The Supreme Court has issued a contempt notice to the Securities and Exchange Board of India (SEBI) on a plea by Reliance Industries (RIL), alleging non-compliance with the court’s August 5 order, which allowed the market regulator was directed to provide access to certain documents to the company.

Judges MR Shah and MM Sundresh served the bench: “A notice has been issued to the accused to be returned on December 2, 2022. Counsel Abhishek Singh served on behalf of the accused.”

Senior advocate Harish N. Salve, who appeared on behalf of RIL, strongly stated that the defendant (SEBI) was instructed to provide copies of the documents despite the Supreme Court order on August 5. Still, the same has not been delivered so far.

Senior Advocate and former Attorney General of India KK Venugopal, on behalf of SEBI, submitted that the Defendant’s preferred request for review is pending in this court; therefore, no further orders will be passed in this proceeding.

In his order, the judge stated: “We have passed the subsequent order passed by this court in the review petition on October 12, 2022. The pending appeal and/or writ petition and stay cannot equate to the pending review petition.
“This court has a final decision on appeal. The mere fact that an application for a stay is under review is not a reason for a defendant to grant a stay on his own without complying with the directions issued by this court.”

The bench said that the thing to watch is the state of J&K vs Mohd. Yaqoob Khan and others started the contempt case against an ex parte order passed by an ex parte judge pending a written application.

“Therefore, this court finds that contempt proceedings cannot be initiated when a stay application has not yet been heard, decided and disposed of. In this case, the above decision does not help the defendant in any way,” said the Supreme Court. The bench has scheduled the matter for a further hearing on December 2.

The company has sought three documents from SEBI that it claims can exempt it and its promoters from criminal charges brought by it and its promoters over alleged illegal acquisitions of its stock between 1994 and 2000.

On August 5, the justices, led by then Chief Justice NV Ramana, said: “SEBI’s approach, in its failure to disclose documents, also raises concerns about transparency and fair trials. Opacity only spreads prejudice and favouritism. Opacity and Transparency are the opposite.”

The Supreme Court has said that market regulators should demonstrate fairness and provide the documents required by the RIL. SEBI is obliged to act fairly when proceeding with proceedings or any proceedings against parties.

RIL filed a petition for contempt of court because SEBI did not share three documents — two legal opinions from former Supreme Court Justice BN. The report by Srikrishna and former ICAI chairman Y.H. Malegam examines violations.

Claiming that SEBI cannot continue to boycott the production of the documents, the company also issued a notice to market regulators saying that if the documents are not received by August 18, then it will determine that SEBI does not want to abide by the Supreme Court’s judgment.

In 2002, Chartered Accountant S. Gurumurthy filed a complaint with SEBI alleging breaches by RIL, its associates and its directors/promoters, including Mukesh Ambani and his wife Nita; Anil Ambani and his wife Tina; and 98 others.

The complaint cited two senior placements of non-convertible bonds in 1994. SEBI alleges that RIL and Reliance Petroleum circumvented sections 77 and 77A of the Companies Act 1956 by financing the acquisition of its shares.