Would the RBI provide information about the loan defaulters and inspection reports?

Reserve Bank of India v. Jayantilal N. Mistry & Anr dated 28.04.2021

For more than 4 years, the Supreme Court judgment in Jayantilal N Mistry v. RBI dated 16.12.2021 is waiting for the day when it would be implemented to usher in an era of transparency in the financial institutions of the country. The hope has been rekindled with the dismissal of the recall application pending with the Supreme Court.

Background of the Case

The information sought was not given by the Reserve Bank of India (RBI) on the ground that such information is exempted from disclosure under Section 8(1)(a), Section 8(1)(d) Notwithstanding anything contained in this Act, there shall be no obligation to give any citizen, information including commercial confidence, trade secrets or intellectual property, the disclosure of which would harm the competitive position of a third party, unless the competent authority is satisfied that larger public interest warrants the disclosure of such information; and Section 8(1)(e) Notwithstanding anything contained in this Act, there shall be no obligation to give any citizen, information available to a person in his fiduciary relationship, unless the competent authority is satisfied that the larger public interest warrants the disclosure of such information; of the RTI Act. Writ Petitions filed in the High Courts were transferred on the request of the RBI to this Court. By a judgment dated 16.12.2015 in Reserve Bank of India v. Jayantilal N. Mistry, the Supreme Court refused to accept the contention of the RBI that the information sought could not be disclosed in view of its fiduciary relationship with the banks. The Court observed that RBI is not in any fiduciary relationship with the banks and that the RBI has a statutory duty to uphold the interest of public at large, the depositors, country’s economy and the banking sector. The Court opined that the RBI has to act with transparency and not hide information that might embarrass the banks and that it is duty bound to comply with the provisions of the Act and disclose the information sought. (Readers may like to refer to our article on the judgment at the link http://www.rtifoundationofindia.com/rbi-does-not-have-fiduciary-relationship-banks-whi#.YIpRWbUzbIX )

Further Legal proceedings

Contempt Petitions were filed complaining of wilful disobedience of the directions issued by the Supreme Court. The disclosure policy of RBI dated 30.11.2016 which was contrary to the directions issued by this Court was found to be in wilful disobedience of the judgment dated 16.12.2015. During the course of hearing of the Contempt Petition, it was brought to the notice of this Court that another disclosure policy was uploaded on the RBI website on 12.04.2019. Later on, the RBI deleted the said disclosure policy from its website. Exemptions in the disclosure policy of the RBI which were contrary to the directions issued by this Court were directed to be withdrawn by the RBI through a judgment dated 26.04.2019 in Girish Mittal v. Parvati V. Sundaram & Another. The Supreme Court observed that violation of the directions of the Court by RBI shall be viewed seriously.

M.A. No.2342 of 2019 was filed by HDFC Bank Limited and Others seeking impleadment in the transferred case and for recall of the judgment dated 16.12.2015 passed by this Court in Jayantilal N. Mistry. By an order dated 18.12.2019, the Supreme Court directed the RBI not to release inspection reports, risk assessment reports and annual financial inspection reports of the banks including the State Bank of India. Other private banks also followed HDFC Bank in filing miscellaneous applications for recall of the judgment of the Court in Jayantilal N. Mistry. The prayer in the Writ Petitions was to strike down the notices issued by the RBI seeking information from the banks relating to inspection reports, risk assessment reports and annual financial inspection reports. A further direction was sought to the RBI not to disclose confidential and sensitive information related to the banks.

The Court directed de-tagging of the Writ Petitions as they pertain to a challenge of notices issued by the RBI. The Court made it clear that all questions raised in the Writ Petitions are left open and the order passed in the miscellaneous applications will not have any bearing on the consideration of the Writ Petitions on their own merits.

Arguments by the Petitioners

1. The main contention of the Applicants for recall of the judgment is that the judgment has far reaching consequences and the applicants who are directly and substantially affected were not made parties and heard.
2. They relied upon the judgments of this Court in for recall of the judgment alleging the same is maintainable when there is violation of principles of natural justice.

• Budhia Swain & Ors. v. Gopinath Deb & Ors.
• Royal Paradise Hotel (P) Ltd. v. State of Haryana & Ors.
• Asit Kumar Kar v. State of W.B. & Ors. and
• Vishnu Agarwal v. State of U.P.& Anr.

3. The petitioner tried to distinguish a review from recall. It was argued that a review petition would require consideration of the matter on merits in case there is an error apparent on the face of record. Whereas, recall applications are entertained only in case the judgment is passed without jurisdiction or without an opportunity of hearing being given to the affected party.
4. The Court addressed a limited perspective and did not consider the important aspect of violation of the right to privacy which has been held to be an intrinsic part of the right to life and personal liberty under Article 21 of the Constitution of India in Justice K.S. Puttaswamy (Retd.) & Anr. v. Union of India & Ors.
5. The judgment is per incuriam as certain judgments of the Supreme Court have not been considered.

Arguments by the Respondents

1. It has been held in Delhi Administration v. Gurdip Singh Uban & Ors. that applications for recall are filed to avoid filing Review Petitions which are decided by way of circulation. It was held in the said judgment that such applications are not maintainable. Further, cases were referred to B.K. Pavithra and Others v. Union of India and Others, Saurabh Chaudri (Dr.)& Ors. v. Union of India & Ors. and Rashid Khan Pathan : In Re : Vijay Kurle and Others.
2. The judgment was delivered after hearing RBI and ICICI Bank. All the banks were aware of the hearing of the case but did not take any step to get themselves impleaded.
3. The Contempt Petition filed for non-implementation of the directions issued by the Supreme Court in Jayantilal N. Mistry judgment was against the RBI and the Applicants could not have been made parties to the Contempt Petitions.
4. It is in public interest that the information that was directed to be furnished under the RTI Act by the RBI is revealed.

Observations of the Supreme Court

1. An attempt was made to make submissions regarding the correctness of the judgment which was curtailed by the Court on the ground that arguments were being heard only regarding the maintainability of the applications for recall.
2. Order XLVII of the Supreme Court Rules, 2013 provides for the remedy of filing application for review. There is no provision in the Supreme Court Rules for filing any application for recall of the judgment of this Court.
3. In Delhi Administration v. Gurdip Singh Uban & Ors., the Court made it clear that applications filed for clarification, modification or recall are often only a camouflage for review petitions. It was held that such applications should not be entertained, except in extraordinary circumstances. While relying upon this judgment of this Court in Rashid Khan Pathan, the Court was of the opinion that filing applications which are not maintainable amounts to abuse of process of Court.
4. Petitions for recall were entertained when a person directly affected by the judgment was not heard. In the instant case, the dispute relates to information to be provided by the RBI under the Act. Though the information pertained to the banks, it was the decision of the RBI which was in challenge and decided by this Court. No effort was made by any of the applicants in the miscellaneous applications to get themselves impleaded when the transferred cases were being heard by this Court.
5. A close scrutiny of the applications for recall makes it clear that in substance, the applicants are seeking a review of the judgment in Jayantilal N.Mistry. The nomenclature given to an application is of absolutely no consequence - what is of importance is the substance of the application - M.C. Mehta v. Union of India.

Decision

1. These applications for recall are not maintainable.
2. The Court made it clear that we are not dealing with any of the submissions made on the correctness of the judgment of this Court in Jayantilal N. Mistry. The dismissal of these applications shall not prevent the applicants to pursue other remedies available to them in law.

Impact of the judgment

1. In the said judgment, this Court reiterated the importance of finality of a judgment and held that parties should not be permitted to file applications to reopen concluded judgments of the Court.
2. The RTI Act was enacted in 2005, almost 16 years ago and the original RTI application in the matter was filed by Mr. Jayantilal N. Mistry on 19.10.2010. It took more than 6 years for the RTI applicant to get a judgment favouring disclosure from the highest court of the land and the actual information still remains elusive till date. Despite a categorical order of the apex court that such information must be provided, RBI, a government institution which is supposed to uphold law, has not complied. There is a distinct possibility that many frauds could have been avoided had the disclosure been in place.
3. The Supreme Court has warded off the attempt by the banks and RBI to challenge the judgment of the court using the instrument of recall. Such endless delays mis-using the legal system are a cause of frustration for the citizen which is leading to erosion of faith in the system.
4. Going by the past conduct, it seems unlikely that the Banks would easily let go. One should closely watch for what new ways the Banks may attempt to delay disclosure of information. Would the Supreme Court allow itself to become a party to such unscrupulous elements?  

Citation: Reserve Bank of India v. Jayantilal N. Mistry & Anr in  M.A. No.2342 of 2019 In Transferred Case (Civil) No.91 of 2015 with M.A. No.805/2020 in T.C.(C) No. 91/2015 M.A. No.1870/2020 in T.C.(C) No. 91/2015 M.A. No.534/2020 in T.C.(C) No. 91/2015 M.A. No.1046/2020 in T.C.(C) No. 91/2015 M.A. No.1129/2020 in T.C.(C) No. 91/2015 M.A. No.1646/2020 in T.C.(C) No. 91/2015 M.A. No.1647/2020 in T.C.(C) No. 91/2015 M.A. No.1648/2020 in T.C.(C) No. 91/2015 M.A. No.2008/2020 in T.C.(C) No. 91/2015 M.A. No.560/2021 in T.C.(C) No. 91/2015 M.A. No.573/2021 in T.C.(C) No. 91/2015

For a reading of the Supreme Court judgment dated 28.04,2021, please refer to the link - http://rtifoundationofindia.com/files/infobeans-cms-next/upload/21.pdf

For a reading of the Supreme Court judgment dated 16.12.2019 , please refer to the link - http://rtifoundationofindia.com/files/infobeans-cms-next/upload/20.pdf