Respondent: Appellant had raised voluminous queries under multiple heads such as NSE Colo case, NSE penalty, Forensic Audit, SEBI settlement, proceedings, etc. and all of them were addressed in point- wise manner - CIC: Appeal is dismissed
7 Jun, 2024
O R D E R
1. The Appellant filed an RTI application dated 06.01.2022 seeking information on the following points:
NSE Colo case
• PIO to provide a copy of the data-sharing agreement of Ajay Shah, with the NSE, after 2012.
• PIO to provide a copy of the Deloitte report, submitted to SEBI, on 23 December 2016, on the NSE's tick-by-tick (TBT) system (Colo case)
• PIO to provide the details of the audit and consulting fees paid, to Deloitte and EY, from FY 2013 to FY 2016, by the NSE, as under:
o Year, Nature of Assignment, Name of Audit/Consulting entity, Amount of fees
• PIO to provide the names of the members who had placed their servers in the NSE, in the years 2014 to 2016, and the fees earned by the NSE, from such placement of servers (by the members)
NSE Penalty
• PIO to provide the details of the aggregate penalty imposed on the NSE, in the last 5 years (irrespective of whether it was stayed by SAT or a High Court or the Apex Court), as under:
o Year, SEBI order reference number, Nature of breach, Amount of penalty, etc./ other related information.
2. The CPIO replied vide letter dated 02.02.2022 and the same is reproduced as under:-
“NSE Colo case
The information sought by you is available to SEBI in fiduciary capacity and hence is exempt u/s 8 (1)(e) of RTI Act, 2005.
NSE Penalty
The form in which information regarding penalty has been requested would disproportionately divert the resources of SEBI against NSE is available on SEBI website www.sebi.gov.in under the head Enforcement. The link for the same is https://www.sebi.gov.in/enforcement/orders.html, etc.”
3. Dissatisfied with the response received from the CPIO, the Appellant filed a First Appeal dated 10.02.2022 alleging that the information provided was incomplete, false and misleading. The FAA vide order dated 17.03.2022 upheld the reply given by the CPIO.
4. Aggrieved with the FAA’s order, the Appellant approached the Commission with the instant Second Appeal dated 28.03.2022.
5. The appellant and on behalf of the respondent Shri Santosh Kumar Sharma, CPIO and Shri Mohd. Atif, General Manager, attended the hearing through video conference.
6. The appellant inter alia submitted that the respondent had illegally denied statistical information under the provisions of Section 8 (1) (d), (e) and Section 7 (9) of the RTI Act. Further, he insisted that his additional written submissions may be taken on records, and extracts thereof are reproduced as under:
As per the SC, (in the case of Jayantilal Mistry), RBI does not hold data of banks in a fiduciary capacity. Hence, the same logic applies to SEBI. SEBI has no fiduciary duty to Deloitte or the Brokers who defrauded 50 million investors. SEBI has a fiduciary duty to the Indian People.
If the audit fees paid to Deloitte is disclosed in the Company Annual reports and does not impact 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; - then how will the fees paid by NSE to Deloitte be impacted under 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; . How can audit fees and consulting fees be a fiduciary matter?
Deloitte audit reports are printed as a routine matter in every annual report of its client. So, if Deloitte did an audit for NSE or of NSE, how is the report exempt under 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; or (e). If the Henderson report on the 1962 war, duly redacted can be released by the MOD, then why not the Deloitte reports. The TOR, Scope of work, Methodology, sample sizes team size and time and conclusions, should be immediately disclosed.
NSE Penalty
There is no disproportionate diversion as data is sought for only 1 party. The public have a right to know the number of infractions of a leading exchange, which is also, not a public authority. If SEBI desires, it can give the data for every year and number of orders in each year. If an exchange is subject to penalties year after year, then what hope exists for investor rights in this nation?
Forensic Audits
Statistical data on forensic audits, in terms of the names of the auditor and auditee and year of audit cannot be exempt under any section of the RTI Act. It is in public interest to know whether a forensic audit was directed by SEBI in view of the massive frauds inflicted on the public by NSE and brokers and CDSL without a forensic audit, the truth will not be known and restitution and justice is not possible.
none of the frauds in Indian securities markets can happen without systemic and policy lacunae in the SEBI, CDSL, NSDL and Ministry Of Finance, which are also the regulators. Since SEBI appoints the auditors, the timing of the audit, nature and scope of audit.
The name of the auditor as the auditor might also have preferred consulting to the regulators and brokers and other interested parties.
Thus, the statistical data of the said audits are in public interest.….”
7. The respondent while defending their case inter alia submitted that the appellant had raised voluminous queries under multiple heads such as NSE Colo case, NSE penalty, Forensic Audit, SEBI settlement, proceedings, etc. and all of them were addressed in point- wise manner vide letter dated 02.02.2022. The CPIO submitted that the FAA had elaborately dealt with all the points and relied upon judicial pronouncements while disposing of the first appeal. He further reiterated and highlighted the following observations thereof, extracts of which are reproduced as under:
“FAA noted that the respondent denied disclosure of information by observing that the same is available to SEBI in fiduciary capacity. FAA noted that in Writ Petition (Civil) Nos. 8396/2009, 16907/2006, 4788/2008, 9914/2009, 6085/2008, 7304/2007, 7930/2009 and 3607 of 2007, the Hon'ble High Court of Delhi (order dated November 30, 2009), held that the 'person' referred to in section 8(1) (e) of the RTI Act will include a public authority. It also held that:
"In a fiduciary relationship, the principal emphasis is on trust, and reliance, the fiduciary's superior power and corresponding dependence of the beneficiary on the fiduciary. It requires a dominant position, integrity and responsibility of the fiduciary to act in good faith and for the benefit of and to protect the beneficiary and not oneself Further, the Hon'ble CIC, in the matter of Mr. Ashok Kumar Rajak vs. CPIO, SEBI, (order dated December 21, 2021), held that "Further the details such as investigation report, file noting, directions and various communication involves with the third party information which is received from other agencies is being held by them in fiduciary capacity hence the same is barred from disclosure under 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; & (j) of the RTI Act, 2005" FAA found that SEBI, being the regulatory authority for the securities market, gets various references/documents from market participants and the information contained therein are received in 'fiduciary relationship'.
Further, the FAA noted that similar queries have been made by the appellant in respect of some other entities i.e. India Bulls ventures/ India Bulls Financial Services/ India Bulls Real Estate and Zee Entertainment. FAA noted that for providing the requested information, the respondent would be required to analyse a substantial amount of data, which is voluminous is nature. Analysing and collating the information would disproportionately divert the resources of SEBI and would defeat the practical regime of right to information' as envisaged in the preamble of the RTI Act. In this regard, FAA noted that the Hon'ble Delhi High Court in the case of The Registrar Supreme Court of India v. Commodore Lokesh K. Batra & Ors., (Order dated January 07, 2016) held that
15. On a combined reading of Section 4(1)(a) Every public authority shall maintain all its records duly catalogued and indexed in a manner and the form which facilitates the right to information under this Act and ensure that all records that are appropriate to be computerised are, within a reasonable time and subject to availability of resources, computerised and connected through a network all over the country on different systems so that access to such records is facilitated; and Section 2(i), it appears to us that the requirement is only to maintain the records in a manner which facilitates the right to information under the Act. As already noticed above, 'right to information' under Section 2(j) “right to information” means the right to information accessible under this Act which is held by or under the control of any public authority and includes the right to- (i) inspection of work, documents, records; (ii) taking notes, extracts or certified copies of documents or records; (iii) taking certified samples of material; (iv) obtaining information in the form of diskettes, floppies, tapes, video cassettes or in any other electronic mode or through printouts where such information is stored in a computer or in any other device; means only the right to information which is held by any public authority. We do riot find any other provision under the Act under which a direction can be issued to the public authority to collate the information in the manner in which is sought by the applicant. While relying on the said judgement, the Hon'ble CIC, in the matter of Bimal Kishore vs. CPIO, State Bank of India (Order dated March 28, 2018), held that ........ the respondent cannot be asked to collate information in the manner in which it is sought by the appellant/complainant. Hence, no further intervention of the Commission is required in the abovementioned matters.
In view of the above observations and applicability of section 7 (9) of the RTI Act, FAA found that the respondent was not obliged to provide the information sought by the appellant. Accordingly, FAA did not find any deficiency in the response.”
8. The Commission after adverting to the facts and circumstances of the case, hearing both parties and perusal of records, observes that the appellant has raised 23 points, under miscellaneous heads, in his RTI application. Nonetheless, the respondent has addressed each and every point vide their reply dated 02.02.2022. Perusal of their reply reveals that they have duly invoked exemption clauses under section 8 (1) of the RTI Act, wherever felt necessary by them. The voluminous queries raised by the appellant under the apprehension of the respondent authority not being transparent is unfounded as the CPIO had shared the hyperlink with respect to the regulatory action taken by SEBI, wherever applicable in their reply dated 02.02.20222. However, the information which is not available in material form or under their custody could not be created for the sake of responding to the RTI application. The Commission would also like to refer to the observations made by the Supreme Court in in Central Page 11 of 12 Board of Secondary Education and another v. Aditya Bandopadhyay and Others, (2011) 8 SCC497:
".67. Indiscriminate and impractical demands or directions under the RTI Act for disclosure of all and sundry information (unrelated to transparency and accountability in the functioning of public authorities and eradication of corruption) would be counter-productive as it will adversely affect the efficiency of the administration and result in the executive getting bogged down with the nonproductive work of collecting and furnishing information. The Act should not be allowed to be misused or abused, to become a tool to obstruct the national development and integration, or to destroy the peace; tranquility and harmony among its citizens. Nor should it be converted into a tool of oppression or intimidation of honest officials striving to do their duty. The nation does not want a scenario where 75% of the staff of public authorities spends 75% of their time in collecting and furnishing information to applicants instead of discharging their regular duties. The threat of penalties under the RTI Act and the pressure of the authorities under the RTI Act should not lead to employees of public authorities prioritizing 'information furnishing', at the cost of their normal and regular duties."
In view of this, the Commission finds no substantial ground and merit in the contentions of the appellant to intervene in the matter. Accordingly, the appeal is dismissed.
Copy of the decision be provided free of cost to the parties.
Sd/-
ANANDI RAMALINGAM
Information Commissioner
Citation: Samir Sardana v. Securities and Exchange Board of India, CIC/SEBIE/A/2022/618551; Date of Decision: 19.03.2024