The Bombay High Court has temporarily stayed a special court’s order that directed the registration of an FIR against former SEBI chairperson Madhabi Puri Buch and five other individuals, including top officials from SEBI and BSE. This decision follows a challenge to the special court’s order, issued on March 1, which had called for an investigation into alleged stock market fraud and regulatory violations.
Justice Shivkumar Dige, in a ruling on Tuesday, noted that the special court’s decision appeared to have been made mechanically, without delving into sufficient details or specifying the roles of the accused in the alleged offenses. As a result, the High Court granted a four-week stay on the order, giving the complainant, Sapan Shrivastava, time to file a response to the petitions filed by the accused parties.
The petitioners, including Buch, SEBI directors Ashwani Bhatia, Ananth Narayan G, and Kamlesh Chandra Varshney, as well as two BSE officials—Managing Director and CEO Ramamurthy and former Chairman Pramod Agarwal—had sought to have the special court’s order quashed. They challenged the decision, claiming it was arbitrary and illegal.
The case stems from a complaint filed by Shrivastava, a media reporter, who alleged that the accused were involved in a large-scale financial fraud and regulatory breaches tied to the 1994 listing of a company on the Bombay Stock Exchange (BSE). The special court had directed the Anti-Corruption Bureau (ACB) to register an FIR based on these claims.
However, the petitioners argued that the order lacked the necessary legal foundation, particularly in terms of evidence and the clear identification of each individual’s role in the alleged wrongdoing. The High Court’s ruling effectively pauses any further legal action until the issue is revisited in four weeks.
