CRB Mutual Fund Case: Supreme Court Rejects Former Director's Plea Against Forensic Audit Order

The Supreme Court recently refused to interfere with a Delhi High Court order directing a forensic audit and SEBI supervision of the winding up of the CRB Mutual Fund, dismissing a special leave petition filed by C.R. Bhansali, a former director of CRB Capital Markets Ltd., in the long-running proceedings arising from securities and mutual fund irregularities of the 1990s.

A bench of Justices J.B. Pardiwala and K.V. Viswanathan said: “Having heard the learned counsel appearing for the parties and having gone through the materials available on record, we do not find any good ground to interfere with the impugned order passed by the High Court.”

The case concerns the affairs of CRB Capital Markets Ltd. and its mutual fund scheme. SEBI had stepped in in the late 1990s after detecting regulatory violations in the functioning of the fund and its asset management structure.

In 2013, the Delhi High Court constituted a three-member Special Committee to function as trustees and wind up the Arihant Mangal Scheme under the SEBI (Mutual Fund) Regulations, 1996.

Over the years, recoveries were made and disbursements carried out. However, disputes later arose over payments allegedly made to entities linked to the CRB Group and Bhansali.

An earlier order passed in 1999 had barred CRB Group companies and persons linked to Bhansali from receiving premature repayments under a court-approved scheme.

On September 1, 2025, a single judge directed a forensic audit, stopped any further payments to CRB-linked entities and handed over the winding-up process to a special cell of SEBI.

In January 2026, a Division Bench affirmed those directions and ruled that the 1999 exclusion order was still in force.

Bhansali challenged that ruling before the Supreme Court. The Court found no ground to interfere and dismissed the petition

Click Here To Read/Download Delhi HC Judgment