Consumer Issues
Investor trading in shares is not a consumer: District forum

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.



R Balakrishnan

4 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.


4 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...

Vedanta PIL: Centre asked to respond to plea for probe into funding for parties from UK group

The ministry of home affairs and Election Commission of India have been asked by the Delhi High Court on Thursday to respond to a plea for a court-monitored probe by an SIT or the CBI into the funds allegedly received by the Congress and BJP from UK-based Vedanta Resources and some Indian public sector undertakings

The two-member Delhi High Court bench comprising justices Sanjay Kishan Kaul and Indermeet Kaur asked the home ministry and Election Commission of India (ECI) to file their replies in the matter relating to funds, allegedly received by the Congress and BJP from UK-based Vedanta and some domestic PSUs, within two weeks. The next date of the hearing in the matter is set for 4 February 2013. The court further said that it will not call upon the political parties, Congress and BJP, to respond until after hearing the responses of the Home Ministry and ECI.

The PIL was filed by Association for Democratic Reforms (ADR) and Dr EAS Sarma, former secretary to the Government of India. Moneylife has been following the matter closely since it emerged last August. We have reported how the Anil Agarwal-promoted Vedanta Group, which does not give political donations, either in the UK of European Union without board approval, has admitted to paying around $8.3 million to political parties since 2003-04.

It has also emerged that both BJP and Indian National Congress (INC) have themselves declared, in their annual contribution reports submitted to the ECI, that they have received funding from the Vedanta Group, which is listed on London Stock Exchange under the name Vedanta Resources PLC.

Which political parties benefitted from Vedanta’s donations? Read the analysis, by Sucheta Dalal.

EAS Sarma, in a letter to the Chief Election Commissioner, had also pointed out that as per information compiled by ADR from 2007 to 2009, both BJP and Congress received donations from other companies as well. Nippon Investment and Finance Pvt Ltd, one of the promoters of Videocon Industries, donated Rs1 crore while a Honda group unit gave Rs15 lakh to the BJP as donation. Congress also received Rs2 lakh from State Trading Corporation of India and MMTC, both government undertakings.

The grounds for the PIL are, therefore, as follows:

a) INC and the BJP have violated Section 29B of the Representation of People’s Act 1951, which categorically prohibits them to take donations from government companies and from any foreign source

b) The donation of huge sums of money made by the Vedanta Group (being a foreign company) to major political parties like INC and BJP is in clear violation of the FCR Act of 1976 and the FCR Act of 2010.

c) The donation of huge sums of money by the public sector undertakings (who are also State within Article 12 of the Constitution) to the political parties is in violation of Section 293A of the Companies Act.

The petition also states that UK-based Vedanta Resources and its subsidiary companies in India, such as Sterlite Industries, Sesa Goa and Malco “have donated several crores of rupees to major political parties like the Congress and the BJP”.

The plea was listed for 10 January 2013 after justice VK Jain recused himself, without assigning any reason, from hearing the matter which was listed 9 January 2013 before the bench headed by Chief Justice D Murugesan.

You may also like to read Moneylife’s coverage on: Which companies are funding political parties and how legal is it


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