Supreme Court Refuses To Stay RBI Notices To Bank Under RTI To Disclose Information

The Supreme Court on Friday refused the prayers made by Punjab National Bank and Union Bank of India to stay the RTI notices issued to them by the Reserve Bank of India to disclose information related to defaulters list, inspection reports etc.A division bench comprising Justices S Abdul Nazeer and Krishna Murari however issued notice on the writ petitions filed by the banks and posted them along with similar petitions earlier filed by the State Bank of India and private banks HDFC Bank, Axis Bank, ICICI Bank and Yes Bank. The bench had refused interim reliefs to those banks as well.The cases will be considered next on July 19.The banks are challenging the notices issued by the Reserve Bank of India to them under Section 11(1) of the Right to Information Act as regards the inspection reports/ risk assessment reports for the years FY17-18 and FY18-19.Section 11 gives power to the Central Public Information Officer to seek information from third party in RTI applications. Section 11(1) is an advance notice issued inviting third party's objections to such disclosure.The RTI notices to banks were issued following the April 28 order of the Supreme Court refusing to recall the 2015 judgment in the case Reserve Bank of India v Jayantilal N. Mistry which had held that the RBI was obliged to disclose defaulters list, inspection reports, annual statements etc., related to banks under the RTI Act.A bench comprising Justices L Nageswara Rao and Vineet Saran had dismissed the banks' applications observing that the Supreme Court Rules did not have any provision for filing any application for recall of a judgment.However, the bench gave liberty to the banks to pursue other available legal remedies against the Jayantilal Mistry judgment.Following that, the banks have filed separate writ petitions challenging the RTI notices issued to them by the RBI, arguing that disclosure of sensitive financial information will be detrimental to their business and will compromise confidentiality of depositors.The banks also argued that their competitors could exploit the disclosure of their internal reports.About the Jayantilal Mistry caseIn the Jayantilal Mistry case, the Supreme Court had rejected the argument of the Reserve Bank of India that it was holding the information of banks in a fiduciary capacity, and therefore such information was exempted from disclosure under the Right to Information Act as per Section 8(1)(e). The Apex Court was considering a batch of transferred cases from various High Courts wherein the order passed by the Central Information Commission (CIC) directing the RBI to furnish the Information sought to the applicants under the RTI Act.A bench comprising Jusitces MY Eqbal and C Nagappan had held that RBI does not place itself in a fiduciary relationship with the Financial institutions 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. The Court held that information obtained under a regulatory capacity or under the mandate of law cannot be termed as information held under fiduciary capacity."RBI is supposed to uphold public interest and not the interest of individual banks. RBI is clearly not in any fiduciary relationship with any bank. RBI has no legal duty to maximize the benefit of any public sector or private sector bank, and thus there is no relationship of 'trust' between them. RBI has a statutory duty to uphold the interest of the public at large, the depositors, the country's economy and the banking sector. Thus, RBI ought to act with transparency and not hide information that might embarrass individual banks", the judgment stated. The Court expressed the opinion that the RBI has to act with transparency and not hide information that might embarrass the banks and that it is duty bound to comply withthe provisions of the Act and disclose the information soughtLater, contempt petitions were filed after the RBI contending that the disclosure policy framed by the RBI in 2016 were contrary to the directions in the Jayantlal Mistry judgment.In April 2019, a bench comprising Justices Nageswara Rao and MR Shah directed the RBI to withdraw the disclosure policy to the extent it permitted exemptions contrary to the Supreme Court verdict (Girish Mittal v. Parvati V. Sundaram & Anr). The Court held that the violations of its direction by the RBI will be viewed seriously.

Supreme Court Refuses To Stay RBI Notices To Bank Under RTI To Disclose Information

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