A dispute arising from service deficiencies in demat account maintenance, such as failure to close accounts or transfer shares, is not purely commercial and is maintainable before consumer fora, regardless of the existence of arbitration clauses or time-barred pleas involving recurring causes of action.

The present Appeal under Section 15 of the Consumer Protection Act, 1986 has been preferred by the Appellant/Complainant (hereinafter referred to as the A/C) assailing the Final Order passed by the Learned District Consumer Disputes Redressal Commission, Unit-I, Kolkata in Complaint Case No.262 of 2018 whereby the complaint was dismissed principally on the grounds that the complainant was not a ‘consumer’ within the meaning of Section 2(1)(d) of the Consumer Protection Act, 1986 and that the complaint was barred by limitation.

Genesis of the Case

The facts leading to the present appeal may briefly be stated thus.

The A/C opened a demat account with Respondent/O.P. No.1 on 06.01.2005. According to the A/C, as on 06.07.2007 he held 100 shares of Omax Auto Ltd. and 1000 shares of S.M. Dychem Ltd. in the said demat account. It is the specific case of the A/C that on 06.07.2007 he submitted an application seeking closure of the demat account along with request for transfer of the aforesaid shares in favour of his brother who also maintained a demat account with the same Respondent.

The grievance of the A/C is that despite repeated visits and communications made between 31.08.2007 and 30.10.2010, the Respondents failed to act upon the said request. It is further alleged that the office of the Respondents subsequently shifted from its original location and later shifted again to another premises at Howrah without proper intimation, thereby causing inconvenience and harassment to the complainant.

According to the A/C, despite request for closure of account, the Respondents continued to keep the demat account operative and issued bills-cum-statements demanding maintenance charges. The A/C claims to have received such bills in 2015 and 2017 and continued receiving statements till 28.08.2018. A further communication dated 28.07.2018 allegedly requesting withdrawal of such demands also evoked no effective response.

Consequently, Complaint Case No.262 of 2018 was instituted before the Learned District Commission praying for directions upon the Respondents to transfer the shares, withdraw the bills, close the account and pay compensation and litigation cost.

The Learned District Commission dismissed the complaint holding that transactions relating to shares are commercial in nature and therefore the complainant does not fall within the definition of “consumer”. The Learned District Commission also held the complaint to be barred by limitation.

Being aggrieved thereby, the present appeal has been preferred.

Submissions on Behalf of the Appellant/Complainant

Learned Counsel for the Appellant submitted that the Learned District Commission fundamentally erred in treating the present dispute as one arising out of speculative or commercial share trading.

It was contended that the complaint does not pertain to trading loss, fluctuation of market value or investment return. The dispute concerns non-transfer of shares and non-closure of a demat account despite express instructions issued by the complainant. According to the Appellant, maintenance and operation of demat account involves rendering of service by a depository participant and deficiency therein squarely attracts jurisdiction under the Consumer Protection Act.

Learned Counsel argued that the Respondents failed to produce any material whatsoever showing that the complainant was regularly engaged in commercial share trading for profit-making purposes. Mere holding of shares or maintenance of demat account cannot by itself establish commercial purpose.

It was further argued that the cause of action was continuous and recurring in nature because the shares were never transferred and bills/statements continued to be issued till 2018. Therefore, dismissal on limitation was erroneous.

Reliance was placed on Acumen Capital Market (India) Ltd. v. K. Viswanathan, III (2013) CPJ 4A (Ker), decisions of the National Commission in Revision Petition No.3941 of 2007 and Revision Petition No.2873 of 2014,