The Crossbill Team
The Bombay High Court on Tuesday (March 4) put a stay on the special Anti-Corruption Bureau (ACB) court’s order directing the registration of an FIR against six individuals, including former SEBI chairperson Madhabi Puri Buch, in an alleged stock market fraud case.
Justice Shivkumar Dige, while staying the order, observed that the special court had passed it “mechanically” without assigning specific roles to the accused.
The court granted the complainant four weeks to respond to the petitions filed by the six individuals seeking to quash the FIR directive.
Complainant Alleges Stock Market Violations
The case stems from a complaint filed by Dombivli resident Sapan Shrivastava, who claimed that he and his family suffered financial losses after investing in Cal Refineries.
He alleged regulatory violations and sought an investigation under cheating, forgery, and criminal conspiracy sections of the Indian Penal Code, along with provisions of the Prevention of Corruption Act.
On Saturday, March 2, special ACB court judge S. E. Bangar had ordered the Maharashtra ACB to file an FIR based on the complaint.
Following the ACB court’s ruling, Buch, along with three SEBI whole-time members, Bombay Stock Exchange (BSE) chairman Pramod Agarwal, and CEO Sundaraman Ramamurthy, moved the High Court to challenge the order.
Solicitor General Tushar Mehta, representing SEBI officials, argued that the complaint was "vexatious" and lacked specific allegations. He pointed out that the complaint sought an inquiry into an IPO dating back to 1994, when none of the accused were associated with SEBI or the BSE.
Mehta also highlighted that the complainant had previously been fined by the High Court for filing a frivolous petition.
Senior advocate Amit Desai, representing BSE officials, criticized the vague and scandalous allegations, warning that such claims against key capital market regulators could have serious economic ramifications.
He further argued that the special ACB court had failed to ensure compliance under the Prevention of Corruption Act, which mandates prior sanction for investigating public servants.
Desai also noted that the company in question, Cal Refineries, had been delisted from the BSE in 2019, while the complaint was only filed in March 2024—raising further questions about its credibility.
Senior advocate Sudeep Pasbola, appearing for Buch, echoed these concerns, stating that action could not be taken based on "vague and unsubstantiated allegations."
Justice Shivkumar Dige, while staying the order, observed that the special court had passed it “mechanically” without assigning specific roles to the accused.
The court granted the complainant four weeks to respond to the petitions filed by the six individuals seeking to quash the FIR directive.
Complainant Alleges Stock Market Violations
The case stems from a complaint filed by Dombivli resident Sapan Shrivastava, who claimed that he and his family suffered financial losses after investing in Cal Refineries.
He alleged regulatory violations and sought an investigation under cheating, forgery, and criminal conspiracy sections of the Indian Penal Code, along with provisions of the Prevention of Corruption Act.
On Saturday, March 2, special ACB court judge S. E. Bangar had ordered the Maharashtra ACB to file an FIR based on the complaint.
Following the ACB court’s ruling, Buch, along with three SEBI whole-time members, Bombay Stock Exchange (BSE) chairman Pramod Agarwal, and CEO Sundaraman Ramamurthy, moved the High Court to challenge the order.
Solicitor General Tushar Mehta, representing SEBI officials, argued that the complaint was "vexatious" and lacked specific allegations. He pointed out that the complaint sought an inquiry into an IPO dating back to 1994, when none of the accused were associated with SEBI or the BSE.
Mehta also highlighted that the complainant had previously been fined by the High Court for filing a frivolous petition.
Senior advocate Amit Desai, representing BSE officials, criticized the vague and scandalous allegations, warning that such claims against key capital market regulators could have serious economic ramifications.
He further argued that the special ACB court had failed to ensure compliance under the Prevention of Corruption Act, which mandates prior sanction for investigating public servants.
Desai also noted that the company in question, Cal Refineries, had been delisted from the BSE in 2019, while the complaint was only filed in March 2024—raising further questions about its credibility.
Senior advocate Sudeep Pasbola, appearing for Buch, echoed these concerns, stating that action could not be taken based on "vague and unsubstantiated allegations."
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