9911796707
TMI Blog1994 (12) TMI 274X X X X Extracts X X X X X X X X Extracts X X X X ..... share totalling Rs. 6,20,000. A memo of confirmation was given by the opposite party. The complainant paid an advance amount of 10 per cent of the total value of the shares, namely, Rs. 62,100 on 1-10-1993 to the opposite party for which the opposite party issued a receipt. On 16-3-1994 the opposite party gave a letter agreeing to deliver the shares within 45 days from 21-3-1994, but failed to do so. The price of the shares went up to Rs. 145 on 9-4-1994. The complainant has thus been put to great loss and hardship. Alleging deficiency in service, the complainant has filed this claim, claiming the difference in share value at Rs. 15,80,000, Rs. 3,80,000 as trading loss, Rs. 10,000 as compensation, in all Rs. 20 lakhs. 4. The claim is r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e shares would be purchased and delivered within 45 days from 21-3-1994. The contention of the opposite party is that the shares have been purchased by the complainant for the commercial purpose and is not, therefore, a consumer. It is further averred that the shares were not then in existence and on that ground also, the complainant is not a consumer. In Dr. Aravind Gupta v . SEBI [1994] (2) CPJ 7, the Supreme Court has held that before allotment of shares there are no shares in existence to be called as goods and an applicant for allotment of shares cannot claim to be a consumer. Different considerations may arise after the shares are allotted. But, that was case against the company which floated shares. It was, therefore, held by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the delivery of goods is not in the contemplation of the parties. The transaction is merely a bet on prices and a gamble in difference - Virjee Daya Co. v. Ramakrishna Rice Oil Milk AIR 1956 Mad. 110. The question whether a contract is a wager or not depends upon the substance on the agreement and not upon its outward form - Carlill v . Carbolic Smoke Ball Co. 1892-2 QB 484. Courts are often required to determine whether contracts of payments of difference in stock transactions with or without colourable provisions for the completion of purchase are or are not wagering transactions. It is open to the Court to examine such provisions to consider the real nature of the agreement as a whole. If the circumstances are such as to wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... complainant himself contains two memos of confirmation. The first memo is from the opposite party to the complainant on 24-9-1993 and it is to the following effect: Memo of Confirmation Sree Varris AgencyNo. 95 Stock Share Brokers 22, Panthadi, 5th Street Date: 24-9-1993 Madurai-625 001. To: Vigneshwar 68, South Masi, St. Madurai. Sir/Madam, We have this day brought for you as per your order the undermentioned securities. This contract is subject to the rules, regulations and usages of the Madras Stock Exchange. Settlement/Ready. Qty. Particulars S.No. Per Share Rs. Ps . Amount. Rs. Ps 20000 Tatiyaskylines (Twenty thousand shares at Rupee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mo that the complain- ant has sold 20,000 shares for the opposite party on 24-9-1993 do not reflect the real purchase and sale but only symbolic of purchase and sale and what does it mean by the opposite party purchasing 20,000 shares for the complainant on 24-9-1993 of Tatiaskylines and the complainant selling the same number of 20,000 shares of Tatiaskylines for the opposite party on the same day. This is a tell-tale. Do not these two memos show that the alleged purchase and sale are not real and what is intended is only a gamble in the difference in price? If the price per share goes up, the purchaser, namely, the complainant gains and the seller, opposite party loses and if the price of shares goes down the opposite party gains and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any wager, or entrusted to person to abide by the result of any game or other uncertain event on which any wager is made." The complainant is not, therefore, entitled to claim the shares or the difference in price or compensation from the opposite party as this is a wagering contract which is void in law. 12. However, the complainant is entitled to get back the amount of advance paid by him on the principle of quantum meruit or money had and received and again on the principle of unjust enrichment. The opposite party must, therefore, refund the sum of Rs. 62,100 received from the complainant with interest thereon at 18 per cent from the date of Ex. A2, namely, 1 -10-1993 till payment. 13 . In the result, we order as follows: 1. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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