The special court had issued the order following allegations of stock market fraud and regulatory violations, but the High Court noted that the order was issued “mechanically, without proper examination of the details or assigning specific roles to the accused”.

Justice Shivkumar Dige, in his ruling, pointed out that the special court's decision on March 1 did not “delve into the specifics of the case or identify clear wrongdoing by the accused”.

The High Court's ruling came after petitions were filed by Buch and other officials involved, including three current SEBI directors -- Ashwani Bhatia, Ananth Narayan G, and Kamlesh Chandra Varshney -- and two BSE officials -- Managing Director and CEO Ramamurthy and former Chairman Pramod Agarwal.

The petitioners argued that the special court’s order was both illegal and arbitrary and sought to have it quashed.

SEBI, in its statement, had criticised the application filed in the ACB Court, referring to it as frivolous and highlighting that the officials involved were not in their respective positions at the time of the alleged incidents.

SEBI further claimed that the application was made by a “habitual litigant and emphasised that the ACB Court’s order did not allow them to present their side of the story”.

The court believed there was prima facie evidence pointing to regulatory lapses and possible collusion, and it ordered an impartial inquiry to take place under the supervision of the court.

In response, the Bombay High Court has temporarily stayed the special court's order, allowing more time to examine the matter before further legal action is taken.