While giving 'one last opportunity', the Supreme Court on Friday asked Reserve Bank of India (RBI) to reconsider its position on disclosure of annual inspection reports of banks, list of wilful defaulters and other details sought by activists under Right to Information (RTI) Act. The apex court just stopped short of issuing a contempt notice against RBI governor, Shaktikanta Das, in this matter.
"Though we could have taken a serious view of RBI 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 RBI are dutybound to furnish all information relating to inspection reports and other material apart from the material that was exempted in para 77 of the judgment. Any further violation shall be viewed seriously by this Court," the bench of Justice L Nageswara Rao and Justice MR Shah said in the order.
The apex court also directed the central bank to withdraw its non-disclosure policy, which the Court concluded is in violation of the Supreme Court's judgement in 2015. The RBI, as per 2015 judgement, was supposed to disclose the annual audit report of the banks, status of NPAs (non-performing assets) and action taken thereon.
Taking a serious view of the continued defiance by RBI, the court came down heavily asking the central bank to make full disclosure of its annual inspection reports on the financial health of banks including position of NPAs and also withdraw its disclosure norms as they came in the way of making information public on the state of banks under the RTI.
A bench of Justice L Nageswara Rao and Justice MR Shah said: "Any further violation will be viewed seriously."
Earlier, both, the apex court as well as central information commission (CIC), had held that RBI cannot refuse to put in the public domain the annual inspection reports of banks. However, RBI has refused to follow these orders saying that these reports contain 'fiduciary information' as defined under the RTI Act and, hence, cannot be placed in the public domain.
RTI activists Subhash Chander Agrawal and Girish Mittal had moved the top court seeking contempt action against RBI governor for not complying with its 2015 judgement.
The petitioners had claimed that RBI and its former governor Dr Urjit Patel had 'willfully and deliberately' disobeyed the apex court's judgement asking the central bank to disclose information under the RTI Act.
The two petitioners sought initiation of contempt of court action against former Governor for not disclosing information as directed by the top court.
One of the contempt petitions filed by Girish Mittal said that RBI refused to provide information sought about the inspection reports of some banks.
In the petition, Mumbai-based Mr Mittal, represented by senior counsel Prashant Bhushan and Pranav Sachdeva, contended that he had sought information under the RTI Act in December 2015 like copies of inspection reports of ICICI Bank, Axis Bank, HDFC Bank and State Bank of India (SBI) from April 2011 and copies of case files, with file notings on various irregularities detected by RBI in the case of Sahara group of companies and erstwhile Bank of Rajasthan.
However, RBI denied the information in January 2016 that such information is exempted under Section 8(1)(e) of the RTI Act and Section 45NB of the Reserve Bank of India Act.
The petition recalled the Supreme Court ruling in a case that RBI is clearly not in any fiduciary relationship with any bank. RBI has no legal duty to maximise the benefit of any public sector or private sector bank and, thus, there is no relationship of 'trust' between them. (Read: SC issues contempt notice to RBI in RTI case
In the notice, the then central information commissioner Prof Sridhar Acharyulu had also asked the prime minister’s office (PMO), finance ministry and RBI to make public the letter sent by previous governor Raghuram Rajan on bad loans.
In the order, Prof Acharyulu had stated, "The Commission finds no merit in hiding the names of, details and action against wilful defaulters of big bad loans worth hundreds of crores of rupees. The RBI shall disclose the bad debt details of defaulters worth more than Rs1,000 crore at the beginning, of Rs500 crore or less at later stage within five days and collect such information from the banks in due course to update their voluntary disclosures from time to time as a practice under Section 4(1)(b) of RTI Act."
Prof Acharyulu, irked over the denial of information on wilful defaulters who had unpaid loans of Rs50 crore and more, asked the RBI governor to explain why maximum penalty should not be imposed on him for ‘dishonouring’ a verdict from the apex court, which had upheld a decision taken by then information commissioner Shailesh Gandhi, calling for disclosure of names of wilful defaulters.
Earlier in February 2016, the Supreme Court had directed RBI to furnish a list of the companies which are in default of loans in excess of Rs500 crore or whose loans have been restructured under corporate debt restructuring (CDR) scheme by banks and financial institutions. (Read: Supreme Court asks RBI to submit list of big defaulters
Even in December 2015, the apex court, in a landmark judgement, had told RBI that the banking regulator cannot withhold information citing 'fiduciary relations' under the RTI Act.