Bombay HC: Traders Vindicated in Mishandled Investments Case Against CDSL

In a recent decision on December 23, 2025, the Bombay High Court, led by Justice Sandeep V. Marne, canceled a previous decision in the case of Nimish Chandulal Shah vs. Central Depository Services India Ltd. (CDSL). The court found that the accusation of choosing courts unfairly against the petitioners was without merit.

Background: The Case of Mishandled Investments

The petitioners, including Nimish Chandulal Shah, were traders with accounts at Anugrah Stock and Broking Private Limited (Anugrah). Anugrah was a stockbroker connected to CDSL. On August 3, 2020, Anugrah lost its trading rights because it didn't follow the rules. This led to a situation where investments worth a lot of money, held as security, were sold by Edelweiss, the company responsible for clearing trades.

Petitioners’ Actions: Seeking Fair Treatment

After Anugrah was suspended, the petitioners tried to get their investments back and filed complaints with CDSL. They also took part in official proceedings against Edelweiss, which were started by NSE Clearing Ltd (NCL). NCL had ordered Edelweiss to return the sold investments, a decision supported by the Securities Appellate Tribunal (SAT) on December 15, 2023.

Arbitration Proceedings: Accusations of Unfair Court Selection

In August 2023, the petitioners started a legal process against CDSL to get their investments back or receive compensation of Rs. 34,72,75,447/-. The legal panel dismissed their claims, accusing them of unfairly choosing courts because they were involved in the NCL proceedings.

"The Arbitral Tribunal has made a serious mistake in accusing the Petitioners of unfairly choosing courts, which findings are completely wrong." - Justice Sandeep V. Marne

Court’s Analysis: No Unfair Court Selection Here

The court found that the petitioners’ involvement in official proceedings did not count as unfairly choosing courts. Justice Marne pointed out that the petitioners were just supporting official actions and had not started separate legal cases asking for the same thing.

Verdict Summary: Fair Treatment Emphasized

The court decided that the legal panel’s decision was unreasonable and went against public interest. The judgment restores the petitioners' right to have their claims judged fairly.

Costs Imposed

The court ordered CDSL to pay costs of Rs. 3,00,000 to the petitioners, highlighting the unnecessary legal problems they faced because of the baseless accusation of unfair court selection.

This case highlights the importance of fair treatment in legal processes and the need to tell the difference between supporting official actions and unfairly choosing courts.