Mumbai, March 4 — The Bombay High Court on Tuesday granted a four-week stay on a special court's order that directed registration of an FIR against former Securities and Exchange Board of India (SEBI) Chairperson Madhabi Puri Buch and five other senior officials. The High Court termed the special court’s decision as passed "mechanically," without attributing any specific roles to the accused.
Justice Shivkumar Dige, while issuing the interim relief, observed, “After hearing all concerned parties and reviewing the special court’s March 1 order, it appears the decision was taken mechanically, lacking detail and specific allegations against the applicants.” The judge further allowed complainant Sapan Shrivastava four weeks to respond with an affidavit.
Allegations of Fraudulent Stock Listing from 1994
The controversial special court order was based on allegations filed by media reporter Sapan Shrivastava, who sought an Anti-Corruption Bureau (ACB) investigation into alleged financial fraud and regulatory violations involving the Bombay Stock Exchange (BSE) listing of Cals Refineries Ltd. in 1994.The petition challenging this order was filed by Madhabi Puri Buch along with three current SEBI whole-time directors—Ashwani Bhatia, Ananth Narayan G, Kamlesh Chandra Varshney—as well as BSE Managing Director and CEO Sundararaman Ramamurthy, and former BSE Chairman Pramod Agarwal. The petitioners argued the special court’s order was "manifestly erroneous, patently illegal," and lacked jurisdiction.
Solicitor General Calls Complaint ‘Vague and Vexatious’
Appearing for SEBI officials, Solicitor General Tushar Mehta highlighted the alleged non-application of mind by the special court. "Ordering an FIR based on a vague and vexatious complaint from an incident reportedly dating back to 1994 is illogical," he argued, further alleging that Shrivastava was attempting extortion under the disguise of public interest litigation.Senior advocate Amit Desai, representing BSE officials Ramamurthy and Agarwal, condemned the complaint as a direct "attack on the economy," asserting that frivolous allegations were being used against senior officials without merit or substance.
Petitions Highlight Lack of Prima Facie Evidence
Advocate Sudeep Pasbola, representing Madhabi Puri Buch, reinforced arguments by Mehta and Desai. The petitions collectively pointed out that the special court had issued its directions without serving any notice or providing an opportunity for SEBI officials to present their side, which rendered the order unsustainable.Additionally, the pleas emphasized that there was no requirement in 1994 for companies to obtain a No-Objection Certificate (NOC) from SEBI before listing on BSE, further weakening the complainant's stance.
SEBI and BSE Reject Allegations, Call Application 'Frivolous'
SEBI clarified in a statement issued Sunday that none of the officials named were serving in their current roles during the period in question. BSE also categorically stated that the individuals named had no connection to the company’s 1994 listing, labeling Shrivastava’s application as "frivolous and vexatious."Bombay High Court Provides Temporary Relief
While granting temporary relief to the petitioners, the High Court has provided Shrivastava four weeks to respond formally. The ACB has confirmed through public prosecutor Hiten Venegaonkar that it will comply with the High Court’s directive.Madhabi Puri Buch, India's first woman to head SEBI, concluded her three-year term on February 28, just days before the special court’s controversial decision.
The matter is slated for further hearing following the submission of responses by the complainant.
