HC junks order granting brokerage refund of ₹66.66L to “ignorant” CA
Mumbai, Feb 6, 2026
The Bombay High Court dismissed a CA's claim for a ₹66.66 lakh brokerage refund, ruling he was liable for losses after sharing account access with a stranger.
The Bombay High Court has quashed orders directing a stock broking firm to refund brokerage of ₹66.66 lakh to a city-based chartered accountant (CA) who had shared the login ID and password of his demat account with a stranger, allowing him to operate the account and execute massive trading transactions.
A single-judge bench of justice Sandeep Marne held that the CA, Shashi Mehra, was not entitled to any refund as the losses and brokerage liability arose from his own conduct in permitting unauthorised access to his trading account.
The court was hearing a petition filed by Nirmal Bang Securities Pvt Ltd, which challenged orders passed by the Investor Grievance Redressal Committee (IGRC), an arbitral tribunal and an appellate arbitral tribunal in favour of Mehra.
Mehra had opened a trading account with the brokerage firm in 2007. Although the account held shares worth about ₹1.38 crore, it had become inoperative and was reactivated in April 2019 at the behest of one Mateen Attar, who falsely represented himself as an authorised person or agent of the broking company.
The CA shared his login credentials with Attar, who then began trading through the account. Between April 25, 2019 and the next two months, transactions worth ₹1,057.86 crore were executed across equity, futures and options, and currency derivative segments.
These trades resulted in losses of ₹2.16 crore and brokerage liability of ₹66.66 lakh. To recover the amounts, the broking firm liquidated all the shares in Mehra’s demat account, fetching around ₹1.38 crore.
Mehra subsequently approached the IGRC, which directed the brokerage firm to refund 75% of the brokerage charged to the senior citizen. Dissatisfied, he moved the arbitral tribunal, which on October 14, 2022, allowed his appeal and ordered a full refund of the brokerage amount. The appellate arbitral tribunal upheld this decision, prompting the broking firm to move the high court.
Setting aside all three orders, the high court noted that the fora had taken contradictory positions. While holding that the trades were authorised and therefore rejecting Mehra’s claim for refund of the amounts recovered by liquidating his shares, they simultaneously concluded that the transactions were carried out only to generate brokerage.
“All the three fora have completely ignored the position that though the amount of brokerage may sound to be slightly high, when compared with the total volume of transactions effected in the respondent’s account of ₹1,057.9 crore, the same is negligible,” the court observed, adding that “the very basis for awarding the amount of brokerage is patently illegal”.
The judge also emphasised Mehra’s professional background, noting that he was a chartered accountant “fully conversant with the nitty-gritties of commerce”.
“Though he may not be a professional stock market player, he clearly is not a person incapable of understanding the nature of transactions which were occurring in his trading account,” the court said, pointing out that the trades were carried out despite transaction alerts being generated.
[Hindustan Times]
