HC to hear pleas of ex-Sebi chief Buch, others in 1994 case today – The Times of India

MUMBAI: Former Sebi chairperson Madhabi Puri Buch, Bombay Stock Exchange MD Sundararaman Ramamurthy, and others approached Bombay HC Monday for quashing a special court order that directed Anti-Corruption Bureau (ACB) to register an FIR against them in an alleged 1994 “irregular” listing of a company on the stock exchange and “oversight failure”.
Terming the order “unjust” and “harsh”, the officials said none of them held the positions in 1994 and the court ought to have seen that “no vicarious liability can be fastened” on them.
Justice S G Dige posted the petitions for hearing on Tuesday and orally asked ACB not to take any action on the trial court order till then.
Senior counsel Amit Desai appearing for BSE managing director Sundaraman Ramamurthy and another stock exchange official said it was “shocking” to see FIR was ordered on a “four-line complaint” filed in 2024 for a 2009 investment in a company listed in 1994.
Since the FIR is not yet registered, Desai requested HC to ask police to hold its hand till it hears the matter, which the court orally did.
Solicitor General of India Tushar Mehta appearing for whole time members at Sebi — Ashwani Bhatia, Ananth Narayan G and Kamlesh Chandra Varshney– and senior advocate Sudeep Pasbola appearing for Buch (60) adopted Desai’s stance when the matter was mentioned before Justice Dige.
The petitioners said the trial court erred in law by ignoring the requirement of prior sanction from the central govt under the Prevention of Corruption Act before ordering a probe against public servants and failed to give reasons for dispensing with such requirement. Besides, no notice was given to the officials before passing the order, they said.
The Sebi officials stated that the trial court order is “manifestly erroneous, patently illegal and without jurisdiction”.
Bhatia was appointed in June 2022, Narayan in Oct 2022, and Varshney in Sept 2023 for three years. All three said the trial judge ignored the law that “specific” allegations indicating any complicity is needed to involve them.
The complaint was filed by a Dombivli resident, Sapan Shrivastava, on April 6, 2024, against the six offficials. Shrivastava’s complaint said he and his family invested in Cal Refineries Ltd, listed “allegedly without requisite compliance” on BSE on Dec 13, 1994. He alleged that the “fraudulent listing of Cal, which was against the rules, resulted in a huge loss to him” and alleged the public servants took “illegal gratification and various other benefits” and “failed to protect the interest of investors.”
The Sebi officials said the complaint was filed only when the complainant’s investment “lost value” and “just to settle his grievances against the company”.
Special ACB court Judge S E Bangar, in the March 1 order, said, “There is prima facie evidence of regulatory lapses and collusion, requiring a fair and impartial probe”. The trial court said it would monitor the probe and directed ACB to submit its report in 30 days.
The petitioners told HC the trial court erred in appreciating that no case was made out of any irregularities against them for the listing or even for alleged failure in their duties as Sebi officers.
Bhatia’s plea also said the special court ought to have seen that Sebi informed Shrivastava that information regarding compliance or NOC was not available with them and thus it “doesn’t establish that CAL had not met with requisite compliances”.