Critical point:is it legally enforceable liability?

1. It is a legally enforceable contractualy liability.

2. 417 is also attracted. 

This is an all India problem. Find out there may be other persons also similarly cheated. File complaint with economic offenses  wing of police.

However not much hope to get back money., the person can be convicted and sent to jail.

1. Mr A Forces Mr B to buy/sale. In general this means that A gave bad advise but all the transactions were carried out by B in his (B's) account only.

2. When caught, A must have felt guilty or cornered and gave the assurance in writing that he would pay and he issued a cheque which got bounced.

If this is the truth and both complainant and accused approach the court with this truth and dishonored cheque, then I am afraid the court in all likelyhood is going to acquit the accused. This is no legally enforceable debt. This is no cheating either, at the best this is the professional misconduct that due to his not so competent advise B lost heavily.

While lost all the stocks, Mr. A still tried to conceal the fact from Mr. B. Moreover, he engineered to give a 'False Voice Confirmation' by his men to give an impression that. Mr. B still have some investment left. Mr. A asked for Rs. 1,00,000.00 from Mr. B to introduce again into market so that the loss can be recovered by the left over investment & Rs. 1,00,000.00. Whereas, in fact, there were nothing left. All these False Confirmation and Mr. A asking for fresh introduction of money - has a voice recording with Mr. B. Moreover, there are several voice recording with Mr. B which can prove Mr. A always accepted his responsibility for the loss. 

In the light of the voice data and the bounced cheque, can Mr. B get his money back?

It is not clear how A was operating on behalf of of B.

For the period of his 'management', Mr. A forced Mr. B to trade only in derivatives - knowing fully that Mr. B has no understanding about the derivative trading atall. Mr. A used to call from his personal mobile to Mr. B, asked him to note down the orders and just echo them to place his order .Thereafter asked the person at broaking house to phone Mr. B to take his order. Besides, Mr. A himself did few transaction even without letting Mr. B to know - which he later admitted over phone. Mr. B has a voice recording of all these through his mobile phone. And Mr. A has siphoned out 70% of the portfolio value of Mr. A as brokerage. By doing this, Mr. A has proved his worth to his company and got incentives and a may be a lift in his designation.

It is seen that, cheats who took money /  jewellery from innocent people to double / triple them, also got punished when cought. If that is the case why Mr B will not get justice for his mistake of believing a higher executive from a reputed broking firm?

Moreover, as per SEBI guideline, no one from a broker's end can influence / force a client. After very first transaction, Mr. A even threaten Mr. B - if Mr. B stops derivative trading now, all his portfolio will be lost as " buy position", "sale position", "hedge position" etc. etc. are entangled in such a way that it can not be stopped misway and Mr. B had to follow Mr. A's instructions every day for 14 days till all the stocks were squered off to meet the loss of derivative trading.

Mr. A must be brought to book for (1) cheating Mr. B by posing himself as Stock Market Guru; (2) breach of trust of Mr. B by destroying his full portfolio; (3) forgery for engineering false 'Voice Confirmation' to extract another Rs. 1 lakh from Mr. B.

If a person like mr. A is aquitted, he may harm maney more person for who bearing Rs. 5 lakh would be end of their life.

Is there any ray of hope?

It is true that A has played with B. But no trading house will give blanket assurance for any gains, since all the transactions were ultimately carried out on behalf and on instruction of B, so B cannot say that he was ignorant and he blindly went ahead on A's advise, 

having said that you can take followinga action:

1. File the case u/ S.138 of NI Act. Hire a good lawyer first and then proceed. This will put pressure on him and send a copy of this to brokerage house. You should know that A may be acquitted in this case, so please preaper hard and file. 

2. File an FIR for unauthorised use of B's funds (somewhere you stated that A traded without confirmation from B). This will take care of A.

3. If you have evidence of any force, file a complaint against the brokerage house also with SEBI.

If Mr. A himself accepts his liability at court, can it be "legally enforceable liability" ?

In criminal cases admission of accused certainly goes against him, but courts look at all the aspect before convicting, self confession prima facie may not result into conviction, it has to be supported by evidence on record.

My observation is solely based on information provided in this forum by you, and on the face of it the court may not convict u/s 138, for one very simple reason also that all the transactions were carried out in B's account only, A's role was to give only bad advise, probably to enhance his brokerage. Other cases as suggested above in Sr#2 and Sr#3 can also be pursued and they have better force. 

Originally posted by : SOLVE PROBLEMS
	This is an all India problem. Find out there may be other persons also similarly cheated. File complaint with economic offenses  wing of police. However not much hope to get back money., the person can be convicted and sent to jail.

It is indeed an all India problem but we need to understand the problem is created by ignorance of customers especially under influence of greed. In western countries broker websites offer absolutely free demo accounts without any time limit. The demo accounts are exactly similar to real accounts and connected to same stock exchange servers. The only difference is that no real money is used and data is refreshed a little slower to lessen load on servers. Everyone is encouraged to experiment in demo accounts and open real accounts only when confident in demo accounts. Thus the role of brokers in misleading the customers is minimized.

In India there is no concept of demo accounts and brokers literally take the customers for a ride by giving false impressions. If the SEBI wants it can make demo accounts mandatory for all kinds of brokers so that customers can themselves practice to their heart's content before opening real accounts. If someone still behaves carelessly and foolishly with his hard earned money, then it is his fault.

I agree with the overall opinions of Adv. R. Trivedi.

hi,

in 138 NI act legally enforceble is necessary. other sections pl. contact your counsel. don't assume.

No legal enforceability if proved that negotiable instrument forced to sign under duress. Probably that is what Adv. R. Trivedi wanted to highlight.

Leagal action under Cheating, Forgery and Breach Of Trust cases can be files I presume.

The problem has migrated from USA, where PONZY schemes and junk bonds were floated and people are cheated in millions.

In Mumbai last year similar cheater with thousand crores fraud was arrested with accounts abroad.

But people get cheated due the abnormal profits and police or law comes in only when persons are cheated so there can only be conviction and no hope of getting money back.