2015 (2) TMI 1415 - HC - SEBI

Order passed by the Central Information Commission directing the Petitioner SEBI to provide the information sought of assets and liabilities statement of Mr. U.K. Sinha Chairman SEBI for the last three years or for the period declared by him; and his total present emoluments along with perquisites on which he has been employed with SEBI - HELD THAT - In our view in the impugned order no reasons have been given by the Central Information Commission. It is obvious that the Central Information Commission while allowing the appeal of Respondent No.1 has not given any reason whatsoever for taking a view which is contrary to the view taken by it earlier. Therefore on this ground alone the impugned order will have to be set aside. Apex Court in S.N. Mukherjee vs. Union of India 1990 (8) TMI 345 - SUPREME COURT held that an important consideration which has weighed with the court for holding that an administrative authority exercising quasi-judicial functions must record the reasons for its decision is that such a decision is subject to the appellate jurisdiction of this Court under Article 136 of the Constitution as well as the supervisory jurisdiction of the High Courts under Article 227 of the Constitution and that the reasons if recorded would enable this Court or the High Courts to effectively exercise the appellate or supervisory power. But this is not the sole consideration. The other considerations which have also weighed with the Court in taking this view are that the requirement of recording reasons would (i) guarantee consideration by the authority; (ii) introduce clarity in the decisions; and (iii) minimise chances of arbitrariness in decision-making. Thus impugned order is set aside and the matter is remanded back to the Central Information Commission. All contentions of both the parties are kept open.

1. ISSUES PRESENTED and CONSIDERED

The legal judgment primarily revolves around the following core issues:

Whether the Central Information Commission (CIC) was justified in directing the Securities and Exchange Board of India (SEBI) to disclose the personal information of its Chairman, Mr. U.K. Sinha, specifically his assets and liabilities, and his total present emoluments, under the Right to Information Act.
Whether the CIC adequately justified its decision to override the exemption under Section 8(1)(j) of the Right to Information Act, which protects personal information from disclosure unless it serves a larger public interest.
Whether the lack of reasons provided by the CIC in its impugned order constituted a valid ground for setting aside the order.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Justification of CIC's Direction to Disclose Information

Relevant Legal Framework and Precedents: The Right to Information Act, particularly Section 8(1)(j), which exempts personal information from disclosure unless it serves a larger public interest. The precedent case, Arun Kumar Agrawal vs. Union of India, was referenced by SEBI to argue against disclosure.
Court's Interpretation and Reasoning: The court noted that the CIC's decision to disclose the information was not accompanied by adequate reasoning. The CIC had previously exempted such information, citing it as personal, and the reversal of this stance required a detailed explanation.
Key Evidence and Findings: The CIC's impugned order lacked detailed reasoning for its decision to disclose the information, which was contrary to its earlier decision.
Application of Law to Facts: The court applied the principles of administrative law, emphasizing the need for reasoned decisions, especially when reversing a prior stance.
Treatment of Competing Arguments: SEBI argued that the disclosure was not justified under public interest, while the respondent claimed a public interest in transparency concerning the Chairman's financial background. The court found the CIC's reasoning insufficient to support its decision.
Conclusions: The court concluded that the CIC's order lacked the necessary reasoning and therefore could not stand. The matter was remanded back to the CIC for reconsideration with a directive to provide a reasoned decision.

Issue 2: Adequacy of CIC's Reasoning

Relevant Legal Framework and Precedents: The requirement for administrative bodies to provide reasoned decisions, as outlined in S.N. Mukherjee vs. Union of India, which emphasizes the need for clarity and avoidance of arbitrariness in decision-making.
Court's Interpretation and Reasoning: The court highlighted the importance of providing reasons for decisions, particularly when an administrative body changes its stance on a matter. The absence of reasons was seen as a significant flaw in the CIC's order.
Key Evidence and Findings: The court identified that the CIC's order did not provide any substantial reasoning for why the disclosure was in the larger public interest, contrary to its earlier decision.
Application of Law to Facts: The court applied the principle that administrative decisions must be reasoned to ensure fairness and transparency, particularly when subject to appellate or supervisory review.
Treatment of Competing Arguments: The court acknowledged the respondent's argument for public interest but found the CIC's lack of reasoning insufficient to justify the disclosure.
Conclusions: The court set aside the CIC's order due to the absence of reasoning and remanded the matter for a fresh decision with a directive to provide a reasoned order.

3. SIGNIFICANT HOLDINGS

Preserve Verbatim Quotes of Crucial Legal Reasoning: "The decisions of this Court referred to above indicate that with regard to the requirement to record reasons the approach of this Court is more in line with that of the American Courts. An important consideration which has weighed with the court for holding that an administrative authority exercising quasi-judicial functions must record the reasons for its decision..."
Core Principles Established: Administrative bodies must provide reasoned decisions, particularly when reversing prior decisions, to ensure transparency, fairness, and the ability for effective appellate review.
Final Determinations on Each Issue: The CIC's order was set aside due to lack of reasoning. The matter was remanded back for reconsideration, with instructions to provide a reasoned decision that addresses the public interest claim adequately.

The judgment underscores the necessity for administrative bodies to provide clear and reasoned decisions, especially when dealing with exemptions under the Right to Information Act, to uphold the principles of transparency and accountability.

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