๐๐๐ฅ๐ก๐ข ๐๐ข๐ ๐ก ๐๐จ๐ฎ๐ซ๐ญ ๐๐๐๐ข๐ซ๐ฆ๐ฌ ๐ญ๐ก๐๐ญ ๐๐๐ ๐ข๐ฌ ๐ โ๐๐ฎ๐๐ฅ๐ข๐ ๐๐ฎ๐ญ๐ก๐จ๐ซ๐ข๐ญ๐ฒโ ๐ฎ๐ง๐๐๐ซ ๐ญ๐ก๐ ๐๐๐ ๐๐๐ญ
A Division Bench of the Honโble Delhi High Court affirmed and upheld the judgment of the Ld. Single Judge in a Letters Patent Appeal. The matter, originally filed in 2010, concerned the Single Judgeโs decision holding that the NSE India qualifies as a โpublic authorityโ under Section 2(h) of the RTI Act, 2005-thereby bringing an end to 15 years of litigation since the original 2010 Single Judge ruling.
๐๐ก๐ ๐๐ฌ๐ฌ๐ฎ๐: Can a privately incorporated company be an RTI โpublic authorityโ merely because it is recognised as a stock exchange under the SCRA, 1956?
๐๐๐ฒ ๐ ๐ข๐ง๐๐ข๐ง๐ ๐ฌ:
1.ย ย ๐๐๐๐ฉ & ๐ฉ๐๐ซ๐ฏ๐๐ฌ๐ข๐ฏ๐ ๐๐จ๐ง๐ญ๐ซ๐จ๐ฅ: Relying on Delhi Stock Exchange v. K.C. Sharma (affirmed by the Supreme Court), the Court held SEBI/Central Government exercises deep, pervasive control over recognised exchanges-not mere regulatory oversight. NSEโs attempt to distinguish this precedent as a โservice matterโ was rejected.
2.ย ย ๐๐๐๐จ๐ ๐ง๐ข๐ญ๐ข๐จ๐ง โ ๐ซ๐๐ ๐ฎ๐ฅ๐๐ญ๐ข๐จ๐ง: Without SEBIโs recognition order under Section 4 (3) SCRA, NSE could not function as a stock exchange at all. This makes recognition a precondition to its existence-not incidental regulation of an already-functioning private company. That order, being an act of the Central Government (delegated to SEBI under Section 29A SCRA), satisfies the โestablished/constituted by Government orderโ limb of Section 2(h).
3.ย ย ๐๐ฎ๐๐ฅ๐ข๐ ๐๐ฎ๐ง๐๐ญ๐ข๐จ๐ง ๐๐๐๐ข๐ซ๐ฆ๐๐: The Court reaffirmed Binny Ltd. v. Sadasivan, which recognises stock exchanges as performing public functions.
4.ย ย NSE was held to qualify as a โpublic authorityโ under both limbs of Section 2(h).
๐๐ก๐ฒ ๐๐ญ ๐๐๐ญ๐ญ๐๐ซ๐ฌ: The Court rejected NSEโs โslippery-slopeโ argument that this would make banks, NBFCs and insurers public authorities too-distinguishing recognition as a precondition for existence from routine regulatory supervision. The ruling has significant implications for RTI compliance obligations of SCRA-recognised market infrastructure institutions.
A copy of the judgment is attached.
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