In an extraordinary case that captured investor attention, Gajanan Rajguru, a trader from a small town, earned about ₹1.75 crore in less than two hours by exploiting a technical glitch in his broker’s system that credited excess margin funds to his trading account. What makes the story remarkable is not just the raw profit but the legal battle that followed with Kotak Securities — one of India’s major brokerage firms.
The controversy began when the glitch erroneously increased Rajguru’s margin balance, giving him the ability to place trades far beyond his actual collateral. Instead of alerting the broker immediately, he executed profitable trades that capitalised on this extra balance, generating substantial earnings in a very short time frame.
Kotak Securities contested the legitimacy of those gains, asserting that the excess funds were a system error and should not benefit the trader. The dispute escalated into arbitration, with an award initially favouring Rajguru for close to ₹2 crore. What swung the outcome was legal reasoning rooted in contract law principles — specifically a provision under Section 163 of the Indian Contract Act concerning the responsibilities of a bailee (custodian). The court noted that when someone is entrusted with another’s property (in this case, excess margin funds credited to an account), they may be responsible for what accrues from that property as well.
This case highlights a rare intersection of trading technology, human action, and legal interpretation on Dalal Street. It raises questions about system robustness in trading platforms, ethical use of unintended credits, and the legal rights of brokers versus customers when technology glitches create opportunities.
The broader lesson for investors and traders is clear: technology can create chances — but they come with legal and ethical complexities that may land even seasoned brokers in court when disputes arise.
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