Bombay HC allows trader to keep ₹1.75 crore profit made after Kotak Securities tech glitch

In a rare legal development, the Bombay High Court has allowed a Mumbai-based trader to retain ₹1.75 crore in profits he earned after a Kotak Securities' technology error credited an unusually large margin amount to his trading account.

The case dates back to 2022 when Kotak Securities inadvertently credited around ₹40 crore of margin funds into trader Gajanan Rajguru’s account because of a system glitch.

With the inflated margin balance, Rajguru executed Futures & Options (F&O) trades within roughly 20 minutes, ultimately generating profits of about ₹2.38 crore, offsetting an initial loss of ₹54 lakh, for a net gain of ₹1.75 crore.

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When Kotak Securities discovered the error, it reversed the ₹40 crore credit and sought to recover the profits from Rajguru, arguing that the funds were mistakenly provided and any gains should rightfully belong to the broker.

However, in a December 2025 interim order, the Bombay High Court rejected the broker’s claim, observing that the profits resulted from the trader’s own market actions and risk-taking rather than automatic benefit from the erroneous margin.

The court held that these gains do not qualify as “unjust enrichment,” a legal doctrine under which wrongful profits may be recoverable if obtained without effort or rightful claim.

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The judge noted that Kotak Securities did not suffer a loss due to the glitch and could not simply reclaim the profits, as that would effectively transfer the trader’s legitimate market gains back to the broker.

Kotak Securities has filed an appeal against the judgement, and the matter is scheduled for further hearing on February 4, 2026, while the interim order allowing Rajguru to keep the ₹1.75 crore remains in effect.