Supreme Court enforces Right to Information Act against RBI, Directs Disclosure of Bank Inspection Reports (26 April 2019)

Date of the Judgment: 26 April 2019
Citation: Not Available
Judges: L. Nageswara Rao, J. and M.R. Shah, J.

Can a regulatory body like the Reserve Bank of India (RBI) withhold information about bank inspections under the guise of fiduciary relationships or economic interests? The Supreme Court of India, in this contempt case, addressed the issue of whether the RBI was complying with its previous judgment that mandated transparency under the Right to Information Act, 2005 (RTI Act). The Court found that the RBI had indeed violated its previous directions by continuing to withhold information, and issued further directions to ensure compliance.

Case Background

The case arises from three contempt petitions alleging that the Reserve Bank of India (RBI) deliberately disobeyed the Supreme Court’s judgment dated 16 December 2015 in the case of *Reserve Bank of India v. Jayantilal N. Mistry*. That judgment had clarified that the RBI could not deny information requested under the RTI Act, except under specific exemptions listed in Section 8 of the Act. The core issue in the earlier case revolved around whether the RBI could refuse to disclose information citing fiduciary relationships with other banks or economic interests. The Supreme Court had ruled that no such fiduciary relationship existed and that the RBI was obligated to disclose information in the interest of the public.

Timeline:

Course of Proceedings

The Central Information Commissioner had directed the RBI to disclose the information sought by the Respondents in the transfer cases. The RBI challenged these orders by filing Writ Petitions in the High Courts, which were then transferred to the Supreme Court and decided by the judgment dated 16.12.2015. After the Supreme Court’s judgment, the RBI was expected to comply with the directions. However, the present contempt petitions were filed alleging non-compliance with the Supreme Court’s directions.

Legal Framework

The core of the legal framework in this case is the Right to Information Act, 2005 (RTI Act). The Supreme Court emphasized that the RTI Act overrides all earlier laws to achieve its objective of transparency. The only exceptions to providing information are those listed in Section 8 of the RTI Act.

Section 8(1) of the RTI Act allows for the denial of information in certain circumstances, such as when it could affect national security, sovereignty, economic interests, or relations with foreign states. However, the Court clarified that not all government-held information could be withheld, particularly lower-level economic and financial information like contracts and departmental budgets.

The Court also referred to Section 2(f) of the RTI Act, which defines information to include material held by public authorities that has been obtained from private bodies. The Court said that the intent of the Legislature was to make such information available to the general public.

Arguments

The petitioners in the contempt cases argued that the RBI had willfully disobeyed the Supreme Court’s 2015 judgment by:

• Withholding information despite the clear directions to disclose.
• Creating a new disclosure policy that effectively exempted various types of information from disclosure, contrary to the judgment.

The RBI, represented by Mr. Jaideep Gupta, argued that:

• The 2015 judgment needed reconsideration.
• There was no intention to disobey the court’s directions.
• The information sought in Contempt Petition (C) No. 412 of 2016 had been provided.
• The disclosure policy dated 30.11.2016 had been superseded and no longer existed.
• The judgment allowed for some leeway in withholding certain information, as mentioned in paragraph 77.
• Each RTI application should be dealt with on its own merits.

The petitioners contended that the RBI’s new disclosure policy, uploaded on 12.04.2019, continued to violate the 2015 judgment by directing various departments not to disclose information that was specifically mandated for disclosure.

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame issues in this judgment. However, the core issue before the court was whether the RBI had committed contempt of court by violating the directions issued in the judgment dated 16.12.2015.

Treatment of the Issue by the Court

The following table demonstrates how the Court dealt with the issues:

Authorities

The Supreme Court referred to the following authorities:

Judgment

How each authority was viewed by the Court:

• *Reserve Bank of India v. Jayantilal N. Mistry* [2016 (3) SCC 525]: The Court enforced its previous ruling, reiterating the RBI’s obligation to disclose information under the RTI Act, except under specific exemptions.
• *Attorney General v. Times Newspapers Ltd.* [(1973) 3 All ER 54 (HL)]: The Court cited this case to emphasize the importance of public policy in punishing civil contempt, highlighting that the administration of justice would be undermined if court orders were disregarded.
• *Priya Gupta v. Ministry of Health & Family Welfare* [(2013) 11 SCC 404]: The Court cited this case to support the maintainability of the contempt petition, stating that a contempt petition can be filed by an aggrieved party for violation of general directions.

What weighed in the mind of the Court?

The Supreme Court’s decision was heavily influenced by the need to uphold the rule of law and ensure compliance with its previous orders. The Court was of the view that the RBI’s actions demonstrated a clear disregard for the directions issued in its 2015 judgment. The Court emphasized the importance of transparency and the public’s right to information, as enshrined in the RTI Act. The Court also noted that the RBI’s new disclosure policy was a deliberate attempt to circumvent the 2015 judgment.

The Court rejected the RBI’s argument that the 2015 judgment needed reconsideration, stating that it could not consider this submission while deciding the contempt petitions. The Court also rejected the argument that the RBI had been given leeway to withhold certain information, clarifying that the only exception was in paragraph 77 of the judgment, which pertained to information affecting the security of the State.

The Court emphasized that the directions issued in the 2015 judgment were general in nature and that any violation of such directions would enable an aggrieved party to file a contempt petition. The Court stated, “There is no ambiguity in the judgment of this Court dated 16.12.2015.”

The Court was of the opinion that the RBI had committed contempt of court by exempting disclosure of material that was directed to be given by the Court. The Court stated, “The Respondents, in our opinion, have committed contempt of this Court by exempting disclosure of material that was directed to be given by this Court.”

The Court also noted that the new disclosure policy uploaded by the RBI on 12.04.2019 directed various departments not to disclose information that was directed to be given by the judgment of this Court on 16.12.2015.

The Court gave the RBI a last opportunity to withdraw the disclosure policy insofar as it contained exemptions that were contrary to the directions issued by the Court. The Court stated, “The Respondents are duty bound to furnish all information relating to inspection reports and other material apart from the material that was exempted in para 77 of the judgment.”

Key Takeaways

• The Supreme Court reaffirmed the importance of the Right to Information Act, 2005, and its applicability to the Reserve Bank of India.
• The RBI cannot deny information under the guise of fiduciary relationships or economic interests, except under specific exemptions listed in Section 8 of the RTI Act.
• The RBI was found to be in contempt of court for violating the directions issued in the judgment dated 16.12.2015.
• The Court directed the RBI to withdraw its disclosure policy insofar as it contained exemptions that were contrary to the directions issued by the Court.
• Any aggrieved party can file a contempt petition for violation of general directions issued by the Court.
• The RBI is obligated to furnish all information relating to inspection reports and other materials, except for material exempted in paragraph 77 of the 2015 judgment.

Directions

The Supreme Court directed the RBI to withdraw its disclosure policy insofar as it contained exemptions that were contrary to the directions issued by the Court.

Development of Law

The ratio decidendi of this case is that the Reserve Bank of India is bound to comply with the directions of the Supreme Court and the provisions of the Right to Information Act, 2005, and cannot withhold information under the guise of fiduciary relationships or economic interests, except under specific exemptions listed in Section 8 of the RTI Act. This case reinforces the principle that regulatory bodies must act with transparency and accountability, and that any attempt to circumvent court orders will be viewed seriously. This case also clarifies that any aggrieved party can file a contempt petition for violation of general directions issued by the Court. This case also clarifies that the RBI is obligated to furnish all information relating to inspection reports and other materials, except for material exempted in paragraph 77 of the 2015 judgment.

Conclusion

In conclusion, the Supreme Court’s judgment in this contempt case serves as a strong reminder to the Reserve Bank of India and other regulatory bodies that they must adhere to the principles of transparency and accountability. The Court’s firm stance against the RBI’s attempts to circumvent its earlier directions underscores the importance of the Right to Information Act and the public’s right to access information. The Court’s decision ensures that regulatory bodies cannot operate in secrecy and that they are accountable to the public.