State Consumer Disputes Redressal Commission
C.J George, Managing Director Geojith ... vs R. Vijaya Chandran Nair on 21 January, 2016
Daily Order KERALA STATE CONSUMER DISPUTES REDRESSAL COMMISSION VAZHUTHACAUD, THIRUVANANTHAPURAM APPEAL NO. 249/14 JUDGMENT DATED: 21.01.2016 PRESENT : JUSTICE SHRI. P.Q. BARKATHALI : PRESIDENT SHRI.V.V. JOSE : MEMBER C.J. George, Managing Director, Geojit Financial Services Ltd., Now kown as Geojit BNP Paribas- : APPELLANT Financial Services Ltd., Having office at 34/659-P, Civil Line Road, Padivattom, Kochi-682 024. (By Adv: Sri.Mathew B. Kurian) Vs. R. Vijayachandran Nair, Vipanchika, M.O.Ward, : RESPONDENT Alappuzha-688 001. JUDGMENT
JUSTICE SHRI. P.Q. BARKATHALI: PRESIDENT This is an appeal filed by the opposite party in CC.52/07 on the file of Consumer Disputes Redressal Forum, Alappuzha challenging the order of the Forum dated January 31, 2014 allowing the complaint.
2. The case of the complainant as testified by him as PW1 and as detailed in the complaint before the Forum in brief is this:-
Since July 2006 complainant has been investing and trading in shares through Alappuzha branch of Geojith Financial Service Limited. On the instruction of the complainant opposite party purchased 1000 shares of Al Champdany Industries Limited on February 14, 2007. He gave instruction to the opposite party to sell the maximum possible number of shares at a good price. On the next day also complainant gave instruction to purchase more shares again and to sell them like on the previous day. But 500 shares of Al Champdany Industries Limited were sold from his account on 15.2.2007 while there were no shares of the company in his account. Because of the short sell of the shares it resulted in the loss of more than Rs.1,03,000/- which is an unauthorized transaction done without his knowledge and consent. The opposite party was not providing him regularly with transaction details in his account. The monthly statement of account provided by the opposite party was ambiguous and difficult to understand. As a consequence of the short sell of shares complainant was compelled to remit Rs.58,800/- and also compelled to do stock clearance. Therefore complainant claimed for refund of the amount paid by him and also the loss sustained by him.
3. The opposite party is M/s Geojith Financial Service Limited, Kochi represented by its Managing Director C.J. George. He in his version contended thus before the Forum. The transactions are commercial in nature and therefore Forum has no jurisdiction to entertain the complaint. All the transactions are done as per the guidelines of Securities and Exchange Board of India (SEBI) and the dispute between the parties have to be referred for arbitration. As a share broker, the opposite party is placing orders for purchase or sale of the scrip or shares with National Stock Exchange (NSE) and Bombay Stock Exchange (BSE). The broker will get the brokerage for these transactions. All the transactions done by clients as well as the broker through the stock exchange are governed by NSE or BSE. Before entering into trading every client has to sign the agreement with the broker as prescribed by SEBI. The opposite party maintains the accounts in the name of client with client code. The code of the complainant is GAV115. On 14.2.2007 complainant had done intraday trading by buying and selling 1000 shares of Al Champdany Industries Limited. The complainant again placed orders for selling 500 shares of Al Champdany Industries Limited on 15.2.2007 fully knowing that he is not holding the same at the time of placing the order expecting to purchase the shares at lower price on that day itself and complete the transaction. But the price did not come down and the client did not purchase sufficient shares on that day. Since there was short selling of these shares by the client, in order to meet the market obligation, auction of short deliveries were conducted by the exchange under Settlement No.NSE/E4/2007/031 and the auction amount debited to the account of the complainant. The copy of contract note and trade confirmation was also sent to client through e-mail or by post on 14.2.2007 itself. The opposite party is not responsible for the loss sustained by the complainant. Therefore complaint has to be dismissed.
4. District Forum by its order dated November 29, 2008 dismissed the complaint. On appeal by the complainant this Commission by order dated:28.3.2011 in Appeal No.212/10 set aside the order and remanded the same to pass a speaking order. Thereafter complainant was examined as PW1 and Exts.A1 to A5 were marked. On the side of the opposite party the authorized representative was examined as RW1 and he produced Exts.B1 to B7 before the Forum. On an appreciation of evidence Forum found that there is deficiency of service on the part of the opposite party in short selling of the shares without his authorization and allowed the complaint. The opposite party has now come up in appeal challenging the said order of the Forum.
5. Heard both the counsels.
6. The appellant/opposite party mainly disputed the maintainability of the complain as this is a dispute regarding the share trading. The National Commission in Ramlal Aggarwalla Vs. Bajaj Allianz Life Insurance Company Limited 2013 (2) CPR 389 (NC) has held that in respect of insurance policies having been taken for investment of premium amount in share market which is for speculative gain complainant does not come within the purview of Consumer Protection Act, 1986. The same principle applies in this case also. In this case dispute regarding the trading of shares. Therefore it is commercial in nature and the complainant cannot be considered as a consumer as defined under the act. That being so, the complaint is not maintainable.
In the result appeal is allowed. The impugned order of the Forum allowing the complaint is set aside. Complaint is found not maintainable and dismissed. No costs.
JUSTICE P.Q. BARKATHALI: PRESIDENT V.V. JOSE : MEMBER VL.