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Supreme Court today referred pleas challenging RBI notices pursuant to Jayantilal Mistry Verdict to a bench presided by Justice L. Nageswara Rao.
 

The judgment in Mistry said that RBI has a statutory duty to uphold the interest of public at large and not hide information that might embarrass individual banks – “It is duty-bound to comply with the provisions of the RTI Act and disclose the information sought by the respondents (RTI Applicants) herein”

A Division bench of Justice Abdul Nazeer and Justice Krishna Murari, referred the matter to a bench led by Justice LN Rao, considering the past developments in the case.

A contempt petition was filed titled Girish Mittal v. Parvati Sundaram, (2019) 20 SCC 747, decided by Justice LN Rao directing the RBI to comply the verdict in Mistry. This was followed by a petition seeking recall of the judgment which was again dismissed by a bench of Justice LN Rao, by Order dated April 28, 2021.

It is to be noted that while dismissing the recall, the bench under Para 5 made no observations on merits;

“We directed de-tagging of the Writ Petitions as they pertain to a challenge of notices issued by the RBI. We make it clear that all questions raised in the Writ Petitions are left open and the order we propose to pass in the miscellaneous applications will not have any bearing on the consideration of the Writ Petitions on their own merits.”

Senior Advocate Mukul Rohatgi, appearing for the petitioner banks, submitted that – 1. The banks were not represented in Jayantilal Mistry case and the contentions/grievances raised by them are completely unaddressed 2. Only Section 8(1)(e) of the RTI Act was discussed by the aforementioned judgment whereas there is exemption (d) and also (j) which protects the petitioner banks 3. Right to Privacy under Article 21 of the Bank as well as it’s customers are at stake by such notices 4. Pvt. Banks are not bound by RTI as they are not a Govt. body

“No bank customer wants that his parameters, his paraphernalia, his operation should be disclosed to any random person,” submitted Mr. Rohatgi.

Supplementing his submissions, Senior Counsel KV Vishwanathan referred Section 35, Banking Regulation Act arguing that when there is a special procedure laid under law for publication of such inspection reports, how can the petitioner move an RTI and get the same diverted citing “public interest”

“What Mr. Bhushan’s client is asking is as soon as the report is submitted to the Govt. you give it to me - when there is a specific process of publication how can you devise your own way? This would result in panic and total collapse of economy,” contended Mr. Vishwanathan

Hinting at some Malafides, Senior Counsel Mr. Rohatgi also informed the Court that the very next day after the recall was dismissed the client of Mr. Bhushan filed a RTI seeking Risk Assessment Reports from the Private Banks – “He has filed for grant of reports of 14 banks - Risk Assessment reports & notices - for the past 3 years. I can understand some specific information but this blanket of information? How is he concerned? He will obviously exchange it for some consideration”

Responding the contentions raised by the Petitioner, Advocate Prashant Bhushan submitted that – 1. Risk Assessment Reports do not disclose any information related to Individual customers 2. Right To Privacy can extend to Customers but not Banks 3. Every aspect – all exemptions were covered in the earlier hearing as against the submission of Mr. Rohatgi that only Section 8(1)(e) of the RTI Act was argued 3. All banks were adequately represented by Indian Banks Association 4. All contentions made in the present petition have been heard and rejected earlier 5. This is just another route of seeking same reliefs – denied earlier

It was later responded by Ld. Senior KV Vishwanathan Right to Privacy also extends to banks – as a juristic person under Article 21.

Senior Counsel Shri Jaideep Gupta appeared for the RBI. It was his contention that RBI was not in contempt – Reliance was placed on Para 16 of the Girish Mittal judgment;

“Though we could have taken a serious view of the respondents continuing to violate the directions issued by this Court, we give them a last opportunity to withdraw the disclosure policy insofar as it contains exemptions which are contrary to the directions issued by this Court. 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 in Jayantilal Mistry. Any further violation shall be viewed seriously by this Court.”

Brief Background

A Division Bench of Justice MY Eqbal and Justice C. Nagappan, while deciding the pleas by several RTI applicants who were denied information from RBI and certain pvt. Banks on the ground of economic interest, commercial confidence and fiduciary relationship – held that RBI is under a Statutory Obligation to uphold the interest of depositors and cannot deny public from accessing these details on the ground of “fiduciary relationship”

The matter again came up before a Division Bench of Justice L. Nageswara Rao and Justice Vineet Saran, seeking recall of the judgment, where the bench observed,

“A close scrutiny of the applications for recall makes it clear that in substance, the applicants are seeking a review of the judgment in Jayantilal N. Mistry. Therefore, we are of the considered opinion that these applications are not maintainable. We make it clear that we are not dealing with any of the submissions made on correctness of the judgment in Jayantilal N. Mistry.”

 Consequently, all miscellaneous applications were dismissed by order dated April 28, 2021.

Following this, on July 19, 2021, A Division Bench of Justice Abdul Nazeer and Justice Krishna Murari took up the writ petition filed by HDFC, SBI, PNB, Union Bank and the Canara Bank wherein the said banks had claimed that they were aggrieved by the notices issued by Reserve Bank of India, mandating to part with information related to inspection reports and risk assessment.

Senior Advocate Mukul Rohatgi appeared for HDFC while Solicitor General Tushar Mehta made submissions for the State Bank of India.

 Advocate Prashant Bhushan appeared for the applicants under RTI.

Also Read: Supreme Court to examine critical issue: Whether RBI can issue notices mandating Private Banks to disclose Risk-assessment data

Case Title: HDFC v. Union Of India