IMPORTANT POINT
Demat Service Provider is guilty of deficiency in service in not appropriately scrutinizing the documents with regard to change of address of the complainant from Ahmedabad to Mumbai facilitating fraud and loss.

M.S. Parikh, President — By way of this complaint the complainant has prayed for following reliefs from the

opponents:

“(B) To direct the opponents to pay to the complainant an amount of Rs. 1,80,238 being the difference of amount secured by them through Court as sale proceeds of the sold out shares of Infosys and the price quoted at the Stock Exchange on the date of retransfer of shares i.e., on 15.10.2001 together with interest at the rate of 12% p.a.

(C) To direct the opponents to pay to the complainant an amount of Rs. 25,000 by way of mental shock and agony the expenses she was required to spend for her journeys to Mumbai and back which the complainant had to undergo on account of negligent acts on the part of opponents.

(D) To direct the opponents to pay Rs. 10,000 by way of cost to the complainant.”

2. It is the complainant’s case that opponent No. 1 is engaged in the activities of a Depository Participant and Merchant Banker at its office at Mumbai as per the particulars set out in the title as Opponent No. 2. As a Depository Participant the first opponent accepts applications for compulsory dematerialization of Equity Shares of various Public Limited Companies by opening account and maintaining the same for such consumers. The complainant had equity shares of various public limited companies. Since she wanted to convert them from physical to electronic form (dematerialized form) she opened a depository account with the first opponent through

its branch office at Mumbai i.e., as opponent No. 2 on 11.1.1999 by making payment of Rs. 3,000. The complainant was assigned 10379703 as client ID number. She received statement of transactions from l.1.2001 to 31.3.2001 showing

balance of the equity shares of following companies:

“Name of the Balance of equity

company shares

(a) Godrej Soaps Ltd. 150

(b) Gujarat Ambuja Exports Ltd. 66

(c) Infosys Technologies Ltd. 1600

(d) Larson & Toubro Ltd. 50"

3. The complainant received a letter dated 15.9.2001 from the Sr. Inspector of Police G.B., C.B., CID Mumbai, calling her to his office at Bombay in connection with a complaint filed by Shri Ganesh Raman of first opponent’s Divisional Office at Mumbai regarding fraudulent transfer dated 1.9.2001 in respect of the aforesaid shares from the complainant’s aforesaid Demat Account. The complainant also received letter dated 19.9.2001 from opponent No. 1 informing her about such fraudulent transfer and that the first opponent was undertaking the process of transferring the shares from one of its group Companies.

4. The complainant has under such circumstances alleged that the fraudulent transfer of her shares had taken place on account of gross negligence and deficiency in service on the part of the opponents. She has asserted that after getting the amount from the fraudulent transaction of sale of her shares from the concerned Court the opponents ought to have consulted the complainant whether she would prefer to have the money from her sold shares or the shares. Instead of doing so the opponents displayed mala fide intention of taking advantage of their own wrong. The transaction of sale reflected that the fraudulently transferred equity shares of Infosys were sold out at Rs. 3,850 per share whereas subsequently its price was reduced to Rs.2,750 per share. The opponents credited the aforesaid shares once again to the complainant’s Demat Account on 11.10.2001 and 15.10.2001. According to the complainant the opponents ought to have conferred the benefit of difference in price to the complainant whose shares were sold out by fraudulent transactions on account of gross negligence and deficiency in service on the part of the opponents. Under such circumstances complainant made demand of Rs. 20,28,000 being the difference of price of the said shares realized by the opponents through fraudulent transaction as stated above, as per letter dated 18.4.2002 and reminder dated 14.6.2002. The first opponent replied on 24.6.2002 virtually reject