The Delhi High Court has affirmed that the National Stock Exchange of India is a public authority, legally binding the institution to disclose information to citizens under the Right to Information Act.
A division bench of Justices C Hari Shankar and O P Shukla dismissed an appeal by the stock exchange on Wednesday, upholding a prior single-judge decision. The bench agreed with the previous ruling that the exchange is controlled by the government and was established through a government order, emphasizing that it cannot function without formal recognition from the Securities and Exchange Board of India.
Legal Definitions And Government Control
Under Section 2(h) of the Right to Information Act, citizens can only enforce their right to obtain information from entities classified as public authorities. The law defines a public authority as any organization that is owned, controlled, or substantially financed, directly or indirectly, by the government.
The division bench rejected the stock exchange’s argument that its relationship with the state is merely regulatory. The court clarified that the exchange was not a standard private company that subsequently became subject to statutory regulations, but rather an entity whose very existence and operation as a stock exchange are dependent on government-backed authorization.
History Of The Dispute
The legal proceedings began when the stock exchange challenged a directive from the Central Information Commissioner. A single-judge bench dismissed that challenge on April 15, 2010, ruling that the exchange qualified as a public authority. The stock exchange then appealed that decision to the division bench.
During the appeal, senior counsel representing the stock exchange argued that the institution is neither owned, controlled, nor financed by the government. The exchange contended that if regulatory oversight by the market regulator were sufficient to classify a privately incorporated entity as a public authority, then other regulated private financial bodies—such as commercial banks and mutual funds—would also fall under the Right to Information Act, which they argued would defeat the law’s original scope and objective.
The division bench found no grounds to interfere with the single-judge’s decision and affirmed the ruling. The appeal was dismissed with no orders as to legal costs.
