The Supreme Court on Thursday adjourned the matter related to Reliance Industries and the Securities & Exchange Board of India.
A Bench comprising Justice JK Maheshwari and Justice Hima Kohli passed the order on a petition filed by Reliance Industries against the Securities and Exchange Board of India over disclosure of shares.
As per the Counsel for the respondents, “This matter is pending in HC; submission is to be done either in session court or the HC. SEC 129 – No one is compelled to disclose to the court any confidential – as SEBI is regulator its legal processual advice cannot be compelled. My humble submission is to let the Bombay HC decide.”
“My submission is as the CA’s report says that there is no round tripping but SEBI’s own internal assessment says that on one single day, the funds came from an account and went to 38 different companies and again from those 38 companies the funds came back to that account.
“That’s why we are relying on SEBI report. But later on, settlement talks begin.
Under that settlement process, they asked for those documents which we don’t gave, so they went to Bombay HC,” he added.
The Court asked not to proceed for round tripping based on CA report but the SEBI wanted to Prosecute for round tripping. Under section 208 of CrPC the question of furnishing documents comes only after the process is issued and trial starts. And as per sec 91 of CrPC also we are not liable to produce documents before inquiry. And let the trial start and let it be decided by Bombay HC. They want legal opinion which was taken upon the report, but both the report and legal opinion cannot be disclosed under litigation privilege. But if we take a legal opinion from a judge and judge refers to expert opinion than that opinion is also considered as part of legal opinion, hence it can’t be disclosed. The allegation against the company was based upon a newspaper or whistle blower article stated that convertible debentures worth 900 crores have been transferred from the parent company
As per the Counsel for the respondent, the main allegation against us is that the money with us Round Tripping. The CA itself thoroughly audited the transaction and the money was not round tripping and SEBI wants to hold the report and prosecute us baselessly. The SEBI is the regulator who said they have conducted an investigation and went to take opinion; they are not the private party. They are supposed to examine fact and not create documents for litigation. Third, if technical breeches upon which we ready to settle with the fine.
In the initial disclosure, they had disclosed part of report (Justice retired shri krishna part 1) and one of the primary rules of privileges is if you disclose part of the report, you lose the privileges.