The Supreme Court on Friday said it will form a bench to hear Securities and Exchange Board of India’s (Sebi) petition, seeking review of its earlier judgment that had directed the market regulator to share certain documents with Reliance Industries.
The company claims these documents will exonerate it and its promoters from criminal prosecution initiated by the regulator in a case related to the alleged irregularities in acquisition of its own shares between 1994 and 2000.
A Bench led by Chief Justice UU Lalit told senior counsel Arvind Datar, appearing for Sebi, that the registry will form a new bench and give a date for the hearing.
Sebi had sought urgent listing of its review petition against the August 5 judgment. Even RIL’s contempt petition against Sebi is yet to be taken up for hearing.
So far, Sebi has not shared the three documents — the two legal opinions by former SC judge BN Srikrishna and the former ICAI president YH Malegam’s report which examined the irregularities — that the SC had asked it to share “forthwith”, thus prompting RIL to file a contempt petition against the market watchdog and its authorised representative Vijayan A.
The Ambani firm said that Sebi had obviously “misadvised itself” in assuming that its compliance with the judgment is a matter of discretion and on which it can see advice.
While asking Sebi to furnish “forthwith” the documents to RIL, the SC had, in its August 5 judgment, said that “the duty to act fairly by Sebi, is inextricably tied with the principles of natural justice, wherein a party cannot be condemned without having been given an adequate opportunity to defend itself.”
Sebi had, in January 2019, rejected RIL’s request for the “privileged” documents on the grounds that under the Sebi (Settlement Proceedings) Regulations, the accused company had no right to seek information from it.
Chartered accountant S Gurumurthy had filed a complaint with Sebi in 2002, alleging fraud and irregularities by RIL, its associate companies and their directors/promoters, including Mukesh Ambani and his wife, Nita; Anil Ambani and his wife, Tina; and 98 others in the issue of two preferential placement of non-convertible debentures in 1994. Sebi had alleged that RIL, along with Reliance Petroleum, had “circuitously funded the acquisition of its own shares” in violation of the Sections 77 and 77A of the Companies Act, 1956 and the market regulator’s then takeover code, among various other regulations.
Earlier, the Bombay High Court, had on March 28, refused to grant any relief for production of material gathered by the regulator, saying it would hear Sebi’s appeal against a special court decision along with RIL’s objections to the criminal case.
Sebi had sought restoration of the case before the HC after the special court had on September 30, 2020 dismissed its July 10, 2020 complaint related to RIL transactions.
The special court had dismissed Sebi plea for being barred by limitation as there was a delay of more than 15 years.