SOWBHAGYA INVESTMENT vs C.KARUNAKARA KURUP

THIS appeal is directed against the order passed by the District Forum, Thiruvananthapuram in O.P. No. 635/93. The opposite party is the appellant.

SHORTLY stated, the allegations in the complaint are as follows : The opposite party M/s. Sowbhagya Investment whose proprietrix Mrs. Shobha Thulasidharan is a Member of Cochin Stock Exchange Limited, and is engaged in the business of buying and selling of shares and stocks on commission. Though their branch office is at Trivandrum, the complainant entered into contract of share transactions on behalf of the minor son Anish and purchased l00 shares of Ambuja Agro, 100 shares of Modi Alkalies, 100 shares of Andhra Cement, 100 shares of Bihar Sponge, 100 shares of Comet Steel and 100 shares of Sanghi Polysters worth Rs. 32,980/- and sold 100 shares of Modi Alkalies, 100 shares of Andhra Cement, 100 shares of Ambuja Agro, 100 shares of Bihar Sponge, 100 shares of Sanghi Polysters and 100 shares of Comet Steel to the value of Rs. 32,840/- and deducting the amount of Rs. 15,885/- is due to the complainant from the opposite party in the share transaction. Inspite of repeated requests, the said amount was not paid to be complainant. On 15.3.1993 he complained to the President, Cochin Stock Exchange Ltd., requesting him to advise the opposite party to make immediate payment of money due to him. But that was not responded. It is on these allegations the complaint was filed seeking a direction to pay Rs. 15,745/- with reasonable interest to the complainant. The opposite party filed a version raising various contentions. The complainant who claims to be a prospective investor, is not a consumer within the purview of the Consumer Protection Act and, therefore, the District Forum has no jurisdiction to entertain the complaint. One V.K.S. Panicker purchased and sold shares in the name of his relations and also in the name of a number of other individuals including Anish and an amount of Rs. 2,00,071/- was due to the opposite party from the said V.K.S. Panicker. The opposite party had not dealt with or acted to instructions from the complainant. The name Anish was a name supplied by the said V.K.S. Panicker. The complainant had no credit account with the opposite party. The contract note provides that all disputes and differences arising out of any such transaction had to be referred for arbitration to the Cochin Stock Exchange Ltd. for disposal by the Committee constituted by the Cochin Stock Exchange Ltd. The Security Exchange Contract Act, 1956 governs and controls relationship between broker and a consumer. Since the Securities Contract Act is a special legislation providing for special procedure, the jurisdiction of the Forum is ousted. There was no deficiency in service on the part of the opposite party and the opposite party had never dealt with the complainant and, therefore, the complaint is not maintainable and is liable to be dismissed.

The District Forum held that the District Forum has jurisdiction to entertain the complaint.

COMING to the merits it rejected the contention that the complainant had no dealings with the opposite party and Anish has only a name supplied by V.K.S. Panicker. The complainant was examined as PW 1 and Exts. P 1 to Pl(g) and P2 P2(a) were marked on the complainant''s side. No evidence was adduced by the opposite party. On the basis of evidence tendered by the complainant the District Forum held that an amount of Rs. 15,745/- is due to the complainant and an order was passed directing the opposite party to pay the said amount together with cost of Rs. 300/-. Feeling aggrieved by the said order this appeal has been preferred.

IN this appeal learned Counsel appearing for the appellant challenged the finding entered by the District Forum and also raised new contentions. It was contended that under Section 11 of the Contract Act a contract with a minor is a nullity. IN this context learned Counsel also invited our attention to a passage at page 165 of Pollock and Mulla on INdian Contract Act and Specific Relief Acts, 11th Edition. It reads as follows : "The Andhra Pradesh High Court has held that a contract with a minor is a nullity for want of legal competency and is not enforceable unless otherwise provided by Statute. It is non established. If, a party who has parted with goods, can trace them with the quondam minor and can recover them from him, he may do so as he has not lost his title thereto. But he cannot recover damages for the branch or recover their price. Nor can money lent to such a minor be recovered because if that were to be allowed it would be tantamount to enforcing the contract. But if the quondam minor seeks relief from a Court on the ground that the contract was void he will not be allowed to succeed unless he makes restitution. The Lahore view was not accepted by the Andhra Court."

Section 11 of the Contract Act reads as follows : "Every person is competent to contract who is of the age of majority according to the law to which he is subject and who is sound mind and is not disqualified from contracting by any law to which he is subject."

However it has been held that guardians of minors are competent to contract on behalf of the minors. (AIR 1939 Nag. 301, AIR 1960 Cal. 65). It has also been laid down that the contract entered into by the guardian on behalf of the minor ward which is to the benefit of the minor can be specifically enforced (See. AIR 1960 Calcutta 65 and AIR 1958 Bombay 202). A Full Bench of the Hyderabad High Court has held in the decision reported in AIR 1952 Hyderabad 192 that a Muslim ''dejure'' guardian is competent to bind the minor with a contract for purchase of property and the minor can sue to obtain the benefit by asking for specific performance. A Full Bench of the Madras High Court has held in the decision reported in AIR 1917 Madras 639 that a mortgage in favour of a minor who has advanced the whole of the mortgage money is a valid transaction and is enforceable by him or by other person on his behalf. No provision of the law has been brought to our notice which holds that a contract for purchase of shares for the benefit of a minor would be void or that the consideration paid on behalf of the minor cannot be recovered in the event of failure of the party to such contract to fulfil the contract. Further no such contention is seen taken in the version and in the circumstances we will not be justified in entertaining any such contention at this appellate stage.

THE evidence of PW 1 corroborated by the documents Ext. P 1 contract notes and Exts. P 2 and P2(a) receipts clearly proves the case of the complainant. THE case of the opposite parties that they did not make any transaction with the complainant and had only transactions with one V.K.S. Panicker and V.K.S. Panicker has purchased shares in the names of his relations including Anish and Anish''s name was supplied by V.K.S. Panicker was not substantiated by any evidence. All the documents produced are in the name of Anish. In the chief-examination PW 1 stated that he was making transaction of selling and purchasing of shares with the opposite party in the name of his son and Rs. 15,745/- is due from opposite party. He also stated in the cross examination that he stated to opposite party that he was dealing business on behalf of his minor son and that consideration was paid by him. In the cross-examination of PW 1 the opposite party has not suggested that he is not the father of minor Anish mentioned in Ext. P1 series. Complainant also produced documents to show that Anish was a minor. PW1 also stated that he has taken Ext. P1 series by signing in the opposite party''s register. THE opposite party did not come to witness box to controvert this evidence. As per Section 15 of the Security Contract (Regulations) Act, 1956 every member of the recognised Stock Exchange has to maintain and preserve register of transaction, clients register, general ledger etc. THE opposite party could have produced these documents to prove the case of the complainant that this is a transaction which is entered with V.K.S. Panicker and he had no transactions with the complainant. But no attempt was made by the opposite party to adduce evidence in support of his case. As per Bye-law 352 of the Cochin Stock Exchange a member shall be guilty of un business like conduct if he transacts his own business or business of his constituents in fictitious names.

THE foregoing discussion would show that no ground has been made out to interfere with the order passed by the District Forum. We accordingly dismiss the appeal with costs which we fix at Rs. 1,000/-. Appeal dismissed with costs.