RELIANCE INDUSTRIES LIMITEDversusSECURITIES AND EXCHANGE BOARD OF INDIA & ORS.

730                      [2022]REPORTS
               SUPREME COURT   15 S.C.R. 730                [2022] 15 S.C.R.


A                     RELIANCE INDUSTRIES LIMITED
                                         v.
        SECURITIES AND EXCHANGE BOARD OF INDIA & ORS.
                        (Criminal Appeal No. 1167 of 2022)
B                               AUGUST 05, 2022
             [N. V. RAMANA, CJI, J. K. MAHESHWARI AND
                         HIMA KOHLI, JJ.]
             Companies Act, 1956 – s.77 – Non-disclosure of information
      by SEBI – SEBI directed to act fairly – Complaint was filed with
C
      SEBI against RIL & its associate companies and its directors alleging
      that they fraudulently allotted 12 crore equity shares of RIL to entities
      purportedly connected with RIL – Investigation Report was submitted
      by the Investigating Authority on 04.02.2005 – SEBI in its counter
      affidavit admitted that the aforesaid report was inconclusive and
D     recommended further enquiry in this regard – SEBI approached a
      retired judge in the year 2009 to give his opinion on the possibility
      of initiating criminal proceedings against RIL – The Retired Judge
      gave his first opinion which formed the basis of initiating action
      against the appellant – SEBI sent a letter to RIL alleging that RIL
      had funded purchase of its own shares by 38 related entities and
E
      thereby violated s.77 (2) of the Act and consequently violated
      Regulations 3, 5 and 6 of the SEBI Regulations,1995 – RIL
      addressed letters to SEBI requesting for copies of documents – SEBI
      refused to furnish copy of opinion of Retired Judge stating that it is
      privileged & confidential in nature – On 29.09.2011 RIL filed
F     settlement application before SEBI – SEBI sought opinion of Retired
      Judge for the second time who wrote back to SEBI to consult
      Chartered Accountant – This culminated in second opinion of Retired
      Judge – Appellant sought further material in connection with
      settlement application – SEBI rejected request for disclosure of
      documents – Appellant filed writ petition before High Court that
G
      was dismissed – SEBI filed complaint in the court of Special Judge
      – Special Judge dismissed the complaint as being barred by limitation
      – SEBI filed Criminal Revision Application before High Court – In
      the aforesaid proceeding appellant filed interim application seeking
      documents – The High Court stated that the interim application will
H     be heard along with main Revision Application – On appeal, held :
                                        730
   RELIANCE INDUSTRIES LIMITED v. SECURITIES AND                        731
             EXCHANGE BOARD OF INDIA

SEBI’s action to initiate a criminal complaint without providing the    A
appellant an adequate opportunity to defend itself by releasing
necessary Reports and other documents is gross violation of the
appellant’s right to natural justice – The objection of SEBI that the
issue of disclosure of documents is res judicata as the same was
disallowed by the High Court in the earlier round of litigation,
                                                                        B
cannot be sustained in the eyes of law – The first opinion of the
Retired Judge is not covered by ‘legal privilege’ u/s.129 of Evidence
Act – The second opinion and the Report of Chartered Accountant
are nothing but a continuation of the fact finding exercise
undertaken by SEBI to determine culpability – SEBI’s attempt to
cherrypick the documents, it proposes to disclose, derogates the        C
commitment to a fair trial – The respondents were directed to furnish
copy of the above referred documents to appellant – Securities and
Exchange Board of India (Prohibition of Fraudulent and Unfair
Trade Practices relating to Securities Market) Regulations, 1995 –
Regulation 3,5,6 – Securities and Exchange Board of India
                                                                        D
(Procedure for Holding Inquiry and Imposing Penalties by
Adjudicating Officer) Rules, 1995 – Rule 4 – SEBI Takeover
Regulations – Regulation 11(1) – Securities and Exchange Board
of India (Settlement Proceedings) Regulations, 2018 – Regulation
13(2)(a),29 – Securities and Exchange Board of India (Prohibition
of Fraudulent and Unfair Trade Practices Relating to Securities         E
Market) Regulations, 2003.
       Role of Regulator – Duty to act fairly – SEBI is a regulator
and has a duty to act fairly, while conducting proceedings or
initiating any action against the parties – Being a quasi-judicial
body, the constitutional mandate of SEBI is to act fairly, in           F
accordance with the rules prescribed by law – The role of a Regulator
is to deal with complaints and parties in a fair manner, and not to
circumvent the rule of law for getting successful convictions – There
is a substantive duty on the Regulators to show fairness, in the form
of public cooperation and deference – The duty to act fairly by
SEBI, is inextricably tied with the principles of natural justice,      G
wherein a party cannot be condemned without having been given
an adequate opportunity to defend itself.
     Doctrines/Principles – Principles of Natural Justice –
Discussed.
                                                                        H
732            SUPREME COURT REPORTS                      [2022] 15 S.C.R.


A            Company Law – Criminal action – Initiation of criminal action
      in commercial transactions – It should take place with a lot of
      circumspection & Courts ought to act as gate keepers for the same
      – Initiating frivolous criminal actions against large corporations
      would give rise to adverse economic consequences for the country
      in the long run – Regulator must be cautious in initiating such an
B
      action and carefully weigh each factor.
            Trial – Transparency and fair trial – Opaqueness only
      propagates prejudice and partiality – Opaqueness is antithetical to
      transparency – In a country grounded in the Rule of Law, institutions
C     ought to adopt procedures that further the democratic principles of
      transparency and accountability – Principles of fairness and
      transparency of adjudicatory proceedings are the cornerstone of
      the principles of open justice.
             Evidence Act, 1872 – s.129 – Litigation Privilege – Legal
D     privilege not applicable to legal opinion used by SEBI to initiate
      prosecution, as such opinion is part of investigation.
             Code of Criminal Procedure, 1973 – Condonation of delay –
      Sec 473 is categorical in stating that any limitation prescribed u/s.
      on 468 of CrPC can be overlooked if sufficient cause is made out
E     in the facts and circumstances of the individual case in the interest
      of justice – The provision while trying to balance public interest in
      initiating criminal prosecutions, has been restricted to peculiarities
      of individual case while clothing the Court with discretionary power
      – Such a discretion vested in the Court ought to be a principled
      exercise, wherein the facts and circumstances portrayed justify such
F     an exercise – The intention of the aforesaid provision is to make the
      inquiry a question of fact and not of untrammelled discretion as to
      whether in a particular case, the Court should condone the delay.
            Doctrines/Principles – Cherry picking principle – Selective
      disclosure is countenanced in law as it amounts to cherry-picking.
G
            Criminal Law – Difference between Legal advice privilege
      and litigation privilege – Discussed.



H
   RELIANCE INDUSTRIES LIMITED v. SECURITIES AND                            733
             EXCHANGE BOARD OF INDIA

      Allowing the appeal, the Court                                        A
       HELD: 1.1 SEBI is a regulator and has a duty to act fairly,
while conducting proceedings or initiating any action against the
parties. Being a quasi-judicial body, the constitutional mandate
of SEBI is to act fairly, in accordance with the rules prescribed by
law. The role of a Regulator is to deal with complaints and parties         B
in a fair manner, and not to circumvent the rule of law for getting
successful convictions. There is a substantive duty on the
Regulators to show fairness, in the form of public co-operation
and deference. [Para 42][751-C-D]
      1.2 The duty to act fairly by SEBI, is inextricably tied with         C
the principles of natural justice, wherein a party cannot be
condemned without having been given an adequate opportunity
to defend itself. [Para 43][751-D-E]
       2. The appellant has pressed into service the ratio laid down
by this Court in Takano case,to seek document disclosure. On                D
the other hand, the respondents have tried to distinguish the
present case by stating that the present case is not one of
disclosure which is being sought during investigation by SEBI
under the Securities and Exchange Board of India (Prohibition of
Fraudulent and Unfair Trade Practices Relating to Securities
Market) Regulations, 2003. Although the Court agree with the                E
respondents that the Takano Case was rendered under the
aforesaid Regulations, however, the Court was of the opinion that
the reasoning of this Court alludes to a general obligation of
disclosure on the part of SEBI. This Court has held in the Takano
Case that three fundamental purposes of disclosure of information           F
are (i) reliability, i.e., the Court will be able to perform its function
accurately only if both parties have access to information and
possess opportunity to address arguments and counter
arguments; (ii) fair trial, i.e., this will enable the parties to
effectively participate in the proceedings; and (iii) transparency
and accountability, i.e., the investigative agencies are held               G
accountable through transparency and not opaqueness. [Para
44][752-B-E]
      3. The impugned action of the appellant hails back to the
year 1994, and almost three decades have gone by without there
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734            SUPREME COURT REPORTS                     [2022] 15 S.C.R.


A     being any light at the end of the tunnel. The investigation report
      by SEBI in 2005 was inconclusive about the alleged offence.
      There is even a communique by the Minister of Corporate Affairs,
      Union of India recommending closure of the case as they found
      nothing to further the prosecution under Section 77 of the
      Companies Act, 1956. In this light, SEBI’s action to initiate a
B
      criminal complaint without providing the appellant an adequate
      opportunity to defend itself by releasing necessary Reports and
      other documents, cannot be appreciated by this Court as it is in
      gross violation of the appellant’s right to natural justice. [Para
      45][764-B-D]
C           4. Indian position seems to be different from England.
      Section 126 to 129 of the Evidence Act do not draw any distinction
      between adversarial and investigative litigation as such, and
      privilege is applicable all through. This aspect is crucial, as it
      touches on the foundations of the legal profession at large in India.
D     This Court does not want to express any opinion in this regard
      as the case at hand is different and such an issue does not arise,
      for the following reasons:
           i. The investigation report was inconclusive, as admitted
      by SEBI itself.
E          ii. Instead of SEBI referring the issue to an expert, it could
      have undertaken the exercise of further investigation by itself,
      which was not done.
             iii. SEBI ultimately took further steps, only because of the
      first opinion of retired judge.
F
            iv. The first opinion of retired judge is a part and parcel of
      the investigation and documents connected therewith.
            v. Moreover, certain documents have already been
      disclosed to the appellant herein. [Para 53][757-A-E]
G           5. The simple test in this case is whether SEBI has launched
      the prosecution on the basis of the investigation report alone.
      The answer seems to be ‘No’ by SEBI’s own admission in its
      reply where it states that the investigation report was inconclusive
      and hence further scrutiny of the transactions by experts was
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   RELIANCE INDUSTRIES LIMITED v. SECURITIES AND                        735
             EXCHANGE BOARD OF INDIA

called for. That being the case, further Reports and opinions           A
obtained, from whomsoever it may be, are only an extension of
the investigation to help SEBI as a Regulator to ascertain the
facts and reach conclusions for prosecution or otherwise. [Para
54][757-E-F]
      6. This Court does not agree with the contention of the           B
Senior Counsel for SEBI that the first opinion of retired judge is
covered by ‘legal privilege’ under Section 129 of the Evidence
Act. Same is the case with the second opinion of retired judge
and the Report of Chartered Accountant, which are nothing but a
continuation of the fact- finding exercise undertaken by SEBI to
determine culpability. [Para 55][757-F-H]                               C

       7. The Senior counsel appearing for SEBI has pointed out
that the present set of proceedings have emanated before Criminal
Court, wherein the procedures must be strictly in accordance
with the provisions of CrPC. He states that the stage of document
production under the CrPC is provided under Section 207 and             D
208, which takes place after cognizance is taken by the
Magistrate. Observing the facts and circumstances of this case,
which have been adumbrated above, the Court was of the firm
opinion that the defence taken by SEBI that they need not disclose
any documents at this stage as such a request is pre-mature in          E
terms of the CrPC, cannot be sustained. [Para 56][757-H; 758-
E]
      8. Another disconcerting aspect of this case that comes to
the fore is SEBI’s attempt to cherry-pick the documents it
proposes to disclose. There is a dispute about the fact that certain    F
excerpts of the opinion of retired judge, were disclosed to the
appellant. It is the allegation of the appellant that while the parts
which were disclosed, vaguely point to the culpability of the
appellant, SEBI is refusing to divulge the information which
exonerate it. Such cherry-picking by SEBI only derogates the
commitment to a fair trial. In the case at hand, SEBI could not         G
have claimed privilege over certain parts of the documents and
at the same time, agreeing to disclose some part. Such selective
disclosure cannot be countenanced in law as it clearly amounts
to cherry-picking. [Paras 57 & 58][758-F-G; 759-C]
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736            SUPREME COURT REPORTS                     [2022] 15 S.C.R.


A           9.The Court allows the present appeal and direct the
      respondents to furnish a copy of the following documents to the
      appellant forthwith:-
            (i) First opinion of the retired Judge
            (ii) Report of Chartered Accountant
B
            (iii) Second opinion of retired judge. [Para 59][759-D]
            State Bank of Patiala v. SK Sharma (1996) 3 SCC 364
            : [1996] 3 SCR 972; T. Takano v. Securities and
            Exchange Board of India 2022 SCC Online SC 2022
C           (3) SCALE 585; S. P. Velumani v. Arappor Iyakkam
            2022 SCC Online SC 663 – relied on.
            Three Rivers District Council and Others (Respondents)
            v. Governor and Company of the Bank of England
            (Appellants) [2004] UKHL 48; In Re K (Infants) [1965]
D           AC; In Re E (S.A.) (a Minor) (Wardship: Court’s Duty)
            [1984] 1 WLR 156; Nea arteria Maritime Co Ltd v.
            Atlantic and Great Lakes Steamship Corporation [1981]
            Com LR 138 at 139 – referred to.
                            Case Law Reference
E     [1996] 3 SCR 972                 relied on           Para 43
      2022 (3) SCALE 585               relied on           Para 21
            CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No.
      1167 of 2022.
F           From the Judgment and Order dated 28.03.2022 of the High Court
      of Judicature at Bombay in Criminal Interim Application No. 1945 of
      2021 in Criminal Revision Application No. 209 of 2020.
           Harish N. Salve, K.V. Vishwanathan, Amit Desai, Sr. Advs., K.
      R. Sasiprabhu, Rohan Shah, Raghav Shankar, Amey Nabar,
G     Gopalakrishna Shenoy, Ms. Drishti R. Vishnu Sharma A. S.,
      Venkataraman, Advs. for the Appellant.
           Arvind P. Datar, Sr. Adv., Suraj Chaudhary, Dhaval Mehrotra,
      Sudhanshu Sikka for M/s K Ashar & Co., Advs. for the Respondents.

H
    RELIANCE INDUSTRIES LIMITED v. SECURITIES AND                                  737
              EXCHANGE BOARD OF INDIA

       The Judgment of the Court was delivered by                                  A
       N. V. RAMANA, CJI
       1. Leave granted.
      2. This appeal is filed against the impugned order dated 28.03.2022,
passed by the High Court of Judicature at Bombay in Criminal Interim               B
Application No. 1945 of 2021 in Criminal Revision Application No. 209
of 2020.
        3. Brief facts necessary for disposal of this appeal are that a
complaint was filed on 21.01.2002 by one Shri S. Gurumurthy, with the
Securities and Exchange Board of India [for short ‘the SEBI’] against              C
Reliance Industries Ltd. [for short ‘RIL’], its associate companies and
its directors, alleging that they fraudulently allotted 12 crore equity shares
of RIL to entities purportedly connected with the promoters of RIL,
which were funded by RIL and other group companies in 1994. It was
alleged that the company and its directors were in violation of Section 77
of the Companies Act, 1956. Based on the aforesaid complaint, the SEBI             D
appointed an investigating officer to inquire into the aforesaid complaint.
Accordingly, a report was submitted by the said investigating officer on
04.02.2005.
       4. It may be necessary to note that SEBI chose not to take any
action with respect to the aforesaid letter. The appellant alleged that a          E
note was prepared by the Legal Affairs Department of the SEBI on
17.05.2006, wherein it was noted that the report had not brought out any
specific violation of any legal provision by RIL. However, the note was
said to have observed that there was requirement of an opinion by an
external expert inter alia on the possibility of initiating appropriate criminal   F
proceedings against RIL. In this context, a retired Judge of this Court,
Justice (Retd.) B.N. Srikrishna was approached by SEBI for the same.
The learned retired Judge is stated to have given his first opinion to
SEBI, which was divulged by SEBI in parts, to the appellant herein.
       5. On 16.04.2010, SEBI sent a letter to RIL alleging that RIL had
                                                                                   G
funded purchase of its own shares by 38 related entities and thereby
violated Section 77 (2) of the Companies Act, 1956 and consequently,
violated Regulations 3, 5 and 6 of the Securities and Exchange Board of
India (Prohibition of Fraudulent and Unfair Trade Practices relating to
Securities Market) Regulations, 1995. RIL, in reply, addressed numerous
letters to SEBI requesting for copies of the documents and submitting              H
738            SUPREME COURT REPORTS                         [2022] 15 S.C.R.


A     inter alia that the issue concerning violation of Section 77 of the
      Companies Act, 1956 was examined by the Ministry of Corporate Affairs
      which had concluded that the transaction was compliant with the
      applicable law.
            6. In any case, the Adjudicating Officer of SEBI issued a show
B     cause notice to the promoters of RIL under Rule 4 of the Securities and
      Exchange Board of India (Procedure for Holding Inquiry and Imposing
      Penalties by Adjudicating Officer) Rules, 1995 alleging violation of
      Regulation 11(1) of the SEBI Takeover Regulations (as it then stood).
             7. It is borne out from the records that an Office Memorandum
C     dated 18.7.2011 was issued by the Ministry of Corporate Affairs wherein
      it was noted that provisions under Section 77 of the Companies Act,
      1956 was not attracted.
             8. When the matter stood thus, on 29.09.2011, RIL filed a
      settlement application before SEBI, without prejudice to its rights, in
D     order to put a quietus to the aforesaid issue which had taken place many
      years ago.
             9. In any case, SEBI issued a letter dated 23.04.2014, answering
      the request of documents sought by the appellant herein in the following
      manner:
E           “With regard to the documents/information sought in paragraphs
            5(a) to (d) of the said letter, SEBI’s response is as under:
            1. Request 5(a): The copy of the opinion received by SEBI on
               June 11, 2009 from a retired judge of the Hon’ble Supreme
               Court of India cannot be provided since it is privileged and
F              confidential in nature.
            2. Request 5(b): a copy of the case for opinion provided by SEBI
               to the Hon’ble retired judge for seeking the opinion is enclosed.
            3. Request 5(c): A copy of the communication from Ministry of
               Corporate Affairs dated February 7, 2012 and dated September
G              1, 2011 forwarding letter dated July 18, 2011 is enclosed.
            4. Request 5(d): A copy of the relevant opinion/views dated April
               6, 2006, June 11, 2009 and August 25, 2010 of the legal
               department of SEBI are enclosed.”

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    RELIANCE INDUSTRIES LIMITED v. SECURITIES AND                             739
     EXCHANGE BOARD OF INDIA [N. V. RAMANA, CJI]

       10. It is a matter of record that in the year 2017-18, the SEBI        A
decided to re-examine the issue and accordingly sought advice of Justice
(Retd.) B.N. Srikrishna for the second time. Justice (Retd.) B.N.
Srikrishna addressed a letter dated 26.07.2017 to the SEBI in the following
manner:
      “Considering the importance of the matter I am of the view that         B
      some very senior person should be consulted in this matter.
      I would suggest SEBI to approach Mr. Y.H. Malegam, Chartered
      Accountant, who may be consulted in this matter. He is a person
      of high standing and great repute. In my opinion, he would be the
      most appropriate person to advise us as to whether the monies           C
      transferred to RUPL and RPTL were towards project advances
      and other charges or were merely round tripping.
      You may depute one senior person to meet him and discuss with
      him the facts. It would enable him to take a view in the matter
      and make a report to you. After the report of Mr. Malegam is            D
      received, you may further discuss the matter with me.”
      11. It is stated by the appellant that Mr. Y.H. Malegam, Chartered
Accountant examined the records of RIL and various other companies
and submitted his report to SEBI.
      12. Based on the report of Mr. Y.H. Malegam, an opinion was             E
sought from the learned retired Judge for the second time.
       13. On 21.01.2019, the appellant addressed a letter to SEBI seeking
further material in connection with the pending settlement application in
the following manner:
                                                                              F
      “Accordingly, we request SEBI to provide us inspection and copies
      of the following in connection with the subject settlement:
      (a) All further material collected by SEBI;
      (b) Further internal reports and noting;
      (c) Reports from external experts, including report from Shri Y.H.      G
          Malegam, which was confirmed by the Committee as having
          been received;
      (d) Any further case for opinion and opinion obtained by SEBI.”

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740            SUPREME COURT REPORTS                          [2022] 15 S.C.R.


A          14. In reply, SEBI rejected the request for disclosure of the
      documents in the following manner:
            “With regard to your request for the said report, it may be noted
            that no such report or other material as asked is asked (sic) is
            made part of the pending settlement proceedings. Further, your
B           attention is drawn to Regulation 13(2)(a) of the SEBI (Settlement
            Proceedings) Regulations, 2018, which reads as under:
            “(a) Call for relevant information, documents etc., pertaining to
            the alleged default(s) in possession of the applicant or obtainable
            by the applicant;
C           Explanation – Nothing in these regulations shall confer a right
            upon the applicant to seek information from the Board or require
            the Board to seek information from any other person for the
            purpose of relying upon it in the settlement proceedings or request
            the Board to permit it to present information not already disposed
D           in the applicant, [Illegible] the applicant our (sic) aware of at the
            time of making the application or which information upon diligent
            enquiry being made could bare became known to the applicant.”
            In view of the same, I am directed to inform you that the request
            for the said report and other material has not been acceded to.”
E            15. Aggrieved by the aforesaid communication of the SEBI, the
      appellant challenged the same before the High Court of Bombay in Writ
      Petition (Lodg.) No. 300 of 2019. The High Court, vide order dated
      04.02.2019, dismissed the aforesaid petition. It may not be out of context
      to note that SEBI also rejected the supplementary application filed by
F     the appellant herein.
            16. On 16.07.2020, SEBI filed a complaint in the Court of SEBI
      Special Judge, Mumbai praying therein as under:
            “(a) That this Hon’ble Court may be pleased to issue the process
            against the accused for the continuing offences punishable under
G           Section 24(1) r/w Section 27 of the SEBI Act, 1992 as amended
            in 2002, for having violated Regulations 3,5 and 6 of the SEBI
            (PFUTP) Regulations 1995, Regulation 11 of the SEBI (SAST)
            Regulations, 1997 and be further pleased to deal with the accused
            in accordance with the law.
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   RELIANCE INDUSTRIES LIMITED v. SECURITIES AND                               741
    EXCHANGE BOARD OF INDIA [N. V. RAMANA, CJI]

      (b) That this Hon’ble Court may be pleased to issue the process          A
      against the accused for offences punishable under Sections 77(2)
      and 77A r/w Section 55A of the Companies Act, 1956.”
       17. On 30.09.2020, the SEBI Special Court dismissed the complaint
filed by SEBI as being barred by limitation.
       18. The aforesaid order has been challenged by SEBI in Criminal         B
Revision Application No. 209 of 2020 before the High Court of Bombay.
In the aforesaid proceedings, the appellant filed an application being IA
No. 1945 of 2021, seeking the following documents:
      (i)   Report of Sh. Y.H. Malegam, Chartered Accountant.
                                                                               C
      (ii) Brief for opinion / Case for opinion prepared by SEBI for
           obtaining further written opinion of Hon’ble Mr. Justice (Retd.)
           B.N. Srikrishna.
      (iii) Revised written opinion issued by Hon’ble Mr. Justice (Retd.)
            B.N. Srikrishna.                                                   D
       19. The High Court after extensively hearing the arguments on
the aforesaid application passed the impugned order on 28.03.2022 in
the following manner:
      “5. At this stage, the prayer sought for in the Interim Application
      cannot be considered without hearing the main Revision                   E
      Application. It is pertinent to note that the respondent No.1 –
      SEBI i.e. original applicant in the Revision Application has filed
      the aforesaid Revision Application seeking quashing and setting
      aside of the impugned order dated 30th September, 2020, passed
      by the learned SEBI Special Judge, City Civil and Sessions Court,
                                                                               F
      Greater Bombay, in SEBI Misc. Application No. 686 of 2020, by
      which the learned Judge dismissed the Miscellaneous Application
      No. 686 of 2020 (complaint) only on the ground, that it was barred
      by limitation. Therefore, the question that arises in the Revision
      Application is whether the complaint filed by SEBI was barred by
      limitation or not.                                                       G
      6. In view of what is stated hereinabove, the Interim Application
      will have to be heard alongwith the main Revision Application, on
      the next date. It is made clear that all contentions of the parties in
      the aforesaid Interim Application are kept open, including the
      question of maintainability.”                                            H
742                SUPREME COURT REPORTS                        [2022] 15 S.C.R.


A           20. Aggrieved by the aforesaid order, the appellant-RIL has filed
      the present appeal.
             21. Mr. Harish Salve, learned Senior counsel appearing on behalf
      of the appellant contends:
            i.       That the challenge to the maintainability of the present appeal
B                    is misconceived. He stated that the interim application filed
                     for seeking documents was argued at length before the High
                     Court, which was ultimately not considered.
            ii.      That the SEBI, being a regulator, has a duty to disclose
                     documents pursuant to Article 21. This constitutional mandate
C                    has been accepted by this Court and has been applied to
                     SEBI in T. Takano v. Securities and Exchange Board of
                     India, 2022 SCC Online SC 210
            iii.     SEBI cannot claim litigation privilege as the proceedings
                     are not adversarial in nature.
D
            iv.      That the selective disclosure of excerpts of the opinion by
                     Justice (Retd.) B.N. Srikrishna, amounted to cherry picking
                     by SEBI which cannot be allowed. The accused is entitled
                     to the complete document to ensure a fair trial.
            v.       That the action of SEBI of disclosing excerpts of the report
E
                     clearly amounts to waiver of litigation privilege claimed by
                     SEBI.
             22. Mr. Arvind Datar, learned Senior Counsel appearing on behalf
      of the respondents contends:
F           i.       That the present appeal is not maintainable as there is no
                     criminal complaint pending as on this date. The appellant
                     cannot seek documents in a criminal revision against
                     dismissal of the complaint on the ground of limitation.
            ii.      The issue before the High Court was limited to the issue of
G                    limitation and the attempt of the accused to expand the
                     proceedings to seek documents cannot be entertained.
            iii.     That the impugned order was a mere adjournment order
                     which has not affected any rights of the accused. Therefore,
                     the appeal is not maintainable against such an adjournment
H                    order.
    RELIANCE INDUSTRIES LIMITED v. SECURITIES AND                             743
     EXCHANGE BOARD OF INDIA [N. V. RAMANA, CJI]

      iv.    The law laid down in T. Takano v. Securities and                 A
             Exchange Board of India, 2022 SCC Online SC 210, is
             not applicable to the present case as it was rendered in the
             context of investigation under different Regulations.
      v.     The documents are being sought at a pre-mature stage. If
             cognizance is taken by the trial Court, the accused would        B
             be entitled for the documents in terms of Section 207 of
             CrPC. Any attempt to seek documents beyond the scope
             of Section 207 CrPC cannot be accepted.
      vi.    The opinion of the Retd. Judge and the report of the
             Chartered Accountant are clearly covered as part of              C
             litigation privilege in terms of the Indian Evidence Act. Such
             opinions cannot be a matter of production by a party.
       23. Having heard the parties at length and perusing the records,
the following questions arise for consideration:
      i. Whether this appeal is maintainable?                                 D
      ii. Whether SEBI is required to disclose documents in the present
          set of proceedings?
      ISSUE I
       24. At the outset, Mr. Datar, learned Senior Counsel appearing on      E
behalf of the respondents has challenged the maintainability of the present
appeal on two grounds namely: (1) that the impugned order is a mere
adjournment order against which this Court should not exercise its
discretionary jurisdiction; (2) that no criminal complaint exists, to seek
document disclosure as the trial Court had already dismissed SEBI’s
                                                                              F
complaint on the ground of delay. On the contrary, Mr. Harish Salve,
learned Senior Counsel appearing on behalf of the appellant has portrayed
that the High Court was not justified in adjourning a case after hearing
the parties on more than two occasions on the application.
        25. The present dispute pertains to certain facts which took place
in 1992-1994, when the initial complaint was instituted before SEBI in        G
the year 2002, which is alleged to be closed by the note of the Legal
Affairs Department of SEBI dated 17.05.2006. Further, the letter of the
Ministry of Corporate Affairs dated 07.02.2012 also clarifies inter-alia,
that no violation of Section 77 of the Companies Act, 1956 was made
out, in the following manner:                                                 H
744            SUPREME COURT REPORTS                          [2022] 15 S.C.R.


A           4. It has further been reported by the ROC that there was no
            violation of Section 81(1A) of the Companies Act, 1956 in respect
            of preferential allotment of shares. Also, there was no specific
            guidelines for valuation or determination of premium in respect of
            issue of convertible debentures at the relevant time. The
            determination of premium was within the authority of the company
B
            subject to compliance with Section 81(1A) which appears to have
            been done.
            5.MCA had conducted inspection of books of accounts of M/s.
            Reliance Industries Ltd. in 2002 and for the various violations
            reported in the inspection report, necessary penal action was
C           initiated as stated in para 2 and 3 above.
            6. The inspection report of 2002 also revealed as follows:-
            i.) Provision of Section 77 of the Act were not attracted in respect
            of funds invested by the company in Somnath Syndicate, a
D           partnership firm in which company is a partner;
            ii.) No funds was given by RIL to 34 entities to which NCDs
            were allotted;
            iii.) Ambanis were neither directors nor shareholders of the entities
            to whom shares were allotted;
E
            iv.) Ambanis were not allotted any shares pursuant to PPD-IV
            issue.
            7. In view of above, no action is required to be taken on the
            part of Ministry of Corporate Affairs.
F                                                       (Emphasis supplied)
                  In this context, the re-examination of the complaint by SEBI
            ought to happen only after providing adequate opportunity to the
            accused to fully defend his case.
             26. There is no doubt that the Special Court of SEBI in M.A. No.
G     686 of 2020 has dismissed the complaint of SEBI on the ground of
      limitation. Against such an order, SEBI has filed a Criminal Revision
      being Criminal Revision Application No. 209 of 2020 before the High
      Court which is pending. On perusal of this Criminal Revision Petition it
      is clear that SEBI has made the following prayer:
H
RELIANCE INDUSTRIES LIMITED v. SECURITIES AND                             745
 EXCHANGE BOARD OF INDIA [N. V. RAMANA, CJI]

 (a) This Hon’ble Court be pleased to quash and set-aside the             A
 impugned order dated 30th September, 2020 and direct the Ld.
 Special Court Judge to issue process against the Accused.
                                              (emphasis supplied)
 Interestingly, SEBI has not restricted the revision petition to the
 grounds of condonation of delay or inapplicability of limitation as      B
 the offences alleged, are continuing in nature; rather SEBI has
 pleaded the case on merits. This is apparent from the following
 grounds advanced by SEBI on merits:
    F. The Ld. Judge erred to appreciate that the allotment including
    the allotment of bonus shares, was fraudulent since it was issued     C
    without any authority, and in violation of securities laws,
    including the Companies Act. When the actual issue and
    allotment of NCDs with detachable warrants and subsequent
    conversion of warrants into equity shares itself was undertaken
    without any authority of the AGM, and the earmarking of               D
    ‘bonus’ issue of shares for the benefit of a debenture-holder
    i.e. a non-share-holder was done and the total private placement
    of 12 crore shares was carried out without any authority either
    of the shares holders or in law resulting in cementing of ‘control’
    and exercise thereof there was a clear breach of the fiduciary
    duty of the accused directors of the issuer company.                  E

    G. The Ld. Judge erred in failing to appreciate that the fraud
    was consummate and involved a complex subterfuge, spread
    over a long period of time. The accused Directors sat in sub-
    committees that negotiated and earmarked without any share
    holder authority, the NCDs with warrants convertible of shares        F
    with a sizeable free allotment of bonus shares to allottees of
    the NCDs which were essentially paper companies and related
    companies of the accused and later on joined them as person
    acting in concert (PACs) when the warrants attached to the
    NCDs were converted into shares in 2000. When the directors           G
    negotiated the placement of NCDs with warrants with the Unit
    Trust of India (UTI) whose allotment is made as per Resolution
    13 as disclosed on the stock exchange, no such ‘free’ bonus
    was given to UTI. However, all this was not considered by the
    Ld. Judge who erred in failing to appreciate that the directors
                                                                          H
746             SUPREME COURT REPORTS                          [2022] 15 S.C.R.


A               also granted a conversion price to the accused allottees which
                was much less than the conversion price given to UTI.
                …
                …
B           P. The Ld. Judge erred in failing to appreciate the ratio laid down
            by the Hon’ble Supreme Court in the matter of Fiona Shrikhande
            Versus State of Maharashtra and another, (2013) 14 Supreme
            Court Cases 44 wherein, the Hon’ble Supreme Court has held
            that at the complaint stage, the Magistrate is merely concerned
            with the allegations made out in the complaint and has only to
C           prima facie satisfy whether there are sufficient grounds to proceed
            against the accused. In the facts of the present case there were
            more than sufficient grounds for the Ld. Judge to prima-facie be
            satisfied of the offence and issue process in the matter.
            …
D
            …
            W. The Ld. Judge failed to note that it was vitally necessary to
            take cognizance of the offences in the interest of justice under
            Section 473, keeping in mind the devious method of involving 38
            companies and routing of funds in a preplanned and preordained
E
            sequence of transactions. If no cognizance is taken of such
            egregious offences, it would seriously harm the interest of the
            investors in the securities market. It is in the interests of justice
            that large conglomerates having lakhs of shareholders are not
            permitted to flagrantly violate the law and seek to escape
F           prosecution.
              27. Coming to the point of delay, inter alia the contention of SEBI
      is that the Court should have considered Section 473 of CrPC to condone
      delay having considered the facts and circumstances in proper
      perspective. At this juncture, it is relevant to quote Section 473 of CrPC
G     which reads as under:
            “473. Extension of period of limitation in certain cases. -
            Notwithstanding anything contained in the foregoing provisions of
            this Chapter, any Court may take cognizance of an offence after
            the expiry of the period of limitation, if it is satisfied on the facts
H
    RELIANCE INDUSTRIES LIMITED v. SECURITIES AND                                747
     EXCHANGE BOARD OF INDIA [N. V. RAMANA, CJI]

       and in the circumstances of the case that the delay has been              A
       properly explained or that it is necessary so to do in the interests
       of justice.”
        The aforesaid provision is categorical in stating that any limitation
prescribed under Section 468 of CrPC can be overlooked if sufficient
cause is made out in the facts and circumstances of the individual case          B
in the interest of justice. The said provision, while trying to balance public
interest in initiating criminal prosecutions, has been restricted to
peculiarities of individual case while clothing the Court with discretionary
power. Such a discretion vested in the Court ought to be a principled
exercise, wherein the facts and circumstances portrayed justify such an
exercise. The intention of the aforesaid provision is to make the inquiry        C
a question of fact and not of untrammelled discretion as to whether in a
particular case, the Court should condone the delay.
       28. It is in this context that the High Court is bound to consider the
facts of the present case concerning the modus of initiation of the case
and other factors, before considering the aspect of condonation of delay         D
in terms of Section 473 of CrPC. The approach of the High Court of
adjourning adjudication of the interim application seeking disclosure of
documents cannot be appreciated. Ideally, the High Court ought to have
considered the interim application before dealing with the limitation aspect.
        29. Initiation of criminal action in commercial transactions, should     E
take place with a lot of circumspection and the Courts ought to act as
gate keepers for the same. Initiating frivolous criminal actions against
large corporations, would give rise to adverse economic consequences
for the country in the long run. Therefore, the Regulator must be cautious
in initiating such an action and carefully weigh each factor.                    F
       30. In ordinary course, this Court would have remanded the matter
for adjudication by the High Court on the interim application moved by
the appellant seeking such disclosure. However, arguments have been
extensively advanced before this Court touching upon important aspects
of criminal jurisprudence which require consideration. Moreover, the             G
facts stated above, clearly indicate that the acts which are sought to be
prosecuted go back to the year 1992-1994, and over three decades have
passed without there being any end to the litigation. In this regard, the
Court intends to examine this important issue and pass appropriate orders
to ensure that the adjudication is not delayed unnecessarily, ad infinitum.
                                                                                 H
748             SUPREME COURT REPORTS                           [2022] 15 S.C.R.


A            ISSUE II
             31. This brings us to the issue as to whether the interim application
      seeking documents, filed by the appellant herein deserves to be allowed
      in the instant case. The respondents have raised objections for such
      disclosure on two counts:
B            i. That such a request was already rejected by the High Court in
                an earlier writ petition filed by the appellant herein, when the
                settlement proceedings were on going;
             ii. That the respondents claim legal privilege, as against both the
                 opinions of Justice (Retd.) B. N. Srikrishna and the Report of
C                the Chartered Accountant, viz. Sh. Y.H. Malegam.
             32. Coming to the first objection, there is no gainsaying the fact
      that the respondent (regulator) had issued a letter dated 16.04.2010,
      conveying the findings of the investigation. In furtherance thereto, the
      appellant had sought to settle the issue considering the fact that substantial
D     time had already elapsed.
             33. During the settlement proceedings, SEBI had appointed Sh.
      Y. H. Malegam, Chartered Accountant on the advice of Justice (Retd.)
      B. N. Srikrishna. Accordingly, the Chartered Accountant is supposed to
      have submitted a Report to SEBI. During the settlement proceedings,
E     the appellant submitted an application dated 21.01.2019, wherein it sought
      the aforesaid documents. In response SEBI, vide letter dated 28.01.2019,
      rejected the request by relying on the provisions of Section 13(2) of the
      Securities and Exchange Board of India (Settlement Proceedings)
      Regulations, 2018 [hereinafter ‘Settlement Regulations’].
F           34. The aforesaid letter dated 28.01.2019, was impugned by the
      appellant before the High Court of Judicature at Bombay in W.P. (Lodg.)
      No. 300 of 2019. The High Court, by final Order dated 04.02.2019,
      while dismissing the aforesaid writ petition held as under:
             “10. The internal Committee of the SEBI is seized of the matter.
G            During the proceedings, an application came to be filed by the
             petitioner seeking copies of certain documents including copy of
             the report submitted by Mr. Malegam. The provisions of Regulation
             13(2)(a) are clear. These regulations do not confer any right
             on the Petitioner to ask for a copy of the said report. In
             that view of the matter, the issue of principles of fairness
H
    RELIANCE INDUSTRIES LIMITED v. SECURITIES AND                               749
     EXCHANGE BOARD OF INDIA [N. V. RAMANA, CJI]

      does not arise at this stage, considering the purpose of the              A
      proceedings before the internal Committee and powers of
      the High Power Committee and the Regulations framed in
      this regard. There is no right conferred under the Regulations on
      the Petitioner to ask for such a copy. In the facts, we are not
      convinced to exercise our writ jurisdiction.
                                                                                B
      As and when the adjudicatory proceedings takes place, the
      Petitioner may ask for copies of such documents in
      accordance with the procedure established to conduct the
      proceedings.”
                                                    (emphasis supplied)         C
        We may only note that the High Court was dealing with specific
requests that were made during the Settlement proceedings under
Regulation 13(2) of the Settlement Regulations. From a reading of the
Explanation appended to Regulation 13(2)(a) of the Settlement
Regulations, it is clear that the intention of Settlement proceedings is to     D
facilitate the Regulator to consider the feasibility of settlement in certain
cases, without allowing a roving and fishing expedition. However, the
findings of the High Court in the aforesaid case are of no avail to the
SEBI, as we are at a stage when SEBI has invoked the provisions under
the criminal law to prosecute the appellant herein.
                                                                                E
      35. At this juncture, SEBI relies on Regulation 29 of Securities
and Exchange Board of India (Settlement Proceedings) Regulations 2018,
which notes as under :
      CONFIDENTIALITY OF INFORMATION.
      29. (1) All information submitted and discussions held in pursuance       F
      of the settlement proceedings under these regulations shall be
      deemed to have been received or made in a fiduciary capacity
      and the same may not be released to the public, if the same
      prejudices the Board and/or the applicant.
      2) Where an application is rejected or withdrawn, the applicant           G
      and the Board shall not rely upon or introduce as evidence before
      any court or Tribunal, any proposals made or information submitted
      or representation made by the applicant under these regulations:
      Provided that this sub-regulation shall not apply where the settlement
      order is revoked or withdrawn under these regulations.                    H
750             SUPREME COURT REPORTS                          [2022] 15 S.C.R.


A           Explanation. – When any fact is discovered in consequence of
            information received from a person in pursuance of an application,
            so much of such information, whether it amounts to an admission
            or not, as relates distinctly to the fact thereby discovered, may be
            proved.
B             Reliance on the above provision is misconceived, as both the clauses
      must be interpreted to deter usage of the applicant’s proposals/
      representations and allied information before Courts/Tribunals, in the
      event the settlement fails. It does not deal with the disclosure obligations
      cast on SEBI. In any case, the purpose of settlement is to ensure that
      parties come to an understanding having assessed their relative merits.
C     It is expected that parties in such proceedings are transparent, more so
      for Regulators like SEBI, who are expected to share all the documents,
      which are necessary for understanding the issue.
              36. It is a matter of record that subsequently, the settlement
      proceedings were terminated by SEBI and thereafter SEBI has decided
D     to initiate a criminal complaint against the appellant herein.
            37. In this context, the objection of SEBI that the issue of disclosure
      of documents is res judicata as the same was disallowed by the High
      Court in the earlier round of litigation, cannot be sustained in the eyes of
      law.
E
             38. This brings us to the right of the accused-appellant to seek
      document disclosure in the present case. In this case, the appellant has
      been pursuing SEBI for these documents as they believe that an attempt
      is being made by SEBI to suppress the Opinions and Reports as they are
      adverse to the cause of SEBI.
F
              39. A cursory glance at the background of the matter would reveal
      that initially, a complaint was submitted to SEBI on 21.01.2002, wherein
      the appellant and its directors were purportedly involved in irregularities
      in allotment of Non-Convertible Debentures in the year 1994.
      Accordingly, an Investigation Report was submitted by the Investigating
G     Authority on 04.02.2005. SEBI in its counter-affidavit has admitted that
      the aforesaid Report was inconclusive and recommended further enquiry
      in this regard.
             40. In pursuance thereof, SEBI approached Justice (Retd.) B. N.
      Srikrishna in the year 2009. He is supposed to have given his first Opinion,
H
    RELIANCE INDUSTRIES LIMITED v. SECURITIES AND                               751
     EXCHANGE BOARD OF INDIA [N. V. RAMANA, CJI]

which formed the basis of initiating action against the appellant herein. It    A
is SEBI’s case that during the Settlement proceedings, the appellant had
disclosed numerous documents, which mandated SEBI to re-examine
its stand. Accordingly, the matter was referred to Justice (Retd.) B. N.
Srikrishna for a second time.
       41. Thereafter, Justice (Retd.) B. N. Srikrishna wrote back to           B
SEBI asking them to consult Sh. Y. H. Malegam, a renowned Chartered
Accountant to determine the culpability of the appellant and various
directors. It is reported that this exercise had culminated in the Second
opinion of Justice (Retd.) B. N. Srikrishna.
       42. SEBI is a regulator and has a duty to act fairly, while conducting   C
proceedings or initiating any action against the parties. Being a quasi-
judicial body, the constitutional mandate of SEBI is to act fairly, in
accordance with the rules prescribed by law. The role of a Regulator is
to deal with complaints and parties in a fair manner, and not to circumvent
the rule of law for getting successful convictions. There is a substantive
duty on the Regulators to show fairness, in the form of public co-operation     D
and deference.
       43. The duty to act fairly by SEBI, is inextricably tied with the
principles of natural justice, wherein a party cannot be condemned without
having been given an adequate opportunity to defend itself. In State
Bank of Patiala v. SK Sharma, (1996) 3 SCC 364, this Court while                E
dealing with document disclosure and natural justice held as under:
             “28. The decisions cited above make one thing clear, viz.,
      principles of natural justice cannot be reduced to any hard and
      fast formulae. As said in Russell v. Duke of Norfolk [(1949) 1
      All ER 109 : 65 TLR 225] way back in 1949, these principles               F
      cannot be put in a strait-jacket. Their applicability depends upon
      the context and the facts and circumstances of each case.
      (See Mohinder Singh Gill v. Chief Election Commr. [(1978) 1
      SCC 405 : (1978) 2 SCR 272] ) The objective is to ensure a fair
      hearing, a fair deal, to the person whose rights are going to be          G
      affected. (See A.K. Roy v. Union of India [(1982) 1 SCC 271 :
      1982 SCC (Cri) 152] and Swadeshi Cotton Mills v. Union of
      India[(1981) 1 SCC 664] .) As pointed out by this Court in A.K.
      Kraipak v. Union of India [(1969) 2 SCC 262] , the dividing
      line between quasi-judicial function and administrative function
                                                                                H
752             SUPREME COURT REPORTS                           [2022] 15 S.C.R.


A            (affecting the rights of a party) has become quite thin and almost
             indistinguishable — a fact also emphasised by House of Lords
             in Council of Civil Service Unions v. Minister for the Civil
             Service [(1984) 3 All ER 935 : (1984) 3 WLR 1174 : 1985 AC
             374, HL] where the principles of natural justice and a fair hearing
             were treated as synonymous. …”
B
             44. At this juncture, the appellant has pressed into service the
      ratio laid down by this Court in Takano case (supra), to seek document
      disclosure. On the other hand, the respondents have tried to distinguish
      the present case by stating that the present case is not one of disclosure
      which is being sought during investigation by SEBI under the Securities
C     and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade
      Practices Relating to Securities Market) Regulations, 2003. Although
      we agree with the respondents that the Takano Case (supra) was
      rendered under the aforesaid Regulations, however, we are of the opinion
      that the reasoning of this Court alludes to a general obligation of disclosure
D     on the part of SEBI. This Court has held in the Takano Case (supra)
      that three fundamental purposes of disclosure of information are (i)
      reliability, i.e., the Court will be able to perform its function accurately
      only if both parties have access to information and possess opportunity
      to address arguments and counter arguments; (ii) fair trial, i.e., this will
      enable the parties to effectively participate in the proceedings; and (iii)
E     transparency and accountability, i.e., the investigative agencies are held
      accountable through transparency and not opaqueness. Keeping a party
      abreast of the information that influenced the decision promotes
      transparency of the judicial process which was discussed in the aforesaid
      case in the following manner:
F            “24. While the respondents have submitted that only materials
             that have been relied on by the Board need to be disclosed, the
             appellant has contended that all relevant materials need to be
             disclosed. While trying to answer this issue, we are faced with a
             multitude of other equally important issues. These issues, all
G            paramount in shaping the jurisprudence surrounding the principles
             of access to justice and transparency, range from identifying the
             purpose and extent of disclosure required, to balancing the
             conflicting claims of access to justice and grounds of public interest
             such as privacy, confidentiality and market interest. An
             identification of the purpose of disclosure would lead us closer
H
RELIANCE INDUSTRIES LIMITED v. SECURITIES AND                              753
 EXCHANGE BOARD OF INDIA [N. V. RAMANA, CJI]

 to identifying the extent of required disclosure. There are three         A
 key purposes that disclosure of information serves:
 (i) Reliability: The possession of information by both the parties
 can aid the courts in determining the truth of the contentions. The
 role of the court is not restricted to interpreting the provisions of
 law but also determining the veracity and truth of the allegations        B
 made before it. The court would be able to perform this function
 accurately only if both parties have access to information and
 possess the opportunity to address arguments and counter-
 arguments related to the information;
 (ii) Fair Trial: Since a verdict of the Court has far reaching            C
 repercussions on the life and liberty of an individual, it is only fair
 that there is a legitimate expectation that the parties are provided
 all the aid in order for them to effectively participate in the
 proceedings;
 (iii) Transparency and accountability: The investigative agencies         D
 and the judicial institution are held accountable through
 transparency and not opaqueness of proceedings. Opaqueness
 furthers a culture of prejudice, bias, and impunity - principles that
 are antithetical to transparency. It is of utmost importance that in
 a country grounded in the Rule of Law, the institutions adopt those
 procedures that further the democratic principles of transparency         E
 and accountability. The principles of fairness and transparency of
 adjudicatory proceedings are the cornerstones of the principle of
 open justice. This is the reason why an adjudicatory authority is
 required to record its reasons for every judgement or order it
 passes. However, the duty to be transparent in the adjudicatory           F
 process does not begin and end at providing a reasoned order.
 Keeping a party bereft of the information that influenced the
 decision of an authority undertaking an adjudicatory function also
 undermines the transparency of the judicial process. It denies the
 concerned party and the public at large the ability to effectively
 scrutinise the decisions of the authority since it creates an             G
 information asymmetry.
 25. The purpose of disclosure of information is not merely
 individualistic, that is to prevent errors in the verdict but is also
 towards fulfilling the larger institutional purpose of fair trial and
                                                                           H
754             SUPREME COURT REPORTS                          [2022] 15 S.C.R.


A           transparency. Since the purpose of disclosure of information targets
            both the outcome (reliability) and the process (fair trial and
            transparency), it would be insufficient if only the material relied
            on is disclosed. Such a rule of disclosure only holds nexus to the
            outcome and not the process. Therefore, as a default rule, all
            relevant material must be disclosed.”
B
              45. There is no doubt that the set of facts portrayed herein are
      unique. The impugned action of the appellant hails back to the year
      1994, and almost three decades have gone by without there being any
      light at the end of the tunnel. The investigation report by SEBI in 2005
      was inconclusive about the alleged offence. There is even a communique
C     by the Minister of Corporate Affairs, Union of India recommending
      closure of the case as they found nothing to further the prosecution
      under Section 77 of the Companies Act, 1956. In this light, SEBI’s action
      to initiate a criminal complaint without providing the appellant an adequate
      opportunity to defend itself by releasing necessary Reports and other
D     documents, cannot be appreciated by this Court as it is in gross violation
      of the appellant’s right to natural justice. Recently, in S. P. Velumani v.
      Arappor Iyakkam, 2022 SCC Online SC 663, while dealing with the
      necessity of document disclosure in cases where prosecuting authorities
      blow hot and cold, this Court has held as under:
E           “22…The principles of natural justice demanded that the appellant
            be afforded an opportunity to defend his case based on the material
            that had exonerated him initially, which was originally accepted
            by the State.”
             46. The approach of SEBI, in failing to disclose the documents
F     also raises concerns of transparency and fair trial. Opaqueness only
      propagates prejudice and partiality. Opaqueness is antithetical to
      transparency. It is of utmost importance that in a country grounded in
      the Rule of Law, institutions ought to adopt procedures that further the
      democratic principles of transparency and accountability. Principles of
      fairness and transparency of adjudicatory proceedings are the cornerstone
G     of the principles of open justice.
             47. Even for adjudication of condonation of delay under Section
      473, CrPC, the modus of initiation of criminal complaint and the
      conclusions reached therein are relevant in the facts and circumstance
      of the case.
H
    RELIANCE INDUSTRIES LIMITED v. SECURITIES AND                               755
     EXCHANGE BOARD OF INDIA [N. V. RAMANA, CJI]

      48. Viewed from a different angle, the respondents have                   A
vehemently relied on litigation privilege under Section 129 of the Evidence
Act, 1872 to claim exemption from document disclosure. Section 129 of
the Evidence Act reads as under:
      129. Confidential communications with legal advisers.—No
      one shall be compelled to disclose to the Court any confidential          B
      communication which has taken place between him and his legal
      professional adviser, unless he offers himself as a witness, in which
      case he may be compelled to disclose any such communications
      as may appear to the Court necessary to be known in order to
      explain any evidence which he has given, but no others.
                                                                                C
      49. The rationale of such a provision has been well known to
common law since ages. Sir George Mackenzie’s Observations upon
the 18th Act of the 23rd Parliament of King James the Sixth against
Dispositions made in Defraud of Creditors etc (1675), in Sir George
Mackenzie’s Works Vol 2 (1755), p1 are significant. He said this, at p
44:                                                                             D

      “An Advocate is by the Nature of his employment tied to the
      same Faithfulness that any Depositor is: For his Client has
      depositate in his Breast his greatest Secrets; and it is the Interest
      of the Common-wealth, to have that Freedom allowed and secured
      without which Men cannot manage their Affairs and private                 E
      Business: And who would use that Freedom if they might be
      ensnared by it? This were to beget a Diffidence betwixt such
      who should, of all others, have the greatest mutual Confidence
      with one another; and this will make Men so jealous of their
      Advocates that they will lose their private Business, or succumb          F
      in their just Defence, rather than Hazard the opening of their
      Secrets to those who can give them no Advice when the case is
      Half concealed, or may be forced to discover them when
      revealed.”
       In England, the Legal professional privilege is often classified under   G
two sub-headings: legal advice privilege and litigation privilege. Legal
advice privilege comprises of communications between a client and his
legal adviser, and is available when proceedings are in existence or
contemplated. Litigation privilege on the other hand, covers a wider class
of communications, such as those between the legal adviser and potential
witnesses.                                                                      H
756             SUPREME COURT REPORTS                          [2022] 15 S.C.R.


A            50. Coming to legal advice privilege in England, the House of
      Lords through Justice Carswell in Three Rivers District Council and
      others (Respondents) v. Governor and Company of the Bank of
      England (Appellants), [2004] UKHL 48, has summarized the law as
      under:
B           “The conclusion to be drawn from the trilogy of 19th century
            cases to which I have referred and the qualifications expressed in
            the modern case-law is that communications between parties or
            their solicitors and third parties for the purpose of obtaining
            information or advice in connection with existing or contemplated
            litigation are privileged, but only when the following conditions
C           are satisfied:
            (a) litigation must be in progress or in contemplation;
            (b) the communications must have been made for the sole or
            dominant purpose of conducting that litigation;
D           (c) the litigation must be adversarial, not investigative or
            inquisitorial.”
            51. The distinction in application of this privilege qua adversarial
      and investigative litigation/inquisitorial litigation is reasoned by English
      Courts in In Re K (Infants), [1965] AC 201 as under:
E
            “Where the judge is not sitting purely, or even primarily, as an
            arbiter but is charged with the paramount duty of protecting the
            interests of one outside the conflict, a rule that is designed for just
            arbitrament cannot in all circumstances prevail.”
            52. Further, In Re E (S.A.) (a Minor) (Wardship: Court’s Duty),
F
      [1984] 1 WLR 156, while pointing out that a court in wardship proceedings
      was not exercising an adversarial jurisdiction and that:
            “Its duty is not limited to the dispute between the parties: on the
            contrary, its duty is to act in the way best suited in its judgment to
            serve the true interest and welfare of the ward. In exercising
G           wardship jurisdiction, the Court is a true family court. Its paramount
            concern is the welfare of the ward. It will, therefore, sometimes
            be the duty of the court to look beyond the submissions of the
            parties in the endeavor to do what it judges to be necessary”

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    RELIANCE INDUSTRIES LIMITED v. SECURITIES AND                               757
     EXCHANGE BOARD OF INDIA [N. V. RAMANA, CJI]

        53. Indian position seems to be different from England. Section         A
126 to 129 of the Evidence Act do not draw any distinction between
adversarial and investigative litigation as such, and privilege is applicable
all through. This aspect is crucial, as it touches on the foundations of the
legal profession at large in India. This Court does not want to express
any opinion in this regard as the case at hand is different and such an
                                                                                B
issue does not arise, for the following reasons:
      i.   The investigation report was inconclusive, as admitted by SEBI
           itself.
      ii. Instead of SEBI referring the issue to an expert, it could have
          undertaken the exercise of further investigation by itself, which     C
          was not done.
      iii. SEBI ultimately took further steps, only because of the first
           opinion of Justice (retd.) B. N. Srikrishna.
      iv. The first opinion of Justice (retd.) B. N. Srikrishna is a part
          and parcel of the investigation and documents connected               D
          therewith.
      v. Moreover, certain documents have already been disclosed to
         the appellant herein.
        54. The simple test in this case is whether SEBI has launched the
                                                                                E
prosecution on the basis of the investigation report alone. The answer
seems to be ‘No’ by SEBI’s own admission in its reply where it states
that the investigation report was inconclusive and hence further scrutiny
of the transactions by experts was called for. That being the case, further
Reports and opinions obtained, from whomsoever it may be, are only an
extension of the investigation to help SEBI as a Regulator to ascertain         F
the facts and reach conclusions for prosecution or otherwise.
       55. For the above reasons, we do not agree with the contention of
the learned Senior Counsel for SEBI that the first opinion of Justice
(Retd.) B. N. Srikrishna is covered by ‘legal privilege’ under Section
129 of the Evidence Act. Same is the case with the second opinion of            G
Justice (Retd.) B. N. Srikrishna and the Report of Sh. Y. H. Malegam,
which are nothing but a continuation of the fact-finding exercise
undertaken by SEBI to determine culpability.
      56. Moreover, learned Senior counsel, Mr. Arvind Datar, appearing
for SEBI has pointed out that the present set of proceedings have               H
758             SUPREME COURT REPORTS                           [2022] 15 S.C.R.


A     emanated before Criminal Court, wherein the procedures must be strictly
      in accordance with the provisions of CrPC. He states that the stage of
      document production under the CrPC is provided under Section 207 and
      208, which takes place after cognizance is taken by the Magistrate. This
      Court, in S. P. Velumani (supra), while rejecting a similar contention,
      held as under:
B
             “26. We may note that the contention of the State may be
             appropriate under normal circumstances wherein the accused is
             entitled to all the documents relied upon by the prosecution after
             the Magistrate takes cognizance in terms of Section 207 of CrPC.
             However, this case is easily distinguishable on its facts. Initiation
C            of the FIR in the present case stems from the writ proceedings
             before the High Court, wherein the State has opted to re--examine
             the issue in contradiction of their own affidavit and the preliminary
             report submitted earlier before the High Court stating that
             commission of cognizable offence had not been made out. It is in
D            this background we hold that the mandate of Section 207 of CrPC
             cannot be read as a provision etched in stone to cause serious
             violation of the rights of the appellant-accused as well as to the
             principles of natural justice.”
            Observing the facts and circumstances of this case, which have
E     been adumbrated above, we are of the firm opinion that the defence
      taken by SEBI that they need not disclose any documents at this stage
      as such a request is pre-mature in terms of the CrPC, cannot be sustained.
             57. Before we part with the present appeal, another disconcerting
      aspect of this case that comes to the fore is SEBI’s attempt to cherry-
F     pick the documents it proposes to disclose. There is a dispute about the
      fact that certain excerpts of the opinion of Justice (Retd.) B. N. Srikrishna,
      were disclosed to the appellant herein. It is the allegation of the appellant
      that while the parts which were disclosed, vaguely point to the culpability
      of the appellant, SEBI is refusing to divulge the information which
      exonerate it. Such cherry-picking by SEBI only derogates the commitment
G     to a fair trial. In Nea Karteria Maritime Co Ltd v. Atlantic and Great
      Lakes Steamship Corporation, [1981] Com LR 138 at 139, Mustill J.
      held as under:
             ‘I believe that the principle underlying the rule of practice
             exemplified in Burnell v British Transport Commission [1956]
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    RELIANCE INDUSTRIES LIMITED v. SECURITIES AND                                759
     EXCHANGE BOARD OF INDIA [N. V. RAMANA, CJI]

       1 QB 187 is that where a party is deploying in court material             A
       which would otherwise be privileged, the opposite party and the
       court must have an opportunity of satisfying themselves that what
       the party has chosen to release from privilege represents the whole
       of the material relevant to the issue in question. To allow an
       individual item to be plucked out of context would be to risk injustice
                                                                                 B
       through its real weight or meaning being misunderstood.’
       The aforesaid principle is often referred to as the ‘Cherry-picking’
principle.
       58. In the case at hand, SEBI could not have claimed privilege
over certain parts of the documents and at the same time, agreeing to            C
disclose some part. Such selective disclosure cannot be countenanced
in law as it clearly amounts to cherry-picking.
       59. In view of the aforesaid discussion, we allow the present appeal
and direct the respondents to furnish a copy of the following documents
to the appellant forthwith:-                                                     D
       (i) First opinion of Justice (Retired) B.N. Srikrishna
       (ii) Report of Y.H. Malegam
       (iii) Second opinion of Justice (Retired) B.N. Srikrishna
                                                                                 E
Ankit Gyan                                                     Appeal allowed.
(Assisted by : Neha Sharma, LCRA)




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