Share acquisition case: Let RIL access documents, Supreme Court tells Sebi

'Regulator has a duty to act fairly', says apex court in order that gives relief to the company

The Supreme Court on Friday asked the Securities and Exchange Board of India (Sebi) to give Reliance Industries Ltd access to documents used to investigate a share acquisition matter, saying it was the “duty of the regulator to act fairly”.

Reliance had moved the apex court after the Bombay High Court rejected its petition to get access to the documents Sebi relied upon to charge that there were irregularities when the company bought its own shares between 1994 and 2000.

“Sebi as a regulator has a duty to act fairly. It is not to circumvent the rule of law and has to show fairness. We direct Sebi to furnish the document sought by RIL [Reliance],” said the apex court on Friday morning.

The court, earlier this year, had advised the regulator to give Reliance access to the documents but did not issue an order. 

Sebi had termed these documents as ‘privileged information’.

The court in May told Sebi that the document must be in favour of the company, or else Reliance would not have asked about it. Sebi should give the copy to the accused, the court said. It observed that once a document is relied upon by the prosecutor, the defendant has a right to its access for a fair trial.

Chartered accountant S Gurumurthy filed a complaint against Reliance in 2002, alleging irregularities in its associate companies, its promoters, including Mukesh Ambani and his wife, Nita; and 100 others in the issue of two preferential placement of non-convertible debentures in 1994.

Acting on the complaint, Sebi moved a lower court in Mumbai in 2020 to initiate prosecution against the company. The court rejected the plea saying there was a delay of 18 years in acting on the complaint and was time-barred.

Reliance then filed a plea in the Bombay High Court and requested Sebi to furnish documents regarding the investigation. The High Court rejected the plea and Reliance approached the apex court.

Kirti Dua, partner at ANG Partners, said according to the Supreme Court, the documents of Sebi are not covered under the Indian Evidence Act. “Reliance said these documents were implicating in nature so they should have access to it and now the apex court has allowed it,” she says.