₹13.11 Lakh Recovered: How Our Team Won This Arbitration Case Against SMIFS Limited?

This is not an anonymized story. Every name in it, the applicant, the broker, the employee, and the arbitrator, comes directly from a signed, publicly available arbitration award.

We are telling it in full because Ramesh’s case is now a matter of public record, and because the reasoning behind this award is genuinely useful for anyone facing something similar.

The Relationship That Caused the Unauthorised Trades

Ramesh opened a Trading Account and Demat Account with SMIFS Limited on 11 April 2023, allotted Unique Client Code 901614.

The account was opened, as the Tribunal would later establish beyond doubt, through a man named Kunal Shyam Mankar, who had approached SMIFS Limited’s Pune branch and introduced himself as someone bringing in a wealthy new client, Ramesh himself.

At the time, nothing about this looked unusual. Mankar signed the Account Opening Form in his capacity as “Executive” and completed the mandatory In-Person Verification for KYC compliance, using an employee code that traced directly back to SMIFS.

Ramesh completed his paperwork, deposited his funds, and began what looked like an entirely ordinary relationship with a SEBI registered broker.

For the first few weeks, it was. Then, on 30 May 2023, something changed.

The Fifty Seven Seconds That Changed Everything

At 17:57:23 on 30 May 2023, Ramesh’s registered email ID on file with SMIFS Limited was changed. His original address, tied to his real identity, was replaced with a new one built around his own client code.

His login credentials were changed alongside it.

Ramesh never requested this. He never provided an OTP for it. He never signed a written request for it, at least not knowingly.

What he later told the Tribunal, and what his WhatsApp chats with Mankar corroborated, was that he had been induced to share his OTP and his Aadhaar details under the pretext of a routine KYC update.

The consequence was immediate and severe, even if Ramesh could not see it happening in real time. With his email address hijacked, he stopped receiving contract notes.

He stopped receiving trade confirmations. He stopped receiving any of the statutory communications a broker is required to send after every transaction.

He had, in effect, been locked out of visibility into his own account, while the account itself remained very much active.

Eleven Weeks, Twenty Eight Lakh Rupees, and Silence

Between 3 May 2023 and 21 July 2023, trades were executed in Ramesh’s account. He had placed none of them, at least not after the email change locked him out of any way to monitor what was happening.

Over this period, ₹28,00,000 was transferred and debited out of his trading account, without, as he would later argue and the Tribunal would ultimately accept, any instruction or authorisation from him whatsoever..

How Ramesh Came to Us First, Before Any Complaint Was Filed?

Ramesh did not discover any of this in real time. He became aware of it only later, once the silence around his account finally broke and he started asking questions that SMIFS Limited could not comfortably answer.

At that point, rather than attempting to navigate NSE’s grievance and dispute resolution machinery on his own, he reached out to our team directly.

From there, we guided him through the entire process, step by step. We helped him lodge the formal complaint with NSE.

When the dispute could not be resolved at the Exchange level, we guided him through the referral to Conciliation under SEBI’s SMART ODR framework.

And when Conciliation produced its strange, contradictory outcome, we advised him on escalating to formal arbitration in stock market, and Mr Assem Juneja went on to represent him personally through every stage of that proceeding.

Why Conciliation Failed: A Contradictory First Result

The Conciliation hearing took place on 8 May 2026 through video conferencing on the CORD ODR Portal. It did not succeed.

But the Conciliator’s own report, dated 12 May 2026, contained something remarkable.

The Conciliator, Mr Sheo Naik Pandey, specifically observed that the conduct of the Respondent’s employee in this matter went beyond fiduciary duty and could be termed an act of cheating or fraud.

And yet, in that same report, the Conciliator held Ramesh’s ₹28 lakh claim as not admissible.

This is exactly the kind of outcome that makes escalation to formal arbitration essential. A finding of fraud sitting alongside a rejected claim is not a resolution. It is a procedural dead end dressed up as one.

Ramesh, understandably aggrieved, escalated the matter to arbitration, seeking a full, de novo consideration of everything that had happened.

How We Took the Case Into Arbitration?

Escalating to arbitration was the natural next step we advised, and this is where our involvement became most visible on the record itself.

Mr Assem Juneja appeared as Ramesh’s Authorised Representative before the Sole Arbitrator, Durga Prasana Panda, appointed by CORD on a round robin basis in accordance with SEBI’s ODR framework.

In his Statement of Claim, Ramesh sought refund of the ₹28,00,000 lost, 18 percent annual interest on that amount, ₹2,00,000 in compensation for mental harassment and emotional distress, and ₹1,00,000 toward the costs of the arbitration proceedings itself.

SMIFS Limited’s defence, filed in its Statement of Defence, was direct and dismissive. The firm argued the claim was false, frivolous, and filed in bad faith to avoid liability for what it characterised as ordinary trading losses.

It denied that Mankar had any role in opening the account. It denied that he was its employee during the disputed period, producing a Chartered Accountant’s certificate to support that position.

It maintained that every trade had been placed on Ramesh’s own instructions, through phone, RMS terminal, and its online platform, and that the email change had been carried out based on a written request bearing Ramesh’s own signature.

Two entirely incompatible stories were now sitting in front of a Sole Arbitrator, and it fell to the evidence, not the assertions, to decide between them.

How the Tribunal Took the Case Apart, Issue by Issue?

The hearing was held on 18 August 2026, after two rescheduling requests, with both sides given full opportunity to present written submissions, oral arguments, and counter-arguments.

The Arbitrator then worked through eight distinct issues, each building on the last.

1. Was the Account Really Opened Through Mankar?

SMIFS Limited’s own Statement of Defence contained an admission that undid its own position on this point. The firm conceded that Mankar had approached its Pune branch specifically to introduce Ramesh as a prospective client.

Combined with the Account Opening Form itself, bearing Mankar’s signature and SMIFS employee code, the Tribunal found this issue answered clearly in Ramesh’s favour.

The certificate SMIFS had produced attempting to distance itself from Mankar’s employment status was described in the award as a misleading document that could not withstand scrutiny.

2. Was the Email Change Actually Authorised?

Here, the burden fell on SMIFS to prove the change had been properly verified. It could not. No Aadhaar OTP log. No IP address. No proof that verification had been sent to Ramesh’s old, genuine email or mobile number before the switch was made.

The Tribunal noted something else telling: that the new email address itself was built directly around Ramesh’s client code, a detail suggesting it had been generated from inside the branch rather than provided independently by Ramesh himself.

The Tribunal held SMIFS, through Mankar, deficient in service and negligent, and found this negligence directly responsible for Ramesh losing visibility into his own account.

3. Who Actually Placed the Trades After the Email Was Changed?

This is where the case turned most decisively.

Under Regulation 18 of the SEBI (Stock Brokers) Regulations, 1992, the burden to prove that trades were placed on a client’s own authorisation sits squarely with the Trading Member, not the investor.

SMIFS produced an Order Log, a Trade Register, an Email Log, and an SMS Register to try to meet that burden.

None of it held up. The Order Log contained a “Server Entry Time” but no IP address, no device ID, no MAC ID, nothing capable of actually identifying who had placed each order.

The Trade Register lacked any authentication details and could not even be reliably linked back to the Order Log. The SMS Register showed alerts sent in early May, before the email change, but nothing date-wise afterward.

The Email Log fared worst of all, described by the Tribunal as suffering from a long list of defects: no proof of delivery, dispatch from a personal ID rather than an official communication channel, delayed sending, duplicate resends, no client code mapping, and no digitally signed contract note format at all.

Faced with a complete absence of any genuine audit trail, and SMIFS’s own inability to produce the pre-trade call recordings the Exchange itself had specifically requested during the earlier General Meeting, the Tribunal drew an adverse inference against the broker under Section 119 of the Bharatiya Sakshya Adhiniyam, 2023.

Every trade executed in Ramesh’s account between 3 May and 21 July 2023 was held unauthorised.

4. Was SMIFS Liable for What Its Employee Had Done?

Yes. Mankar had personally conducted Ramesh’s In-Person Verification as a SMIFS employee. Once the Tribunal established his employment, vicarious liability for his conduct followed naturally.

SMIFS, the Tribunal held, was duty-bound to put safeguards in place to prevent exactly this kind of misuse of client credentials by its own staff, and had failed to do so.

But There Was a Complication, and the Tribunal Did Not Look Away From It

Ramesh had admitted, in his own Statement of Claim, that he had shared his trading login credentials with Mankar. This is expressly prohibited under SEBI regulations and under the standard client-broker agreement every investor signs.

The Tribunal treated this candidly, finding Ramesh guilty of contributory negligence for that decision, even while holding SMIFS primarily and independently liable for its own failure of supervision, verification, and record-keeping.

This is the part of the award that makes it worth reading in full rather than skimming to the number at the bottom. The Tribunal did not treat this as a case where one party was entirely blameless.

It treated it as a case where two separate failures, a client’s poor judgment in sharing credentials, and a broker’s systemic failure to maintain any verifiable trail of authorisation, had combined to produce the loss.

What the Award Actually Delivered?

Ramesh had, by the time of the final hearing, revised his net principal loss claim to ₹26,22,904, reflecting adjustments from the original ₹28,00,000 figure.

The Tribunal, having found both parties at fault, apportioned this figure equally.

Each side was held responsible for ₹13,11,452.

SMIFS Limited was directed to pay this amount to Ramesh within 15 days of the award, along with simple interest at 9 percent per annum running from the date of the award until the date of actual payment.

No interest was awarded on Ramesh’s own share of the loss, a direct consequence of his contributory negligence.

The ₹2,00,000 claim for mental harassment was dismissed for lack of documentary evidence, and because compensation of that kind falls outside what Exchange arbitration guidelines are designed to award.

No order was made as to the costs of the arbitration itself.

Suspect Someone at Your Broker Changed Something Without Telling You? Our Team Can Help

Ramesh’s case was won on records SMIFS could not produce, not records we had to invent. If your contract notes stopped arriving, or your registered email or mobile number looks unfamiliar, pull your account history today and check.

Register with us and we will take it from there.

Conclusion

This case is worth remembering for reasons beyond the number at the end of it.

It shows that a broker’s own inability to produce a proper audit trail, IP addresses, device identifiers, and proof of delivery is not a technicality that quietly gets overlooked in arbitration.

Under SEBI’s own regulations, that burden sits with the broker, and when a Trading Member cannot meet it, an Arbitrator is entitled to draw exactly the adverse inference the Tribunal drew here.

It also shows that arbitration does not always deliver an all-or-nothing outcome.

Ramesh’s own decision to share his login credentials was not ignored or excused; it was weighed honestly against SMIFS’s own far more serious failures, and the award reflects that balance.

For any investor who has watched contract notes stop arriving, or discovered a login change they never made, this award is a clear demonstration that the path from a stalled Conciliation to a reasoned, binding arbitration outcome is real, provided the case is built on the same discipline that won this one.

If you’re evaluating your own options, our guide on SEBI SCORES complaint covers where to start.

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Report. Recover. Stay Fraud Free.

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Frequently Asked Questions

1. Why did the Conciliator find evidence of fraud but still reject the claim?

Conciliation is a settlement process, not a binding adjudication. A Conciliator can flag serious conduct in their observations while still concluding the claim, as presented, does not meet the threshold for admission at that stage. This is exactly why escalation to formal arbitration exists.

2. Who has to prove that a disputed trade was authorised, the investor or the broker?

Under Regulation 18 of the SEBI (Stock Brokers) Regulations, 1992, the burden sits with the Trading Member, not the investor. A broker unable to produce IP addresses, device identifiers, or other authentication details tied to a disputed order has failed to meet that burden.

3. Does sharing my login credentials with someone automatically forfeit my claim?

No, but it does not help it either. In Ramesh's case, the Tribunal treated it as contributory negligence, reducing his award rather than eliminating it, since the broker's own independent failures in verification and record keeping remained a serious, primary cause of the loss.

4. Why was interest only awarded on part of the amount, and only from the date of the award?

The Tribunal apportioned the loss between both parties based on their respective fault. Interest was awarded only on SMIFS's share of the liability, and only from the date of the award itself, reflecting the commercial nature of the dispute and Ramesh's own contributory negligence.

5. What kind of records should I keep if I suspect unauthorized activity on my trading account?

Keep every contract note, trade confirmation, and account statement you actually receive, and note immediately if they stop arriving. A gap in this communication trail, exactly as it did in this case, can become central evidence in a dispute.