A division bench comprising acting Chief Justice Mahinder Narain and Justice Mukul Mudgal directed the respondents to file their reply by November 30, the next date of hearing in the matter.

The application filed by Arun Kumar Aggarwal challenged the continuance of D R Mehta as Sebi chairman despite the expiry of his three-year tenure on February 20 this year. Prashant Bhushan, counsel for the petitioner, contended that the continuance of Mehta as chairman of the Securities & Exchange Board of India was illegal and contrary to the Sebi (terms and conditions of services of chairman and members) rules 1992 made under the Sebi Act.

The application also asked for disclosure and making accessible all reports and quasi-judicial orders of the Securities & Exchange Board of India asthe board had been unreasonably and illegally withholding them in contravention of the fundamental rights of citizens guaranteed under Article 19 (1) (a) of the Constitution. In view of these facts, the application says it will be in public interest that Mehta is restrained from continuing in his post.

The court also admitted the petition of Aggarwal, claiming to be an expert in financial matters, seeking an order to the cabinet secretary not to reappoint Mehta as the chairman of the Securities & Exchange Board of India in view of his failure to protect the interests of investors. Bhushan urged the court to issue a writ declaring that Mehta was illegally holding office and also sought a high-level independent investigation into the working of the Securities & Exchange Board of India.

The contention of Mehta that his initial letter of appointment issued by the government was for a longer duration than that provided for in the rules and, hence, overrides the provisions of the Securities & Exchange Board ofIndia rules was not correct as the government does not have the authority to override the rules approved by Parliament, Bhushan argued.