Mumbai: The supreme court has declined to vacate a stay granted by the Delhi high court on criminal proceedings initiated by CBI against CRB Capital Markets, for allegedly duping 1.35 lakh small investors and several financial institutions of Rs1,200 crore in the 1990s.

A bench of the supreme court headed by Justice Ashok Bhan dismissed CBI`s plea on the ground that the agency failed to appeal against the high court order in time.

The Delhi high court had not only stayed the criminal proceedings, but had also approved the revival scheme of CRB Capital Markets in January last year. The high court had appointed a retired judge Justice C M Nayyar as an administrator for CRB. It had also directed RBI to defreeze all accounts of the company, its group firms and ex-directors.

CBI submitted that criminal charges filed under the Prevention of Corruption Act, 1988 were pending before the special judge, Mumbai, and the stay was beyond the jurisdiction of the high court.

CBI, on the basis of complaints, had registered various cases against CRB chairman Chain Roop Bhansali, State Bank of India (SBI) officials and others for duping Bank of Baroda and SBI of Rs3.43 crore and Rs57 crore, respectively, in 1997.

CRB, the CBI said, had issued warrants for huge amounts from these banks favouring its own associates who were ineligible for such fixed repayment and brokerage payments. These warrants were later encashed from SBI and BoB branches across the country, causing undue loss to the banks, it added.

Bhansali had floated the company in May 1985, and converted it into a non-banking financial company in October 1996. The CBI had registered cases against all the accused under Indian Penal Code and Prevention of Corruption Act.

The supreme court had also last month allowed transfer of a trust petition filed by market regulator Sebi against CRB Capital Markets from the Bombay high court to the Delhi high court which is hearing various petitions, including an appeal by RBI against the revival scheme of CRB Capital Markets.

Sebi had moved the Bombay high court alleging violations by CRB Mutual Fund - Arihant Manglam (Growth Scheme) - which had allegedly raised around Rs229 crore. Sebi had noted various deficiencies in the records of CRB Capital Markets and its group companies CRB Trustee and CRB Asset Management Company.