S.V. SAMPATH KUMAR vs RAMPAL ATTAL

AGGRIEVED by the order of the dismissal of the complaint by the District Forum in C.D. No. 717/92, this appeal is preferred by the complainant.

HIS case is that he is an investor and the Opposite Party a share broker. The complainant used to purchase and sell the shares of various companies through the Opposite Party and he used to give written instructions to the Opposite Party for that purpose. On 7.4.1992 on his instructions, the Opposite Party purchased 50 shares of Reliance Industries at the rate of Rs. 345-20 Ps per share. The complainant paid a sum of Rs. 16,360/- and was due in a sum of Rs. 900/-to the Opposite Party. When the complainant offered to pay the balance of Rs. 900/- and requested O.P. to deliver 50 shares, he was informed by the Opposite Party that on 25.3.1992 the complainant had placed an order with him for purchase of 100 shares of Reliance Industries for which the complainant is due Rs. 39590/-. Unless that amount was paid, the opposite party refused to deliver the aforesaid shares. It is the case of the complainant that he had not placed any order with the Opposite Party on 25.3.1992 for purchase of 100 shares and the Opposite Party invented this with a view to recoup heavy losses suffered by him due to slump in the stock market. The complainant therefore claimed a sum of Rs. 28,000/- towards loss suffered by him as he had lost an opportunity to apply shares and debentures on preferential basis. He also claimed a sum of Rs. 7640/- on a account of pain, suffering, mental tension and visits to the opposite party and also sought for delivery of 50 shares from the Opposite Party by accepting Rs. 900/- or else refund Rs. 16,360/- with interest at 24% p.a. from 23.4.92. In his version, the Opposite Party submitted that the complainant is not an inves- tor and he used to pay or receive only the difference between the rate of purchase and sale. He used to place orders orally over telephone. On 25.3.1992 the complainant placed an order for 100 shares of Reliance Industries and the Opposite Party purchased the same as instructed by the complainant. It is his case that payment of Rs. 16,360/- by the complainant was not towards the costs of 50 shares purchased by him, but was merely credited to the account of the complainant. Because of the slump in the share market the complainant is disowning the said transaction. When a demand was made by the Opposite Party by letter dated 2.6.1992 asking the complainant to pay the balance of Rs. 40,490/- as counter blast the complainant got issued a legal notice dated 6.6.1992 disowned the purchase of 100 shares. It is no doubt, the complainant placed an order for purchase of 50 shares, but delivery of 50 shares cannot be given without payment of the balance of amount with interest due to the Opposite Party and the Opposite Party has a lien on the shares until the complainant pays all the amount due to the Opposite Party. As and when the complainant pays the balance of amount with interest at 21% p.a. the Opposite Party is prepared to deliver 150 shares of Reliance Industries to the complainant.

On behalf of the complainant Exs. A-1 to A-12 were marked and on behalf of the Opposite Party Exs. B-1 to B-18 were marked.

THE District Forum framed the points for consideration as whether on the request of the complainant on 25.3.92, the Opposite Party had purchased 100 shares of Reliance shares and whether he has a right of Hen over the 50 shares purchased subsequently till the complainant clears his amount. The District Forum relied on Sauda book which was maintained by the Opposite Party in the usual course of his business which shows that on 25.3.1992 the Opposite Party had purchased 100 shares of Reliance Industries for the complainant at the rate of Rs. 395-90 Ps per share under contract note No. 66 as evidenced by Ex. B-5 Xerox copy of the relevant page of the register. It also relied on Ex. B1 contract note which disclosed that on the order of the complainant the Opposite Party purchased 100 shares of Reliance Industries for the complainant at the rate of Rs. 395-90Ps per share. It also mentions, the contract note No. as 66. Ex. B17 is the postal register which shows that on 28.3.1992 the Opposite Party has sent to the complainant contract No. 66 dt. 25.3.1992 under certificate of posting. Ex. B2 is certificate of posting dated 28.3.1992. The District Forum also relied on Ex. A-10 the complainant''s account statement ending 30.4.1992 sent by the Opposite Party to the complainant. It discloses the purchase of 100 shares of Reliance Industries on 25.3.92. It also shows an entry on 7.4.92 showing purchase of 50 shares. A credit entry for Rs. 16360/- was also found in Ex. A-10. The Opposite Party on 2.6.1992 sent a letter Ex. B4 to the complainant requesting him to make payment of balance of the amount outstanding in the account i.e. Rs. 40,490/-. The District Forum is not inclined to believe the version of the complainant that he never placed oral order with the Opposite Party for purchase of shares as the same is belied by Ex. A-11 the Financial Statement of account of the complainant with the Opposite party. This clearly shows that during the Financial year 1991-92 the Opposite Party had purchased and sold shares worth more than Rs. 22 lakhs on behalf of the complainant. The complainant is not able to produce office copy of a single written order which he alleged to have placed with the Opposite Party. It, therefore, held that the version of the complainant that he give written orders only is far from truth. The complainant contended relying on Ex. A-11 statement of account which shows that as on 313.1992 the complainant was due only in a sum of Rs. 1275/- and, therefore, submitted that if he placed an order for 100 shares on 25.3.92 it would have found a place in the account sent by the Opposite Party to the complainant ending with 31.3.1992. But the opposite party a settlement programme of the Hyderabad Stock Exchange for March, 1992 which shows that in respect of any transaction which was settled between 13.3.1992 and 26.3.1992 a series of formalities were to be completed which extend till 7.4.1992 and hence it was only on 7.4.1992 that the transaction relating to 100 shares acquired a final shape. Hence the transaction relating to 25.3.1992 did not find place in Ex. A-11 statement of account upto 31.3.1992 sent to the complainant. The District Forum therefore held that mere commission to mention the transaction relating to 100 shares in Ex. A-11 does not in any way show that the Opposite Party did not purchase 100 shares for the complainant. It also does not establish that the complainant did not place an order for 100 shares on 25.3.1992. The District Forum also referred to Bye law No. 227(a) of the Hyderabad Stock Exchange Limited in accordance with which the member of the stock exchange can exercise his lien over the securities and other assets of the constituent when some amount is due from him, to the member. It therefore held relying on Ex. A-11 that the purchase and sales by the complainant during the financial year 1991-92 is almost equal, it therefore can be said that it shows that the complainant merely settled the difference of the amounts. With regard to the claim for a sum of Rs. 28,000/- being the loss suffered on account of the fact of complainant lost the opportunity to apply for the shares and debenture on preferential basis. It relied on the affidavit filed by third party showing that even though applications were made for preferential shares by the shares-holders, no such preferential shares were allotted. It, therefore, held, it is merely a chance and the complainant has not sustained any loss on account of it. In view of its finding that there is no deficiency of service on the part of the Opposite Party and even otherwise the complainant did not suffer any loss as it believed the version of the Opposite Party that the order was placed for 100 shares by the complainant and the Opposite Party purchased the same, the District Forum dismissed the complaint.

IN this appeal, it is submitted by the learned Counsel for the appellant firstly that no reliance should have been placed by the District Forum on the Sauda book produced by Opposite Party. We are not inclined to agree with this contention. It is evident from various entries made in the Sauda book that it was maintained in usual course of the business of the Opposite Party and the entries in Ex. B5 also indicate that the contract numbers are also entered in that book. Hence we consider that Sauda book was maintained by the opposite party in the usual course of business and reliance can be placed on the same. It is next contended that Ex. A-11 statement of account sent by the Opposite Party to the complainant dated 31.3.1992 did, not contain the entry toward purchase of 100 shares, although according to the Opposite Party they were purchased on 25.3.1992. It therefore cannot be said that the opposite party purchased 100 shares for the complainant. It is to be seen that the Opposite Party explained and filed a settlement programme of the Hyderabad Stock Exchange for March, 1992. It shows that the transactions that took place between 13.3.92 and 26.3.92 did not acquire final shape until 7.4.1992 when all the formalities were completed by the stock exchange. Thus it is evident, that since the transactions were not finalised upto 7.4.1992 by the stock exchange, being the registered stock broker with the exchange the Opposite Party would not have included the transaction dt. 25.3.1992 in the account sent to the complainant. Therefore in Ex. A-11 the statement of account ending 31.3.1992 the transaction relating to 100 shares was included. Moreover it was only after receiving letter from the Opposite Party dated 2.6.1992 demanding payment of the amount, the complainant sent a reply on 6.6.92 dis-owning the purchase of 100 shares of Reliance Industries. Thus there is truth in the allegation of the Opposite Party that notice dated 6.6.92 was merely sent as a counter blast to the earlier notice issued by the Opposite Party dated 2.6.1992. If really the order was not placed by the complainant he would have immediately raised an objection on receiving Ex. A-10 statement of account ending 31.1.1992 sent by the Opposite Party for the complainant, in which the transaction of 100 shares was mentioned. It was only after receiving notice from the Opposite Party, the complainant replied to the same on 6.6.92 came forward with a plea that he did not place any order for 100 shares. In these circumstances, we are not inclined to believe the version of complainant that he did not place order for 100 shares. We, therefore, agreed with the finding of the District Forum that there is no deficiency of service rendered by the Opposite Party. The appeal is accordingly dismissed. In the circumstances of the case, no order as to costs. Appeal dismissed.