Supreme Court Rejects Banks’ Appeal To Restrict RBI from Disclosing Defaulters’ List, Inspection Report under RTI
Moneylife Digital Team 29 April 2021
In a significant ruling, the Supreme Court (SC) has rejected a plea by banks to recall a judgement given by the apex court asking Reserve Bank of India (RBI) to disclose list of loan defaulters and bank inspection reports under the Right to Information (RTI) Act. Some banks had filed the plea seeking to recall the SC's 2015 judgement in the Jayantilal N Mistry versus RBI case. In this judgement, the apex court had directed RBI to share such information as the list of defaulters, inspection reports of banks and annual statements, under the RTI Act.
In an order, the bench of justice L Nageswara Rao and Justice Vineet Saran says, "There is no provision in the Supreme Court rules for filing any application for recall of the judgment of this Court. In the instant case, the dispute relates to information to be provided by the RBI under the RTI Act. Though the information pertained to the banks, it was the decision of the RBI which was in challenge and decided by this Court. No effort was made by any of the applicants in the miscellaneous applications to get themselves impleaded when the transferred cases were being heard by this Court. The applications styled as recall are essentially applications for review."
The banks, however, are allowed to pursue other remedies available under the law.
In the 2015 judgement, the Supreme Court had refused to accept the contention of RBI that the information sought by the respondents could not be disclosed in view of its fiduciary relationship with the banks. (Read: RBI cannot withhold information under RTI citing ‘fiduciary relations’: SC)
The apex court had observed that RBI is not in any fiduciary relationship with the banks and that RBI has a statutory duty to uphold the interest of the public at large, the depositors, the country’s economy and the banking sector. 
“In the instant case, the RBI does not place itself in a fiduciary relationship with the financial institutions (though, in words, it puts itself to be in that position) 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. In this case neither the RBI nor the banks act in the interest of each other. By attaching an additional 'fiduciary' label to the statutory duty, the regulatory authorities have intentionally or unintentionally created an in terrorem effect,” the SC had said. (In terrorem is Latin for "into/about fear", a legal threat, usually one given in the hope of compelling someone to act without resorting to a lawsuit or criminal prosecution. – Wiki)
The Court observed, “Furthermore, the RTI Act under Section 2(f) clearly provides that the inspection reports, and documents. fall under the purview of 'information' which is obtained by the public authority (RBI) from a private body.”
In its judgement, the SC conclusively stated that, “As in this case, the RBI is liable to provide information regarding inspection reports and other documents to the general public.” 
The Court believed RBI must 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.
However, despite the clear order from the Supreme Court, RBI came up with its own disclosure policy in November 2016, which was contrary to the apex court judgement.
Since RBI defied the Supreme Court order, contempt petitions were filed in 2016. During hearing of the contempt petition (Girish Mittal v. Parvati V. Sundaram & Anr), it was brought to the notice of the apex court that another disclosure policy was uploaded on RBI website on 12 April 2019. Later, RBI deleted the disclosure policy from its website. 
This matter was decided by the Supreme Court in April 2019 with a warning to RBI to comply with its orders and honour its duties as per the RTI Act. The Court also warned that violation of its directions by RBI shall be viewed seriously.
Few days ago, speaking at a webinar organised by Moneylife Foundation on transparency and disclosure in the banking sector, senior counsel Prashant Bhushan had mentioned RBI's approach while handling RTI applications. Even before the SC, RBI had used privacy clause for its argument for denying information under the RTI Act.
However, advocate Bhushan explained, “If people have borrowed public money from the banks and thereafter defaulted on the same, then information about the loans they had taken, and their defaults cannot be said to be private information and then held as exempt under the RTI Act.”
Watch video of the webinar...
The Supreme Court's 2015 ruling in the Jayantilal Mistry case was challenged by some banks including State Bank of India (SBI) and HDFC Bank with a plea to recall the judgement. In an order on 18 December 2019, the SC directed RBI not to release inspection reports, risk assessment reports and annual financial inspection reports of the banks including the SBI's.
In the current case, the counsels for the banks contended that in the Jayantilal N Mistry ruling the SC did not consider the important aspect of violation of the right to privacy, which has been held to be an intrinsic part of the right to life and personal liberty under Article 21 of the Constitution of India in Justice KS Puttaswamy (Retd.) & Anr vs Union of India & Ors. 
Another submission made on behalf of the banks is that the judgment in Jayantilal N Mistry was per incuriam (through lack of due regard to the law or the facts) as certain judgements of the apex court have not been considered. 
An attempt was also made to make submissions regarding the correctness of the judgement which was curtailed by the bench on the ground that arguments were being heard only regarding the maintainability of the applications for recall.
While rejecting the plea by banks, the SC says, "A close scrutiny of the applications for recall makes it clear that in substance, the applicants are seeking a review of the judgment in the Jayantilal N Mistry case. Therefore, we are of the considered opinion that these applications are not maintainable."
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1 year ago
One of my SCSS Account, fraudulently closed by SBI, Asked for audit and inspection report under RTI, the CPIO LEFT THE COLUMN BLANK. First appellate authority directed cpio to furnish information within 5 days. That is the END
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