CentralInformationCommission,NewDelhi FileNo.

CIC/SM/A/2012/000196,1020,1062&1127 RighttoInformationAct2005UnderSection(19)

Dateofhearing Dateofdecision

: :

6November2012 6November2012

NameoftheAppellant

ShriArunKumarAgrawal, T8,EagletonGolfResort, 30KmBangaloreMysoreHighway Bidadi, BangaloreSouthDistrict,Bangalore 562109.

NameofthePublicAuthority

CPIO,SecuritiesandExchangeBoardof India,SEBIBhavan,PlotNo.C4A,G Block,KurlaComplex,Bandra(E), Mumbai400051.

TheAppellantwaspresentinperson. OnbehalfoftheRespondent,thefollowingwerepresent: (i) (ii) ShriG.Ramar,G.M. ShriAmanJain,A.G.M.

ChiefInformationCommissioner

ShriSatyanandaMishra

2. 3.

Boththepartieswerepresentandmadetheirsubmissions. InfourseparateRTIapplications,theAppellanthadsoughtavarietyof

information,namely,relatingtotheSEBIinvestigationintotheallegationsof insidertradingandshortsaleofsharesoftheReliancePetroleumin2007by

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theRelianceIndustriesLtdandalso.Hehadalsosought someinformation regardingtheconsentordercasesfiledbytheRelianceIndustriesLtdandother entities for offence under Prohibition of Fraudulent and Unfair Practices Regulations.Inonecase,hehadwantedtogetthecopiesoftheassetsand liabilitiesreturnsfiledbytheChairmanofSEBI.Inyetanothercase,hehad soughtthedetailsofalltheentitiesinvolvedintheshortsaleofshares.Inall thesecases,theCPIOhadnotdisclosedanyinformationbyclaimingthat(a) thequasijudicialproceedingswereinprogressand(b)thedesiredinformation wasexemptintermsofsubsection1(d),(h),(e),(g)and(j)ofsection8ofthe Right to Information (RTI) Act. The Appellate Authority had, by and large, endorsedthestandtakenbytheCPIO. 4. Duringthehearing,theAppellantsubmittedthattheinsidertradingby

the Reliance Industries Ltd had been widely reported in the press at the relevanttimeanditwasbelievedthatanillegalgainofmorethan500crore rupeeshadbeenmade.Therefore,hearguedthatgreaterpublicinterestwould warrantthedisclosureofthedesiredinformation.Hefurthersubmittedthatthe exemptionprovisionscitedbytheCPIOsimplydidnotapplytotheinformation hehadsought.Againstthedisclosureoftheinformationsoughtineachofthese fourRTIapplications,theRespondentreiteratedthefollowingargumentswhich theCPIOhadadvancedinhisorders:

i.Inrespectofthecopiesoftheinvestigationreportorthedetailsofthe consentorderproceedings,theCPIOhadheldthatthiscouldnotbe disclosedbeingpartofthequasijudicialproceedingsasthedisclosure ofsuchinformationwouldimpedetheprocessofinvestigationalready

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underway.Besides,thedisclosureofsuchinformationwhichisinthe nature of commercial confidence could also affect the competitive positionofthethirdparty;

ii.inregardtothedetailsabouttheidentityoftheentitiesinvolvedinthe shortsaleofthesharesoftheReliancePetroleumin2007,theCPIO hadadvancedsimilarargumentsasinthe previouscaseagainstthe disclosureoftheinformation; iii.ontheassetsandliabilitiesofthecurrentChairman,SEBIandhis monthly emoluments, the CPIO had invoked both the provisions containedinsubsection1(e)and(j)oftheRighttoInformation(RTI)Act, thatis,theinformationispersonalinnatureandalsoheldinafiduciary capacity; iv.finally,onthequestionofthedisclosureofthefilenotingandother relevantrecordsresultingintheissueofacertaincircularin2007laying downtheguidelinesfortheconsentordermechanism,theCPIO,while providing part of the information, had also invoked the provisions of subsection 1(g) and (j) of the RTI Act for denying the remaining information. 5. The issue concerning the firsttwo items is whethersuchinformation

shouldbedisclosedinpublicinterestornot.ItisanadmittedfactthattheSEBI had taken cognizance of certain allegations made regarding insider trading/shortsaleofsharesoftheReliancePetroleumin2007involvingthe Reliance Industries Ltd and had ordered investigation into these charges.
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Basedontheinvestigationreport,someproceedingshadalsobeeninitiated. Simultaneously, on the request of the party concerned, consent order proceedingshadbeeninitiated.Thematterhasbeenlyingforseveralyears nowpendingafinaldecisioninthematter.Severalentitieshavebeenidentified bytheSEBIwhowereinvolvedintheinsidertrading/shortsaleofsharesofthe ReliancePetroleumin2007.Thedetailsoftheseentitiesarestillnotinthe public domain. After carefully considering the facts of the case and the submissionsmadebeforeus,weareinclinedtoagreetothedemandofthe Appellant that the disclosureof this information wouldserve a largerpublic interest. If as a regulator, the SEBI took cognizance of allegations of any breachoflaw,rulesorregulationsbyoneormoreentitiesforunlawfulprivate gain,theinformationgeneratedintheprocessofitsinvestigationneedstobe disclosedinthepublicdomain.Suchdisclosurewouldkeepthegeneralpublic informed and educated about the risks they may confront in making investmentsinthemarket.Itwouldalsopreventmanyentitiesfromadopting shortcutstomakeprofitthroughunlawfulmeans.Theargumentthatattheend ofthequasijudicialproceedings,thechargedentitiesmaybefoundinnocent cannot be an argument against disclosing the information. This becomes especiallyimportantastheSEBIhasalsoinitiatedconsentordermechanismon the request of party involved and the breach and violations found in the investigationcould besettledthroughaconsent ordertherebynullifyingthe likelypenaltywhichwouldhavevisitedthepartyinvolvedattheendofthe quasijudicialproceedings. 6. The CPIO has invokedtheprovisions ofsubsection1 (d) and (h) of

section8oftheRTIActindenyingtheaboveinformation.Subsection1(d)

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clearlyprovidesthateveninformationinthenatureofcommercialconfidenceor trade secret or intellectual property could be disclosed if the larger public interestwarrantsthedisclosureofsuchinformation.Subsection1(h)isnot simply attracted in the case because the investigation is already over. Therefore,weareoftheviewthatthesetwoitemsofinformationshouldbe disclosed(a)inpublicinterestand(b)notbeingcoveredbyanyexemption provision.WedirecttheCPIOtoprovidethefirsttwoitemsofinformationtothe Appellantwithin10workingdaysofreceivingthisorder. 7. Theremainingtwoitemsofinformationrelatetothedisclosureofthe

assetsandliabilitiesoftheChairmanSEBIandthefilenotingleadingtothe issue of the particular circular in 2007 laying down the guidelines for the consentordermechanism.Ofthesetwoitemsofinformation,theinformation regardingtheassetsandliabilitiesoftheChairmanSEBIisclearlyinthenature ofpersonalinformationexemptundersubsection1(j)ofsection8oftheRTI Act.WedonotagreewiththesubmissionsoftheAppellantthatgreaterpublic interestwouldwarrantthedisclosureofsuchinformationandwould,therefore, notliketodirecttheCPIOtodiscloseanysuchinformation.Itis,however,a separate thing that the Chairman SEBI, as the head of a very important regulatorybody,decidestodisclosethedetailsofhisassetsvoluntarilyjustas many occupying positions of authority in several other constitutional and statutorybodieshavealreadydoneso. 8. Lastly,thefilenotingandotherrelatedinformationrelatingtotheissueof

thecircularin2007regardingtheguidelinesfortheconsentordermechanism cannotfallassuchunderanyoftheexemptionprovisions.Infact,transparency demandsthattheentireprocessofdeliberationleadingtotheformulationof

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importantpolicieslikethisoneisdisclosedupfrontinthepublicdomainsothat the people can find out why and how such important decisions have been taken. Since the consent order mechanism constitutes a very important decisionforsettlingdisputesbetweenregulatedentitiesandtheSEBI,itisall themorenecessarythatthebackgroundfortheformulationoftheparameters ofthemechanismascontainedinthecircularof2007ismadepublic.The exemptionprovisionscitedbytheCPIOaresimplynotattractedtothisitemof information. Therefore, we also direct the CPIO to provide to the Appellant within10workingdaysofreceivingthisorderthephotocopiesoftherelevant filenotingandotheravailabledocumentsleadingtotheissueofthecircular dated 20 April 2007 laying down the guidelines for consent orders and for compositionofoffences. 9. 10. Allthefourcasesaredisposedoffaccordingly. Copiesofthisorderbegivenfreeofcosttotheparties.

(SatyanandaMishra) ChiefInformationCommissioner
Authenticatedtruecopy.Additionalcopiesofordersshallbesuppliedagainst applicationandpaymentofthechargesprescribedundertheActtotheCPIOofthis Commission.

(VijayBhalla) DeputyRegistrar

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