A person involved in sale and purchase of shares does not come under the purview of consumer

A State Commission held that the company is not liable to pay compensation. In this case the complainant indulges in the purchase and sale of shares of various companies. The complainant approached the company to pay him the money so that he purchases the shares on the complainants behalf. But the company did not purchase the shares as instructed by the complainant. The complainant suffered mental harassment due to the deficiency in the services provided. Complainants plea was that he was into this sale and purchase business of the shares to earn his livelihood which was not taken into consideration. The commission found that the complainant does not comes under the purview of the consumer.

 

CHHATTISGARH STATE
CONSUMER DISPUTES REDRESSAL COMMISSION
PANDRI, RAIPUR
Appeal No.602/2010
Instituted on 11.10.10
Bijay Agrawal, S/o Late Shri Satyanarayan Agrawal,
R/o J-47, Cloth Market, Pandri, Raipur,
Dist. RAIPUR (C.G.) … Appellant.
Vs.
Kanti Lal Chhagan Lal Security Pvt. Ltd.,
Through: Shekh Irfaan Security Head,
C-21/22, 1st Floor, Shayam Market,
Jeewan Beema Marg, Pandri,
RAIPUR (C.G.) … Respondent.
PRESENT: -
HON’BLE JUSTICE SHRI S.C. VYAS, PRESIDENT
HON’BLE SMT. VEENA MISRA, MEMBER
HON’BLE SHRI V.K. PATIL, MEMBER
COUNSEL FOR THE PARTIES: -
Shri H. S. Rai, for appellant.
Shri Bhupendra Jain, for respondent.
ORDER
Dated: 13/01/2011
PER: – HON’BLE SMT. VEENA MISRA, MEMBER
This is an appeal of unsuccessful complainant, whose complaint Case No.108/2009, was dismissed by the District Consumer Disputes Redressal Forum, Raipur (hereinafter called “District Forum” for short) vide order dated 16.09.2010.
2. Brief facts necessary for disposal of this appeal are that the complainant runs a shop in the name of Maharaja Gharana at Pandri Market and sales Ghaghra choli etc. Besides this, he also indulges in purchase and sales of shares of various companies. In the period between 22.07.2008 to 18.09.2008, the complainant gave various
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cheques to the OP of amount aggregating to Rs.13,05,000/- for purchasing shares of Reliance Power, when there is downwards trend in the market and prices are low. When the complainant approached the OP on 29.10.2008, he was surprised to know that amount in his account has been reduced to Rs.7,665.78p only. The OP invested the amount in other shares un-authorizedly and did not purchase shares of Reliance Infrastructure as instructed by the complainant. The complainant claimed damages from OP for deficiency in service committed by them and resultant mental harassment suffered by the complainant.
3. Resisting the complaint, the OP raised various preliminary objections to the maintainability of the complainant. OP raised objection on the ground that the complainant runs a shop and his indulgence in share market, is solely for commercial purpose for earning profit. It was averred in the written version that the OP is a member of Bombay Stock Exchange Committee and purchases shares only as per instructions of the party concerned. After each and every transaction of purchase of shares, intimation was duly given to the complainant vide E-mail, but the complainant never raised any objection. The complainant is fully aware that there are chances that the person investing money in share market, may suffer loss. It was
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prayed that since the complainant is not a consumer, the complaint be dismissed. 4. Parties have filed affidavits in support of their respective pleadings and have also filed various documents. 5. The District Forum relying on order dated 12.04.2010, passed by this Commission in Appeal No.569/2009 between S.S.Kantilal Ishwar Lal Security Ltd. & anr. Vs. Neeraj Sharma had dismissed the complaint.
6. Learned counsel for the complainant / appellant submitted that the District Forum has erred in coming to the conclusion that the transaction of sale and purchase, was for commercial purpose and the complainant was not consumer. He submitted that the complainant had invested money in share market and the OP was rendering service for consideration. Hence the complainant is a „consumer‟ and as the OP did not follow the instructions of the complainant and invested money in other shares, without any intimation to the complainant, thereby causing loss. So, the District Forum ought to have come to the conclusion that the OP has committed deficiency in service by not following the instructions of the complainant, while rendering service. He submitted that the agreement executed between the parties stipulated that the OP will invest the money as per instructions of the
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complainant and by not following the terms of agreement the OP has committed deficiency in service. The District Forum failed to appreciate this simple fact and passed an erroneous order. Learned counsel submitted that the appeal be allowed, setting aside the impugned order. Learned counsel for the appellant relied on Delhi Stock Exchange Vs. Ravinder Pal Singh and Anr. I (2008) CPJ 341 (NC); Vimal Chandra Grover Vs. Bank of India AIR 2000 SC 2181 and Unit Trust of India Vs. Shri Shankar Das order dated 28.04.2009 in Civil Appeal No. 7604/2002 decided by the Apex Court.
7. Learned counsel for the OP/respondent submitted that the complainant is not a consumer, as held by this Commission in the case relied by the District Forum. Besides running a shop he is indulging in sale and purchase of shares solely with intention of earning profit. Learned counsel further submitted that the OP acted according to the instructions of the complainant and had sent due intimation of transactions on E-mail ID of the complainant/appellant. It was stipulated in the agreement between the parties that in case the investor is not satisfied with any transaction, he would bring the same to the notice of the OP within a period of 24 hrs. and his failure to do so would amount to his confirmation. No such objection was taken by the complainant regarding transaction of shares. Learned counsel submitted that the OP has abided by terms of agreement. It is a known
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fact that there is risk of loss in share market and in case a person indulges in the share market, he should be prepared to suffer loss as well. As the complainant had suffered loss, he has leveled false allegations against the OP. Learned counsel submitted that the order of the District Forum does not require interference. 8. In view of the controversy between the parties, the basic question that is required to be considered is whether the complainant is a consumer or not? The definition of „consumer‟ under Section 2(1)(d) of the Consumer Protection Act, 1986, reads as under : – “(d) “consumer” means any person who, -
(i) buys any goods for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of deferred payment, when such use is made with the approval of such person, but does not include a person who obtains such goods for resale or for any commercial purpose; or
(ii) hires or avails of any services for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such services other than the person who hires or avails of the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payment, when such services are availed of with the approval of the first mentioned person but does not include a person who avails of such services for any commercial purpose.”
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[Explanation.-For the purposes of this clause, “commercial purpose” does not include use by a person of goods bought and used by him and services availed by him exclusively for the purposes of earning his livelihood by means of self-employment] 9. It is abundantly clear from the aforesaid provision that a person, who avails service for any commercial purpose, is excluded from the definition of consumer as per amendment added by Act 62 of 2002 w.e.f. 15.03.2003. 10. Complainant‟s Individual Client Registration Application Form, is placed on record. It has been stated in the complaint that the complainant runs a shop and also indulges in purchasing and sale of shares. As per averments of the complaint, the transaction between the parties took place between the period from 22.07.2008 to 18.09.2008 i.e. after amendment. Obviously purchase and sale of shares cannot be said to be for earning livelihood. Hence, we agree with the plea taken by learned counsel for the OP / respondent that the complainant had invested the amount for earning additional income / profit and in this way; the service was availed for commercial purpose.
11. Otherwise also it is a matter of common knowledge that sale and purchase of shares involves the element of risk, it may fetch huge profit and may result in huge loss. Share transactions come under commercial activity and as the services of OP were availed by the
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complainant for the purpose of purchasing and selling the shares, the complainant cannot be said to be consumer under the provisions of Consumer Protection Act, 1986, as decided by us earlier also in the case relied by the District Forum while passing the impugned order. 12. So far as the cases relied by learned counsel for the appellant are concerned, the dispute in all those cases related to the period, prior to amendment to the Act in 2002 whereby the persons availing services for commercial purpose were excluded from the purview of „Consumer‟. Hence, the cases relied by learned counsel for complainant / appellant would not afford any benefit to the complainant. 13. We do not feel it necessary to consider other objections taken by the complainant because the complainant does not come within the purview of „consumer‟ under provisions of Section 2(1) (d). We find no infirmity in the order of the District Forum so, the same is affirmed, the appeal being devoid of merits, is dismissed. No order as to cost. (Justice S.C. Vyas) (Smt. Veena Misra) (V.K. Patil) President Member Member /01/2011 /01/2011 /01/2011

 

Judgement Link

http://164.100.72.12/ncdrcrep/judgement/2301102051121046402010-602.pdf

 

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