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SEBI denied Information relating to the investigation into short sale of shares of Reliance Petroleum Limited in 2007 claiming that appellant is overstating the public interest - CIC: Denial upheld; disclosure of information would impede the investigation

2 Mar, 2015

ORDER

1. The brief facts of the case are that Shri Arun Kumar Agrawal, the appellant, submitted an application dated 14.02.2013 to the Central Public Information Officer (CPIO) of the Securities and Exchange Board of India (SEBI) seeking certain information under the Right to Information Act, 2005 (the Act) on seven points including the investigation into short sale of shares of Reliance Petroleum Limited in 2007.

2. The CPIO vide his reply dated 15.03.2013 provided some information with respect to point nos. 1 to 3. With respect to points no. 4 to 7, the information sought for was denied being exempt under section 8(1)(h) Notwithstanding anything contained in this Act, there shall be no obligation to give any citizen, information which would impede the process of investigation or apprehension or prosecution of offenders; Notwithstanding anything contained in this Act, there shall be no obligation to give any citizen, information which would impede the process of investigation or apprehension or prosecution of offenders; Notwithstanding anything contained in this Act, there shall be no obligation to give any citizen, information which would impede the process of investigation or apprehension or prosecution of offenders; Notwithstanding anything contained in this Act, there shall be no obligation to give any citizen, information which would impede the process of investigation or apprehension or prosecution of offenders; Notwithstanding anything contained in this Act, there shall be no obligation to give any citizen, information which would impede the process of investigation or apprehension or prosecution of offenders; of the Act as quasi-judicial proceedings were pending based on the investigation report in the matter.

3. The appellant’s first appeal dated 22.03.2013 was disposed of by order dated 25.04.2013. Regarding point nos. 1 and 3 of the RTI application the appellate authority directed the CPIO to re-examine the reply given. Regarding points no. 4 to 7, the decision of the CPIO was upheld as the requested information was exempt under section 8(1)(h) Notwithstanding anything contained in this Act, there shall be no obligation to give any citizen, information which would impede the process of investigation or apprehension or prosecution of offenders; Notwithstanding anything contained in this Act, there shall be no obligation to give any citizen, information which would impede the process of investigation or apprehension or prosecution of offenders; Notwithstanding anything contained in this Act, there shall be no obligation to give any citizen, information which would impede the process of investigation or apprehension or prosecution of offenders; Notwithstanding anything contained in this Act, there shall be no obligation to give any citizen, information which would impede the process of investigation or apprehension or prosecution of offenders; Notwithstanding anything contained in this Act, there shall be no obligation to give any citizen, information which would impede the process of investigation or apprehension or prosecution of offenders; of the Act.

4. In his second appeal dated 08.05.2013 the appellant has stated that the first appellate authority has upheld the decision of the CPIO to deny the information regarding points 4 to 7 without application of mind. The appellate authority has not addressed the issue of public interest in not disclosing the requisite information. He has requested that the SEBI be directed to provide the requested information.

5. During the hearing, the appellant submitted that –

(i) he was mainly challenging the reply of the CPIO pertaining to points 4 to 7 of his RTI request;

(ii) the SEBI had carried out the investigation in the short sale of shares by the Reliance Petroleum Ltd in 2007 and the investigation is complete;

(iii) the SEBI is wrongly stating that quasi-judicial proceedings are under way in the matter. The information asked for has nothing to do with the quasi-judicial proceedings which may be pending. The information sought as to whether any attempt has been made by the authority to fix accountability under the Indian Penal Code for cheating the investors, therefore, section 8(1)(h) Notwithstanding anything contained in this Act, there shall be no obligation to give any citizen, information which would impede the process of investigation or apprehension or prosecution of offenders; Notwithstanding anything contained in this Act, there shall be no obligation to give any citizen, information which would impede the process of investigation or apprehension or prosecution of offenders; Notwithstanding anything contained in this Act, there shall be no obligation to give any citizen, information which would impede the process of investigation or apprehension or prosecution of offenders; Notwithstanding anything contained in this Act, there shall be no obligation to give any citizen, information which would impede the process of investigation or apprehension or prosecution of offenders; Notwithstanding anything contained in this Act, there shall be no obligation to give any citizen, information which would impede the process of investigation or apprehension or prosecution of offenders; does not apply; and

(iv) the respondent never addressed the public interest argument of the appellant;

6. Shri Aman Jain, representative of SEBI submitted that –

(a) he is relying upon the reply of the CPIO and the order of the first appellate authority. All the relevant information which may be disclosed at this stage has been already provided to the appellant;

(b) the investigation in the matter cannot be said to be complete or over as it is still to reach a finality. Points 4 to 7 of the RTI request are all related to the investigation, which will be concluded only after the final order is passed by the competent authority;

(c) the information required in this case is similar to that mentioned in his RTI application dated 14.09.2011 to the SEBI, which is the subject matter of the appeal no. CIC/SM/A/2012/000196 filed by the appellant. That appeal was pending before a full bench of this Commission; and (d) it is not a case of larger public interest so as to attract section 8(2) Notwithstanding anything in the Official Secrets Act, 1923 (19 of 1923) nor any of the exemptions permissible in accordance with sub-section (1), a public authority may allow access to information, if public interest in disclosure outweighs the harm to the protected interests. Notwithstanding anything in the Official Secrets Act, 1923 (19 of 1923) nor any of the exemptions permissible in accordance with sub-section (1), a public authority may allow access to information, if public interest in disclosure outweighs the harm to the protected interests. of the Act;

Discussion:

7. The submissions made by the parties during the hearing have been taken into account along with the contents of the appeal and the written submissions of the parties.

8. In short, the case of the appellant is that no investigation by SEBI in the matter is pending. Even if some investigation is pending, the requested information should be disclosed in public interest as the investors have become the victims on account of the insider trading by the RIL. He is relying upon the decision of the High Court of Delhi in W.P. no. 7848/2012 – RIL vs CIC, decisions of this Commission in case no.CIC/AT/A/2010/000694 – Arun Kumar Agrawal vs SEBI and in case no. CIC/AT/A/ 2007/007/00234 – K.S. Prasad vs SEBI.

9. The case of the SEBI, in short, is that the matter in the present case is similar to the case no.CIC/SM/A/2012/000196 which was pending before the full bench of this Commission. As the investigation process in this matter is under way, the information cannot be disclosed at this stage being exempt under section 8(1)(h) Notwithstanding anything contained in this Act, there shall be no obligation to give any citizen, information which would impede the process of investigation or apprehension or prosecution of offenders; Notwithstanding anything contained in this Act, there shall be no obligation to give any citizen, information which would impede the process of investigation or apprehension or prosecution of offenders; Notwithstanding anything contained in this Act, there shall be no obligation to give any citizen, information which would impede the process of investigation or apprehension or prosecution of offenders; Notwithstanding anything contained in this Act, there shall be no obligation to give any citizen, information which would impede the process of investigation or apprehension or prosecution of offenders; Notwithstanding anything contained in this Act, there shall be no obligation to give any citizen, information which would impede the process of investigation or apprehension or prosecution of offenders; of the RTI Act. He relies upon, inter alia, on the orders of this Commission in case no.CIC/DS/A/2013/000138/MP – Narendra Bansal vs Oriental Insurance Co. Ltd and CIC/AT/A/2007/00234 - K.S.Prasad vs Amarjit Singh, CPIO, SEBI. It is not a case covered by section 8(2) Notwithstanding anything in the Official Secrets Act, 1923 (19 of 1923) nor any of the exemptions permissible in accordance with sub-section (1), a public authority may allow access to information, if public interest in disclosure outweighs the harm to the protected interests. Notwithstanding anything in the Official Secrets Act, 1923 (19 of 1923) nor any of the exemptions permissible in accordance with sub-section (1), a public authority may allow access to information, if public interest in disclosure outweighs the harm to the protected interests. of the RTI Act.

10. During one of the hearings in case no. CIC/SM/A/ 2012/000196 before the full bench, the appellant (through video conferencing) asked for a decision in the present case to which he was informed that the matter would be decided after the case before the full bench was decided.

11. To decide this case, it is necessary to deal with the contention of the parties as to whether any investigation of short sale of shares undertaken by the SEBI involving the RIL is pending. In case the investigation is pending and as to whether the requested information may be disclosed in larger public interest.

12. In the decision dated 10.7.2007 in appeal no. CIC/AT/A/2007/0007, 10 & 11 (Shankar Sharma & Others Vs. DGIT), this Commission observed that the term ‘investigation’ used in section 8(1)(h) Notwithstanding anything contained in this Act, there shall be no obligation to give any citizen, information which would impede the process of investigation or apprehension or prosecution of offenders; Notwithstanding anything contained in this Act, there shall be no obligation to give any citizen, information which would impede the process of investigation or apprehension or prosecution of offenders; Notwithstanding anything contained in this Act, there shall be no obligation to give any citizen, information which would impede the process of investigation or apprehension or prosecution of offenders; Notwithstanding anything contained in this Act, there shall be no obligation to give any citizen, information which would impede the process of investigation or apprehension or prosecution of offenders; Notwithstanding anything contained in this Act, there shall be no obligation to give any citizen, information which would impede the process of investigation or apprehension or prosecution of offenders; of the Act should be interpreted broadly and liberally and that no investigation could be said to be complete unless it has reached a point where the final decision on the basis of that decision is taken. This Commission In CIC/AT/A/2007/007/00234 – K.S. Prasad vs SEBI, observed that “…as soon as an investigation or an enquiry by a subordinate Enquiry Officer in Civil and Administrative matters comes to an end and, the investigation report is submitted to a higher authority, it cannot be said to be the end of investigation. ... which can be truly said to be concluded only with the decision by the competent authority.”

13. It is admitted by both the parties that the SEBI has issued a fresh show cause notice to the RIL and the proceedings are currently continuing. Final orders are yet to be passed by the competent authority under the SEBI Act. Therefore, the process of investigation against the RIL is still pending before SEBI. Hence, the information being sought falls under exemption under section 8(1) (h) of the Act.

14. The appellant argued on the dimensions of public interest overriding the protected interest. However, the SEBI argued that the appellant is overstating the public interest without taking into account that the investigation is still going on and is yet to be concluded. Therefore, this Commission may have to await the completion of the investigation by the SEBI. It ought to be mentioned here that the disclosure of information at this stage would impede the process of investigation. Hence, it may not be in the public interest at this stage. This Commission does not find any reason to take a different view than the view taken by the full bench of this Commission in order dated 28.11.2014 in case no. CIC/SM/A/2012/000196.

15. In the light of the above discussion and in the circumstances of the case, this Commission is of the view that the process of investigation against the RIL initiated by the SEBI is still continuing. Therefore, the disclosure of the information being asked for at this stage would impede the said process and defeat the purpose of the exemption granted to such information. No concrete and tangible case of public interest has been made out by the appellant which may be described as overriding the protected interests at this stage.

Decision:

16. In view of above, we are not inclined to allow the disclosure of the requested information. The appeal is disposed of.

(Manjula Prasher)

Information Commissioner

Citation: Shri Arun Kumar Agrawal v. Securities and Exchange Board of India (SEBI) in F.No.CIC/SM/A/2013/000834/MP

SEBI denied Information relating to the investigation into short sale of shares of Reliance Petroleum Limited in 2007 claiming that appellant is overstating the public interest - CIC: Denial upheld; disclosure of information would impede the investigation

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