Investor trading in shares is not a consumer: District forum
MDT/PTI 11 January 2013

The complainant informed the court that she suffered immense mental stress and agony due to the conduct of the company

Thane: Dismissing a complaint by an investor using the services of a share broking company, the Thane District Consumer Disputes Redressal Forum has held that an investor cannot be treated as a consumer, as he is indulging in trading for commercial purposes, reports PTI.

 

One Chayya V Madane from New Panvel had enrolled herself with the India Infoline, for availing their services in trading in shares. Accordingly, she had opened a demat account and was using the services of the firm for trading.

 

Thane Consumer Forum president Jyoti A Mandhle and member Smita L Desai passed the order on 9th January on a complaint by Madane against India Infoline.

 

In her complaint, Madane said that in March 2008, she had opened a demat account with India Infoline for selling and purchase of shares.

 

She deposited Rs60,555 with the company and Re0.05 (paise) was to be taken as brokerage for trading. It was noticed by the complainant that instead of charging Re0.05 (paise), they charged Re 0.10 (paise) as brokerage.

 

On 6 June 2008 an email was sent by the complainant to the company to stop the transaction going into the account but despite that, the latter continued the trading transaction and disposed amount from her account.

 

On 2 August 2008, she sent a letter to the company saying that the amount Rs60,000 should be reversed back into her account with interest or else she will take legal action against them.

 

She submitted that as no response was given by the company, she sent a notice on 20 September 2008 to the manager of the company saying that the deposited amount in her account should be reversed into her account with interest.

 

The complainant informed the court that she suffered immense mental stress and agony due to the conduct of the company.

 

However, the trading company contested the complaint and told the court that “as the complainant is taking services from us for commercial purposes for making profit by trading in stock market, so she is not a consumer and as the complainant is not a consumer, this complaint should be dismissed with heavy cost.”

 

The respondent also stated that any disputes arising between the parties in respect of this agreement of any contract dealings or transactions or interpretation or construction of the agreement are subject to the arbitration procedure, as prescribed by the Exchange provisions, so the complainant has no right to seek any relief for want of jurisdictions.

 

They also said that the object behind opening the account was commercial and in view of the terms in Section 2(1)d of Consumer Protection Act, 1986, parties who avail services are excluded from the definition of the consumer and therefore, the complainant is not a consumer and thus, her complaint is not maintainable under Consumer Protection Act.

 

In its order, the Thane District Consumer Disputes Redressal Forum held that, “The complainant has not made out any case under section 2(1)(d) of the Consumer Protection Act 1986 to the effect that such trading is for her own employment and earning her livelihood, therefore she being not a consumer within the meaning of Consumer Protection Act, the dispute is not a consumer dispute.”

 

“From the facts of the present case and the aforesaid discussion, we hold that the complainant has availed services for commercial purposes and therefore the complainant is not a consumer as defined under Consumer Protection Act,” the form added.

Comments
R Balakrishnan
10 years ago
Funny. When I have a trading a/c with a broker, I am his 'consumer'. I consume his services. Price. service levels are key deliverables. Very perverse judgement, I think.
Param
10 years ago
interesting... i thought this discretion (investor v/s trader) was only available for IT officers.
now we can see more such instances where companies will go to length to prove that the applicant is not a customer because there is some monetary gain involved...
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