Central Information Commission
Arun Kumar Agrawal vs Securities And Exchange Board Of India ... on 22 March, 2017
CENTRAL INFORMATION COMMISSION
2nd Floor, C-Wing, August Kranti Bhawan,
Bhikaji Cama Place, New Delhi -110066.
Tel: 011 - 26182597, 26182598
Email: [email protected]
Appeal No.:- CIC/MP/A/2014/001006-BJ + CIC/MP/A/2015/001322-BJ
Appellant : Mr. Arun Kumar Agrawal
T-8, Eagleton Golf Resort,
30 KM Bangalore Mysore
Highway, Bidadi, Bangalore South District,
Bangalore-562109
Respondent : The CPIO
SEBI, SEBI Bhavan,Plot No. C-4-A, G-Block,
Bandra Kurla , Complex, Bandra East,
Mumbai-400051
Date of Hearing : 08.03.2017
Date of Decision : 22.03.2017
Date of filing of RTI applications 19.08.2013 10.12.2014
CPIO's response 16.09.2013 07.01.2015
Date of filing the First appeal 03.10.2013 22.01.2015
First Appellate Authority's response 01.11.2013 26.02.2015
Date of diarised receipt of second appeals by 30.05.2014 10.06.2015
the Commission
ORDER
FACTS:
RTI 1 The Appellant vide his RTI application dated 19.08.2013 sought information on 13 points regarding the entire file along with file noting and investigation report in respect of orders passed by WTM mentioned in the RTI application relating to promoter's holding in Bank of Rajasthan, copy of the letter forwarding the order of WTM in WTM/KMA/ISD/235/03/2010 to the RBI, copy of the RBI letter by which a reference was made to SEBI mentioned in para 1 and investigation report/preliminary finding report of the aforesaid order, investigation report in the order of WTM dated March, 2012 as mentioned in the application, date and number of shares of ICICI Bank sold by the entities mentioned in order of WTM dated March, 2012, entire file noting specifying reasons for SEBI not appealing against the order of WTM with the name of the Adjudication Officer, WTM, details of penalties received/ or not from the 118 entities mentioned in para 80 and 81 of the order no. BM/AO/8-125/2013 and matters related thereto.
The CPIO vide his letter dated 16.09.2013 provided point wise reply to the appellant stating that information on points 1, 3, 4 and 5 was exempted from disclosure under Section 8(1)(e), 8(1)(g) & 8(1)(h) of the RTI Act, 2005. As regards point-2, partial information was provided after severing the names Page 1 of 10 and designations of the officials as the disclosure of the same had no relationship to any public activity or interest and hence exemption sought under Section 8(1)(g) and 8(1)(j) of the RTI Act, 2005. In respect of point no. 6, it was stated that no information was available with the concerned department of SEBI with reference having been made to RBI for approval of merger of BOR with ICICI. As in the case of point-2, a copy of the letter dated 11.08.2010 by SEBI to RBI was provided severing the names and designations of officials as disclosure of the same was considered to be not in public interest and exemption sough under Sections 8(1)(g) and 8(1)(j) of the RTI Act, 2005. On other points, information as available on record had been provided.
Dissatisfied by the reply of the CPIO, the appellant approached the FAA. The FAA vide its order dated 01.11.2013 upheld the reply of the CPIO and dismissed the first appeal.
RTI 2 The appellant vide his RTI application dated 10.12.2014 sought information on 3 points regarding inspection report referred to in para no 5 and 6 of order no. WTM/PS/81/IVD/ID-4/MARCH/2012 of SEBI dated 26.02.2012 of WTM Shri Prashant Sharan, inspection report mentioned in para 78 of the adjudication order no. BM/AO/8-125/2013 of 14.02.2013 of M/s Barnali Mukherjee, the rates at which 118 entities mentioned in the RTI application sold their shares, Bank of Rajasthan after they were converted into shares of ICICI and issues related thereto.
The CPIO, vide its letter dated 07.01.2015, had submitted that the matter on which the information was sought by the appellant was pending before the Hon'ble Supreme Court of India and had not reached its conclusive end hence disclosure of information may impede the said proceedings. It was therefore submitted that the information sought by the appellant was exempted from disclosure as per section 8 (1) (h) of the RTI Act, 2005. Dissatisfied by the response of the CPIO, the appellant approached the FAA. The FAA, vide its order dated 26.02.2015, concurred with the response of the CPIO.
It was noted that IC (SB) vide its order dated 23.02.2017 transferred the matters to the registry of IC (BJ) on account of revised allocation of work amongst registries w.e.f., 10.01.2017.
HEARING:
Facts emerging during the hearing:
The following were present:
Appellant: Mr. Arun Kumar Agrawal (M: 9845097444) in person; Respondent: Mr. Jeevan S., CPIO (M: 9819344904) and Mr. Naveen Kumar, AM (M: 9833109918) in person;
It was observed that similar issues were raised in both the RTI applications hence a common decision is pronounced in both the matters. Both the parties were offered an opportunity by the Commission to be present through videoconferencing at their respective places but they voluntarily chose to present themselves personally.Page 2 of 10
The appellant reiterated the contents of RTI application and stated that no satisfactory information was provided to him in the matter till date. It was alleged that certain promoters of Bank of Rajasthan were in violation of PFTUP regulations and made illegal profit which was to be disgorged and penalty levied under the law. It was submitted that all these institutions were regulated by the SEBI and that the SEBI deliberately did not calculate the illegal profit of Rs. 600/ 950 Crores and levied a token penalty of Rs. 30 Crores. It was further submitted that exemption under section 8 (1) (h) of the RTI Act, 2005 was wrongly claimed by the respondent without illustrating any specific grounds on how disclosure of information would impede the process of investigation. The appellant also placed reliance on several decisions of the Hon'ble High Court of Delhi and the Commission in support of its contention. It was also argued that the RTI application was one of public interest and was legitimately made under section 8 (2) of the RTI Act.
In reply, the respondent submitted that information was denied to the appellant under section 8 (1) (h) of the RTI Act, 2005 since the investigation process in the matter was under progress. It was further argued that the process of investigation continued unless it had reached a point where final decision was taken on the basis of the decision. On a query from the Commission regarding the present status of investigation, it was argued by the respondent that the matter may be remanded back to them for re- examination afresh.
The Commission before passing a final decision in the matter, vide its oral order dated 08.03.2017, directed the respondent to submit their written submissions in the matter through e-mail or post etc., latest by 10.03.2017 endorsing a copy to the appellant.
Note: Having received the written submission in the matters from the appellant and the respondent dated 10.03.2017, the Commission hereunder pronounces its final decision in the matter.
The appellant vide his written submission dated 10.03.2017 stated that this was a strange case of corruption for which RTI was filed requesting information on corruption relating to fraud played on the market and investors by the promoters of Bank of Rajasthan. It was submitted that under the present dispensation, it would not be possible to calculate the illegal gain made by the promoters and related persons involved in violation of PFTUP Regulations. It was argued that he had proof of transactions done through fraudulent trades. He desired information to conclusively prove that the profits could be calculated from the available information but were not. He highlighted the alleged loss due to non-implementation of RTI Laws by the SEBI. Time and again, it was emphasized that the RTI application was one of public interest and legitimately made under Section 8 (2) of the RTI Act, 2005. It was alleged that the FAA, did not act as a judicial person but endorsed the Page 3 of 10 view expressed by the CPIO. Even during the hearing, it was articulated that the CPIO misled the Commission. Certain facts were detailed like the first RTI application filed on 19.08.2013 while adjudication order was dated 14.02.2013, the second RTI filed on 10.12.2014 while SAT order was dated 11.02.2014 i.e., 10 months after the SAT order, the third RTI filed on 07.11.2016 after the Supreme Court order dated 26.10.2016 and information rejected by the CPIO on 26.11.2016 and FAA on 26.12.2016. Therefore, it was alleged that the CPIO consistently misled the Commission at the hearing by stating that the laws of disgorgement and penalty were made subsequently in 2014. Another moot point put forth by the Appellant was whether investigation can continue under Section 8 (1) (h) after the adjudication order passed and whether investigation was impeded by disclosure. There could be no adjudication till the investigation was completed and that there were no orders for re-investigation by the AO, SAT or the Apex Court. The appellant in support of his contention also relied upon the decision of the Hon'ble High Court of Delhi in Bhagat Singh v. CIC & Ors. WP(C) 3114/2007, B.S. Mathur v.
PIO in W.P. (C) 295 of 2011 affirmed in Adesh Kumar v. UOI and Ors. W.P. (C) 3542/2014 and several other decisions passed by the Commission. It was also submitted that the respondents had wrongly invoked section 8 (1) (e) and 8 (1) (g) of the RTI Act, 2005. The appellant prayed for providing investigation report urgently in order to enable him to file a rejoinder in WP 172/ 15 before the Hon'ble Supreme Court of India together with the information on all other points.
The respondent, vide its written submission dated 10.03.2017 relied upon the orders of the CPIO and speaking orders of the FAA and elaborated the role of SEBI to initiate multiple proceedings/ processes against the entities/ persons for violation of various provisions of the SEBI Act. It was contended that during the process of investigation and related proceedings under the SEBI Act, a variety of information including information relating to commercial and business interests, documents involving strategic information are submitted by entities/ persons against whom investigations were being conducted by SEBI. It was submitted that such information were fiduciary in nature and disclosure of information may hamper a level playing field for the entities and may cause irreparable damage to the reputation of the entities and may further adversely affect the competitive position of the entities and hence exempt from disclosure under section 8 (1) (d) and (e) of the RTI Act, 2005. The respondent further submitted that mere submission of investigation report to the competent authority did not imply a completion of investigation process. It was explained that the proceedings under SEBI Act were in progress and the matter had not reached its conclusion. The respondent relied on several decision of the Commission in Shri Narender Bansal v. Oriental Insurance Co. Ltd., CIC/DS/A/2013/000138/MP dated 13.01.2014, K.S. Prasad v. Amarjit Singh, CPIO, SEBI, CIC/AT/A/2007/00234 dated 11.12.2007 and Shankar Sharma v. Director of Income Tax and CPIO, CIC/AT/A/2007/007, 10 and 11 dated 10.07.2007 to submit that "investigation" appearing in section 8 (1) (h) has to be broadly interpreted. It was further submitted that the information was rightly denied under section 8 (1) (h) of the RTI Act, 2005 since at the time of filing of RTI application dated Page 4 of 10 19.08.2013, the matter was pending before the Hon'ble SAT. Similarly it was stated that at the time of filing RTI application dated 10.12.2014, the matter was pending before the Hon'ble Supreme Court of India and had not reached its conclusive end. It was also submitted that recovery proceedings had been inserted in SEBI Act, 1992 vide Securities Laws (Amendment) Act, 2014 w.r.e.f., 18.07.2013. The respondent explained that information was received by SEBI in its fiduciary capacity and disclosure of the same would endanger the life or physical safety of the person or identify the source of information or assistance given in confidence hence the information sought was exempted from disclosure as per section 8 (1) (e) and section 8 (1) (g) of the RTI Act, 2005. On the issue of disclosure of investigation report and related documents, it was submitted that the relevant disclosable portion of the investigation report was already available in the public domain and reproduced in the Whole Time Member, SEBI's orders dated 03.03.2010 and Adjudication Officer, SEBI's order dated 14.02.2013. It was also stated that information was available with appellant about SEBI's stand since an affidavit was filed in the Hon'ble Supreme Court of India in respect of Writ Petition no. 172/2015. It was submitted that due to non-payment of penalty imposed by the AO, enforcement proceedings including recovery proceedings have been initiated by SEBI hence disclosure of said information may impede the process of investigation. With regard to the decisions of the Hon'ble High Court and the Commission relied upon by the appellant regarding its contention on section 8 (1) (h), the respondent submitted that the decisions were dealt with by the FAA vide its order dated 26.02.2015. The respondent apart from the afore-mentioned decisions, further relied upon the decisions of the Commission in Smt. Durgesh Kumari v. Income Tax Department dated 26.08.2011, Shri Vinod Kumar Jain v. Directorate General of Central Excise Intelligence, New Delhi dated 20.07.2011, Shri Arun Kumar Agrawal v. SEBI, CIC/SM/A/2012/000196 dated 28.11.2014 and Shri Arun Kumar Agrawal v. SEBI, CIC/SM/A/2013/000834/MP dated 19.12.2014 in support of its contention under section 8 (1)(h) of the RTI Act, 2005.
The Commission finds the following observation of the Hon'ble High Court Delhi in Bhagat Singh v. CIC & Ors. WP(C) 3114/2007 pertinent in this matter.
"13. Access to information, under Section 3 of the Act, is the rule and exemptions under Section 8, the exception. Section 8 being a restriction on this fundamental right, must therefore is to be strictly construed. It should not be interpreted in manner as to shadow the very right itself. Under Section 8, exemption from releasing information is granted if it would impede the process of investigation or the prosecution of the offenders. It is apparent that the mere existence of an investigation process cannot be a ground for refusal of the information; the authority withholding information must show satisfactory reasons as to why the release of such information would hamper the investigation process. Such reasons should be germane, and the opinion of the process being hampered should be reasonable and based on some material. Sans this consideration, Section 8(1)(h) and other such provisions would become a haven for dodging demands for information."Page 5 of 10
Furthermore, the Hon'ble High Court of Delhi in B.S. Mathur v. PIO in W.P. (C) 295 of 2011 dated 03.06.2011 had held that :
"19. The question that arises for consideration has already been formulated in the Court's order dated 21st April 2011: Whether the disclosure of the information sought by the Petitioner to the extent not supplied to him yet would "impede the investigation" in terms of Section 8(1)(h) RTI Act" The scheme of the RTI Act, its objects and reasons indicate that disclosure of information is the rule and non-disclosure the exception. A public authority which seeks to withhold information available with it has to show that the information sought is of the nature specified in Section 8 RTI Act. As regards Section 8(1)(h) RTI Act, which is the only provision invoked by the Respondent to deny the Petitioner the information sought by him, it will have to be shown by the public authority that the information sought "would impede the process of investigation." The mere reproducing of the wording of the statute would not be sufficient when recourse is had to Section 8(1)(h) RTI Act. The burden is on the public authority to show in what manner the disclosure of such information would 'impede' the investigation...............
22. ...........The mere pendency of an investigation or inquiry is by itself not a sufficient justification for withholding information. It must be shown that the disclosure of the information sought would "impede" or even on a lesser threshold "hamper" or "interfere with" the investigation. This burden the Respondent has failed to discharge."
Furthermor, the Hon'ble High Court of Delhi in Adesh Kumar v. UOI and Ors. W.P. (C) 3542/ 2014 dated 16.12.2014 had held as under:
"10. A bare perusal of the order passed by the FAA also indicates that the aspect as to how the disclosure of information would impede prosecution has not been considered. Merely, citing that the information is exempted under Section 8(1)(h) of the Act would not absolve the public authority from discharging its onus as required to claim such exemption. Thus, neither the FAA nor the CIC has questioned the Public Authority as to how the disclosure of information would impede the prosecution."
The Commission observed that in the written submission of the respondent dated 10.03.2017 and the reply of the CPIO dated 16.09.2013, information was denied by the CPIO under section 8 (1) (h) of the RTI Act, 2005 since the matter was pending before the Hon'ble Supreme Court of India and had not reached its conclusive end. However, the respondent could not satisfactorily demonstrate as to how the disclosure of information would "impede" the process of investigation. Furthermore, no specific direction of any Court was cited which prohibited the disclosure of information.
Moreover, it was observed that as per the provisions of section 8 (1) of the RTI Act, 2005, no specific exemption is codified which allows non-disclosure of Page 6 of 10 information on the ground that the matter on which information is sought is sub-judice. In this context, the following extract of the decision of the High Court of Delhi in Municipal Corporation of Delhi v. R.K. Jain in W.P. (C) 14120/ 2009 dated 23.09.2010 can be cited:
"5...........The matter being sub judice before a court is not one of the categories of information which is exempt from disclosure under any of the clauses of Section 8(1) of the RTI Act."
The Commission in its decision in Mr. Ashu v. CPIO/ Sr. Supdt of Posts, Department of Posts in CIC/BS/A/2015/001578/11769 dated 28.11.2016 had held as under:
"At the outset it is clarified that the RTI Act provides no exemption from disclosure requirements of sub-judice matters. The only exemption for sub-judice matters is regarding what has been expressly forbidden disclosure by a court or a tribunal and what may constitute contempt of court."
Furthermore, the Commission in CIC/SM/A/2011/000343/SG/13645 can be cited wherein it was held as under:
"The stay order(s) of the High Court of Delhi do not appear to have framed a specific issue for determination and have granted a stay specifically only on the operation of the order of the Commission dated 24/08/2009. No claim for the exemption has been made by the PIO as per the RTI Act. However, the Commission assumes that the PIO is claiming that disclosure of information is exempt since the matter is sub- judice. The only exemption which may relate to matters in court is Section 8(1)(b) of the RTI Act. Section 8(1) (b) of the RTI Act exempts from disclosure "information which has been expressly forbidden to be published by any court of law or tribunal or the disclosure of which may constitute contempt of court". From a plain reading of Section 8(1)(b) of the RTI Act, it is clear that it does not include sub- judice matters. As mentioned above, information may be exempted from disclosure in accordance with Section 8 and 9 only and no other exemptions can be claimed while rejecting a demand for disclosure. Hence, disclosing information on matters which are sub- judice cannot constitute contempt of Court, unless there is a specific order forbidding its disclosure. The mere claim that a matter is sub- judice cannot be used as a reason for denying information under the RTI Act. In view of the same, the Commission rules that the denial of information by the PIO on queries 36 and 38 of the RTI application is legally untenable. Moreover, in view of the observations laid down above, the decisions cited by the PIO are not relevant to the present matter."
The Commission in the matter of Shri Nanak Chand Arora v. State Bank of India in CIC/MA/A/2006/00018 dated 30.06.2006 had also held as under:
Page 7 of 10"10 The CPIO and the Chief Manager of the Bank has not responded to the information seeker in the spirit in which the Act seeks to promote transparency in functioning of the Bank. He has mis-interpreted the provision of the Act and informed that there was no provision for inspection of the record in the Act. This is contrary to the provision u/ s 2
(f). He has also not indicated as to why the report could not be disclosed, except that the matter was sub-judice. There is no provision in the Act which restricts the disclosure of information merely on the ground of the fact that matter is pending with the Consumer Court. In the instant case, the Court has not forbidden the disclosure of investigation report or inspection of record."
As regards exemption under section 8 (1) (d) or 8 (1) (j) of the RTI Act, 2005, it was observed that the respondents were not able to justify or substantiate in their written submissions or their earlier replies to the appellant as to how the information sought would harm the competitive position of a third party.
With regard to the exemption of information from disclosure under Section 8(1)(e) of the RTI Act,2005, a reference can be drawn from the decision of the High Court of Delhi in WRIT PETITION (CIVIL) NOS.8396/2009, 16907/2006, 4788/2008, 9914/2009, 6085/2008, 7304/2007, 7930/2009 AND 3607 OF 2007, decided on 30th November , 2009 wherein it was held as under:.
15. "The object behind Section 8(1) (e) is to protect the information because it is furnished in confidence and trust reposed. It serves public purpose and ensures that the confidence, trust and the confidentiality attached is not betrayed. Confidences are respected. This is the public interest which the exemption under Section 8(1)(e) is designed to protect. It should not be expanded beyond what is desired to be protected. Keeping in view the object and purpose behind Section 8(1)(e) of the RTI Act, where it is possible to protect the identity and confidentiality of the fiduciary, information can be furnished to the information seeker. This has to be examined in case to case basis, individually.
16. Thus, where information can be furnished without compromising or affecting the confidentiality and identity of the fiduciary, information should be supplied and the bar under Section 8(1)(e) of the Act cannot be invoked. In some cases principle of severability can be applied and thereafter information can be furnished. A purposive interpretation to effectuate the intention of the legislation has to be applied while applying Section 8(1)(e) of the RTI Act and the prohibition should not be extended beyond what is required to be protected.
17. Even when Section 8(1)(e) applies, the competent authority where larger public interest requires, can pass an order directing disclosure of information."
The Commission also observed that the respondents vide their written submission dated 10.03.2017 took a view that disclosure of information would endanger the life or physical safety of any person or identify the source Page 8 of 10 of information or assistance given in confidence hence information was exempted from disclosure under Section 8 (1) (g) of the RTI Act, 2005. Furthermore, as per available records, the CPIO had given point-wise reply to each of the issues raised by the Appellant giving justification of the relevant provision under the RTI Act, 2005. However, copy of the letter forwarding the order of WTM sought in point no 2 of the RTI application was provided by the CPIO after severing the names and designations of the concerned officials. The Commission further observed that the information on remaining points could be provided and the purpose could be fully achieved by obliterating/blocking the name, designation or any other indication which would disclose or tend to disclose the identity of the author of the noting under section 10 of the RTI Act, 2005.
The Commission referred to the decision of the Hon'ble High Court of Delhi in its decision dated 7/10/2013 [W.P. (C) 4079/2013 Union Public Service Commission vs. G S Sandhu] wherein it was held as under:
"11. In my view, the apprehension of the petitioner that if the identity of the author of the file notings is revealed by his name, designation or in any other manner, there is a possibility of such an employee being targeted, harassed and even intimidated by the persons against whom an adverse noting is recorded by him on the file of UPSC, is fully justified. Though, ultimately it is for the members of the UPSC who are to accept or reject such notings, this can hardly be disputed that the notings do play a vital role in the advice which UPSC ultimately renders to the concerned department. Therefore, the person against whom an adverse advice is given may hold the employee of UPSC recording a note adverse to him on the file, responsible for an adverse advice given by UPSC against him and may, therefore, harass and sometime even harm such an employee/officer of UPSC, directly or indirectly. To this extent, the officers of UPSC need to be protected. However, the purpose can be fully achieved by blocking the name, designation or any other indication which would disclose or tend to disclose the identity of the author of the noting. Denying the notings altogether would not be justified when the intended objective can be fully achieved by adopting such safeguards."
Furthermore, the Hon'ble High Court of Delhi in the decision of KVS v. CIC and Anr. W.P.(C) 6892/2009 dated 15.09.2009 while upholding the decision of the Commission had held as under:
"The only objection raised by the petitioner against the supply of statement of witnesses was under Section 8(1)(g) of the Right to Information Act, 2005. The said provision stipulates that information disclosure of which would endanger life and physical safety of any person or identity, the source of information or assistance given in Page 9 of 10 confidence for law enforcement and security purposes need not be supplied. The Information Commissioner keeping in mind Section 8(1)(g) of the Right to Information Act, 2005 has directed that the name of the witnesses need not be disclosed to the respondent No.2.
In fact the order passed by the Information Commissioner seeks to rely upon section 10, which permits withholding of certain portions of information by applying severability principle. The order of the Information Commissioner takes care of the apprehension of the petitioner."
DECISION:
Keeping in view the facts of the case and the submissions made by both the parties, the Commission directs the respondent to re-examine the RTI application afresh as agreed by the respondent and provide point wise reply to the appellant within a period of 15 days from the date of receipt of this order in accordance with the provisions of the RTI Act, 2005.
The appeals stand disposed with the above direction.
(Bimal Julka) Information Commissioner Authenticated True Copy:
(K.L.Das) Deputy Registrar Page 10 of 10