SEBI's counter affidavit proves NSE as government entity in RTI case  

April 19, 2010

Last week the Delhi High Court, while ruling that the National Stock Exchange (NSE) is bound to reveal information under the Right to Information (RTI) Act, said the Exchange falls under the purview of 'public authority'. Market regulator Securities and Exchange Board of India (SEBI) was found to have played a significant role in the case by filing a counter affidavit.

The NSE tried to maintain that since it is an autonomous body and not controlled by the government, it cannot be forced to disclose information under the RTI Act. However, SEBI's counter affidavit clearly stated that Government of India or Government companies own more than 50% of the shares of NSE. The Exchange then tried to dispute the counter affidavit as 'contention and not factual statement'.

In the ruling, Justice Sanjiv Khanna said that since the aspect of factual dispute is examined by the Central Information Commissioner (CIC), he was not going into this aspect.

In 2007, the CIC had held that stock exchanges are quasi-governmental bodies which are bound to disclose information to the public under the RTI Act.

"It is held that the petitioner is a public authority as it is an authority or institution of self-government constituted or established by notification or order issued by the appropriate Government. It is also held that the petitioner is controlled by the appropriate Government.  The writ petition WPC No.4748/2007 accordingly has no merit and is dismissed," the order said.

While directing the Exchange to put in place a mechanism for providing information under the RTI Act, the High Court said, “A stock exchange being a quasi-governmental body working under the statute and exercising statutory powers has to be held to be a public authority under the Act.

With this order, the stock exchange will now fall under the ambit of the RTI Act. As such, it will be forced to disclose information demanded by the public on various matters, subject to certain exceptions.

Justice Khanna, in the ruling, also said that the idea, purpose and objective behind the beneficial legislation is to make information available to citizens in respect of organizations, which take benefit and  advantage by utilizing substantial public funds. This ensures that the citizens can ask for and get information and know how public funds are being used, and there is accountability, transparency and openness, the order said.

However, the embattled exchange may not take the order lying down and may soon appeal to the Supreme Court of India. Earlier, when Moneylife contacted an NSE official for their future plan of action, we were told that an immediate response would not be available. (Read more http://www.moneylife.in/article/8/4823.html — Moneylife Digital Team