Court allows NSE to intervene in case against Madhabi Buch, others

The order permitted NSE to participate in the proceedings, holding that the exchange’s involvement is necessary to place the “true and correct facts” before the court

MUMBAI: A special court for cases under the Anti-Corruption Bureau (ACB) has allowed the National Stock Exchange (NSE) to intervene in proceedings against the former chairperson of the Securities and Exchange Board of India (Sebi), Madhabi Puri Buch, other Sebi officials and NSE functionaries.

Mumbai, India - December 20, 2022: Securities and Exchange Board of India (SEBI) chairperson, Madhabi Puri Buch during a press conference at SEBI Head Office, BKC, in Mumbai, India, on Tuesday, December 20, 2022. (Photo by Vijay Bate/HT Photo) (HT PHOTO)

The order, passed by Special Judge Abhijeet A Nandgaonkar, permitted NSE to participate in the proceedings, holding that the exchange’s involvement is necessary to place the “true and correct facts” before the court.

The proceedings arise from a complaint filed by Dombivali resident Sapan Shrivastava, who has named as respondents several senior individuals associated with market regulation and governance, including Buch, other SEBI officials, stock exchange executives and government functionaries. The charges relate to alleged stock market fraud and regulatory violations linked to the listing of a company in 1994.

NSE, which is impleaded as a party in the complaint, had sought permission to intervene on the ground that it is necessary to place relevant facts and documents on record and to contest what it described as the complainant’s contentions.

Allowing the intervention application filed by NSE, the court observed that it was “necessary to permit the applicant/intervenor to place itself before this Hon’ble Court and to address the Court in order to bring on record the true and correct facts pertaining to the complaint.” The judge added that permitting NSE to participate and argue the application would be “essential for the ends of justice”.

The court invoked Section 302 of the Code of Criminal Procedure, 1973, corresponding to Section 339 of the Bharatiya Nagarik Suraksha Sanhita, 2023, which empowers a criminal court to allow any person to conduct or assist the prosecution where such participation is required in the interest of justice. Recording that such permission could be granted “to place the true facts before the Court”, the judge held that NSE “deserves to be permitted to intervene” in the pending proceedings.

Accordingly, the court allowed the application and directed that the exchange would be entitled to “file the necessary documents and to address arguments, either through or on their behalf, through their learned advocate” in the matter.

The special court recorded that notice of the intervention application had been issued to the complainant and to the state. While the additional public prosecutor left the matter to the court’s discretion, the complainant did not appear despite being served notice by email, nor was any response filed on his behalf.

The complaint forms part of proceedings that had earlier resulted in an ACB court directing the registration of an FIR against five persons, including Buch, on allegations raised by Shrivastava. That order has since been challenged before the Bombay High Court, where the issue remains pending consideration.