TaxTMI 
TaxTMI 
1994 (12) TMI 274
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.... party who is a share broker for the purchase of 20,000 shares of Tatiaskyline & Co. on 24-9-1993 at the rate of Rs. 13 per 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 v....
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....dvance of Rs. 62,100 under Ex. A2 receipt. The opposite party also gave a letter under Ex. A7 dated 16-3-1994 that the 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....
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....t agreed to speculate only in differences according to rise and fall in the prices in the market and 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 co....
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....rchase or sale but only a dabble in the difference in prices. Ex. A1 filed by the 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 Tatiyaskyline....
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....d memo 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 ....