Quasi-Judicial Authority Has To Disclose Material That Has Been Relied Upon At The Stage Of Adjudication: Supreme Court

The Supreme court observed that a quasi-judicial authority has a duty to disclose the material that has been relied upon at the stage of adjudication.Keeping a party bereft of the information that influenced the decision of an authority undertaking an adjudicatory function undermines the transparency of the judicial process, the bench comprising Justices DY Chandrachud and Sanjiv Khanna observed. The court added that an ipse dixit of the authority that it has not relied on certain material would not exempt it of its liability to disclose such material if it is relevant to and has a nexus to the action that is taken by the authority.In this case, the petitioner before the Bombay High Court challenged a show cause notice which was issued by the Securities and Exchange Board of India alleging a violation of the provisions of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices) Regulations 2003. Against the order of the High Court dismissing the petition, he approached the Apex Court essentially contending that an investigation report under Regulation 9 of the PFUTP Regulations must be disclosed to the person to whom a notice to show cause is issued. SEBI's stand was that only materials that have been relied on by the Board need to be disclosed.The bench referring to various provisions of the PFUTP Regulations, noted that the consideration of the report of the investigating authority which is submitted under Regulation 9 is one of the components guiding the Board's satisfaction on the violation of the regulations. If the report of the investigation authority under Regulation 9 has to be considered by the Board before satisfaction is arrived at on a possible violation of the regulations, the principles of natural justice require due disclosure of the report, the court said. The court, in this regard, said that there are three key purposes that disclosure of information serve:(i) Reliability: The possession of information by both the parties can aid the courts in determining the truth of the contentions. The role of the court is not restricted to interpreting the provisions of law but also determining the veracity and truth of the allegations made before it. The court would be able to perform this function accurately only if both parties have access to information and possess the opportunity to address arguments and counter-arguments related to the information; (ii) Fair Trial: Since a verdict of the Court has far reaching repercussions on the life and liberty of an individual, it is only fair that there is a legitimate expectation that the parties are provided all the aid in order for them to effectively participate in the proceedings; (iii) Transparency and accountability: The investigative agencies and the judicial institution are held accountable through transparency and not opaqueness of proceedings. Opaqueness furthers a culture of prejudice, bias, and impunity – principles that are antithetical to transparency. It is of utmost importance that in a country grounded in the Rule of Law, the institutions adopt those procedures that further the democratic principles of transparency and accountability. The principles of fairness and transparency of adjudicatory proceedings are the cornerstones of the principle of open justice. This is the reason why an adjudicatory authority is required to record its reasons for every judgement or order it passes. However, the duty to be transparent in the adjudicatory process does not begin and end at providing a reasoned order. Keeping a party bereft of the information that influenced the decision of an authority undertaking an adjudicatory function also undermines the transparency of the judicial process. It denies the concerned party and the public at large the ability to effectively scrutinise the decisions of the authority since it creates an information asymmetry.Referring to various judgments in this regard, the bench observed:"(i) A quasi-judicial authority has a duty to disclose the material that has been relied upon at the stage of adjudication; and (ii) An ipse dixit of the authority that it has not relied on certain material would not exempt it of its liability to disclose such material if it is relevant to and has a nexus to the action that is taken by the authority. In all reasonable probability, such material would have influenced the decision reached by the authority. Thus, the actual test is whether the material that is required to be disclosed is relevant for purpose of adjudication. If it is, then the principles of natural justice require its due disclosure."Allowing the appeal, the court held that the Board shall be duty-bound to provide copies of such parts of the report which concern the specific allegations which have been levelled against the appellant in the notice to show cause. The court made the following conclusions: The appellant has a right to disclosure of the material relevant to the proceedings initiated against him. A deviation...

Quasi-Judicial Authority Has To Disclose Material That Has Been Relied Upon At The Stage Of Adjudication: Supreme Court

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