The Bombay High Court on Tuesday stayed, for four weeks, a lower court order to file a police case against Madhabi Puri Buch, the former chief of markets regulator SEBI, and five others in connection with alleged market fraud and regulatory violations.
A single bench of Justice Shivkumar Dige said the special court order of March 1 had been passed mechanically without going into details or attributing specific roles to the accused.
"Hence, the order is stayed till next date. Four weeks' time is given to the complainant in the case (Sapan Shrivastava) to file his affidavit in reply to the petitions," the court said.
The judgement was on pleas by Ms Buch and three full-time Directors of SEBI, or the Securities Exchange Board of India - Ashwani Bhatia, Ananth Narayan, and Kamlesh Chandra Varshney.
Bombay Stock Exchange Managing Director and Chief Executive Officer Ramamurthy and the BSE's ex-chairman and Public Interest Director, Pramod Agarwal, had also filed pleas0
These had sought quashing of the special court directing the Anti-Corruption Bureau to file a police case over allegations of fraud committed in 1994, while listing a company on the BSE.
The special court had passed the order after a complaint by a reporter seeking investigation into the alleged offences, which were said to involve financial fraud, regulatory violations, and corruption.
"There is, prima facie, evidence of regulatory lapses and collusion, requiring a fair and impartial probe," special court judge Shashikant Eknathrao Bangar had said.
The allegations disclose a cognisable offence, making investigation necessary, and the inaction by law enforcement agencies and SEBI "necessitates judicial intervention" the court had said.
On Monday the High Court had agreed to an urgent hearing of Ms Buch's plea, and that of the other four. It had also directed the ACB to not act till the hearing this morning.
READ | High Court Halts Fraud Case Against Ex-SEBI Chief Madhabi Buch
Solicitor-General Tushar Mehta appeared for the SEBI directors and he, and the lawyers for Ms Buch and the BSE officials argued that the special court order was "manifestly erroneous, patently illegal, and passed without jurisdiction" and that no case had been made out.
SEBI on Sunday said it "would be initiating appropriate legal steps to challenge this order and remains committed to ensuring due regulatory compliance in all matters".
READ | "Will Challenge": SEBI As Court Orders FIR Against Ex-Chief, Officials
"The applicant is known to be a frivolous and habitual litigant, with previous applications being dismissed by the Court, with imposition of costs in some cases," SEBI had said.
The BSE called the reporter's claims "frivolous and vexatious in nature.
With input from agencies
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