MUMBAI: The Bombay High Court on Friday quashed a police FIR against Viresh Gangaram Joshi, the former chief dealer at Axis Mutual Fund, in a case alleging that he and his associates defrauded 6.6 million investors of ₹ 2.52 lakh crore through a “front-running” racket involving the mutual fund’s trades.
The court found that the police FIR was not the legally prescribed route for prosecuting an alleged SEBI Act offence. The matter had to be taken to SEBI first. The state government and Enforcement Directorate (ED) opposed the plea. The ED has been investigating the money-laundering aspect of the case on the basis of the Sion police FIR. It argued that there was sufficient material to show that Joshi and others had also committed offences under the Indian Penal Code. The court also allowed Axis Mutual Fund, whose complaint to the police had been merged with the Sion police FIR, to approach SEBI and lodge an appropriate complaint against its former chief dealer.
His counsel argued that Parmar should have approached SEBI and that, since the SEBI Act is a special law governing securities-market offences, its prescribed procedure had to be followed. Under Section 26 of the Act, a court cannot take cognisance of an offence under the Act unless there is a complaint by SEBI or an officer authorised by it. Joshi approached the high court seeking quashing of the FIR, arguing that Section 26 of the SEBI Act bars prosecution of offences under the Act except on a complaint by SEBI or its authorised officer.
A single-judge bench of justice Ranjitsinha Raja Bhosale held that the allegations in the FIR primarily concerned “front-running”, an offence covered by the SEBI Act.
Because of a legal bar under the Securities and Exchange Board of India (SEBI) Act, 1992, the court did so not by holding that the allegations against Joshi were false or that he had been cleared of wrongdoing, but.
SEBI’s final order in July 2026 barred Joshi from the securities market for seven years, imposed a ₹ 3 crore penalty on him and ordered disgorgement of the unlawful gains, while also taking action against other entities in the case. The high court’s order comes against the backdrop of parallel regulatory and money-laundering proceedings against Joshi. SEBI’s investigation had alleged that Joshi passed confidential information about Axis Mutual Fund’s impending trades to associates, who traded ahead of the fund’s orders to profit from the resulting price movement.
