Clearing houses are intermediaries between buyers and sellers. They become the buyer to every seller and the seller to every buyer. This reduces risk for the concerned parties and enhances confidence.
It increases the faith of the concerned parties by assuring every buyer that shares will be delivered and assuring every seller that money will be credited to their account.
If either party(buyer or seller) doesn’t keep their end of the bargain the clearing house will intervene and facilitate the deal.
For example-
a) If a buyer refuses refuses to pay cash the clearing house will pay the seller.
b) If a seller refuses to deliver shares the clearing house will deliver shares.
The clearing house reduces risk by demanding margin.
In most cases deals are concluded in 3-4 working days.
In this case I’m speculating so please excuse me if I err-
Is it possible that Mr. Pabrai’s fund didn’t buy the shares and lost the margin deposited. The clearing house stepped in and acquired shares of the seller and they’ve held on to it.
Second possiblity: Mr. Pabrai sold shares a few days before 31st March and in the meanwhile the clearing house was in possession of shares.
Third possibility: There’s a dispute and in the process of resolution shares are in the custody of the clearing house.