S.G. Sudhakar,
Aged 37 years,
S/o. S.M. Ganapathi,
Thannimani Village,
Bhagamandala,
Madikeri,
Kodagu.


OPPOSITE PARTY/IES:

1.The Managing Director,
M/s India Infoline Securities Pvt Ltd.,
Regd & Dealing Office:
Building No.24, 1st Floor,
Nirlon Complex, Off Western
Express Highway, Geregaon(E)
Mumbai.

2.The Manager,
M/s India Infoline Securities Pvt. Ltd.,
1st Floor, Malnad Complex,
Mahadevpet Road,
Madikeri,
Kodagu.

O R D E R


M.R. DEVAPPA, PRESIDENT

The case of the complainant briefly stated is as follows;

1.That the complainant being an agriculturist, having earned some amount by selling property he made following investment in securities, shares with the opposite parties.

a)On 10-1-2008 Rs.5,5555-00 (rupees five thousand five hundred and fifty five only)
b)On 24-1-2008 Rs.15,000-00 )rupees fifteen thousand only)
c)On 11-3-2008 Rs.1,50,000-00 (rupees one lakh fifty thousand only)
d)On 17-3-2008 Rs.49,000-00 ( rupees forty nine thousand only)
e)On 26-3-2008 Rs.99,000-00 (rupees ninety nine thousand only)
f)On 1-4-2008 Rs.1,00,000-00 (rupees one lakh only)
g)On 14-5-2008 Rs.1,00,000-00 (rupees one lakh only)
h)On 26-5-2008 Rs.40,000-00 (rupees forty thousand only)

Thus the complainant has totally invested a sum of Rs.5,58,555-00 with the opposite parties for which the 2nd O.P has issued receipts for the investments made by the complainant.

2.That on 6-10-2008 when the complainant approached the 2nd opposite party to enquire about his investment for the first time to his utter surprise, the 2nd opposite party told the complainant that the investment made by the complainant has been transacted in the market and the amount of Rs.5,58,555/- invested by the complainant has come to Rs.93,676-00 and the same amount has been remitted to the complainants ICICI Bank, Madikeri Branch on 12-8-2008 and further it was told by the 2nd opposite party that no more money of the complainant is with the opposite parties. The complainant having heard the same was shocked.

3.That the opposite parties ought to have taken the prior approval consent and sanction, ought to have transacted the business but without the approval and consent of the complainant the opposite parties have transacted the share business and the complainant has been put to heavy loss, nor even the complainant has been informed the complainant before remitting the amount to his account. By doing so the opposite parties have kept the complainant under dark and misused his money and they have practiced unfair trade and also deficiency in service.

4.That the opposite parties by their illegal act have made the complainant to suffer a loss of Rs.4,64,879-00 . The opposite parties are liable to make good the loss of the complainant and further they are liable to pay back the complainant a sum of Rs.4,64,879-00.

5.That the complainant has suffered mental agony for which the opposite parties are liable to pay compensation to the extent of Rs.25,000-00. That the complainant has issued legal notice dated 7-10-2008 calling upon the opposite parties to pay back Rs.4,64,879-00 with interest and damages, for which the opposite party failed to send the reply.

6.That the complainant has prayed for following relief;

a)To hold that the respondents have practiced unfair trade practice and are deficient in service.
b)To order the respondents to pay back Rs.4,64,879-00 (rupees four lakh sixty four thousand eight hundred and seventy nine only) to the complainant with interest at the rate of 12% per annum and damages of Rs.25,000-00 for the mental agony suffered by the complainant.
c)To grant cost of this complaint and to grant all such other relief’s in favour of the complainant.

7.The complainant has filed the following documents;

1.Cash receipt – dated 10-1-2008
2.Cash receipt – dated 24-1-2008
3.Cash receipt – dated 11-3-2008
4.Cash receipt – dated 17-3-2008
5.Cash receipt – dated 26-3-2008
6.Cash receipt – dated 26-3-2008
7.Cash receipt – dated 1-4-2008
8.Cash receipt – dated 14-5-2008
9.Cash receipt – dated 26-5-2008
10.Office copy of the legal notice
11.Postal receipt two in numbers
12.Postal acknowledgement

8.Upon admitting the complaint notice was sent to the opposite parties and the opposite parties on receipt of the notice have engaged their advocates and has filed version taking following contentions;

1.That M/s India Infoline Limited, the 1st opposite party is a company incorporated under the Companies Act 1956 having its registered office at Building No.75, Nirlon Complex, Off Western Express Highway, Goregaon (E) Mumbai and registered as member of National Stock Exchange of India on the capital market segment and he is also registered with security exchange of Board of India Rules 1992.

2.That the complainant voluntarily came and approached the opposite party to become the member to do stock trade business and entered in to broker client agreement (NSE, BSE) risk disclosure agreement etc. and signed the said documents on his own accord after going through them and with proper understanding.

3.That the complainant is well educated and understood the terms and conditions of the said agreement and other documents.

4.That the complainant, having understood the terms and conditions, has signed and executed the following documents along with initial deposit towards the opening of his account:-

a)Account Opening (Individual) Broking and depository services
b)Agreement for Transaction statement through Internet
c)Power if Attorney
d)DP Client Agreement
e)Broker Client Agreement NSE
f)Broker Client Agreement BSE
g)Combined Risk Disclosure document for capital Market/Cash Segment and future and option/segment (BSE & NSE)
h)Fax Indemnity
i)Running Account Letter
j)Schedule of charges.
The copies of the same have been produced as Annexure –A

5.That the complainant after knowing fully well about the terms and conditions has opened his account.

6.That the details of the transaction (contract notes) from 17-2-2008 to 7-8-2008 has been sent to the complainant and also through E-mail and the complainant has been informed through phone to know about the day to day transaction and to confirm the same which has been produced and marked as annexure –B

7.That the details of transaction (ledger extract ) from 11-3-2008 to 29-7-2008 is also produced which is marked as annexure –C. The details of the same has already been sent to the complainant.

8.That the complainant has studied the complete terms and condition of the same agreement, General Power Attorney and other documents signed the same and hence the complainant has agreed about the profit and loss of the transactions in the share market and the complainant is also aware that if any disputes arise in the transaction and the same will have to be settled by referring to the sole arbitration at Mumbai as per the arbitration Act and the same is also mentioned under the Client- Broker agreement (NSE) at clause 19 page 13 and also under clause 20 sub clause 20.1 at page 21 under client- broker agreement (BSE) as under.

“ LAW AND JURISDICTION:
This Agreement shall be governed by and construed in all respects in accordance with the laws of the Republic of India and, subject to the provisions of Clause 21, the Courts in Mumbai, India shall have the jurisdiction over this Agreement and the Arbitration proceedings in relation to the Agreement”.

9.In view of the above the complaint has to be dismissed for want of jurisdiction by the Hon’ble Forum.

10.Thathe complainant is also aware that if any dispute arises in transaction the dispute may be settled by referring to the sole arbitrator and Mumbai as per the Arbitration and Conciliation Act 1996. But no notice has been issued to the opposite party to this effect and neither the arbitrator had been approached by the complainant.

11.The clause 21, page 21 under the client broker agreement (BSE) is reproduced ;

DISPUTE RESOLUTION:

Any claim, dispute or difference arising between the parties hereto in respect of this Agreement of any contracts, dealings or transactions pursuant hereto or any rights, obligations, terms or conditions as contained in this agreement or interpretation or constructions of this Agreement shall be subject to the grievance redressal procedure of the Exchange and shall be subject to the Arbitration procedure as prescribed by the Exchange Provisions.”

Hence no cause of action arose for the complainant to seek relief before this Forum.

12.That the complainant has agreed to receive the digital contract notes through Internet to his unique client ID and / or to his designated E-mail ID. Further he has also agreed to confirm all the transactions if the same has not been objected within 24 hours to the opposite party as per client-broker agreement (NSE) at clause 12.1.1 at page 12.

13.That the complainant has agreed to take all the responsibility conducted by the opposite party as per clause 15.1.6 at page 13 of Client- Broker agreement and also as per clause 15.1.6 at page 18 of Client-Broker agreement (BSE)

14.That the complainant has agreed and consented with the opposite party to sell stock or share in his account if he fails to deposit the additional margin amount by dead line or if an out standing debt occurs in his account. Further the same is also clearly stated under the combined risk disclosure documents for capital market/ cash segment and futures and options segments (BSE &NSE) at clause 2.1 A & B at page 23.

15.That all the transactions started with permission and consent of the complainant when information and accounts are sent through Internet, E-mail and statement of accounts were entered in to the customers trade account and the opposite party is diligent, careful and prompt in dealing with transactions and immediately it transfers through its Auto generated server to their respective E-mail ID and customers trade account and as such there is no question of deficiency of service, at any given point of time.

16.That the complainant has no right to seek any relief at Madikeri for want of jurisdiction and as such the complaint is not maintainable.

17.That the complainant has not specifically and clearly stated what is the loss he has suffered and how he has suffered.

18.That the complainant has failed to establish negligence, unfair trade practise, deficiency in services etc. against the opposite party in his complaint.

19.That the opposite party is a reputed company in India and they maintained their accounts and dealings by hiring all qualified accounts officers and all transaction of the customer are being scrutinized and checked by qualify and efficient accounts people.

20.That the complainant has also received confirmation letter, E-mail about the transactions of account and did not object and point out any fault on the account letters, but has and confirmed the same without any protest.

21.That the complainant is an advocate by profession and it is true that the complainant is having is trading account with the opposite party and it is also true that he has deposited as described on various dates i.e., 10-1-2008, 24-1-2008, 11-3-2008, 17-3-2008, 26-3-2008, 1-4-2008, 14-5-2008 and 26-5-2008 for which the opposite party has issued receipts on the respective dates when ever the deposits are made.

22.That it is false to state that the complainant has invested in securities / shares with the opposite party. That the opposite party is a share broker through whom the Demat account holder is permitted to invest in the share market and the complainant has invested in the share market through the opposite party on various company shares, not with the opposite party. Further it is not true that he has made investment out of the income earned by selling a property, the complainant is put to strict proof of the same.

23.That the complainant has not approached the Hon’ble Forum with clean hands by revealing the truth about his transaction and his source of income.

24.That it is false that the complainant has approached the opposite party for the 1st time on 6-10-2008 to enquire about his investment, but the complainant has visited frequently to the Madikeri Branch of the opposite party and got all the information about his account on various dates and put his signature on respective dates in the client visiting ledger and the same is produced for perusal of the Forum.

25.That the allegations made by the complainant are false and the complainant is put to strict proof of the same. That the transaction has been done seeking the assistance of experienced hand in share trading and with the consent and permission of the complainant through phone and in person and after obtaining consent the transaction of trade would be supplied and forwarded in the computer system immediately by the opposite party and therefore there is no question of deficiency in service on the part of the opposite parties. The details would be available in the complainant’s Unique Client ID in share trade, the business time between 10 A.M. to 3-30 P.M and immediately after trading hours the information of all the transactions would be available and if complainant’s opens the client ID he would get all the details of share trade affairs of the day and therefore the questions of not informing the trade transactions to the complainant by the opposite parties are not acceptable.

26.That as per clause 12.1.1 of the Broker – client agreement, all the details of the transactions held in the complainant’s account has been sent to his Unique Client ID i.e., MADKE 138 which he can access in five PAIS, A.COM, and also to his designated E-mail ID i.e., Sudhakara 04 @ Yahoo.com which he has provided at the time of signing the agreement mentioned in annexure –A.

27.That the complainant has never disputed the alleged transaction within 24 hours as agreed in the above mentioned clause, hence it is deemed to be confirmed as per the terms and conditions mentioned in the agreements.

28.That the allegations made in the complaint that the complainant has not obtained any document is denied as false and the complainant was regularly visiting the opposite party branch office as mentioned above and also collected the contract notes and affixed his signature on the Client Contract Notes ledger. The copy of the client contract note ledger has been produced as Annexure –E.

29.That the opposite party has supplied all the details of transactions held in his account and then and there alone through E-mail and has also provided the additional copy of the same to him and the same is acknowledged by the complainant by affixing his signature in Annexure-E which proves that the complainant is aware of all the facts and figures of his account but he is misleading the Hon’ble Forum stating that he has been kept in darkness and the opposite party has misused his money.





9.Having regard to the averments made in the complaint and the defence taken by the opposite party the following issues arise for determination;

1.Whether the opposite party has committed deficiency in service

2.To what order?

R E A S O N S

10.It is argued by the advocate for the complainant that without the consent of the complainant the opposite party has sold shares to the disadvantage of the complainant and remitted the account to the complainant’s account without consent and without prior intimation and further argued that complainant has not opened his individual website and inspite of bar in jurisdiction and arbitration clause in the agreement the district Forums can entertain the complaint in view of section 3 of Consumer Protection Act. It is further argued that the opposite party has failed to prove that the complainant’s consent is obtained before shares are sold.

11.As against the above submission the advocate for opposite party with reference to the written argument argued that the complainant has entered in to an agreement and opened his individual website and also the website in the office of the opposite party no.2 and has become the member to do stock trade business and entered in to broker client agreement (NSE,BSE) risk disclosure agreement etc. and signed the said documents on his own accord after going through them and with proper understanding, complainant being educated and having understood the terms and conditions of the said agreement has signed those documents.

12.It is also contended by the opposite party that the complainant has signed and executed the following documents along with initial deposit towards the opening office account.

a)Account Opening (Individual) Broking and depository services
b)Agreement for Transaction statement through Internet
c)Power of Attorney
d)DP Client Agreement
e)Broker Client Agreement NSE
f)Broker Client Agreement BSE
g)Combined Risk Disclosure document for capital Market/Cash Segment and future and option/segment (BSE & NSE)
h)Fax Indemnity
i)Running Account Letter]
j)Schedule of charges.

13.It is also contended that the details of the transactions (contract notes) from 17-2-2008 to 07-08-2008 has been sent to the complainant and also through e-mail and the complainant has been informed through phone about the day today transaction and to confirm the same as per annexure –B and the details of transaction (ledger extract) from 11-03-2008 to 29-07-2008 is also produced as annexure –C the details of which has already been sent to the complainant.

14.It is contended that the complainant is very much aware that as per clause 21 of the agreement the courts in Mumbai shall have the jurisdiction over this agreement and the arbitration proceedings in relation to the agreement and therefore for want of jurisdiction the complaint is liable to be dismissed and clause 21 page 21 of the client broker agreement also says that all the disputes must be resolved as per the arbitration procedure and therefore the complainant has to seek relief by invoking that provision and as such complaint cannot be entertained by the Forum.

15.It is argued by the advocate of the opposite party that the complainant has agreed to receive the digital contract notes through internet through his unit client I.D or to his designated email I.D and he has also agreed to confirm all the transaction if the same has not been objected within 24 hours to the opposite party as per client broker agreement (NSE) at clause 12.1.1 at page 12 and further the complainant has agreed and consented with the opposite party to sell stock or share in his account if he fails to deposit the additional margin amount by dead line or if an outstanding debt occurs in his account. That all the transaction started with permission and consent of the complainant when information and accounts are sent through internet, email and statements of account were entered in to the customers trade account and the opposite party is diligent, careful and prompt in dealing with transactions and immediately if it is transferred through its autogenerated server to their respective email I.D and customers trade account, it is for the complainant to look in to those things and in this instant case the complainant has been informed through the above mode and as such it cannot be said that the opposite party has committed deficiency of service at any given point of time.

16.It is further submitted that the opposite party is a reputed company in India and they maintained their accounts and dealings by hiring all qualified officer and all transaction of the customer are being scrutinized and checked by qualified and efficient accounts officers and when the complainant has also received confirmation letter email about the transactions of account and when he has failed to object the same it can be said that the complainant has failed to establish negligence, deficiency of service, unfair trade practice of the opposite party.

17.It is also contended that as per clause 12.1.1 of the broker client agreement that all the details of the transactions held in the complainants account has been sent to his unique client I.D i.e., MADKE 138 which he can access in five PAIS, A.COM and also to his designated email I.D. i.e., Sudhakara 04 @ Yahoo.com which was provided by him at the time of signing the agreement mentioned in annexure –A, when the complainant has never disputed the alleged transaction within 24 hours as agreed in the above mentioned clause it could be deemed to be confirmed as per the terms and conditions mentioned in the agreement.

18.It is further contended that the complainant has received the contract notes and for having received has affixed signature on the client contract notes ledger. Now at this point of time he cannot deny for having done so. The annexure –D i.e., contract node ledger amply demonstrate the same.

19.The annexure –A to E documents which have been referred in preceding para 4 clearly show that the complainant is aware of all the facts and figures of his account but now has taken a contention that he has not informed the fact of selling the shares and remitting the said proceeds in his accounts, and therefore the complainant has not been kept in darkness.

20.Regarding the jurisdiction and the arbitration clause it can be said that despite those provisions in the documents referred in the previous para the jurisdiction of the Forum cannot be ousted and as per section 3 of the Consumer Protection Act. The Form’s can very well entertain the complainant and in this case also the Forum is not bared from exercising jurisdiction. But as for as the merit of the case is concerned we can very well say that the complainant has failed to establish that the opposite party has committed deficiency of service and practised unlawful trade and acted to the disadvantage of the complainant.

21.It may not be out of place to mention here that due to uncertainty in the share market and stock business these types of allegation are being made.

22.When the complainant has given power of attorney to the opposite party to act on his behalf and has signed as many as 10 documents agreeing for the terms and conditions mentioned therein, now he is forbidden from saying that no written consent is obtained from him.

23.It may not be out of place to quote clause 15.1.6 page 18 of client broker agreement (BSE) which reads as follows;

“The client shall take responsibility for all the transactions conducted by using the E broking service and will abide by the record of transaction generated by IIL and such records generated by IIL shall used as evidence in any proceedings. In particular it shall not be an auction to the client to content or to try and avoid the transaction on the allegation that a trade conducted on its account using the password allotted to client was not a transaction done by or on behalf of the client”.

24.It is pertinent to note that the loss what the complainant is alleging is only due to the volatility of the share market and not due to the act of the opposite party; according to the opposite party.

25.It is also relevant to mention that the share market bears the risk of higher volatility and risk of lower liquidity and the complainant has agreed for the same at clause No.1 in combined risk disclosure document.

26.In view of the discussion made in the preceding paragraphs it can be said that the complainant has failed to establish that the opposite party has committed deficiency in service and has indulged in mal practices in trade, Consequently we have no options except to answer point no.1 negatively and as such we proceed to pass the following order.

O R D E R


The complaint is dismissed.