Regulations
SAT seeks clarification from SEBI and RIL on new consent norms

The Securities Appellate Tribunal said it would like to know whether the RIL appeal will hold since new SEBI regulations, issued on 9th January, are retrospective in nature

The Securities Appellate Tribunal (SAT) on Wednesday sought clarifications from market regulator Securities and Exchange Board of India (SEBI) and Reliance Industries Ltd (RIL) on how new consent settlement norms would affect the ongoing case between the regulator and the company.

 

The tribunal, which had concluded its hearings on two petitions from RIL on 6th January and reserved its order for an unspecified date, set 24th February for the next hearing.

 

Since SEBI notified the new consent norms on 9th January, after issuing the draft consent norms in May 2012, SAT has sought clarifications from the regulator and RIL on the effects of the guidelines on the ongoing case involving the two.

 

"Before we pronounce the order, we would like to know whether the RIL appeal will hold since new SEBI regulations are retrospective in nature," SAT presiding officer JP Devdhar said, giving time until 24th February to reply.

 

SAT has been hearing a seven-year-old case of alleged insider trading arising from the merger of Reliance Petroleum Ltd (RPL) with RIL back in 2007.

 

SEBI notified a stricter set of consent norms that exclude settlement of serious offences such as insider trading, front-running, violations of listing disclosure norms and illegal pooling of money, among others.

 

The new norms are retrospective and apply to all cases from 20 April 2007. SEBI also excluded all pending cases from the consent settlement process and made it mandatory for an affected party to file for consent within 60 days of receiving a SEBI show-cause notice.

 

Earlier, RIL's senior counsel Janak Dwarkadas requested SAT to fix a timetable for hearing the company's consent application by SEBI once again, which the regulator rejected.

 

According to him, SEBI was wrong in saying RIL's application could not be dealt with under the consent mechanism as the company had been clearly told on 15 April 2011, that it could apply for a settlement through consent.

 

SEBI senior lawyer Darius Khambata maintained the regulator could not be compelled to settle a case through consent.

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RTI Judgement Series: PIO of RBI asked to provide info on StanChart Bank

The CIC said if there are irregularities in the functioning of StanChart Bank, including any regulatory lapses, citizens have a right to know about it. This is the 193rd in a series of important RTI judgements given by former Central Information Commissioner Shailesh Gandhi

The Central Information Commission (CIC), while allowing an appeal, directed the Public Information Officer (PIO) and chief general manager of the Reserve Bank of India (RBI) to provide copies of the findings, recordings, enquiry reports, directive orders, file notings and/ or any information on the investigations conducted by the central bank against Standard Chartered Bank (SCB) in respect of non-compliance by the Bank of RBI's instruction on derivatives. 

 

The PIO had refused to disclosed the information under Sections 8(1)(d), Section 8(1)(A) and (e) of the Right to Information (RTI) Act.   

 

While giving the judgement on 9 January 2012, Shailesh Gandhi, the then Central Information Commissioner said, "If there are certain irregularities in the working and functioning of such banks and institutions, the citizens certainly have a right to know about the same. The CIC does not believe there is any merit in the argument that disclosure of information about non-compliance of regulatory norms by SCB and action taken thereon by RBI can have any impact on the economy of India."

 

Colaba, Mumbai resident, KP Muralidharan Nair from Indian Sugar Exim Corp, on 19 May 2011, sought from the PIO information regarding complaints received against SCB and action taken by RBI. Here is the information he sought and the reply provided by the PIO...

 

1. What contraventions and violations were made by SCB in respect of non-compliance of RBI instructions on derivatives, for which RBI has imposed penalty of INR 10 lakhs on SCB in exercise of its powers vested under Section 47A(1)(b) of the Banking Regulations Act, 1949 and as stated in the RBI press release dated April 26, 2011issued by Department of Communication, RBI

PIO's Reply—The bank was penalised along with 18 other banks for contravention of various instructions issued by the Reserve Bank of India in respect of derivatives, such as, failure to carry out due diligence in regard to suitability of products to users not having risk management policies and not verifying the underlying/adequacy of underlying and eligible limits under past performance route. The information is also available on our web site under press release.

 

2. Please provide us the copies/details of all the complaints filed with RBI against SCB, accusing SCB of mis-selling derivative products, failure to carry out due diligence in regard to suitability of products, not verifying the underlying/adequacy of underlying and eligible limits under past performance and various other non-compliance of RBI Instructions on derivatives.

Also, please provide the above information in prescribed format.     

PIO's Reply—Complaints are received by Reserve Bank of India and as they constitute third party information, the information requested by cannot be disclosed in terms section 8(1) (d) of the RTI Act 2005.

 

3. Please provide us the copies of all the written replies/correspondences made by SCB with RBI and the recordings of all the oral submissions made by SCB to defend and explain the violations/contraventions made by SCB.       

PIO's Reply—The action has been taken against the bank based on the findings of the Annual Financial Inspection (AFI) of the bank which is conducted under the provisions of Sec 35 of the BR act 1949. The findings of the inspection are confidential in nature intended specifically for the supervised entities and for corrective action by them. The information is received by us in fiduciary capacity, disclosure of which may prejudicially affect the economic interest of the state. As such the information cannot b disclosed in terms of Section 8(1)(A) and (e) of the RTI Act 2005

 

4. Please provide us the details/copies of the findings, recordings, enquiry reports, directive orders, file notings and/or any information on the investigations conducted by RBI against SCB in respect of non-compliance by SCB in respect of non-compliance of RBI instruction on derivatives. Also, please provide the above information in prescribed format.      

PIO's Reply—Same as above.

 

Citing incomplete and unsatisfactory information provided by the PIO, the applicant filed his first appeal. However, there was no mention of any order passed by the First Appellate Authority (FAA).

 

Muralidharan Nair, the appellant, then approached the CIC with his second appeal.

 

During the hearing before the Bench of Mr Gandhi, the PIO of RBI claimed that information on query 2 was exempt under Section 8(1)(d) of the RTI Act and information sought in queries 3 and 4 was exempt under Sections 8(1)(a) and (e) of the RTI Act.

 

The appellant stated that this Bench, in a number of decisions, had ruled that the information sought, as that in the present matter, must be disclosed under the RTI Act.

 

The PIO submitted that as regards some of these decisions, a stay has been obtained from the relevant High Court(s). The Bench noted that these stay orders were specific and apply only to the specific order of the Commission sought to be stayed.

 

Whether information sought in query 2 is exempt under Section 8(1)(d) of the RTI Act.

Section 8(1)(d) of the RTI Act exempts from disclosure—"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".

 

Mr Gandhi said, "In order to claim the exemption under Section 8(1)(d) of the RTI Act, the PIO must establish that disclosure of the information sought, which may include commercial or trade secrets, intellectual property or similar information, would result in harming the competitive position of a third party. As per Section 19(5) of the RTI Act, the burden of establishing the applicability of the exemption lies on the PIO."

 

He observed that in the query 2, the appellant had sought copies and details of all the complaints filed with RBI against SCB accusing SCB of mis-selling derivative products, failure to carry out due diligence in regard to suitability of products, not verifying the adequacy of underlying and eligible limits under past performance and various other non-compliance of RBI instructions on derivatives.

 

The PIO argued that the complaints are received by RBI and as they constitute third party information, the information was exempt from disclosure under Section 8(1)(d) of the RTI Act.

 

Mr Gandhi said, "It appears that the PIO is arguing that disclosure of information regarding complaints received from third parties would harm the competitive position of the third party. This Bench is unable to appreciate how disclosure of complaints made against SCB would harm the competitive position of the person/entity making these complaints. Moreover, the PIO has not even clarified the nature/identity of the third party. Section 19 (5) of the RTI Act states that 'In any appeal proceedings, the onus to prove that denial of a request was justified shall be on the Central Public Information Officer or State Public Information Officer, as the case may be, who denied the request.' The PIO has not justified this denial claiming exemption under Section 8 (1) (d). Therefore, the denial of information on query 2 on the basis of Section 8(1)(d) of the RTI Act is rejected."

 

Whether information sought in queries 3 and 4 is exempt under Sections 8(1)(a) and (e) of the RTI Act.

 

The Bench noted that in queries 3 and 4, the appellant has sought copies of all the written replies/ correspondences made by SCB with RBI and the recordings of all the oral submissions made by SCB to defend and explain the violations/ contraventions made by SCB. The appellant has also sought details/ copies of the findings, recordings, enquiry reports, directive orders, file notings and/ or any information on the investigations conducted by RBI against SCB in respect of non-compliance by the bank of central bank's instruction on derivatives.

 

The PIO stated that action against SCB has been taken based on the findings of the Annual Financial Inspection (AFI) of SCB, which is conducted under the provisions of Section 35 of the BR Act 1949. "The findings of the inspection are confidential in nature intended specifically for the supervised entities and for corrective action by them. The information is received by RBI in fiduciary capacity, disclosure of which may prejudicially affect the economic interest of the state. Therefore, the information sought cannot be disclosed in terms of Sections 8(1)(a) and (e) of the RTI Act," the PIO said.

 

Section 8(1)(a) of the RTI Act

Section 8(1)(a) of the RTI Act exempts "information, disclosure of which would prejudicially affect the sovereignty and integrity of India, the security, strategic, scientific or economic interests of the State, relation with foreign State or lead to incitement of an offence".

 

Mr Gandhi said, "It is unlikely that disclosure of information sought in queries 3 and 4 would prejudicially affect the sovereignty and integrity of India, the security, strategic or scientific interests of the state, or relation with foreign State, or lead to incitement of an offence. Hence it must be examined whether the economic interests of the state are likely to be prejudicially affected by disclosure of the information. The information sought is copies of all the written replies/ correspondences made by SCB with RBI, recordings of oral submissions made by SCB to defend and explain the violations/contraventions made by it, details/ copies of the findings, recordings, enquiry reports, directive orders, file notings and/ or any information on the investigations conducted by RBI against SCB in respect of non-compliance by SCB."

 

He said, "This Bench is unable to understand how disclosing this information would affect the economic interests of the state. Financial stability of a nation cannot lie solely on public confidence in banks/ financial institutions, and certainly not where banks/ financial institutions holding public funds are involved in irregularities. The submissions of the PIO appear to suggest that the banking system and the economic state of this Nation are extremely fragile and therefore, the information should not be disclosed.

 

Section 8(2) of the RTI Act

Section 8(2) of the RTI Act states, "Notwithstanding anything in the Official Secrets Act, 1923 nor any of the exemptions permissible in accordance with sub-section (1), a public authority may allow access to information, if public interest in disclosure outweighs the harm to the protected interests".

 

Mr Gandhi observed that the RBI is a regulatory authority which is responsible for inter alia monitoring subordinate banks and institutions. "Needless to state significant amounts of public funds are kept with such banks and institutions. Therefore, it is only logical that the public has a right to know about the functioning and working of such entities including any lapses in regulatory compliances. If there are certain irregularities in the working and functioning of such banks and institutions, the citizens certainly have a right to know about the same. The best check on arbitrariness, mistakes and corruption is transparency, which allows thousands of citizens to act as monitors of public interest. A nation's economic interests lie in the robustness of its Institutions and weeding out of the bad ones. There must be transparency as regards such organisations so that citizens can make an informed choice about them. In view of the same, this Bench is of the considered opinion that even if the information sought in queries 3 and 4 was exempt under Section 8(1)(a) of the RTI Act, as claimed by the Respondent, Section 8(2) of the RTI Act would mandate disclosure of the information sought," he said.

 

Section 8(1)(e) of the RTI Act

Section 8(1)(e) of the RTI Act exempts from disclosure "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".

 

Mr Gandhi reiterated the definition of a fiduciary relationship. "An equally important characteristic for the relationship to qualify as a fiduciary relationship is that the provider of information gives the information for using it for the benefit of the one who is providing the information. All relationships usually have an element of trust, but all of them cannot be classified as fiduciary. Information provided in discharge of a statutory requirement, or to obtain a job, or to get a license, cannot be considered to have been given in a fiduciary relationship," he said.

 

"In the instant case," the Bench said, "while the correspondence exchanged between RBI and SCB may have been maintained in a confidential manner, there does not appear to be any duty case upon RBI to act in benefit of SCB. In fact, both- correspondence exchanged as well as recordings of submissions by RBI are likely to be in the course of inspection of SCB carried out by RBI under Section 35 of the Banking Regulation Act. When RBI carries out inspection of banks under Section 35 of the BR Act, it does so in a regulatory/ monitoring capacity. The information provided to RBI by the Bank is clearly in discharge of statutory obligations. Therefore, there does not appear to be a creation of any fiduciary relationship between RBI and SCB."

 

Mr Gandhi said, "Citizens have a right to know about the working of banking companies including any regulatory lapses. If there are irregularities in the functioning of SCB including any regulatory lapses which may be reflected in the information sought in queries 3 and 4, citizens certainly have a right to know about the same. A larger public interest would be served by disclosing this information- under Section 8(2) of the RTI Act. This Bench is of the considered opinion that even if the information sought in queries 3 and 4 was exempted under Section 8(1)(e) of the RTI Act, as claimed by the Respondent, Section 8(2) of the RTI Act would mandate disclosure of the information sought. "

 

While allowing the appeal, the CIC then directed the PIO to provide complete information as per records to KP Muralidharan Nair before 5 February 2012.

 

CENTRAL INFORMATION COMMISSION

 

Decision No. CIC/SG/A/2011/002841/16732

http://rti.india.gov.in/cic_decisions/CIC_SG_A_2011_002841_16732_M_73736.pdf

Appeal No. CIC/SG/A/2011/002841

 

Appellant                                        : KP Muralidharan Nair,

                                                            Indian Sugar Exim Corporation,

                                                            Colaba, Mumbai - 400 001

                                                                       

Respondent                                     : Dr N Krishna Mohan

                                                            PIO & Chief General Manager,

                                                           Reserve Bank of India,

                                                            Dept. of Banking Supervision,

                                                          Central Office, Centre - I,

                                                          Cuffe Parade, Colaba, Mumbai - 400005

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Firebrand poet, activist Namdeo Dhasal passes away

Dhasal’s poems broke away from stylistic conventions. He was also the founder of the militant Dalit Panther movement and also one of the famous and outspoken members of this group

Renowned Marathi poet and firebrand activist Namdeo Dhasal passed away in Mumbai on Wednesday after a prolonged illness. He was 64.

 

Dhasal, who was battling with colorectal cancer, died at the Bombay Hospital. His last rites would be performed at Chaityabhoomi in Dadar on Thursday.

 

He was also a pioneer of the Dalit literature movement known for its deep concern for the under-privileged. Dhasal’s poems broke away from stylistic conventions. He included in his poetry many words and expressions which only the Dalits normally used. Thus, in Golpitha he adapted his language to that of the red light milieu, which shocked middle class readers.

 

Following the example of the American Black Panther movement, Dhasal founded the Dalit Panther with friends in 1972. This militant organization supported its radical political activism with provocative pamphlets. Dhasal was one of the famous and outspoken members of this group.

 

In 1973, he published his first volume of poetry, Golpitha. More poetry collections followed: Moorkh Mhataryane (By a Foolish Old Man) --inspired by Maoist thoughts--; Tujhi Iyatta Kanchi? (How Educated Are You?); erotic Khel; and Priya Darshini (about the former Indian Prime Minister Indira Gandhi).

 

Dhasal wrote two novels, and also published pamphlets such as Andhale Shatak (Century of Blindness) and Ambedkari Chalwal (Ambedkarite Movement), which was a reflection on the socialist and communist concepts of Dalit movement founder Babasaheb Ambedkar.

 

Later, he published two more collections of his poetry: Mi Marale Suryachya Rathache Sat Ghode (I Killed the Seven Horses of the Sun), and Tujhe Boat Dharoon Mi Chalalo Ahe (I'm Walking, Holding Your Finger).

 

Recently, Dhasal has been writing columns for the Marathi daily Saamana. Earlier, he worked as an editor for the weekly Satyata.[2]

 

Dhasal was diagnosed with colon cancer and admitted for treatment in a Mumbai hospital in September 2013.

 

The Padma Shri awardee also has a medical history of myasthenia gravis which is one of the lesser known auto-immune disorders.

 

In 2007, actors Amitabh Bachchan and Salman Khan had helped raise funds for Dhasal whose family was on the verge of selling their house to pay his medical bills.

 

Dhasal, also a rights activist, received the Nehru award for his book ‘Golpitha’. In 2004, he was awarded the prestigious Sahitya Akadami award for his contribution for literature.

 

Dhasal’s selected poems were translated into English under the title ‘Namdeo Dhasal: Poet of the Underworld’, Poems 1972-2006.

 

Arundhati Subrahmaniam describes his poetry thus: "Dhasal is a quintessentially Mumbai poet. Raw, raging, associative, almost carnal in its tactility, his poetry emerges from the underbelly of the city — its menacing, unplumbed netherworld. This is the world of pimps and smugglers, of crooks and petty politicians, of opium dens, brothels and beleaguered urban tenements."

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