Delhi High Court Declines Chaubara Eats' Plea Against SEBI Order, Says SAT Remedy Available

The Delhi High Court has declined to examine Chaubara Eats Private Limited's challenge to an interim order passed by the Securities and Exchange Board of India (SEBI), holding that the company can approach the Securities Appellate Tribunal (SAT) against the order.

Justice Amit Mahajan was considering a petition filed by Chaubara Eats challenging the order dated September 16, 2026 passed by SEBI, by which various interim directions were issued against the company and other noticees, including the impounding of specified amounts in bank accounts and restrictions on access to the securities market.

By the impugned order, SEBI directed the noticees to have specified amounts impounded in their bank accounts and create fixed deposits with a lien in favour of SEBI. The order also restrained the noticees from accessing the securities market and imposed restrictions on debits from their bank and demat accounts, transfer or redemption of securities, and alienation of their assets. The noticees were also directed to furnish details of their assets, investments and accounts to SEBI.

In the case of Chaubara Eats, the amount sought to be impounded was ₹6.05 crore.

Before the High Court, Chaubara Eats contended that the order was passed ex parte, without giving it an opportunity to rebut the allegations, and that the figures relied upon by SEBI were not supported by the record.

It further argued that while SEBI had considered the profits allegedly earned by Chaubara Eats, it had failed to note the losses suffered by it, and created a huge amount of money as lien.

The company also challenged the restrictions imposed on its bank accounts, arguing that once SEBI had created a lien for the specified amount, it could not additionally prevent further debits and transactions beyond the amount sought to be impounded.

SEBI, however, contended that Chaubara Eats had an alternative remedy of approaching the SAT under Section 15T of the SEBI Act.

Though the Court observed that the company's argument “at the first blush appears to be attractive,” it noted that the company had an efficacious remedy before the SAT. The Court therefore refrained from passing any order or recording any prima facie finding on the issue.

The Court similarly declined to examine the company's contention that the SEBI order had been passed without due application of mind. Justice Mahajan observed that the company could raise all its contentions before the Appellate Tribunal.

Accordingly, the Court disposed of the petition, granting liberty to Chaubara Eats to approach the appropriate forum.

For Petitioner: Advocates Mukesh M Goel and Sagar Sharma

For Respondent: Senior Advocate Pratap Venugopal and Advocates Ashish Raghuvandhi, Anshit Aggarwal, Soutriky Chakravarty, Ishan Agrawal, Ashutosh Mishra and Gandharv Garg