Banks not heard in case leading to 2015 verdict asking them to disclose info under RTI, SC told

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New Delhi, Jul 19 (PTI) Banks were neither parties nor heard in a case which led to the 2015 judgement holding that the RBI would have to provide information such as confidential annual reports and list of defaulters under the transparency law, the Supreme Court was informed on Monday by the Centre and lenders who are against the verdict.

The Centre, State Bank of India (SBI), Punjab National Bank (PNB), Canara Bank (CB), Union Bank of India (UBI) and HDFC Bank Ltd have moved the top court assailing the 2015 verdict in the Jayantilal N Mistry case and the consequential directions of the Reserve Bank of India (RBI) asking them to provide crucial information to applicants under the Right to Information (RTI) Act.

A bench of justices S Abdul Nazeer and Krishna Murari said it would hear on July 22 the pleas of the banks and the Centre and may take a call on whether it or another bench headed by Justice L Nageswara Rao should hear them.

“In all fairness the case should go to a bench headed by Justice Rao,” Justice Nazeer said.

Solicitor General Tushar Mehta, appearing for SBI, said he has no problem which bench hears the case, but the matter needed to be heard by a three-judge bench as “the issue of statutory embargo (under RTI) on holding back the confidential information was not adverted to in the judgement”.

The observation of the court was made in view of the fact that on April 28 this year a bench of Justices Rao and Vineet Saran had refused to recall the 2015 judgment, as sought by some banks, saying that under the law and the apex court rules the pleas seeking recall were not maintainable.

However, the court had then made it clear that it was not dealing with any of the submissions of the banks on the correctness of the judgment. 'The dismissal of these applications shall not prevent the applicants (banks) to pursue other remedies available to them in law,' it had said.

“Banks were not parties to the case in which the judgement came,” senior advocate Mukul Rohatgi, appearing for HDFC Bank, said, adding that how can a private bank be asked to divulge its confidential banking secrets and details of its customers to a “fourth party”.

The RBI had taken the ground that it has fiduciary relationship with the banks and hence cannot part with the information to applicants under the RTI, Rohatgi said, adding that many more grounds are available to the banks and they could not be taken up then as they were not parties to the litigation.

He referred to a provision of the RTI prohibiting dissemination of information and the 9-judge bench judgement on privacy and said, “I do not want anybody else to know my annual inspection report”.

The submission was opposed by lawyer Prashant Bhushan, appearing for the RTI activist, saying the Indian Banks’ Association, to which all the banks are members and the ICICI were parties to the plea.

At the outset, the solicitor general said that the matter needed hearing by a three-judge bench and a holistic judicial view of the entire issue was needed as banks were not party to the 2015 judgement.

On July 3, the top court had taken note of PNB's plea and had sought responses from the Centre, RBI and its central public information officer (CPIO).

Banks are aggrieved by the RBI notices to them under Section 11(1) of the Right to Information (RTI) Act asking them to part with information pertaining to their inspection reports and risk assessment.

The RTI Act empowers the RBI's CPIO to seek information from banks.

On April 28, the top court had, on legal grounds, refused to recall its famous 2015 judgment in the Jayantilal N Mistry case, which had held that the RBI will have to provide information about banks and financial institutions (FIs) regulated by it under the transparency law.

Several FIs and banks, including CB, Bank of Baroda, UCO Bank and Kotak Mahindra Bank had filed applications in the top court seeking the recall of the 2015 judgment, saying the verdict had far-reaching consequences and they were directly and substantially affected by it.

The banks had contended that the pleas for a recall of the judgment, instead of a review, is 'maintainable' as there was a violation of the principles of natural justice in view of the fact that they were neither parties to the matter nor heard.

'A close scrutiny of the applications for a recall makes it clear that in substance, the applicants are seeking a review of the judgment in Jayantilal N Mistry. Therefore, we are of the considered opinion that these applications are not maintainable,' the apex court had held.

While dismissing the pleas, the bench, however, had made it clear that it was not dealing with any of the submissions made by the banks on the correctness of the 2015 judgment.

Now, the apex court is seized by several pleas of banks against the RBI's direction to disclose information under RTI. PTI SJK ABA MNL SA

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