The Delhi High Court on Wednesday set aside a November 6 order passed by the Chief Information Commission (CIC) directing capital market regulator Securities and Exchange Board of India (Sebi) to disclose information in the 2007 Reliance Industries Ltd (RIL) insider trading case.
The order was set aside on the grounds that the CIC did not give RIL an opportunity to present its case before passing the impugned order. The court remanded the case back to the commission directing it to issue notices to both RIL and petitioner Arun Agarwal.
At the request of Agarwal’s petitioner, the court also clarified that it is not taking any call on the merits of the order and the decision to set aside the order is only on the grounds that an opportunity was not given to RIL.
The move is a shot in the arm for RIL, which had last week sought to defer proceedings in the Bombay High Court on the same matter citing on Wednesday’s hearing in the Delhi High Court.
RIL counsel Abhishek Manu Singhvi, said the CIC order ignored several key issues and that the company was not given an opportunity to be heard and this was against the principles of natural justice.
The impugned order was passed by the CIC on an appeal by Bangalore-based lawyer Arun Agarwal under the Right to Information Act. Agarwal had sought from Sebi details including the investigation reports and identities of entities that helped RIL offload over four per cent stake in subsidiary Reliance Petroleum in November 2007. While Sebi had refused to share the details saying the investigations were not complete, CIC had directed it to disclose the details saying it was in ‘public interest’.
Explaining the rationale for this decision, CIC had said: “If as a regulator, the Sebi took cognisance of allegations of any breach of law, rules or regulations by one or more entities for unlawful private gain, the information generated in the process of its investigation needs to be disclosed in the public domain. Such disclosure would keep the general public informed and educated about the risks they may confront in making investments in the market. It would also prevent many entities from adopting shortcuts to make profit through unlawful means.”
While RIL had got a stay on the order in the Delhi High Court in the matter, Sebi had challenged the order in the Bombay High Court. RIL was made a party in the latter case also. On RIL’s request, the Bombay High Court had agreed to postpone the hearing till the Delhi High Court decision. However, earlier this month, Sebi by its own will put out the names of 12 entities that helped RIL in the 2007 RPL transaction.
