J U MANSUKHANI & CO Vs. KALYAN TIWARY

JUDGEMENT

(1.) APPELLANT is a share broker. Vide impugned order dated 23.12.1997, passed by the District Forum, it has been directed to either deliver the shares of M/s. Rockland Leasing Ltd. of the value of Rs. 1,03,115/ - to the respondent or refund the amount to him with interest @ 12% p.a. from the date of payment till the date of realisation, on account of deficiency in service.

(2.) FACTS giving rise to this appeal are that the respondent invested Rs. 35,000/ - with the appellant towards purchase of shares of M/s. Rockland Leasing Ltd. in March, 1994. He handed over share certificates of Shri S. Gadekar for sale from which the respondent realised Rs. 58,800/ - making the total of Rs. 93,800/ -. Shares worth Rs. 65,685/ - of M/s. Rockland Leasing Ltd. were delivered leaving the balance of Rs. 28,115/ - with the appellant. The respondent further deposited a sum of Rs. 25,000/ - on 1.4.1994 and Rs. 30,000/ - on 16.4.1994 making the total deposit of Rs. 1,03,115/ - but no further shares were delivered to him, though the appellant had purchased shares of the value of Rs. 93,336/ - for the respondent. Appellant further purchased shares worth Rs. 1,14,726/ - between 23.4.1994 to 5.5.1994 on which the respondent sent two cheques of Rs. 25,000/ - and Rs. 75,000/ - to the appellant. On refusal to deliver further shares to the respondent, the respondent stopped the payment of the aforesaid two cheques and filed the instant complaint for delivery of the shares or refund of the balance amount lying with the appellant.

(3.) THE aforesaid claim of the respondent was resisted by the appellant on the plea that as per Stock Exchange Rules, full payment becomes due from the clients immediately after the purchase is made and not when the delivery is made and further the purchaser is liable to pay advance by way of margin of atleast 20% of the price of securities proposed to be purchased and in case the payment is not made, the broker can sell back the shares in the market. According to the appellant against the payment of Rs. 1,03,115/ -, the respondent had received shares amounting to Rs. 65,685/ -. Though more shares were purchased but the respondent did not make full payment and rather two cheques issued to the respondent on presentation were bounced. It was further pleaded that when the payment was not forthcoming and the price of shares was falling down 2000 shares were sold on 27.5.1994 and 14,600 shares were sold on 31.5.1995 at lower price and as a result the appellant suffered loss of Rs. 65,250/ - which the respondent is liable to pay.