How was the second one obtained? By reporting the first one as lost or stolen? If she reported it as lost or stolen, and got a new one, the Indian govt. would have canceled the old one in their system and flagged it as lost or stolen. So if the old one is used, and it is verified at a port of entry with computers, she could get arrested because they'll think she is somebody else who stole or found the passport.
If she keeps the old one locked up and never uses it for anything, I don't see how she'd get in trouble. But if she is keeping it so she can show the arrival stamps in it as proof of travel, or for any other non-private purpose, she should report that she found it to the Indian consulate and ask if she can keep it for those purposes, and ask if it is required for her to submit it to them for them to stamp the cancellation in it.
If the old one was already submitted to the Indian authorities for cancellation, there is no harm in keeping it and using it for certain purposes like showing the arrival stamps or visas.