr.Ashutosh Marathe-Advocate for the appellant Mr.Kulkarni-Advocate for the respondents ORDER
Per Mr.S.R.Khanzode, Honble Presiding Judicial Member
1. These appeals though arises from separate orders, passed in respective consumer complaints, involve identical question of facts and common question of law and, hence, are disposed of by this common order.
2. Undisputed facts are that respondent no.1-Vimal Raosaheb Chougule in Appeal no.1622/07, 1624/07 to 1626/07 corresponding to consumer complaint nos.277/06, 279/06, 280/06 and 282/06; and her husband Dr.Raosaheb Siddappa Chougule, respondent in Appeal no.1623/07 corresponding to complaint no.278/06 had opened Demat account with appellant from all these opponents (opponent no.1 in all the consumer complaint as per agreement dated 22/01/2002 and transacted in shares through their sub brokers, respondent no.2 in all these appeals namely Hemant Natwarlal Shah and respondent no.3 Mr.Natwarlal Manilal Shah original opponent nos.2 & 3 in all the complaints). When on 16/06/2005 officials, namely, Mr.Nair and Mr.Kulkarni of the appellant made enquiries from Dr.Raosaheb and Mrs.Vimal about the transactions transferring the shares, these complainants flatly denied having entered into transactions of transfer of shares, which were carried out through sub brokers named above, particularly, sub broker Hemant. It is alleged by these complainants that the transactions were carried out by their sub brokers fraudulently misusing a sheet of paper on which their signatures were obtained by the sub brokers. It is also alleged that the appellants were negligent and, thus, exhibited deficiency in service on its part by allowing such transfers. The transactions pertaining to these consumer complaints are as under:-
Sr.no.
Consumer complaint no.
Name of company Number of shares Date Amount in ` 1 CC/06/277 Dr.Reddies Lab 654 12/06/2004 8,65,896/-2
CC/06/278 Aurbindo Farma Reliance Industries 800 295 27/10/2004 27/10/2004 4,70,400/-
3,09,455/-3
CC/06/279 SBI Reliance Capital ONGC 50 121 30 20/05/2005 20/05/2005 20/05/2005 36,450/-
58,322/-
34,200/-4
CC/06/280 Reliance Industries Reliance Energy Aurbindo Farma 228 100 800 27/10/2004 27/10/2004 27/10/2004 2,39,172/-
45,900/-
4,70,400/-5
CC/06/282 HDFC HDFC Bank 880 500 12/04/2004 12/04/2004 10,62,160/-
3,95,000/-
3. Sub brokers, namely, respondent nos.2&3/original opponent nos.2 & 3 remained absent before the Consumer forum. However, appellant/original opponent no.1 in all these complaints appeared and took objections relating to pecuniary and territorial jurisdiction, also raised objection referring to the arbitration clause in the agreement and categorically denied that there is/was any deficiency in service on its part. It is also submitted that the transactions were entered into on the basis of the Authorization Slip cum letter issued by the complainants and after verifying their signatures on such instructions. They were also entered bonafidely since the complainants carried out all these transactions through their sub brokers, who only used to give instructions on behalf of the complainants to carry out transfer of shares.
4. Forum disposed of all these consumer complaints by its orders dated 23/10/2007 (separate order in each consumer complaint) and upholding the contention of the complainants, directed the appellant to transfer the respective shares again in the name of respective complainants and, further, directed to pay compensation for the mental torture and cost. Feeling aggrieved by these orders the appellant /original opponent no.1 preferred these appeals.
5. We heard both the parties. We particularly invited attention of both the parties as to the locus standi of the complainants as a consumer in view of the judgement of the apex court in the case of Economic Transport Organisation v/s. Charan Spinning Mills Pvt. Ltd. 2010 CTJ 361 (SC)(CP). Appellant/original opponent no.1 is a company which provides Depository facilities to investors within the meaning of the Depositories Act, 1996 and for that purpose is registered as a Depository Participant (in short DP) of National Securities Depository Ltd. (NSDL) and Central Depository Services Ltd. (CDSL). During the course of its business as a Depository Participant, it facilitates dematerialization of securities by the issuer companies. Dematerialization is process by which a person who is holding security certificates in physical form can get his physical security certificates converted into electronic balances and hold the same in his/its account with a D.P. This particular nature of services offered by the appellant company is not in dispute. Complainants Vimal and Raosaheb do not claim anything beyond hiring of such services from the appellant. Thus, it could be seen that the nature of services hired from the appellant and for which deficiency in service is alleged, relates to a commercial transaction i.e. trading in shares for profit or loss. Therefore, the services of the appellant being hired for commercial purpose, the complainants Vimal as well as Dr.Raosaheb are not consumers within the meaning of Consumer Protection Act, 1986 (herein after referred as Act for brevity) and, thus, the present dispute cannot be termed as consumer dispute. A useful reference can be made to In-re Economic Transport Organisation, supra.
As far as submission referring to ousting of jurisdiction of the Consumer Fora in view of arbitration clause in the agreement dated 22/01/2002 entered in between the parties i.e. appellant and the complainants is concerned, the remedy before the consumer forum being the additional one, it does not oust the jurisdiction of Consumer Fora. Issue is already settled on the point of law. Therefore, we find no substance in the grievance made on behalf of the appellant on this count.
As far as territorial jurisdiction is concerned, considering to the pecuniary jurisdiction of the forum in each case, infra, objection of the appellant on that count will not survive. As far as pecuniary jurisdiction is concerned, we find that each consumer complaint is filed referring to a transaction(s) of a particular date which are grouped together. In consumer complaint no.277/06, value of the shares transferred on 12/06/2004 is estimated at `8,65,896/-;
in consumer complaint no.278/06 total value of transaction dated 27/10/2004 is valued at `7,79,855/-;
in consumer complaint no.279/06 value of transaction dated 20/05/2005 is at `1,29,472/-;
in consumer complaint no.282/06 value of transaction dated 27/10/2004 relating to each shares valued at `7,55,472/-;
in consumer complaint no.282/06 transactions are dated 12/04/2004 and value of shares transferred is of `14,57,160/-;
in consumer complaint no.278/06 and consumer complaint no.280/06 though transaction referred to different shares they are of the date 27/10/2004 and even clubbing together the value of the shares transferred, it will not exceed pecuniary jurisdiction of `20 lakhs of the forum. Thus, in all cases each consumer complaint is well within the limit of pecuniary jurisdiction of the Consumer Fora. Submission on behalf of the appellant that all the transactions should be taken together i.e. shares of all companies and of different date transactions for the purpose of deciding pecuniary jurisdiction cannot be accepted. In fact each transfer of share gives a fresh and distinct cause of action.
Referring to the impugned orders which are subject matter of these appeals it could be seen that the forum went on hypothetical basis rather than judicial assessment, and exhibiting their poor knowledge of law of evidence while drawing the adverse inference. They blissfully ignored the fact that the documents are stated to be not in possession of the appellants but in possession of the police authorities. They further ignored the fact that the complainants themselves on whom the burden lies to establish their case never used the power within themselves vested under section 13(4) of the Act either to discover or get produce the documents. No evidence is led by the complainants to prove alleged deficiency in service on the part of appellant /original opponent no.1. Under the circumstances, even on the facts, the finding of the forum cannot be accepted as far as alleged deficiency in service on the part of appellant/opponent no.1 is concerned.
It may be pointed out that it is the appellants officials, supra, who made enquiry on 16/07/2005 with the complainants and, thereupon, alleged fraud committed by the sub brokers was surfaced. It may be further pointed out and the fact which is not in dispute is that though the complainants received monthly statement from the appellant covering the transaction of transfer of shares from time to time, they all the while maintained silence and did not complain about the fraudulent transfer of shares. It is also ignored by the forum that it is the case of complainants that their genuine signatures taken on the blank papers by the sub brokers were misused. Therefore it is not the case of any false signature or tampered signature.
We also find direction given about re-transfer of shares as per impugned orders does not fall within the ambit of section 14 of the Act and, therefore, they cannot be supported in the eyes of law.
For the reasons mentioned above, impugned orders cannot be supported in the eyes of law. We hold accordingly and pass the following order:-
ORDER Appeal nos.1622/2007 to 1626/2007 are allowed.
Impugned orders dated 23/10/2007 passed in all the consumer complaint nos. 277/06, 278/06, 279/06, 280/06 and 282/06 stands set aside.
In the result, all these consumer complaint nos.277/06, 278/06, 279/06, 280/06 and 282/06 stands dismissed.
In the given circumstances both the parties to bear their own costs.
Copies of the order be furnished to the parties.
Dated 6th June, 2011.
[Hon'ble Mr. S.R. Khanzode] PRESIDING MEMBER [Hon'ble Mrs. S.P.Lale] Member Ms.