The Bombay High Court has suspended for four weeks the order of the special court, directing an FIR against former SEBI chairman Madhabi Puri Buch and five other officials in a purported stock market fraud case in 1994.
Justice Shivkumar Dige noted that the order was made mechanically and no specific roles were assigned to the accused.
The direction was initially made by a special ACB court on March 1 on the complaint of journalist Sapan Shrivastava, who charged financial fraud, regulatory irregularities, and corruption in the listing of a company on the Bombay Stock Exchange (BSE) in 1994. The accused, however, comprising three sitting SEBI directors and BSE's MD, contended that they were not involved in the happenings of 1994.
Solicitor General Tushar Mehta, who appeared for SEBI officials, condemned the special court's judgment, saying it was a case of "non-application of mind." He sought to know how serving SEBI officials could be held responsible for what had happened almost three decades ago. Senior counsel Amit Desai, appearing for BSE officials, contended that frivolous such allegations would damage the economy.
The HC has granted Shrivastava four weeks to submit a reply to the petitions, which are aimed at quashing the special court's order, terming it "illegal and arbitrary." The ACB has said that it will follow the HC's orders.
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