SEBI Appeals Mandate De Novo Review: Regulator Orders Disclosure of Investigation Records Pertaining to Alleged Illegal Fund Mobilization

SEBI Appeals Mandate De Novo Review: Regulator Orders Disclosure of Investigation Records Pertaining to Alleged Illegal Fund Mobilization​

The Appellate Authority under the Right to Information Act, 2005, has issued a significant order regarding transparency within regulatory processes. The decision concerns Appeal No. 6868 of 2026 filed by Sanjay Kumar against SEBI concerning his complaints and appeals related to alleged illegal fund mobilization by Bahubala Private Limited.

Review of Initial Information Denial​

The appeal was lodged after the appellant received a response from the Chief Public Information Officer (CPIO), SEBI, in May 2026. The original RTI application sought comprehensive records regarding both his complaints and subsequent appeals filed before SEBI.

These crucial documents included requests for file notings, internal correspondence, any communication issued by SEBI to Bahubala Private Limited, inquiry reports, and status updates of the appeal file. These details relate directly to regulatory oversight and investigation processes.

SEBI’s initial response exempted certain information, claiming it related to the agency's "internal functioning" (under Section 8(1)(a) of the RTI Act). Another part of the denial cited personal information concerns regarding the names and designations of processing officials (Section 8(1)(j)).

Critical Directives on Investigation Documentation​

Reviewing the submissions, the Appellate Authority found that the initial response provided by SEBI did not adequately address several key queries. This suggests a potential lapse in regulatory transparency concerning specific investigations.

The Authority specifically mandated that SEBI must ascertain and provide all requested information pertaining to queries 3, 4, and 5. These include copies of inquiry reports, inspection reports, verification reports, and any correspondence between SEBI and the PMO or other relevant authorities regarding the complaint.

Furthermore, concerning query Nos. 6 (present status of appeal) and 7 (order notes), the Authority noted that the respondent failed to provide sufficient justification for denying access to these internal records. Therefore, these queries warrant immediate reconsideration by the regulator.

Balancing Regulatory Efficiency Against Public Access​

The Appellate Authority addressed the initial claim by SEBI regarding the denial of certain information based on it being strategic or relating to internal functioning. The ruling acknowledged Supreme Court precedents that emphasize maintaining a balance between transparency and the efficient operation of public authorities.

Despite this acknowledgment, the Authority confirmed that for specific elements of the regulatory process—namely the records detailing investigations against third parties like Bahubala Private Limited—the denial was found deficient.

Regarding the request for names and designations of officials processing the matter (Query 8), the Authority agreed with SEBI's initial assessment regarding privacy invasion. The ruling cited legal precedents confirming that such information, unrelated to public affairs, may be exempt under Sections 8(1)(g) and 8(1)(j).

Regulator Directed to De Novo Consideration Within 30 Days​

In conclusion, the Appellate Authority has not disposed of the matter entirely but has directed a remedial action by SEBI. The application is hereby remitted back to the respondent CPIO at SEBI.

SEBI must undertake a complete de novo consideration of queries numbers 3 through 7 of the original RTI application. This comprehensive response must be provided to Sanjay Kumar within 30 days from the date of receiving this order, ensuring adequate disclosure of records concerning the investigation and disposal process.