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M/s. Karvy Computer Share Pvt Ltd. v/s Dr. Kodali Dharma Nanda Rao & Others

    F.A.No. 604 of 2012 Against C.C.No. 95 of 2010 District Forum Ongole
    Decided On, 13 September 2013
    At, Andhra Pradesh State Consumer Disputes Redressal Commission Hyderabad
    By, MEMBER
    For the Appellant: M/s. PAV Bala Prasad, Advocate. For the Respondent: R1, M/s. Gurram Pedda Babu, Advocate.

Judgment Text
Oral Order: (R. Lakshminarasimha Rao, Member)

1. The opposite party no.2 is the appellant.

2. The brief facts as set out in the complaint are that on 12.12.1986 complainant purchased 900 units of UTI Master Share Unit Scheme and again in the month of January 1989 he was allotted another 600 units by the opposite parties and in total he possessed 1500 units. By the year 1991 the complainant was entitled bonus units in the ratio of 1:2 as to which he is entitled for 750 units. The opposite parties issued statement of account showing crediting of 150 units instead of 750 units. In the year 1995 the complainant is entitled for 1:5 bonus units. Due to the mistake committed by the opposite parties the complainant sustained cumulative loss of 4122 units all together. The total principal amount by way of dividends and interest due to the complainant is Rs.1,22,469/- and Rs.1,95,703/-. The complainant sustained a loss of Rs.3,18,172/-.

3. In the year 1998 the complainant again purchased 1000 Unit Trust of India Master shares in secondary market and certificates were transferred in the name of the complainant and he received statement account from the third opposite party. The opposite parties had not accounted the 1000 shares and they did not send dividends on one pretext or another. The complainant sustained loss of dividend on 1000 shares of to Rs.24,100/- and interest thereon periodically upto 2009, Rs.24,757/- totaling Rs.48,887/-. In addition the value of 1000 units is Rs.29,090/- as on 24.3.2010 which amounts to Rs.29,900/-. The opposite parties did not rectify the mistake made by them and they had sent incorrect dividend to the complainant.

4. The opposite parties no.1 and 2 resisted the case contending that the UTI is a Statutory Corporation incorporated under the provisions of the ActUTI Act, 1963. As per the provisions of repealing Act the UTI has been bifurcated into two entities. One is the Administrator of the specified undertaking of UTI and the second one is the UTI Trustee Company Private Limited. The present scheme vests with UTI Trustee Company Private Limited which entity is having its head office at Mumbai. Subsequently, the UTI Trustee Company Private Limited empowered UTI Asset Management Company Limited under a business agreement dated 19.12.2002. According to the arrangement the UTI, AMC has taken a decision to consolidate its investors service and appointed the second opposite party to deal with the scheme. The second opposite party took over the data and records pertaining to the scheme from the first opposite party and commenced their service from June 2008.

5. The opposite parties no.1 and 2 submitted that the third opposite party is the Registrar, from 1986 to 2001. The first opposite party is the Registrar from 2001 to 2008 and the second opposite party is the Registrar, from January 2008 onwards. As per the purchase of shares by the complainant the opposite parties used to give bonus units in terms of the scheme. The rights of issues in ratio of 1:1 will be made on the application of the complainant with the required amount. The complainant has not made an application nor paid an amount for the issue of rights of issue. As there is an error took place when the scheme was handled by the first opposite party, the statement of account showing the units as 3078 was erroneously generated and the copy of the same was sent to the complainant.

6. The opposite parties no.1 and 2 submitted that in the statement of account there are six entries which are shown as initial purchase. There can only be one initial purchase and the rest have to be accruals to the initial purchase. The opposite parties no.1 and 2 stated that the complainant was having 3078 units against his share of 1000 units and as such they had right to recover the excess units which were credited under mistake to his account.

7. The opposite parties no.1 and 2 submitted by filing additional written statement that some of the documents filed by the complainant are not genuine and the documents, Exs.A20 to A25 are fabricated documents. It is submitted that the complaint is not filed within the period of limitation. The opposite parties have stated that the complainant is making claim basing on a technical mistake crept in the statement of account. There was no deficiency in service and thus prayed for dismissal of the complaint.

8. The complainant filed his affidavit and the documents, Exs.A1 to A50 and on behalf of the opposite parties, Exs.B1 to B8 had been marked.

9. The District Forum allowed the complaint on the premise that the opposite parties paid dividend to the complainant from 1991 to 2010 and as such the complaint is filed within the period of limitation. The District Forum observed that the objection of the opposite parties that the claim was made on the basis of fabricated documents was raised in the additional written version filed by the opposite parties no.1 and 2 and as such not tenable.

10. Feeling aggrieved by the order of the District Forum, the opposite party no.2 filed appeal contending that the District Forum failed to appreciate the legal position that the complainant has the onus of substantiating his case and that the complaint is barred by law of limitation. It is contended that the District Forum misinterpreted the documents and that the District Forum has not properly appreciated the contents of the written version and additional written version.

11. The learned counsel for the complainant and the opposite parties no.1 and 2 filed written submissions.

12. The point for consideration is whether the order of the District Forum is vitiated by misappreciation of facts or law?

13. POINT NO.1: The facts beyond any dispute are that the complainant used to purchase shares pertaining to the opposite party no.1. It is also an admitted fact that the opposite parties no.1 and 2 used to send statement of account to the complainant. The complainant has stated that he is entitled to 750 units of bonus and the opposite parties by mistake made incorrect entries in his statement of account showing 150 units to the credit of his account which entry stated to have been continued subsequently in the statement of account. Whereas the opposite parties no.1 and 2 would contend that the complainant is harping on a technical mistake crept in the statement of account as regards showing 3078 units against his holding of 1000 units and that the receipts produced by the complainant are fabricated to suit his claim.

14. The opposite parties no.1 and 2 raised the objection as to maintainability of the complaint. The subject matter of the complaint is sale and purchase of shares involves earning of profits which is a commercial activity. Any transaction infested with element of commercial purpose forming part of subject matter of complaint is not amenable to the jurisdiction of consumer forum.

15. The matter involved several questions of facts which cannot be decided in summary trial proceedings. The plea of limitation, fabricated documents, accrual of dividend on the shares etc., and all such aspects need detailed examination and cross examination of parties which is not possible in the proceedings initiated before Consumer Forum.

16. The opposite parties contend that the receipts produced by the complainant are fabricated. The question need to be addressed requires to be decided by civil court as the same cannot be determined by Consumer Forum in view of its limitations as regards holding full pledged trial.

17. The National Commission in 'Safe Home Developers and Contractors vs S.S.B. Ltd' IV (2012) CPJ 729 referred to the decisions of the Hon’ble Supreme Court in 'Synco Industries vs State Bank of Bikaner & Jaipur and Others' I(2002)CPJ 16 and 'Trai Foods Ltd vs National Insurance Company Ltd and others' III(2012)CPJ 17 that where detailed evidence is required to be led by both parties to prove the claim and damages the complainant suffered , necessarily the parties have to be relegated to Civil Court.

18. In Trai Foods Ltd)supra), the Hon’ble Supreme Court considered the nature and scope of the dispute whether amenable to the jurisdiction of Consume Forum and Civil Court as under:

'The only question to be decided is, when should this jurisdiction be exercised by the Commission. In our view the Commission should address itself to the quantity of the claim, the nature of the claim, the nature of the evidence which would be required to be submitted both in respect of the claim and the damages suffered and the nature of the legal issues before deciding that the matter ought to be decided by the Civil Courts in the regular course. It is not disputed that the Consumer Forum has been set up to grant speedy remedy. The Consumer Forums have been given the responsibility of achieving this object. They were not meant to duplicate the civil courts, and subject the litigants to delays which have become endemic in the Civil Courts.

'Although the reasons given in the impugned order of the Commission for referring the present matter to the Civil Court is cryptic, we have been through the records filed before us and are satisfied that the Commission’s decision was correct. There is no doubt having regard to the nature of the claim, the large amount of damage claimed, and the extensive inquiry inot the evidence which would be necessary in order to resolve the disputes between the parties that this is not matter to be decided summarily at all'

19. The ratio laid in 'Vijay Kumar vs Indussind Bank' reported in II(2012)CPJ 391(NC)can be made applicable to the facts of the case for the reason that trading business can be considered as commercial transaction when the actual sale and purchase of the shares takes place l and as a part of the business the shares are dematerialised . The National Commission held that trading business particularly the business that is regularly done is commercial transaction with an exception as to the trading activity done to eke out one’s livelihood. The appellant has nowhere in the complaint mentioned that he has been doing the trading business to eke out his livelihood for the purpose of self-employment.

20. The National Commission in Vijaya Kumar’s case(supra) held that:

Petitioner has nowhere pleaded in its entire complaint that he is doing share trading business as 'self-employment for livelihood'. Nor it has been alleged that the services provided by the respondent, were being availed of exclusively for the purpose of earning of his livelihood by means of self-employment by the petitioner. Dispute between the parties relating to commercial purposes are excluded under the Act.

Since, petitioner has been trading regularly in the shares which is a commercial transaction and for which he has also availed the 'over draft facility' from the respondent, as such he would not be a consumer as per Section 2(1)(d)(ii) of the Act. Moreover, regular trading in the purchase and sale of the shares is a commercial transaction and the only notice is to earn profit. Thus, this activity is purely commercial one and is not covered under the Act. There are concurrent findings of facts also with regard to the service of the notice upon the petitioner.

21. The object of purchasing the shares is to sell them at the time wherein the share market the price of the shares is high. The ultimate result of the transaction is to earn prof

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it. The primacy of any transaction made with an intention to earn profit is the source of commercial purpose. The disputes involving commercial transactions do not attain the status of consumer dispute as provided for, by Section 2(1) of the Consumer Protection Act. In order to maintain complaint on the premise of deficiency in service by the broker or the trading company under the provisions of the Consumer Protection Act, the person should meet the requirement of Section 2(1)(d) read with Section 2(1)(o) of the Consumer Protection Act. Trading business involves the opening of 'Trading Account', 'Demat Account', 'permission to be given to the broker for purchase and sale of shares' etc., 22. In the result, the appeal is allowed setting aside the order of the District Forum. Consequently, the complaint is dismissed with liberty to approach to the Civil Court or any other Forum. In the event the respondent no.1 approaches the Civil Court, the period spent between the filing of the claim before the District Forum and the disposal of the matter today by us will be excluded under Section 14 of the Limitation Act, 1963in the light of the decision of the Hon’ble Supreme Court in 'Trai Foods Ltd vs National Insurance Company Ltd and others' reported in III (2012) CPJ 17'.