TaxTMI 
TaxTMI 
2021 (2) TMI 1393
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....of a brokerage house and is a corporate member of the Bombay Stock Exchange Limited and the National Stock Exchange of India Limited. The defendant had invited deposits through its business partner M/s. Crefin India Management Private Limited. It was represented to the plaintiffs that a monthly return/interest of 2 percent would be paid on investment. The principal amount would be invested in an Index Stock Option Funds, which would ensure a guarantee on capital invested. Over a period of time, the plaintiffs invested a sum of Rs. 5,80,00,000/-, the particulars of which, are tabulated in paragraph 3(a) of the plaint. (b) The defendant acknowledged the receipt of the said amount by issuing letters dated 8th July, 2016, 15th September 2016, 1st March 2018, and 1st September 2016 ('Welcome Letters') and undertook the obligation to pay interest @ 2 percent per month from the date of investment, with a lock-in period of six months. The said letters captioned, "Welcome Letters" incorporate the contract to repay the principal amount and the interest thereon. (c) Initially, the defendant did pay interest, at the agreed rate, through banking channels. In the month of Janua....
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....d into a private arrangement with Mr. Ameet Savant, the defendant sought to deny the liability. The said Ameet Savant, according to the defendant, had indulged in fraudulent activities in respect of which criminal proceedings have been initiated at the instance of the Economic Offences Cell of Goa Police against him. On these, amongst other grounds, the defendant has prayed for an unconditional leave to defend the suit. 7. In the backdrop of the aforesaid defence, the plaintiff No.1 Mr. Carl Pinto has filed an affidavit in rejoinder and the plaintiff No.2, Shreya Pinto has filed a further affidavit in support of the summons for judgment. The Trading Member and Authorised Person Agreement, dated 11th December 2014 executed by and between the defendant and Mr. Ameet Savant was produced and relied upon to establish the jural relationship between the defendant and the said Mr. Ameet Savant. The defendant joined the issue by filing an affidavit in sur-rejoinder. 8. In the wake of the aforesaid pleadings, I have heard Mr. Karl Tamboly, the learned counsel for the plaintiffs and Mr. Simil Purohit, the learned counsel for the defendant at some length. 9. Mr. Tamboly, the learned c....
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....ed 11th December 2014, which cast the liability on the trading member for all acts of omission and commission of the authorised person and/or their employees. The fact that the amount was not directly credited in the account of the defendant, in the face of indisputable jural relationship between the defendant and Mr. Ameet Savant, pales in significance, urged Mr. Tamboly. It was further submitted that the general public is entitled to look upon and believe the representations of the authorised agent as that of the principal. In such a situation, it is a legally impermissible for the principal to disown the liability for the acts of the authorised agent, submitted Mr. Tamboly. 14. To bolster up the aforesaid submission, Mr. Tamboly placed reliance on a judgment of the Division Bench of Delhi High Court in the case of Delhi International Airport P. Ltd. Vs. Union of India & Ors. 2017 SCC OnLine Del.7021. In the said case, in the context of liability of the "franchisee" to pay service tax, the Division Bench expounded the nature of the franchisee agreement in the following words : "58 A representational right would mean that a right is available with the franchisee to rep....
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....son is entitled to act as a 'Authorised Person' within the meaning and subject to SEBI Circular MIRSD/DR-1/Cir-16-09, dated November 06, 2009 and Circulars issued by SEBI and NSEIL from time to time. The client shall be registered with Trading Member only. The funds and securities of the clients shall be settled directly between Trading Member and client and all documents like contract note, statement of funds and securities would be issued to client by Trading Member. The Authorised Person may provide administrative assistance in procurement of documents and settlement, but shall not issue any document to client in its own name. No Authorised Person. All acts of omission and commission of the Authorised Person shall be deemed to be of the Trading Member. 2. RESPONSIBILITIES/OBLIGATIONS OF THE AUTHORISED PERSON : ........... (d) The Authorized Person shall not receive or pay any money or securities in its own name or account. All receipts and payments of securities and funds shall be in the name or account of Trading Member. (e) The Authorized Person shall not to issue any documents like bill, confirmation memo, statement of funds/ secur....
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....had invited deposits through its business partner M/s. Crefin India Management Private Limited does not find support in the documents relied upon by the plaintiffs. The claim of the defendant that M/s. Crefin India Management Private Limited is neither its agent nor an associate could not be contested. The Welcome Letters (Exh. A to Exh. A-5) appear to have been issued by Mr. Ameet Savant. Indisputably, the plaintiffs were not registered with the defendant. Nor the amount deposited by the plaintiffs has been credited in the account of the defendant. Apparently, the amount has been credited in the account of Mr. Ameet Savant which were opened in the name of "Ventura". The regulations incorporated in the Agreement, dated 11th December 2014 expressly prohibit the authorised person from receiving any money or securities in his own name or account. 21. In the aforesaid backdrop, the nature of the underlying transaction assumes significance. The Welcome Letter, dated 8th July 2016 (Exh. 'A') reads as under : "We thank you for your investment of Rs. 1,30,00,000/- (One Crore Thirty Lakhs only) with VENTURA and we assure the performance of your investment with the following agre....
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....fendant had raised the grounds of absence of privity of contract and that no amount was deposited by the plaintiffs with the defendant in its reply to the demand notice, dated 4th September 2019, assumes significance. The subsequent developments in the nature of the scrutiny of the accounts of the defendant to ascertain whether the amounts have, in fact, been credited into the account of the defendant, indicate that there is substance in the defence of the defendant that no amount has been deposited into its account directly. 25. The learned counsel for the plaintiffs attempted to salvage the position by inviting the attention of the Court to the transactions which have taken place between the defendant and Mr. Ameet Savant. A table indicating the date and the amount credited into the account of Ventura (Ameet Savant) and the subsequent transfer of some of the amounts into the account of the defendant was placed on record. It was submitted that a substantial part of the amount invested by the plaintiffs came to be eventually transferred to the account of the defendant. I am afraid to accede to this submission, at this stage, sans evidence. The question as to whether the amount w....
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....quests of representatives from the Indian clients of the respondent's constituent, the Chief Manager had induced some officers of the appellant Bank who were In-charge of Foreign Exchange Department to issue tested telex messages of co-acceptance. The charge sheet further alleges that these officers were not authorized to issue such co-acceptances and the motive behind their illegal and unauthorized action was to enable the constituent of the respondent to get their bills discounted by jeopardizing the interests of the appellant Bank. It is also on record that the trial of the said case was at the stage of evidence as on 13th November, 2014. 22. Apart from these, the substantial revelations of the defendant (appellant) in the affidavit coupled with the views expressed by the Division Bench of the High Court makes it clear that there are certain triable issues for adjudication and the defendant/appellant is entitled to defend the Suit. The appellate side of the High Court ought to have taken into consideration the factual matrix of the case before recording its finding. Taking into consideration the totality of the facts and circumstances of the case, we are of the opinion ....