3 min readMumbaiJul 7, 2026 05:02 AM IST
First published on: Jul 3, 2026 at 10:30 AM IST
The Bombay High Court’s two-judge bench on Thursday upheld the arbitral award to compensate a Mumbai-based investor whose shares worth Rs. 86.02 lakh were fraudulently pledged and siphoned by a stockbroking firm BRH Wealth Kreators.
A division bench of Justices Bharati H Dangre and Manjusha A Deshpande on July 2 rejected the arbitration appeal by Central Depository Services (India) Limited (CDSL) that challenged the December 1, 2025 order passed by a single-judge bench of Justice Sandeep V Marne granting relief to investor Daksha Narendra Bhavsar.
She had opened a demat account with the Kolkata-based company Wealth Kreators Limited (BRH), which was registered as a stockbroker with the Stock Exchanges and a registered Depository Participant (DP) with the CDSL.
Based on the Power of Attorney (POA) executed by Bhavsar and her late husband in 2018, BRH had transferred equity shares from her demat account to its clearing member/trading member (TM/CM) account, and the title to the shares owned by Bhavsar got transferred to BRH. The HC had noted that in the same manner, BRH had transferred shares of 9,493 clients into its second TM/CM or proprietary account.
The HC noted that based on the title to the transferred shares, BRH pledged them with HDFC Bank to avail of a loan facility. It was noted that the CDSL accepted the request for the creation of the pledge. After BRH defaulted, HDFC Bank invoked the pledge and sold the securities.
The Securities Appellate Tribunal (SAT), on Bhavsar’s plea, had in June 2023 allowed her to initiate arbitration proceedings against CDSL to settle her claims, after which a three-member Arbitral Tribunal was constituted and found that the pledge occurred while BRH was functioning as CDSL’s DP.
The Arbitral Tribunal in January 2024 passed an award in Bhavsar’s favour, allowing her claim of Rs. 86.02 lakh along with 9 per cent interest to be paid by CDSL, which was challenged in the High Court.
Observing that CDSL was attempting the “mere footballing” of Bhavsar’s genuine claim for compensation to the National Stock Exchange (NSE), Justice Marne had noted that the Arbitral Tribunal had “rightly captured” that as DP, BRH acted as an agent of CDSL, with whom the shares were entrusted for safekeeping. Justice Marne termed BRH’s conduct as “one composite act of stark fraud”.
Aggrieved by Justice Marne’s ruling, CDSL approached a division bench, which rejected its appeal on Thursday, holding that the single-judge bench did not err in its verdict.
Upholding submissions by advocates Karl Tamboly and Harsh Moorjani for Bhavsar, the bench observed that the “arbitral award was based on evidence” and was “reasonable”. Justice Dangre added that the single-judge bench had “rightly exercised his powers” under Section 34 (application for setting aside an award) of the Arbitration and Conciliation Act, 1996 and “examined the Award on the permissible grounds” while recording that ” it did not suffer from illegality or that any error was committed”. The HC however directed that no coercive steps shall be taken for recovery of the amount from CDSL for six weeks.
The HC noted that based on the title to the transferred shares, BRH pledged them with HDFC Bank to avail a loan facility. (File Photo) 
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