RESERVE BANK OF INDIA V. JAYANTILAL MISTRY

INTERESTING ELEMENTS:-

  • COURT : Supreme Court of India
  • JURISDICTION : Civil Original Jurisdiction
  • CASE NO : Civil Appeal No. 91 OF 2015
  • BENCH : M.Y. Eqbal, C. Nagappan
  • APPELLANT : Reserve Bank Of India
  • RESPONDENTS : Jayantilal N. Mistry
  • DECIDED ON : 16 December 2015

INTRODUCTION:-

This decision’s backbone resides in the provisions of the Right to Information Act of 2005, which offered a different degree of independence for citizens to obtain information from different institutions to guarantee accountability. The weaknesses of this extraordinary Act were still definitely attached. The prosecution reflects on the aspects of two major acts.

On many occasions, the Reserve Bank of India declined to offer such information to the respondents because of secrecy, confidence, and economic interests. In this case, the numerous intimates have taken steps in respect of their claims and subsequently investigated by the Central Information Commission (CIC) to implement and supply information by RBI. But RBI addressed courts in each case by several writ petitions and eventually clubbed all appeals and took them before the Supreme Court of India after unsatisfactory judgments.

Finally, the Supreme Court’s decision held that RBI was obliged to provide information according to the RTI Act and rejected its grounds of failure to provide sufficient information based on secrecy and other grounds put up by RBI.

FACTS OF THE CASE IN BRIEF:-

The petitioner, the Reserve Bank of India, referred to the Supreme Court in several High Courts on the publication of details on numerous prior decisions filed by them. Many respondents, including Jayantilal Mistry and others who had gone to court to seek information under the RTI Act that the Reserve Bank did not include based on fiduciary partnership, economic interests, and other secrecy grounds. Since failing to comply with the Central Information Commission’s ruling, the Bank has now appealed to the Supreme Court, which has analyzed all prior cases on the grounds of claims posed by both sides.

ISSUES RAISED:-

Under the Right to Information Act, 2005, the Reserve Bank of India’s authority ceases to extend the information desired by people?

QUESTIONS BEFORE THE COURT:-

I. If the Right to Information Act 2005 will bypass those particular laws containing clauses granting the information collected by the RBI confidentiality?
II. If, on the grounds of commercial trust, economic interests, or fiduciary ties with other banks, the Reserve Bank of India is willing to refuse to reveal the information requested under the Right to Information Act, 2005?

ARGUMENTS ADVANCED BY THE PETITIONERS:-

The petitioner argued that the CIC’s actions were unconstitutional and without authority. To develop their claims, the petitioner’s counsel cited numerous provisions of different acts: The Reserve Bank of India Act, 1934; The Banking Regulation Act, 1949; and The Credit Information Companies (Regulation) Act, 2005;

The statements made by the petitioners were:

The RBI serves as a regulatory body to manage the country’s money supply under the Reserve Bank of India Act 1934. Under Section 28 of the Banking Regulation Act 1949, the RBI supplies information in a consolidated manner in the event of public concern. The RBI performs inspections of different banks under Section 35 of the Banking Regulations Act, 1949. Under its regulatory and supervisory power, it has access to the officers’ sensitive information during the inspections, which RBI can, if necessary and not otherwise, publish only in the public interest. Because of its status as a safeguard of the country’s economic and financial stability, the Bonafide capability of the RBI cannot be doubted.

By depending on diverse decisions such as Peerless general finance and investment co ltd v RBI, and B. Suryanarayana v Kolluru Parvathi Co-op Bank Ltd- The petitioner pleaded that the RBI rulings could not be interfered with by the courts. The petitioner claimed that the dissemination of information is synonymous with unavoidable secrecy threats that would result in repercussions that could impact the information’s general adequacy owing to possible risks that may not protect clients’ records. The petitioner submits that they are prohibited from presenting information under Section 8(1)(a)(d)&(e) of the RTI Act, 2005.

By citing separate judgments, RBI’s solicitor argued that the disclosure would negatively impact the state’s economic interests and could call for adverse market responses that could lead to a financial crisis. The RBI has many persuasive protections under Sections 27, 34(a), Subsection 5(35), 45(e)(3), confirming its argument for non-disclosure.

ARGUMENTS ADVANCED BY RESPONDENT:-

The respondent referred to the preamble’s critical feature and asserted that accountability for the government’s proper running is the most valuable aspect. According to Article 19 of the Indian Constitution, the right to knowledge is a constitutional right. Section 22 of the RTI Act overrides all acts, including the official secret Act of 1923.

Under the exemption demanded by the petitioner according to sections 8(1)(a), 8(1)(d) and 8(1)(e) of the RTI Act, the details of the case are not applicable and, if the case is revealed, it is deemed to be in the public interest.
The respondents cited the case of the Central Board of Secondary Education v. Aditya Bandopadhyay to substantiate the real sense of the word fiduciary relationship as provided in this case by the court and the petitioner’s reaction to the perceived meaning. The Supreme Court illustrated the importance of faith, direction, responsibilities, transparency, and honesty. It emphasizes the need for an individual to act to help others in a fiduciary capacity and understand the extent of their fiduciary duty.

THE JUDICIAL DECISION:-

In-depth, the Supreme Court clarified the initially debated deliberations when the RTI Act bill was discovered. The Supreme Court ruled that publication of such information related to the public interest is permitted if the damage done to public authorities is eliminated.

The Supreme Court declared that, in compliance with the constitutional provision of the Democratic Republic, taking into account all facets of accountability and its consequences, it is essential to include all the relevant information that people want.

On the ground claimed by the “fiduciary relationship” counsel of the bank, it was beneficial to determine that the RBI does not place itself in a fiduciary relationship with the financial institutions (although in the term it places itself in that position) because the inspection reports, bank statements, business-related information obtained by the RBI are not under the pretext of inspection reports, bank statements, business-related information obtained by the RBI. The RBI should uphold the public interest and not the interest of particular banks. In any fiduciary arrangement with any bank, the RBI is not. RBI has no legal responsibility to optimize either the public sector or private sector bank’s profit, so there is no confidence arrangement between them. RBI is mandated by law to protect the interests of the general public, the depositors, the country’s economy, and the banking sector. Therefore, RBI should be open and not mask details that may be humiliating for individual banks. Formance with the RTI Act provisions and dissemination of the respondents’ details is a responsibility.

“The RBI’s frivolous and unfounded contention that the disclosure will damage the country’s economic interests is misconceived. In the order questioned, the CIC gave a range of reasons to state why the disclosure of the information demanded by the respondents would be of immense benefit to the public interest and that the refusal to reveal the information would be greatly adverse to the public interest and not to the economic interest of India. RBI’s claim that the nation’s economic stability will be threatened if sovereign citizens are made aware of the violations being perpetrated by the banks is not just ridiculous but also equally misconceived and unreasonable. The RBI is also liable and has to give information to information seekers in compliance with Section 10(1) of the RTI Act.”

ANALYSIS:-

Because of the justification given by it for the orders passed, the Supreme Court’s judgment carries essence. Following the ruling, the RBI was under enormous pressure to release details in relation to the provisions of the RTI Act. The RBI was requested to provide reports on the periodic checks carried out by them and was also asked to cooperate with the audit details issued by financial institutions and banks.

Although it is essential to provide people with knowledge in specific ways, however, it cannot be denied that the dangers involved with this can be devastating and intolerable. The harm that may be incurred and the public’s misinterpretation of facts was clear. In separate assessments, the misapplication of decisions is clear. The abuse of the data would be unforeseeable, and the only way to do that would be to amend the current decision.

CASE NAME: – Reserve Bank of India v. Jayantilal
Mistry

Author – P.BHUVAN DEEPAK, [ B.B.A,L.L.B.], Gitam School Of Law.
E-mail id – bhuvandeepak99@gmail.com