My stock broker carried out unauthorised trades in my and my family members' four accounts resulting in losses. The concerned dealer said she would be put behind bars and requested me to help her by paying Rs 5 lakhs into my trading acccount, and she would recover it in a few days. I paid, but she could not recover the amount as the market movement was adverse. I filed for arbitration. The broker argued that all four accounts were treated together a family account and the payment I had made extended to all four accounts regularising the unauthorised trades. The arbitrator held that the payment had ratified the unauthorised trades in all four accounts and losses up to the date of payment were to be borne by us, and after that date to be borne by the broker. The broker filed application in the district court u/s 34 of arbitration act to set aside the order. During the hearings, it has now emerged that the accounts were delinked (i.e., no longer family account) well before the unauthorised trading took place. Can I argue in the district court that the arbitrator's order on ratification was induced by fraud and that all losses have to be borne by the broker? Should I make a pleading? Would be grateful for replies.
