Skip to main content

Share traders not consumers, rules consumer panel

The state consumer disputes redressal commission has held that compensation cannot be given under the Consumer Protection Act to those involved in sale and purchase of shares, which are commercial transactions.

Relying on several judgments that reiterate the above view, the Goa state consumer disputes redressal commission has reversed the order of the North Goa district consumer forum which awarded damages to a couple, who lost money in share trading through a stock broker.

In its recent order, commission president N A Britto and member Jagdish Prabhudesai observed that, "The Consumer Protection Act is not for entertaining or compensating speculative transactions or losses".

The order follows an appeal by Mumbai-based stock broker India Infoline Limited against an order of the North Goa district consumer forum, which awarded damages to Panaji-resident Vaman Nagesh Usapkar and his wife.

They had claimed that they suffered a loss of 1,72,020 which they sought to recover from the stockbroker after filing a complaint on December 30, 2009.

In fact, the Usapkars held the Goa representatives of India Infoline - the branch manager and the relationship manager - who traded on their behalf, responsible for their loss.

In its order dated October 18, 2012, two members of the district forum held the complainants to be consumers and awarded to them a sum of 1,72,020 towards the loss with interest at the rate of 18% from December 30, 2009, till payment and also compensation of 50,000 besides awarding costs of 15,000. But the third member of the forum dissented and held that the complainants were not consumers and that their case was liable to be dismissed.

During the hearing, the counsel for the Usapkars argued that the stockbroker's representatives did the transactions without his clients' consent.

He also argued that Vaman Usapkar is 'in service' and therefore any investment by him could not be commercial.

But the stockbroker's advocate submitted that the Usapkars had given their occupation as "business" and that they had entered into an agreement with the stockbroker for trading in shares which is a commercial activity.

But the Goa consumer commission ruled that the Usapkars did not fall within the purview of consumers under section 2(d)(ii) of the Consumer Protection Act, 1986.

Comment:

There still remains some ambiguity in the definition. A person buys a property intending to stay. But later sells that. Is that a commercial transaction ? Actually, there are many facets to this. It would have to be seen why did he sell and did he buy another again ? So each case has to be treated individually which is why though judgment on share trading have been given several times in the past, they are admitted by the court and heard.

Article referred: http://timesofindia.indiatimes.com/City/Goa/Share-traders-not-consumers-rules-consumer-panel/articleshow/34016076.cms

Comments

Post a Comment

Most viewed this month

Deposit Of Minimum 20% Fine/Compensation U/s 148 NI Act Mandatory

In OP(Crl.).No.348 OF 2019, T.K.SAJEEVAN vs FRANCIS T.CHACKO, the appeal was filed against the order of the lower court to deposit 25% of the fine before filling of appeal. The appellant argued that the deposit introduced through the Section 148 of the NI Act after amendment was directory in nature as it used the term 'may' while mentioning the issue of deposit. The Kerala High Court however disagreeing held that in view of the object of the Legislature while incorporating Section 148 into N.I. Act, the word 'may' will have to be read as 'shall'. The imposition of payment contemplated under Section 148 N.I. Act cannot be restricted to some prosecutions and evaded in other prosecutions. Since the amount directed to be deposited being compensation, undoubtedly, it is liable to be ordered to be deposited irrespective of the nature of the prosecution. Therefore, the word 'may' can only be taken to have the colour and meaning of 'shall' and there

NCLT - Mere admission of receipt of money does not qualify as a financial debt

Cause Title : Meghna Devang Juthani Vs Ambe Securities Private Limited, National Company Law Tribunal, Mumbai, CP (IB) No. 974/MB-VI/2020 Date of Judgment/Order : 18.12.2023 Corum : Hon’ble Shri K. R. Saji Kumar, Member (Judicial) Hon’ble Shri Sanjiv Dutt, Member (Technical) Citied:  Carnoustie Management India Pvt. Ltd. Vs. CBS International Projects Private Limited, NCLT Swiss Ribbons Pvt. Ltd. & Anr vs. Union of India & Ors. (2019) Sanjay Kewalramani vs Sunil Parmanand Kewalramani & Ors. (2018) Pawan Kumar vs. Utsav Securities Pvt Ltd 2021 Background Application was filed under section 7 of the Insolvency and Bankruptcy Code, 2016 alleging loan of Rs, 1.70 cr is due. The Applicate identified herself as the widow and heir of the lender but could not produce any documents proving financial contract between her Late husband and the CD but claimed that the CD has accepted that money was received from her husband. The applicant subsequently filed rejoinder claiming the debt t

Jurisdiction of consumer forum is not ousted even if the other party has filed suit on the same matter in Civil Court

In Yashwant Rama Jadhav v. Shaukat Hussain Shaikh, First Appeal No. 1229 of 2017, decided on 18.11.2017,  the grievance of the petitioner before the National Consumer Disputes Redressal Commission was that appellants/complainants had entered into agreements with the respondents for purchase of residential flats, which the respondents were to construct and despite paying the substantial amount to the respondents, the construction of the flats had not been completed. The State Commission dismissed the complaints and ruled in favor of respondents against which the appellants approached the National Commission. The NCDRC held that Section ‘3’ of the Consumer Protection Act, to the extent it is relevant provides that the provisions of the Act shall be in addition and not in derogation of the provisions of any other law for the time being in force. Thus the remedy available under the Consumer Protection Act is an additional remedy, which Parliament has made available to a consumer. Even