Delhi District Court
M/S. Kumar Share Brokers Ltd vs Sh. Vinod Arora on 5 April, 2019
IN THE COURT OF JSCCASCJGJ, EAST DISTRICT,
KARKARDOOMA COURTS, DELHI
Presided By : Sh. Jay Thareja, DJS
Civil Suit No: 7980/2016
M/s. Kumar Share Brokers Ltd.
Through its Manager Sh. Jiya Lal Kashyap,
Regd. Office: G55, IIIrd Floor,
Royal Palace, Laxmi Nagar,
Vikas Marg, Delhi110092. ... Plaintiff
Versus
Sh. Vinod Arora
S/o Sh. Kasturi Lal Arora,
R/o H.No. 396, Sector46A,
Chandigarh160047. ... Defendant
SUIT FOR RECOVERY OF AMOUNT OF
RS.1,38,306/ ALONG WITH COST, PENDENTE
LITE AND FUTURE INTEREST AT THE RATE OF
24% PER ANNUM.
DATE OF INSTITUTION : 24.01.2014
DATE OF FINAL ARGUMENTS : 07.03.2019
DATE OF DECISION : 05.04.2019
JUDGMENT
1. The plaintiff has filed this suit against the defendant, seeking recovery of (a) Rs.1,38,306/, (b) pendentelite and future interest, at the rate of 24% per annum and (c) costs.
2. In order to justify the recovery of aforesaid money from the defendant, the plaintiff has interalia pleaded in the plaint of this suit that Civil Suit No.7980/2016 M/s. Kumar Share Brokers Ltd. v Sh. Vinod Arora Page No.1 of 11 the plaintiff is a company dealing in the business of trading of shares, stocks and other securities; that the plaintiff is a member of National Stock Exchange and Bombay Stock Exchange; that vide 'Application for Client RegistrationIndividual', 'MemberClient AgreementNSE' and vide 'MemberClient AgreementBSE', executed at Delhi, the defendant had become a client of the plaintiff; that upon accepting the defendant as a client, the plaintiff had allotted a code number viz. CH14 to the defendant and done transactions of securities in the account of the defendant, as per the instructions of the defendant; that as per statement of account maintained by the plaintiff, a sum of Rs.1,38,306/ is payable by the defendant to the plaintiff and that despite repeated requests and demand by the plaintiff, the defendant has not paid the said sum of Rs.1,38,306/ to the plaintiff.
3. Upon service of summons for settlement of issues of this suit, the defendant has contested this suit by filing his written statement. In order to contest this suit, the defendant has interalia pleaded in his written statement that this Court does not have the territorial jurisdiction to entertain this suit because the defendant had signed the agreements with the plaintiff at Kumar Shares Broker Ltd., Sector17, Opposite Estate Office, Chandigarh; that the defendant is not liable to pay any money to the plaintiff because the defendant had never received any trade confirmation calls, demand for payment of outstanding debit balance, statement of account or any other information, relating to his account, from the plaintiff; that the defendant is not liable to pay any money to the plaintiff because all the transactions done by the plaintiff, in the account of the defendant, were unauthorized and that the defendant Civil Suit No.7980/2016 M/s. Kumar Share Brokers Ltd. v Sh. Vinod Arora Page No.2 of 11 is not liable to pay any money to the plaintiff because the statement of account filed by the plaintiff is an inchoate document, which does not reflect the transactions done between 10.03.2011 to 30.03.2012.
4. In the replication qua the written statement of the defendant, the plaintiff has traversed the contents of the said written statement, made the necessary denials and reaffirmed the contents of the plaint. Also, the plaintiff has pleaded that during the pendency of this suit, the defendant had approached the Investor Grievance Resolution Panel of the National Stock Exchange; that the complaint made by the defendant to the said Panel, stands dismissed vide Order dated 09.04.2015 and that as per the instructions of the defendant, the plaintiff had served upon the defendant, electronic contract notes qua all the transactions done in the account of the defendant.
5. On the basis of the aforesaid pleadings of the parties, the following issues were framed by a Ld. Predecessor Judge, on 20.11.2015 : "1. Whether the plaintiff is entitled for recovery of Rs.1,38,306/ as prayed for ? OPP
2. Whether the plaintiff is entitled for interest on the abovesaid amount? If yes, at what rate and for what period ? OPP
3. Whether this court has no territorial jurisdiction to entertain the present suit ? OPD
4. Relief."
Civil Suit No.7980/2016M/s. Kumar Share Brokers Ltd. v Sh. Vinod Arora Page No.3 of 11
6. During the trial of this suit, one witness viz. PW1 Sh. Jiya Lal Kashyap was examined in support of the case of the plaintiff and one witness viz. DW1 Sh. Vinod Arora was examined in support of the case of the defendant. The testimonies of the said witnesses, are not being discussed, at this stage of this judgment, for the sake of brevity.
7. In order to adjudicate upon this suit, I had heard Sh. Suresh Aggarwal, Ld. Advocate for the plaintiff and Sh. Amresh Kumar, Ld. Advocate for the defendant, on 07.03.2019. The issue wise findings, in this case are as follows: ISSUE NO.3
8. In respect of this issue, the case of the plaintiff is that this Court has the territorial jurisdiction to entertain this suit because the defendant had interalia signed the 'Application for Client Registration', 'MemberClient AgreementNSE' and 'MemberClient AgreementBSE', at Delhi and thereby agreed to become a client of the plaintiff, at Delhi. Per contra, the case of the defendant is that this Court does not have the territorial jurisdiction to entertain this suit because the defendant had signed the 'Application for Client Registration', 'MemberClient AgreementNSE' and 'MemberClient AgreementBSE' at Kumar Shares Broker Ltd., Sector17, Opposite Estate Office, Chandigarh and thereby agreed to become a client of the plaintiff, at Chandigarh.
9. In my view, the finding qua this issue can be given by simply Civil Suit No.7980/2016 M/s. Kumar Share Brokers Ltd. v Sh. Vinod Arora Page No.4 of 11 examining (a) the contents of the undisputed 1 MemberClient AgreementNSE dated 10.03.2011, Ex.DW1/P1, (b) the contents of the undisputed2 MemberClient AgreementBSE dated 15.07.2011, Ex.DW1/P2 and (c) the law laid down by the Hon'ble High Court of Delhi in Satyapal v Slick Auto Accessories Pvt. Ltd. and Ors., 2014 IV AD (Delhi) 589. In the MemberClient AgreementNSE dated 10.03.2011, Ex.DW1/P1 and the MemberClient AgreementBSE dated 15.07.2011, Ex.DW1/P2, it is explicitly recorded that they were executed at Delhi. In Satyapal v Slick Auto Accessories Pvt. Ltd. and Ors., 2014 IV AD (Delhi) 589, the Hon'ble High Court of Delhi has held that if the contract between the parties is executed at Delhi, the Courts of Delhi will have the territorial jurisdiction to entertain the suit 3. Therefore, upon a combined reading of the contents of the MemberClient AgreementNSE dated 10.03.2011, Ex.DW1/P1, the contents of the MemberClient Agreement BSE dated 15.07.2011, Ex.DW1/P2 and the law laid down by the Hon'ble High Court of Delhi in Satyapal v Slick Auto Accessories Pvt. Ltd. and Ors., 2014 IV AD (Delhi) 589, this issue is decided in favour of the plaintiff and against the defendant. It is held that this Court has the territorial jurisdiction to entertain this suit.
1 During crossexamination dated 04.08.2018, the defendant viz. DW1 Dr. Vinod Arora had admitted the execution of the MemberClient AgreementNSE dated 10.03.2011, Ex.DW1/P1.
2 During crossexamination dated 04.08.2018, the defendant viz. DW1 Dr. Vinod Arora had admitted the execution of the MemberClient AgreementBSE dated 15.07.2011, Ex.DW1/P2.
3 The exact observation made in the said judgment, is reproduced below:
"4. ... The second reason for holding that civil courts at Delhi had territorial jurisdiction was because the contract is said to have been entered at Delhi because the order was placed upon the appellant/plaintiff at Delhi."
Civil Suit No.7980/2016M/s. Kumar Share Brokers Ltd. v Sh. Vinod Arora Page No.5 of 11 ISSUE NO.1
10. In respect of this issue, the case of the plaintiff is that the plaintiff is entitled to recover Rs.1,38,306/ from the defendant (a) because in accordance with the instructions received from the defendant, the plaintiff had done transactions in the account of defendant; (b) because in accordance with the instructions of the defendant, the plaintiff had served upon the defendant, electronic contract notes qua all the transactions done in the account of the defendant and (c) because as per the statement of account maintained by the plaintiff, a sum of Rs.1,38,306/, is payable by the defendant to the plaintiff. Per contra, the case of the defendant is that he is not liable to pay any money to the plaintiff (a) because the defendant had never received any trade confirmation calls, demand for payment of outstanding debit balance, statement of account or any other information, relating to his account, from the plaintiff and (b) because all the transactions done by the plaintiff, in the account of the defendant, were unauthorized.
11. In order to prove his case qua this issue, the plaintiff has examined PW1 Sh. Jiya Lal Kashyap. During examination in chief, PW1 Sh. Jiya Lal Kashyap has deposed in line with the plaint of this suit and tendered in evidence certificate of incorporation, Ex.PW1/1(OSR), board resolution, Ex.PW1/B, application from, Ex.PW1/3, statement of account, Ex.PW1/4, certificate of registration with NSE, Mark A, certificate of registration with BSE, Mark B, proceedings done by Investor Grievance Resolution Panel of the National Stock Exchange, Mark C and digital Civil Suit No.7980/2016 M/s. Kumar Share Brokers Ltd. v Sh. Vinod Arora Page No.6 of 11 mail contract register, Mark D1. During crossexamination, PW1 Sh. Jiya Lal Kashyap has interalia deposed that the regulations of the National Stock Exchange and Securities and Exchange Board of India, apply to the plaintiff; that the agreement, Ex.PW1/3 was executed at Delhi; that the plaintiff does transactions on behalf of a client, only upon receiving instructions; that once a transaction takes place, a contract note is generated by the plaintiff and sent to a client, like the defendant, on their email ID; that the plaintiff had never handed any statement of account to the defendant, in person and that in place of margin money, the plaintiff had taken shares of HDFC Ltd., from the defendant.
12. In order to prove his case qua this issue, the defendant has examined himself as DW1 Dr. Vinod Arora. During examinationinchief, the defendant viz. DW1 Dr. Vinod Arora has deposed in line with the written statement. During crossexamination, DW1 Dr. Vinod Arora has interalia deposed that the MemberClient AgreementNSE dated 10.03.2011, Ex.DW1/P1, bears his signatures at point A, B and C; that the MemberClient AgreementBSE dated 15.07.2011, Ex.DW1/P2, bears his signatures at point A, B, C, D and E; that he had not received the contract note bearing settlement dated 25.09.2013, part of Mark D; that till the filing of this suit, he had not received the statement of account, Ex.PW1/4 (colly) and that he knows that his complaint dated 15.03.2015 made to Investor Services Cell of National Stock Exchange was ultimately rejected/dismissed.
1 The digital mail contract register was deexhibited and marked, as Mark D. This indicates that the Ld. Predecessor Judge, who had recorded the examinationinchief of PW1 Sh. Jiya Lal Kashyap, on 19.08.2016, wanted the plaintiff to file a certificate under Section 65B of Indian Evidence Act, 1872 qua the digital mail contract register, Mark D. Civil Suit No.7980/2016 M/s. Kumar Share Brokers Ltd. v Sh. Vinod Arora Page No.7 of 11
13. Upon examining the probative value of the competing evidence lead by the parties qua this issue, I find that this issue is liable to be decided in favour of the defendant and against the plaintiff because of three reasons.
14. Firstly, this issue is liable to be decided in favour of the defendant and against the plaintiff because the plaintiff has failed to prove that the transactions in the account of the defendant, were done with the authorization of the defendant. In this regard, it is relevant to note (a) that plaintiff has not tendered in evidence the contract notes 1, which constitute primary evidence qua all the transactions done in the account of the defendant and thereby, withheld information from this Court regarding the time, when the defendant had placed the order qua each transaction and the time, when each transaction was executed by the plaintiff2; (b) that in the absence of certificate under Section 65B of the Indian Evidence Act, 18723 and some explanation regarding the contents of digital mail contract register, Mark D by PW1 Sh. Jiya Lal 1 As per clause 6.1.17 of the Regulations of National Stock Exchange of India, Mark R1, the plaintiff is supposed to maintain the copies/duplicates of the contract notes issued by it.
2 As per SEBI Guidelines, a contract note is interalia is suppose to disclose the order number, order time, order execution time, trade number, client code etc., (as have been disclosed in the contract note, filed by the plaintiff, as part of Mark D). In my view, the examination of the contract notes qua the transactions done in the account of the defendant, would have assisted this Court in determining the truth of the respective cases of the parties. Also, in my view, on account of nonproduction of contract notes by the plaintiff, this Court is bound to draw an adverse inference against the plaintiff, on the basis of Section 114 Illustration (g) of the Indian Evidence Act, 1872 (re: Union of India v Ibrahim Uddin & Anr, (2012) 8 SCC 148).
3 In this regard, reference is craved to the judgments of the Hon'ble Supreme Court in Anvar P. V. v P. K. Basheer and Ors., (2014) 10 SCC 473 and Shafhi Mohd. v State of Himachal Pradesh, 2018 SCC OnLine SC 233 Civil Suit No.7980/2016 M/s. Kumar Share Brokers Ltd. v Sh. Vinod Arora Page No.8 of 11 Kashyap, the digital mail contract register, Mark D, cannot be relied upon to conclude that the contract notes were duly served upon the defendant1 and (c) that the plaintiff has not led any evidence to prove that in accordance with clause 16 of the MemberClient AgreementNSE dated 10.03.2011, Ex.DW1/P1, it had ever reconciled its accounts, with the defendant.
15. Secondly, this issue is liable to be decided in favour of the defendant and against the plaintiff because (a) the failure of PW1 Sh. Jiya Lal Kashyap to identify the signatures of the persons, who had certified the statement of account, Ex.PW1/4(colly) 2 and (b) the absence of a duly 'tendered in evidence' certificate under Section 65B of Indian Evidence Act, 1872 qua statement of account, Ex.PW1/4(colly), renders the statement of account, Ex.PW1/4(colly), to be a highly unreliable piece of evidence, on the basis of which, no liability can be imposed upon the defendant.
16. Thirdly, this issue is liable to be decided in favour of the defendant and against the plaintiff (a) because the Order dated 09.04.2015, passed by the Investor Grievance Resolution Panel of National Stock Exchange, exfacie does not bind this Court and (b) because even otherwise, the said Order, having been passed on 1 In my view, the plaintiff should have tendered in evidence, all the emails, through which, the plaintiff had served contract notes upon the defendant and having not done so, the plaintiff should have examined some employee, who had detailed knowledge about the digital mail contract register, Mark D. 2 In my view, in his examinationinchief, recorded on 19.08.2016, the PW1 Sh. Jiya Lal Kashyap, who is not the author of statement of account, Ex.PW1/4 (colly), should have identified the signature of the persons, who had certified statement of account, Ex.PW1/4 (colly).
Civil Suit No.7980/2016M/s. Kumar Share Brokers Ltd. v Sh. Vinod Arora Page No.9 of 11 account of nonappearance of the defendant, does not reflect upon the merit of the defence of the defendant.
17. In view of the aforesaid three reasons, this issue is decided in favour of the defendant and against the plaintiff. It is held that the plaintiff is not entitled to recover the sum of Rs.1,38,306/ from the defendant.
ISSUE NO.2
18. Since, while deciding issue no.1, it has been held that the plaintiff is not entitled to recover the principal sum of Rs.1,38,306/ from the defendant, this issue is decided in favour of the defendant and against the plaintiff. It is held that the plaintiff is not entitled to recover any interest from the defendant.
RELIEF
19. In view of the aforesaid findings, this suit is dismissed with costs in favour of the defendant.
20. Before parting with this judgment, it is clarified (a) that upon conclusion of hearing of final arguments, on 07.03.2019, it was informed to the Ld. Advocate for the plaintiff that in respect of the electronic records filed in this suit, the plaintiff has not 'tendered in evidence' any certificate under Section 65B of Indian Evidence Act, 1872 and that the certificate under Section 65B of Indian Evidence Act, 1872, filed by the plaintiff, on 05.02.2016, is also silent about the digital mail contract Civil Suit No.7980/2016 M/s. Kumar Share Brokers Ltd. v Sh. Vinod Arora Page No.10 of 11 register, Mark D; (b) that despite being informed about the said anomalies, neither the Ld. Advocate for the plaintiff nor plaintiff has taken any corrective steps qua the said anomalies, till date and (c) that this judgment has been passed, after taking note of the judgment of the Hon'ble Supreme Court in Sayed Muhammed Mashur Kunhi Koya Thangal v Badagara Jumayath Palli Dhara Committee and Others, 2004 (7) SCC 708, wherein it has been held that a plaintiff can only succeed on the strength of his case and not the weakness found in the case of the defendant.
21. After preparation of the decree sheet by the Reader, the file shall be consigned to the record room. Digitally signed by JAY THAREJA Location: East JAY District Announced in the Open Court THAREJA (Jay Thareja) Karkardooma Courts, Delhi On 05.04.2019 JSCC/ASCJ/GJ/EAST DISTRICT Date: 2019.04.05 Karkardooma Courts/Delhi 16:47:17 +0530 Civil Suit No.7980/2016 M/s. Kumar Share Brokers Ltd. v Sh. Vinod Arora Page No.11 of 11