3 Answers
Dear Client,
Firstly, the criminal charges (BNS 316/318) are unlikely to stand. You did not misappropriate funds into your own account, and she voluntarily gave you access, which disproves the deception required for a cheating charge. Secondly the SEBI Regulations are inapplicable here as these rules govern paid professionals. Since you did not charge a fee, you do not fall under commercial advisory regulations. And regarding your WhatsApp Statement, while they are admissible as evidence, expressing regret over market losses is not a legally binding admission of debt. Moreover, Her voluntary sharing of login credentials establishes implied consent. Furthermore, sharing these details violates her own broker's security rules, severely undermining her claim of "unauthorized access."
So, all in all, your criminal and regulatory exposure is minimal. While she could technically file a civil suit to recover the ₹2.5 lakh, the legal costs. However, your immediate next steps should be to cease all direct communication with her immediately. Have an advocate draft a formal legal reply that denies all liability, highlights her voluntary handover of credentials, notes the absence of any advisory fees, and reiterates the inherent risks of market trading.
I hope this answer helps, if you have any other query kindly do not hesitate to contact us. Thank-you.
Dear Client,
Your defence has real substance on the criminal side, though civil exposure is a separate and more realistic concern. Voluntary access granted by your friend is a genuine defence to the "without authorization" element, and the absence of written F&O consent does not, by itself, make the trades unauthorized. That said, the actual scope of authorization (equities versus derivatives) remains a factual dispute both sides will contest.
Section 316 BNS (criminal breach of trust) requires dishonest misappropriation, not merely a loss from authorized but risky trading. Since you received no fee or personal benefit and losses arose from market-linked F&O positions rather than diversion of funds, this element is weak here.
On the SEBI allegation, Regulation 2(1)(m) of the IA Regulations requires consideration and a business of providing advice, both doubtful here given a fee-free, friend-to-friend arrangement, making this the weakest of the three heads.
On the WhatsApp messages, your expression of regret is not an unambiguous admission of legal liability, though it may be read adversely in a civil claim. No further such messages should be sent, and nothing should be deleted.
Your primary realistic exposure is civil, a recovery suit turning on what the conversations show about the scope of your authority. We would recommend engaging counsel to reply to the notice addressing each head separately, preserving all records, and exploring a without-prejudice settlement given the facts do not point clearly toward fraud.
I hope this answer helps. If you have any further query kindly do not hesitate to contact us. Thank you.
Dear Client,
I understand your concern based on your legal query. I suggest you consult a lawyer to draft a reply to the legal notice you received and to address your legal query.
You can reach us for further legal assistance
OlQ LAW FIRM