The High Court also stated that if SEBI finds any omission with a connivance, then only it can proceed by giving directions.
However, the high court on Aug 26 has directed SEBI not to proceed with its inquiry against the audit firm for a period of four weeks.
The court also ordered SEBI that if the regulatory body wishes to pass a final order against the audit firm, it must first determine whether it has jurisdiction against chartered accountants.
Price Waterhouse had filed a writ petition before the Bombay high court seeking to quash the showcause notice issued by SEBI and it may also file an appeal before the Supreme Court soon.
Price Waterhouse, which is the Indian arm of Price Waterhouse Coopers (PWC), was accused under the criminal conspiracy case related with the Satyam fraud scam in 2009.