Quick Summary: On December 1, 2025, the Bombay High Court decided that Central Depository Services (India) Limited (CDSL) must pay Daksha Narendra Bhavsar for the loss of her shares due to dishonest actions by BRH Wealth Kreators. The court found CDSL responsible because BRH acted on behalf of CDSL during the fraud.
The case involved Central Depository Services (India) Limited (CDSL) and Daksha Narendra Bhavsar, who lost shares worth Rs.86,02,768 because of unauthorized actions by BRH Wealth Kreators. The decision was given by Justice Sandeep V. Marne.
On July 31, 2019, BRH Wealth Kreators misused a Power of Attorney (POA) to move shares from Daksha's account to their own accounts. They then used these shares as collateral for a loan from HDFC Bank, which they didn't pay back, leading to the sale of the shares.
"BRH stole shares by misusing the POA they got from their clients."
Daksha first asked the National Stock Exchange (NSE) to pay her back, but her request was turned down several times. NSE said she didn't make any trades on their platform.
"NSE denied any responsibility, saying that she had not made any trades on NSE platform."
After NSE refused, Daksha went to the Securities Appellate Tribunal (SAT), which allowed her to start arbitration proceedings. The Arbitration Tribunal found CDSL responsible for BRH's actions, as BRH was acting on behalf of CDSL.
"The Arbitration Tribunal has approved Daksha Narendra Bhavsar’s claim for Rs.86,02,768/-."
CDSL argued that BRH was only acting as a broker, not on their behalf. However, the court decided that BRH's dual role as a broker and Depository Participant (DP) made CDSL responsible under Section 16 of the Depositories Act.
"As soon as BRH’s role as DP is involved, CDSL’s responsibility is triggered."
The court rejected CDSL's request against the arbitration decision, stressing that CDSL must pay Daksha for the loss of her shares.
"The petitioner has not provided any valid reason to challenge the arbitration decision."
The court's decision makes it clear that depositories like CDSL have a duty to protect investors' assets and are responsible for the actions of those acting on their behalf. CDSL must compensate Daksha for her lost shares, highlighting the importance of following rules and protecting investors.
