Bombay High Court tells RIL to explain in CIC case

Last Updated: Thu, Dec 20, 2012 20:20 hrs

The high court here today directed Reliance Industries Ltd (RIL) to explain its position in the case between the Securities and Exchange Board of India (Sebi) and the Central Information Commission (CIC), which directed the securities market regulator to make public all details of the insider trading case involving the company. Sebi had moved the court against the CIC order.

The court maintained its position that it was bound to give Mukesh Ambani's RIL a hearing. The bench of judges D Y Chandrachud and A A Sayed asked Reliance to file its reply before January 14, while adjourning the next hearing to January 23.

Reliance will have to state why the information sought by an activist under the Right to Information (RTI) law involving the company was not in the public interest, said legal experts.

  • 2007: RIL allegedly indulges in insider trading in Reliance Petroleum shares
  • 2008: Sebi begins probe in the matter 
  • 2010: Sebi initiates quasi-judicial proceedings against RIL
  • Nov 6, 2012: CIC asks Sebi to disclose details of the case, following RTI appeal by Arun Agrawal
  • Nov 24: Sebi appeals in Bombay HC against CIC's order
  • Dec 4: Bombay HC says make RIL party to the case; adjourns case to December 19
  • Dec 20: Bombay HC directs RIL to reply before January 14; adjourns case to January 23

There is a provision under the RTI Act that any information which is a trade secret or a commercial confidence can be held back if it is not in the public interest to disclose. The case dates back to 2007, when Reliance Industries had allegedly sold a stake in Reliance Petroleum in 2007 in the futures market and covered it in the cash market, to prevent a slide in the stock price.

Last month, CIC chief Satyananda Mishra directed Sebi to disclose the information sought in the 2007 case. It was based on an appeal by a Bangalore-based lawyer and RTI activist, Arun Agrawal. He sought information from Sebi on the consent order proceedings and identities of the entities involved in the alleged insider trading case.

Sebi’s Chief Public Information Officer (CPIO) had earlier refused to share these details with Agarwal, on the grounds that investigations and quasi-judicial proceedings were pending.

“The CIC has directed Sebi to disclose information which Reliance has kept with us (Sebi). The court is saying before that can happen, shouldn’t Reliance, which will be affected by the disclosure, be given an opportunity to explain why it shouldn’t be disclosed? Ultimately, it’s the question of public interest,” said Jamshed Cama, a senior counsel who appeared for Sebi.

The high court in Delhi has already stayed the CIC’s order, in a petition filed by Reliance on the ground that the company should be given the chance of a hearing.

Agrawal, who was appearing in person, said the disclosures sought by him were completely in the public interest, as it will keep the general public informed and educated about the risks they might confront while investing in the market.

The court today again asked the Sebi counsel on whether it could disclose the information on identities and notings of the consent circular in the case. To this, the Sebi counsel said it could give the foundation for the decision but would not like to disclose the names of the people who formulated it.

The Sebi lawyer said an investigation report had been prepared in this case and a wholetime member at the board was likely to initiate adjudication proceedings in the matter.

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