Appeal no. FA-8/51



(Appeal against the order dated 01.12.2007 passed by District Central, Kashmeri Gate, Delhi in complaint case no.1181/2003)

1. Kotak Securities Limited,
2. Mr. Narayan S.A.
Director, Kotak Securities Limited
3. Mr. Rajashekhar Iyer,

Director, Kotak Securities Limited,
All having their office at

Nirlon House,
5th floor, Dr. Annie Besant Road,

Worli, Mumbai 400025.

…..Appellants/Respondents

Through

Shri Arvind Kumar, Advocate.

VS
Dr. S.C. Jain, S/o Late Shri H.S. Jain,

9/6701, Dev Nagar, New Delhi.

…Respondents/Complainant

CORAM
Justice Barkat Ali Zaidi, President.

M.L. Sahni, Member
1. Whether reporters of local newspaper be allowed to see the

judgment?
2. To be referred to the reporter or not?
M.L. SAHNI, MEMBER
1. M/s Kotak Securities Ltd., (hereinafter referred to as Appellant), OP before the District Forum have assailed the order dated 01.12.2007, passed by the District Fourm, Kashmere Gate, Delhi on variety of grounds, inter-alia, that the Ld. District Forum grossly erred in observing that the Appellant did not file any statement showing credit of Rs. 58,996.08, that the respondent has calculated the value of scrips from the contract notes enclosed with the complaint. The amount of those contract notes has already been credited in the account of the Respondent and a sum of Rs. 61172.80 had been credited in the account of the Respondent for the scrips sold on NSE vide Contract Note bill no. N/11/Bill No. 0694 which was reflected in NSE Ledger of the Respondent on 26.03.2001.

2. Facts giving rise to this appeal before us , precisely stated, are that the respondent (complainant before the District Forum) entered into agreement with OPs by virtue of which, Appellant allotted account no. DDDDM/F/S11M8. The purpose of account was to deal in sale and purchase of shares. The statement of Accounts shows that complainant/respondent was owner of following shares as on 15.03l.2001:-



i. Asian Hotels Eq. 67
ii. Bharat Hotels Eq 399
iii. Gujrat Heavy Chemicals Eq 1800
iv Henkel Spic Eq 100
v JCT Fabrics Eq 2650
vi Shri Shakti LPG Eq 4700
vii. United Berweries Eq 41.
Statement was received on 08.06.2001. The complainant/respondent asked Appellant to sell above mentioned shares. Appellants sold these shares for Rs. 58,996.08. In spite of various reminders, legal notice and visits, Appellants had not paid the amount of Rs. 58,996.08 to the complainant/Respondent. The complainant/Respondent termed the retention of the amount illegally as deficiency in service on the part of the Appellants. The complainant/Respondent prayed for directions to the Appellants to pay a sum of Rs. 58,996.08 with interest, cost and compensation.

3. The Appellants, in reply filed before the District Forum admitted the maintenance of Account No. DDDDM/F/S11M8 in the name of respondent. Appellant did not deny the holding of shares by the respondent stated in the complaint on 15.03.2001. Appellant did not deny that holdings as pleaded in the complaint were sold for Rs. 58,996.08. However, the Appellants averred that sale proceed of the shares was adjusted against the balance security margin of 30% in the account of the respondent. Appellant further pleaded that due to adjustment of sale proceeds Appellant is not liable to pay anything to the respondent.

4. The appellant also raised certain preliminary issues against the maintainability of the complaint, which were dismissed by the Ld. District Forum, holding that these were devoid of any merit and made following observations while holding the Appellant deficient-in-service:-

“ The clinching document to decide this issue is Statement of Account for the relevant period. Shri Dubey relied on Annexure- 5 which is statement of account for the period 01.04.2000 to 31.03.2001. OP also filed margin status report from 27.02.2001 to 16.03.2001. OP, however, withheld the statement for the relevant period. OP did not file any statement showing credit of Rs. 58,996.08 in the account of complainant and then setting it off against outstanding liabilities. Not even a single document was filed to prove transparent adjustment of sale proceeds”

5. Allowing the complaint the Ld. District Forum directed the Appellant to pay to the Respondent a sum of Rs. 58,996/- with interest @ 9% w.e.f. 1.7.2001, and a sum of Rs. 5,000/- as compensation and Rs. 2,000/- as cost of litigation.

6. We have heard the Ld. Counsel for the parties and have gone-through the material on record.

7. The contention of the Appellant before us, is that the Appellant executed Member-Client Agreement with the Respondent and allotted trading account bearing no. SIIM8 for effecting transaction on the Exchanges; that the Respondent also opened a beneficiary De-M

at Account bearing no. 10120957 and executed a power of attorney in favour of Appellant; that it is mandatory for the Appellant to maintain a margin amount in the trading account of its clients. As per the policy of the Appellant 30% margin money was to be maintained in the trading account of the client. The Respondent also agreed to maintain a minimum margin of 30% in his trading account. The Respondent further unconditionally agreed to replenish any shortfall in his account; that all the trading was done on the instructions of the Respondent. After these transactions the account balance went in negative. The Appellant no. 1 after informing the Respondent , sold various shares to adjust the said debit. The proceeds received from the sale of the shares could not completely replenish the debit in the Respondent’s account and there was a shortfall of Rs. 13,210.21 on 30th March, 2001; that , Respondent instead of replenishing his balance debit, raised this dispute before the Investor Grievance Cell of the NSE.

8. We have carefully examined the documents referred to by the Ld. Counsel for the Appellant. These are, (1) copy of the statement dated 15.3.2001, showing list of disputed shares (2) copy of the statement dated 26.03.2001 showing list of shares sold on 21.3.2001 and credited to the Account of the Respondent ; (3) copy of statements showing an amount of Rs. 61,172.00 credited to the Account of the Respondent and balance of Rs. 13,210.21 recoverable from the Respondent. Copies of these documents were produced by the Appellant before the Ld. District Forum as Ex. RW 5. The same are also filed in this appeal as annexure-5.

9. Copy of Annexure-5 at page 75, clearly shows that a sum of Rs. 61,172.80 was credited to the Account of the Respondent on 26.03.2001 and there was balance of Rs. 13,210.21 paise , as on 31.03.2001. Thus we find the observations of the Ld. District Forum that the Appellant did not file any document showing credit of Rs. 58,996.08 paise having been set off against outstanding liabilities of the Respondents, has perhaps happened due to not showing exact figure of Rs. 58,996.08 in the statements Annexed at page 38 and 75 with this appeal. Explanation, of this variation in figures, according to the Appellant, is that there are many other charges and taxes besides the exact amount of trading which are levied at the time of transaction. We find this explanation convincing. The Ld. District Forum , therefore, erroneously reject this document filed before it as Ex RW 5.

10. In the light of this document, we feel satisfied that the Appellant duly credited the sale proceeds in the account no. S11MB of Respondent, who still owed liability of Rs. 13,201.21 as on 31.03.2001, reflected in the ledger for the Financial year ending 31.03.2001.

11. We , therefore, find sufficient substance in the appeal meriting allowance. Hence the appeal is allowed and the impugned order is set aside. Original complaint, accordingly, stands dismissed.

12. FDR, if any, deposited by the appellant , be released in their favour after completing due formalities.

13. A copy of this order as per statutory requirements be forwarded to the parties free of charge and also to the concerned District Forum and , thereafter , file be consigned to Record Room.

Dear Sir/Madam

I am Zakir Parwez and my client ID is ZMNF6 in Kotak Securities. It almost one year old account. From the beginning to till now, I have only one issue with Kotak Securities that they are not giving me a Kotak Mahindra Bank zero balance account as per the Kotak Securities (Executive) promised to me. Kotak Securities not in mood to keep their promise.

In first scene:
An Executive came to me to open my Kotak Securities account with DP account and Kotak Bank account with all documents of all accounts.
I gave him Rs. 10000/- cheque with my all required documents.

In Second scene:
My Rs. 10000/- cheque was went bounced because the fault of your side I all ready warn about that but the due to the bank concerning executing make this fault, and they even won’t informed me about bounced cheque. Even I already got all documents of Kotak Mahindra Bank account (Welcome kit, ATM card, PIN and all that), but because of my cheque was bounced my all procedure was on hold for a while.
Any ways your executive once again to me to ask for second Rs. 10000/- cheque, and he was assured me to open (activate) all proposed or promised account that’s mean one Kotak Securities account, one DP account and one zero balance Bank account(Kotak Mahindra). I gave him again Rs. 10000/- cheque on same condition that he has to open my zero balance Bank account and all that.
After some days my two of three accounts were opened but my Kotak Mahindra Bank account was still on hold for some kind of approval and all that, which is as a client of Kotak Securities it is none of my business, in between I got several call from Abhishek (Mobile No. 09999251549) for asking about some necessary information. And suddenly he was stopped calling me. In between your executive again visited to me and collects Rs. 5000/- cheque and again assured me about opening the zero balance bank account, and said out it is very near to approval give me Rs. 5000/- cheque for banking use.
After a long time when I don’t get any information about my bank account I called on toll free KS number and mail to your executive Mr. Dilshad Ghani and Mr. Shantanu Malviya but no one giving me any correct information about my bank account even they didn’t reply back my mail. I always asked for my bank account status but they only use to wrap out the issue.
I was giving them only one statement, you committed to open my zero balance bank account thus you have to do the same.
Finally I wrote on Kotak Securities website, after long time I got a mail from service.securities@kotak.com. After that my case was went on follow up mode. In between I mailed a lot and got reply a lot and call a lot but case was still as it is. No progress!!!! Still on follow up mode.

Finally I didn’t have any solution.

In third scene:
I got a call from Ms. Puja on 02-06-2010, in long voice conversation, almost one year later she told me that we are not able to give you zero balance bank account. I asked her why? But she didn’t give me any appropriate reason for the same.
Finally I asked her give me mail for the same and mention what u said on telephonic conversation, mention each and every thing that you are saying to me but still I didn’t get any mail from her.

Now please solve my issue as soon as possible.

And I am very rigid on your own commitment. If you committed for open my zero balance bank account that you have to open. I am not such a intellectual who know every thing. I know only one thing, if u promised about some thing then you has to give me the same.

Please do the needful.

I really appreciate if you solve my issue. Any further query kindly contact on my cell number 08802292621 and 09891863530.



Thanks

Zakir Parwez
ZMNF6
Mob.: +919891863530/ +918802292621
Ho. No. 2B/22
Zakir Nagar, Okhla, N.D.-25

hiii kotak

myself shailendra shukla.. your one excutive mr vinay tripathi located andheri east.
monday he calld me and said that we have good offer you can open ur account by cancil cheq we will give you additional brokrage of rs 1000.. i told him i already hav 2 account he told he you genrate only 1 rs brokrage.. i will revrt ur mony.today is my review so please give me only ur document i will submit form.. my one friend working in virar kotak bank he was saying you can open two type of account give advance brokrage or take normal account opening charge..
i massage to mr vinay tripathi nw i am not able to open ur account i will call you.. he massage .. tere pass mannar nahi tha chutiya kahi ka.. i have alll massage
i want to knw wich kind of service kotak securities provide to his coustmar..i hav also one saving account in kotak bank.
i want action on immidiate bassis..

ragards.
shailendra shukla
mob -9967807090

Dear Mr.Shukla,

We are happy to share that the issue has been resolved to your satisfaction. Your feedback is important to us. Please write to us on ks.escalation@kotak.com for any other queries and we will be happy to be of assistance.

Regards,
Team Kotak Securities

The day i opened my account the problem started. The brokerage offered to me was never given and no relationship manager assigned. Later on for the sake of saying a RM was given who was of no use. Now I have requested for closure of my account as i am being charged tremendously whereas initially i was told its free account. I have deposited my closure form on 16th at faridabad branch and till date have been following up for the closure on mails with service team and each time getting holding message with no update. Today when i spoke to customer care i am being informed that my closure forms have not reached head office from branch till date !!! What a great service ? Can you help me ?

Dear Kavish,

We hear you. We will look into the matter and address your concern at the earliest. In the meantime, do share your contact details with us at service.securities@kotak.com so our customer care executive can get in touch with you.

Regards,
Team Kotak Securities

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