Delhi HC dismisses Chaubara Eats plea challenging SEBI order in cross-segment price manipulation case

New business data points to the fact that The Delhi High Court on Wednesday dismissed a petition filed by Chaubara Eats challenging a September 16 interim order by the Securities and Exchange Board of India (SEBI) in a cross-segment price manipulation case, sources familiar with the proceedings told Moneycontrol.

SEBI had strongly opposed the petition, arguing that Chaubara Eats had an alternative remedy available. After hearing arguments from both sides, the court dismissed the petition on grounds relating to maintainability and jurisdiction. The dismissal means the High Court did not examine the allegations in SEBI’s interim order on their merits. What is the SEBI case?

In its September 16 interim order, SEBI barred Prrsaar Sampada, Chaubara Eats and four individuals from accessing the securities market and directed the impounding of alleged wrongful upside totalling Rs 28.12 crore.

Of this amount, SEBI attributed Rs 22.06 crore to Prrsaar Sampada and its directors, while Rs 6.06 crore was attributed to Chaubara Eats and its directors. The regulator stated the findings in the interim order were prima facie and that a detailed investigation was required.

According to SEBI’s allegations, the entities used a cross-segment trading strategy involving single-stock futures and options. The regulator alleged that trades in the futures segment were used to influence prices, with the resulting price movement helping generate upside in the options segment.

SEBI described the strategy as involving deceptive orders and possible coordinated or synchronised trading. It additionally alleged that after the National Stock Exchange (NSE) boosted questions over Prrsaar Sampada’s trading activity in February and March 2026, similar activity subsequently shifted to related entity Chaubara Eats.

The order covers alleged trading activity in derivatives and related cash-market activity.

SEBI Whole-Time Member Kamlesh Chandra Varshney, in the interim order, directed the noticees to deposit the alleged wrongful upside in set deposits with a lien marked in favour of the regulator and restrained them from accessing the securities markets.

Chaubara Eats subsequently approached the Delhi High Court challenging SEBI’s action. The court’s September 23 decision has now dismissed that challenge on maintainability and jurisdiction grounds.