Supreme Court: In a contempt petition against Securities Exchange Board of India (‘SEBI’) for not supplying the required documentsto the respondent as directed by the Court in Reliance Industries Ltd. v. SEBI, (2022) 10 SCC 181, the division bench of M.R. Shah and C.T Ravikumar, JJ. has accepted SEBI’s apologyand dropped contempt proceedings against it.

The matter relates to allegations of Reliance Industries fraudulently allotting 12 crore equity shares to entities purportedly connected with its promoters, which were funded by Reliance Industries 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. SEBI, hence, appointed an investigating officer to inquire into the aforesaid complaint.

In Reliance Industries (supra) the Court held that SEBI’s action to initiate a criminal complaint without providing Reliance industries an adequate opportunity to defend itself by releasing necessary reports and other documents is not proper and legal and is a gross violation of Reliance Industries right to natural justice.

The Court noted the submissions of Senior Advocate K.K. Venugopalthat all the relevant documents, which were required to be supplied to Reliance Industries, have now been furnished. Further, the documents were not supplied as the review petition was pending and there was no other intention on the part of SEBI in not complying with the directions issued by the Court. Thus, the Court accepted the apology tendered and closed the contempt proceedings.

[Reliance Industries Limited v. Vijayan A, 2022 SCC OnLine SC 1715, decided on 02-12-2022]

*Apoorva Goel, Editorial Assistant has reported this brief.

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