Worst Problem What To Do?
- Thread starter trader31339
- Start date
I am quite happy that this Forum is also turning out to be a fertile grazing ground for shrewd lawyers 
To solve your first problem, send a registered noitce immediately to your broker and demand payment. If your demand is still not complied with, you can approach civil court or as opined by Satya, by approaching Consumer Forum. Consumer Forum is less expensive and quite fast when compared to civil courts.
Your second problem requires bit more facts. Please note that your broker is taking your several signatures in the account opening form (both demat account and trading account). These papers contain terms and conditions. These are rarely read before signing. One of such condition will usually be that you are authorising your broker to accept your order even over telephone. This condition will enable the broker to avoid the necessity of written orders from the customer before execution of orders. However, in a situation as mentioned by you, the question comes to "burden of proof" as they say in legal language. In simple terms, it is the responsibility of your broker to prove that you have in fact, placed the order over telephone. Because, you are asserting a negative fact, whereas broker is asserting a positive fact. In most cases, only positive fact (i.e. actual fact of placement of order) can be proved and therefore, at least in the problem mentioned by you, the burden of proof will be upon the broker to prove that you have placed the order over telephone. However, the terms and conditions of the account opening form and the various agreements signed along with it will have to be carefully analysed before putting a final word on the matter.
With regards
Munchikana
To solve your first problem, send a registered noitce immediately to your broker and demand payment. If your demand is still not complied with, you can approach civil court or as opined by Satya, by approaching Consumer Forum. Consumer Forum is less expensive and quite fast when compared to civil courts.
Your second problem requires bit more facts. Please note that your broker is taking your several signatures in the account opening form (both demat account and trading account). These papers contain terms and conditions. These are rarely read before signing. One of such condition will usually be that you are authorising your broker to accept your order even over telephone. This condition will enable the broker to avoid the necessity of written orders from the customer before execution of orders. However, in a situation as mentioned by you, the question comes to "burden of proof" as they say in legal language. In simple terms, it is the responsibility of your broker to prove that you have in fact, placed the order over telephone. Because, you are asserting a negative fact, whereas broker is asserting a positive fact. In most cases, only positive fact (i.e. actual fact of placement of order) can be proved and therefore, at least in the problem mentioned by you, the burden of proof will be upon the broker to prove that you have placed the order over telephone. However, the terms and conditions of the account opening form and the various agreements signed along with it will have to be carefully analysed before putting a final word on the matter.
With regards
Munchikana
munchikana great reply. What do u mean by registered demand notice? does it means demand send by regsitered post? please give the format of demand notice.
What if a person dont want to take legal actions and solve the probelm directly as there are many person who dont want to take the headache of legal problems.
One solution that comes to my mind is that the person should buy shares and then transfer it to another demat account by instruction slips and then sell them , thus he will recive cash. Here we will pay brokerage, also sell price may be less than the buy price. But he recices the cash here.
any other such practical ideas?
any legal ideas?
any worst cases?
What if a person dont want to take legal actions and solve the probelm directly as there are many person who dont want to take the headache of legal problems.
One solution that comes to my mind is that the person should buy shares and then transfer it to another demat account by instruction slips and then sell them , thus he will recive cash. Here we will pay brokerage, also sell price may be less than the buy price. But he recices the cash here.
any other such practical ideas?
any legal ideas?
any worst cases?
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Frankly speaking, scope of Section 420 of Indian Penal Code (relating to cheating) (that is how we get the term coloquial term "Char Sow Bees" in Hindi) is entirely different from what is understood in common paralance among ordinary persons. For that matter even some lawyers also have misunderstood the scope and ambit of Section 420 of I. P. C. To apply Section 420, the following criterias must be met with.
1. There must be "representation" or "promise" from the person cheating (sorry again another legal term. If I were to explain it, it will be a huge letter)
2. Believing that representation, the person cheated must change his "position" to his "detriment" or he should refrain from doing something to his detriment. (This is a long legal concept, where lawyers thrive in arguing for hours altogether)
3. Now the person resiles from his original "representation" or "promise"
4. The person who is cheating should have "intention to cheat right from the begining" (sorry. A too complicated legal term, over which Honourable Supreme Court itself has interfered on many ocassions) This space is not sufficient to explain it.
5. If all the above ingredients are there, then the offence under Section 420 is complete.
Many things happen in police station, which are not (strictly speaking) legal. Even without filing case also, police can recover money. If you and I adopt those methods, we will be behind bars. That is the advantage of being in police department. That is why in my previous post I specifically used the term "there is no other Legally Acceptable" method to recover money from broker. If you can adopt all those illegal methods, then why should you approach the police? I know how tenants are evicted from rented houses in many metropolitan cities, without adopting any legal course. Is it possible for every one of us?
1. There must be "representation" or "promise" from the person cheating (sorry again another legal term. If I were to explain it, it will be a huge letter)
2. Believing that representation, the person cheated must change his "position" to his "detriment" or he should refrain from doing something to his detriment. (This is a long legal concept, where lawyers thrive in arguing for hours altogether)
3. Now the person resiles from his original "representation" or "promise"
4. The person who is cheating should have "intention to cheat right from the begining" (sorry. A too complicated legal term, over which Honourable Supreme Court itself has interfered on many ocassions) This space is not sufficient to explain it.
5. If all the above ingredients are there, then the offence under Section 420 is complete.
Many things happen in police station, which are not (strictly speaking) legal. Even without filing case also, police can recover money. If you and I adopt those methods, we will be behind bars. That is the advantage of being in police department. That is why in my previous post I specifically used the term "there is no other Legally Acceptable" method to recover money from broker. If you can adopt all those illegal methods, then why should you approach the police? I know how tenants are evicted from rented houses in many metropolitan cities, without adopting any legal course. Is it possible for every one of us?
I beg to differ with you again. There are many loopholes in our legal system. For example, just take the first problem posed by trader31339. If the matter goes to court, in all probability, the court will order the broker to repay the amount with interest. What could be the interest that the court will order? Usually not more than 10% p. a. (that too simple interest). Stretch it to the maximum, it will not be more than 12% p. a. Only Section 80 of Negotiable Instruments Act provides that in case of dishonour of cheques, interest should be paid at the rate of 18% p. a. Even here also interest for the period subsequent to judgment will not be at 18% p. a., but far less than that. Courts are taking sympathetic view only towards Banks when it comes to rate of interest. That is why various state governments are coming up with various schemes to waive interest on bank loans. There are other political considerations also for this. I am not oblivion to this. Now we are doing business. If the amount demanded is say more than Rs. 1 Crore and if the matter is prolonged for several years at this meager rate of interest and at the same time if the broker invests the money in the market, he will easily repay the entire interest and principal by the initial amount of money alone and he will pocket the major portion of money gained from the market by investing my friends money, which he has to refund. He will have huge gains. This is only one method suggested by me. Trust me, I have seen many such methods and I infact hate those methods. Will any one have patience to see these things for years altogether? So naturally you will go for settlement at a stteply discounted rate. Again broker will gain. You will have to learn to live with these sorts of drawbacks in our legal systems. However much one may try, there is always another cheat who invents another method to bypass the system. That is the reality.
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