Justice C Hari Shankar, Justice Om Prakash Shukla, Delhi High Court
National Stock Exchange Is A Public Authority Under RTI Act: Delhi High Court
|The Court held that statutory recognition under the SCRA and pervasive SEBI control make NSE amenable to the RTI Act despite its private incorporation.
The Delhi High Court has held that the National Stock Exchange of India Limited (NSE) is a "public authority" within the meaning of Section 2(h) of the Right to Information Act, 2005, making it amenable to the transparency obligations imposed under the RTI Act.
The Court held that registration or recognition granted to a stock exchange under Section 4(3) of the Securities Contracts (Regulation) Act, 1956 (SCRA) constitutes it as an authority or institution of self-government, notwithstanding its incorporation as a private company.
Pertinently, the Single Judge Bench had held that NSEI qualifies as an "authority or body" within the meaning of Section 2(h) of the RTI Act. It further observed that the expression "established or constituted", particularly the word "constituted", is wide enough to include a body which, though initially established by private parties, can function as a stock exchange only upon obtaining statutory recognition. The Court held that the recognition granted by SEBI under Section 4(3) of the Securities Contracts (Regulation) Act, 1956, which is indispensable for NSEI's functioning as a stock exchange, must be regarded as an order of the Central Government by virtue of Section 29 of the SCRA.
Accordingly, agreeing with the observations in the impugned order, a Division Bench comprising Justice C. Hari Shankar and Justice Om Prakash Shukla in the Letters Patent Appeal, observed, “We see no reason to differ. It has to be remembered that this is not a case in which the body was established as a private company and was regulated by statute later, which is what Thalappalam referred to, it is a case where, without recognition by the SEBI, the NSEI could not function as a stock exchange at all. Therefore, the NSEI also satisfies the first part of the definition of ‘Public authority’”.
Senior Advocate Jayant Mehta appeared for the appellant and Advocate Ashish Aggarwal appeared for the respondent.
“…Registration or recognition of the stock exchange under Section 4(3) resulted in the stock exchange being constituted and established as an ‘authority’ or ‘institution of selfgovernment’. In the case of the NSEI, the requisite Order under Section 4(3) stood issued by the SEBI, recognizing the NSEI as a stock exchange. NSEI thereby became an ‘authority’ or “institution of self-government’ within the meaning of the first part of Section 2(h) of the RTI Act”, the Bench further said.
The brief facts involve the incorporation of the NSEI as a limited company on November 27, 1992, with the stated objective of facilitating, managing, and regulating dealings in securities in a transparent, fair, and open manner in the public interest.
To function as a stock exchange, the appellant sought and received the mandatory statutory recognition from SEBI under Section 4(3) of the SCRA. Subsequently, proceedings arose concerning whether the NSEI was bound to disclose information under the RTI Act, leading to a challenge regarding its legal status as a public entity.
A Single Judge Bench of the Delhi High Court had, by a judgment dated April 15, 2010, clinically analyzed Section 2(h) of the RTI Act and answered the issue in the affirmative, declaring the NSEI a public authority.
Aggrieved by this decision, the NSEI preferred a Letters Patent Appeal before the Division Bench, contending that its incorporation under the Companies Act rendered it a private entity beyond the scope of the RTI Act.
The Court considering the first and second parts of Section 2(h) of the RTI Act, noted that for the first part, the word "constituted" includes subsequent executive acts that confer a special legal status upon a private body.
Since SEBI acted as a delegatee of the Central Government under Section 29A of the SCRA, its recognition order under Section 4(3) must be deemed an order issued by the Central Government, satisfying Section 2(h)(d).
For the second part, the Bench rejected the appellant's reliance on Thalappalam Service Cooperative Bank Limited v. State of Kerala (2013) 16 SCC 82, clarifying that if an entity is subjected to deep and pervasive state control, as established for stock exchanges in K.C. Sharma v. Delhi Stock Exchange, it disjunctively satisfies the test of being a "controlled" body. The Court emphasized that stock exchanges explicitly discharge public functions by participating in the socio-economic affairs of the public interest.
“The learned Single Judge is, therefore, correct in his view that the NSEI would qualify as a “public authority” not only under the second part, but also under the first part of Section 2(h) of the RTI Act”, the Bench said.
The Division Bench dismissed the appeal, finding no reason to interfere with the well-reasoned judgment of the learned Single Judge. The Court affirmed that the NSEI satisfies both the first and second parts of the definition of a "public authority" under the RTI Act.
Cause Title: National Stock Exchange of India Ltd. v. Central Information Commission & Ors. (Neutral Citation: 2026:DHC:5170-DB)
Appearances:
Appellant: Jayant Mehta, Senior Advocate, Pranav Sarthi, Prachi Dhingra, Ishan Agrawal, Gandharv Garg, Jasleen Oberoi, Anshit Aggarwal, Mansvini Jain, and Udit Bajpai, Advocates.
Respondent: Ashish Aggarwal, O.P. Faizi, Anand Aggarwal, Darshana Aggarwal, Nishtha Verma, Lisha Arora, Tanya Jain, Himanshu Singh, Ishita, and Anjali, B.S. Shukla, CGSC, with Dashmesh Tripathi, Advocates.