Bombay HC Grants Relief to Madhabi Puri Buch, 5 others; Stays FIR in Listing Fraud Case

The Bombay High Court has granted temporary relief to former Sebi chief Madhabi Puri Buch and five other officials. The Bombay High Court has stayed a special court’s order which directed it to file a First Information Report (FIR) concerning the alleged stock market fraud.

Presided over by Justice Shivkumar Dige, the High Court found that the Special Court issued its order without highlighting any specific roles of the accused. While granting Buch and her co-petitioners temporary relief in their ongoing legal battle, the court said, “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 special court’s order was based on a complaint that alleged financial fraud and corruption during a company’s listing in 1994. The complaint was filed by media reporter Sapan Shrivastava, which has been dismissed by SEBI. The regulatory body has labeled Shrivastava as “frivolous and habitual litigant.”

SEBI noted in its statement, “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 would be initiating appropriate legal steps to challenge this order and remains committed to ensuring due regulatory compliance in all matters.”

The initial order by Anti-Corruption Bureau (ACB) was criticised for suggesting “prima facie evidence of regulatory lapses and collusion, requiring a fair and impartial probe,” without allowing SEBI or BSE the opportunity to present their facts. BSE also reiterated that the named officials were not in their positions at the time of the alleged fraud.

Sebi stated, “Even though these officials were not holding their respective positions at the relevant point of time, the court allowed the application without issuing any notice or granting any opportunity to SEBI to place the facts on record.”

Notably, Shrivastava has been given a deadline of four weeks to submit an affidavit in response to the petition.