Mr Justice D. D. Sinha of the Bombay High Court, one of the judges on the Division Bench hearing audit firm Price Waterhouse’s petition against Securities and Exchange Board of India, recused himself from hearing the case on Friday, without assigning any reason.
Today was the fourth day of the hearing of the petition for admission; the plea was filed last week. A counsel appearing for one of the parties said that when the case was called in the afternoon, the judge said the ‘the matter is not before this Bench’, meaning the Bench cannot hear the case. The case will now have to be heard by another Bench, counsel said.
“We are surprised that the judge recused himself without giving any reason after hearing the matter for four days,” a lawyer arguing for one of the parties said.
Price Waterhouse had filed the petition last week challenging SEBI’s jurisdiction to investigate its role in the multi-crore- rupee Satyam fraud. Its contention is that audit firms are not regulated by SEBI. They are registered with the Institute of Chartered Accountants of India and are accountable to it for any professional lapses.
SEBI has been investigating the case for the past few months. In fact, it had issued a show cause notice to the audit firm and the hearing is still going on at SEBI.
Price Waterhouse moved the court seeking a stay on the SEBI proceedings. The parties were expecting a decision on the petition today, the lawyer said.
Since the judge has recused himself from hearing the case, the matter has to be heard by another Bench. This would further delay the admission of the case, he said.
If the case is admitted, it would delay the SEBI proceeding against the audit firm that had allegedly overlooked the accounting manipulations by Mr Ramalinga Raju, founder and Chairman of Satyam Computers.
Significantly, the next hearing of the case at SEBI is scheduled for July 21.