State Consumer Disputes Redressal Commission
Badjate And Company vs Fazalbhai S.Hussain & Ors. on 17 January, 2014
STATE CONSUMER DISPUTES REDRESSAL COMMISSION, MAHARASHTRA, CIRCUIT BENCH AT NAGPUR STATE CONSUMER DISPUTES REDRESSAL COMMISSION, MAHARASHTRA, CIRCUIT BENCH AT NAGPUR 5th Floor, Administrative Building No. 1 Civil Lines, Nagpur-440 001 First Appeal No. A/58/2009 (Arisen out of Order Dated 29/12/2008 in Case No. CC/08/139 of District Nagpur) Badjate and Company Through Shri Anju Badjate R/o 274, Sanjay Apartment Dharampeth Extn. Nagpur ...........Appellant(s) Versus 1. Fazalbhai S.Hussain 2. Smt Amruta W/o Fazaibhai Hussain Both Respondents R/o South Civil Lines Chhindwara, Dist. Chhindwara (M.P.) 3. S. S Kantilal Iswarlal (SSKI) A-206, II Floor, Phoenix House S B Marg, Lower Parel Mumbai 4. Security & Exchange Board of India (SEBI) Mittal Court, B-Wing, 1st Floor 224, Backbay Reclamation Mumbai- 21 ...........Respondent(s) BEFORE: Hon'ble Mr. B A Shaikh, Presiding Member Hon'ble Smt. Jayshree Yengal, Member PRESENT: Adv. Mr A M Nabira for the Appellant Adv. Mr. V K Sharma for Respondent Nos. 1 & 2 Respondent No.3 Proceeded Exparte Adv. Mr S D Harode for Respondent No.4 ORDER
(Passed on 17.01.2014) Per Mr B A Shaikh, Honble Presiding Member
1. This appeal is preferred against order dtd.29.12.2008 passed by District Forum, Nagpur in CC/08/139 by which the complaint has been partly allowed.
2. The case of the original complainants as set out in complaint in brief is that they are having relationship of husband & wife inter se and that the original opposite party (for short O.P.) No.1 is the Sub-broker and O.P.No.2 is the Chief broker and the O.P.No.3 is the controlling authority over the share purchase transactions, brokers & Sub-brokers both the complainants are aged persons and they invested their money in share sale-purchase transactions. They did the said transactions through O.P.No.1 and they also opened D-mat Account.
They purchased 600 shares of ICICI Bank for the amount mentioned in the complaint. But the O.P.No.1 did not deliver 300 shares out of the same to the complainants. The complainants then asked the O.P.No.1 to sale 100 shares of Lupin Laboratory, which were purchased @ Rs.520.95. However, there certificate was not given to the complainants. Then the complainants purchased 20 shares of Wipro Co. but the same were not delivered to the complainants. It was informed to the complainants that on 16.02.2000 10 shares of Wipro Co. are sold @ Rs.7521.85, however, the said amount was not paid to the complainants. On 19.02.2000 it was informed to the complainant that the Stock Exchange sold the shares of Wipro Co. and Rs.90,882/- are debited to the account of the complainants in respect of said transaction. The complainants raised objection about the same, but it was ignored. The complainants had instructed O.P.No.1 to purchase 50 shares of HCL Co. and therefore he purchased it @ Rs.610.35. However, out of the same 45 shares were delivered to the complainants and O.P.No.1 retained 5 shares. The complainants sustained loss as the O.P.No.1 retained the aforesaid shares of ICICI Bank, Lupin Laboratory and Wipro Co. The complainants, therefore, claimed that direction be given to O.P.Nos. 1, 2 & 3 to deliver them shares as above with up to date dividend and profit etc. with difference amount of actual cost of shares at the relevant time or to pay him Rs.2,92,556/- with interest @ 18% p.a. till its realization and also to pay him Rs.20,000/- towards mental harassment and cost of the complaint.
3. The original O.P.No.1 resisted the said complaint by filing the Written Version.
It is not disputed that it is a Sub-broker and the O.P.No.2 is the main broker. It admitted that the complainants opened D-mat account. It is not disputed that the complainants have placed orders for purchase of 100 shares of Lupin Laboratory, 600 shares of ICICI Bank, 20 shares of Wipro Co. and that the complainant had asked him to sell the share of Wipro Co. and to sell 100 shares of HCL. It the case of O.P.No.1 that the complainants did not pay any amount for the purpose of purchase of shares at the time of placing of their orders. The complainants were having debit balance of Rs.49,450/- on 09.12.1999, Rs.97,655/- on 17.10.1999 and Rs.1,50,630/- on 12.10.1999 in their account. The shares purchased by O.P.No.1 were not transferred to the D-mat account of the complainants for want of amount and confirmation from them.
They have not cleared their account. As the complainants committed default of making payment within two days of purchase of shares, they were automatically sold by the member of Stock Exchange to pay to the seller and any difference in purchase and selling price is adjusted into purchasers account. As the complainants did not supply the share transfer slip, shares were auctioned by the Stock Exchange on 19.02.2000 and their account was automatically debited. The O.P.No.1 has no role to play in case of auction of shares. The exchange board automatically auction the shares for which the amount is not received by it or where no confirmation is given the shares are not transferred. The 100 shares of HCL & Wipro were sold in open market, but the shares were not delivered to it by the complainants for transferring the same to the purchaser. The Stock Exchange auctioned 100 shares of HCL for Rs.86,200/- and the said amount was debited to the account of the complainants. It has to recover an amount of Rs.57,480.45 as due from the complainants. It has maintained regular books of account of daily transactions. Therefore, the O.P.No.1 prayed that the complainants are not entitled to any amount as claimed and hence, complaint may be dismissed with exemplary cost.
4. The O.P.No.2 did not appear before the Forum below though served with notice.
Therefore, the Forum below proceeded exparte against O.P.NO.2 as per order dt.03.11.2008.
5. The O.P.No.3 filed its Written Version and its case in brief is that it has no liability for payment of any amount and the liability is concerning to O.P.No.1 and it only keeps control over stock sales transactions and hence, it may be deleted from the complaint.
6. The complainants filed their complaint on affidavit. They, in support of their complaint, filed the receipts of the transactions made by them with O.P.No.1, notice served to O.Ps. and the reply given to it by O.P.No.1. The O.P.No.1 filed Written Version on affidavit. It also filed the D-mat account extract.
7. The Forum below heard advocates of complainants and O.P.No.1 and perused the documents produced before it by both the parties. The Forum below found that the original O.P.No.1 / appellant besides filing copy of account extract, produced no other documents in support of its defence raised in the Written Version. It observed that account extract can be manipulated at any time and in the absence of any authentic document to support the same, it cannot be considered. The Forum below also observed that the O.P.No.1 also produced no evidence to show that as the value of the share was not paid by the complainants within time, the said shares were sold in public auction by Stock Exchange and to show that that amount due from the complainants and to show that certain amount is due from the complainants under the said transaction. The Forum below also observed in the impugned order that on the contrary the complainants alongwith the complaint filed receipts dtd. 12.10.1999, 17.10.1999, 28.03.2000, 25.01.2000, 01.02.2000, 07.03.2000 and 17.02.2000 which show that amount mentioned in most of them is shown as Balance due to us i.e. due from original O.P.No.1. None of the receipts shows that any amount was due from the complainants. Moreover, it also observed that the complainants in their notice dtd. 22.03.2000 served to the O.P.No.1 by their advocate demanded Rs.2.00 Lacs with interest, compensation, difference of amount and loss of profits and in that notice it is also mentioned that the shares of HCL, Wipro, Lupin Laboratory and ICICI Bank were also not delivered to them. It is also observed in the impugned order that the O.P.No.1 sent its reply to the complainants on 02.04.2001 only mentioning that it has no knowledge of complainants demand. Thus, it found that the O.P.No.1 did not avail first opportunity to raise its defence in the said reply sent by it. It also observed that the arguments of the advocates of the O.Ps cannot be considered that it has no jurisdiction and jurisdiction lies with the Civil Court only. The reason given in support of the said conclusion that the State Commission in appeal passed an order that the District Forum has jurisdiction. Therefore, the Forum below came to the conclusion that there is deficiency in service provided by the O.P.No.1 to the complainants and it directed the O.P.Nos. 1 & 2 to pay jointly and severally to the complainants Rs.2,67,011.55 with interest @ 12% p.a. from the date of complaint i.e. from 12.07.2001 till realization of the said amount and also to pay him Rs.10,000/- towards mental harassment and Rs.2,000/- towards cost of the complaint within 30 days of the receipt of that order and in case of default, the said amount shall carry interest @ 15% p.a. in stead of interest @ 12% p.a.
8. Feeling aggrieved by that order, the original O.P.No1. has preferred this appeal.
The learned advocates of the appellant as well as original complainants / respondent Nos.1 & 2 & respondent No.4 herein filed their Written Notes of argument. The respondent No.3 / original O.P.No.2 proceeded exparte in appeal as per order dtd.29.03.2012 passed by this Commission.
9. We have also orally heard the advocates of the appellant / original O.P.No.1, respondent Nos. 1, 2 & 4 and we have also perused the papers placed before us by them.
10. The learned advocate of the appellant submitted that Civil Court has jurisdiction to decide the complaint and that the State Commission in advertently directed the complainants to present the complaint before the Consumer Forum, Nagpur. He reiterated the case of the appellant as put forth in its Written Version and submitted that in this appeal the appellant produced audit report alongwith statement of account and therefore, the said can be relied upon in the appeal. He also submitted that notice dtd.22.03.2001 issued by the complainants to the appellant is vague and did not specify the details of the amount of Rs.2.00 Lacs claimed by the complainants and about return of the shares. Therefore, he submitted that the Forum below erred in partly allowing the complaint and hence, impugned order may be set aside and the complaint may be dismissed.
11. The learned advocate of the respondent Nos.
1 & 2 herein in his argument supported the impugned order and submitted that initially the complaint was filed before the Consumer Forum, Chhindwara, (M.P.) and it was returned for filing before the competent Forum and that in appeal the State Commission, Bhopal advised the complainants to file complaint before authority having jurisdiction and that the complainants then filed complaint before the Forum below and the application made by the O.Ps in that complaint for dismissal of complaint for want of jurisdiction, was rejected on 28.03.2000 and the appeal preferred before State Commission, Mumbai against that order has been also dismissed on 05.03.2008. He, therefore, submitted that again said contentions cannot be raised by the appellant in this appeal. He has invited our attention to the copies of the aforesaid orders and the receipts of payments, referred to in the impugned order, in support of his contention that in those receipts the appellant admitted that the amount shown in those receipts are due from it and there is no endorsement in them to show that any amount is due from respondent Nos. 1 & 2 herein. He, therefore, submitted that the appeal may be dismissed. He relied upon observations made in the following cases:-
i.
CCI Chambers Co-op. Hsg. Soc. Ltd. Vs. Development Credit Bank Ltd. 2004 (1) Mh.LJ. 651 It is observed in that case by the Honble Supreme Court that mere complicated nature of question of facts & law arising for decision is no ground for shutting the doors of any Forum under Consumer Protection Act 1986 to the person aggrieved.
ii.
VP Sharma Vs. Secundar Lal & Co & Ors. IV (2004) CPJ- 298, Delhi, SCDRC. In that case neither the shares were returned nor proceeds were transferred and therefore, deficiency in service was proved and it is held that O.P. is liable to pay value of the shares with interest @ 9% p.a.
12. The learned advocate of the respondent No.4 herein submitted that the respondent No.4 is no way liable to pay any amount to the complainants since it is a statutory body set up under the statutory provision and hence, it submitted that the appeal as against it may be dismissed.
13. At the outset we find that the audit report filed by the appellant for the first time in the appeal in support of the account statement cannot be relied upon since no explaination is given by the appellant for its non production before the Forum below. Moreover, it is also not explained before us by the appellant as to how none of the aforesaid receipts referred to in the impugned order as filed by the original complainants and issued by the appellant, show that any amount is due from the original complainants / respondent Nos. 1 & 2 herein. On the contrary, the Forum below has rightly observed in the impugned order that most of the receipts show that the certain amounts are due from the original O.P.No.1 / appellant. Moreover, the appellant did not serve any notice to the complainants / respondent Nos. 1 & 2 claiming the amount due from them. The reply given by it to the notice of the complainants / respondent Nos. 1 & 2 herein is also very vague and it also does not support the plea taken for the first time by the appellant / org.
O.P.No.1 in original complaint.
The Forum below has rightly disbelieved the account extract produced by the appellant as there was no substantive evidence in support of the same.
14. We, thus, find that the Forum below has properly considered the evidence brought on record and it has rightly come to the conclusion as discussed above. The aforesaid decisions relied upon by the learned advocate of respondent Nos.1 & 2 herein also are clear to show that the Forum has jurisdiction to decide such cases.
15. We, thus, find no merits in this appeal and hence, it deserves to be dismissed.
ORDER i.
The appeal is dismissed ii.
No order as to cost in this appeal.
iii.
Copy of this order be furnished the parties.
[ B A SHAIKH ] PRESIDING MEMBER [ SMT.JAYSHREE YENGAL] MEMBER sj