Supreme Court To Hear Banks' Challenge Against RBI's RTI Notices For Disclosures On August 17

Allowing the request made by Senior Advocate Mukul Rohatgi, appearing for one of the petitioner-Banks, a Bench of Justices S. Abdul Nazeer and Krishna Murari fixed the matter for hearing on August 17.

He has raised a preliminary issue in the case, stating that the matter needs to be heard by Justice Nageswara Rao as an earlier contempt matter was decided by him.

"Your Lordships had yourselves ordered that all these matters should go before Justice Rao as contempt matter was decided by him. According to what norms are of this court, this matter needs to be heard by a bench headed by Justice Nageswara Rao," Bhushan had said on the last date.

A Justice Rao led Bench of the Supreme Court had on April 28, refused to recall the 2015 judgment in the case Reserve Bank of India v Jayantilal N. Mistry which had held that the RBI was obliged to disclose defaulters list, inspection reports, annual statements etc., related to banks under the RTI Act.

It had dismissed the banks' applications observing that the Supreme Court Rules did not have any provision for filing any application for recall of a judgment. However, the bench gave liberty to the banks to pursue other available legal remedies against the Jayantilal Mistry judgment.

Following that, the banks have filed separate writ petitions challenging the RTI notices issued to them by the RBI, arguing that disclosure of sensitive financial information will be detrimental to their business and will compromise confidentiality of depositors.

The pleas have been filed by Banks including State Bank of India, Punjab National Bank, Union Bank of India, HDFC Bank, Axis Bank, ICICI Bank and Yes Bank. They argue that their competitors could exploit the disclosure of their internal reports.

A division bench comprising Justices S Abdul Nazeer and Krishna Murari had on July 2 refused the prayers made by Punjab National Bank and Union Bank of India to stay the RTI notices issued to them by the Reserve Bank of India to disclose information related to defaulters list, inspection reports etc.

The Bench had however issued notice on the writ petitions filed by the banks and posted them along with similar petitions earlier filed by the State Bank of India and private banks HDFC Bank, Axis Bank, ICICI Bank and Yes Bank. The bench had refused interim reliefs to those banks as well.

Section 11 gives power to the Central Public Information Officer to seek information from third party in RTI applications. Section 11(1) is an advance notice issued inviting third party's objections to such disclosure.

In the Jayantilal Mistry case, the Supreme Court had rejected the argument of the Reserve Bank of India that it was holding the information of banks in a fiduciary capacity, and therefore such information was exempted from disclosure under the Right to Information Act as per Section 8(1)(e).

A bench comprising Jusitces MY Eqbal and C Nagappan had held that RBI does not place itself in a fiduciary relationship with the Financial institutions because, the reports of the inspections, statements of the bank, information related to the business obtained by the RBI are not under the pretext of confidence or trust.

The Court held that information obtained under a regulatory capacity or under the mandate of law cannot be termed as information held under fiduciary capacity.

The Court expressed the opinion 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.

Later, contempt petitions were filed after the RBI contending that the disclosure policy framed by the RBI in 2016 were contrary to the directions in the Jayantlal Mistry judgment.

In April 2019, a bench comprising Justices Nageswara Rao and MR Shah directed the RBI to withdraw the disclosure policy to the extent it permitted exemptions contrary to the Supreme Court verdict (Girish Mittal v. Parvati V. Sundaram & Anr). The Court held that the violations of its direction by the RBI will be viewed seriously.