RBI vs. Jayantilal Mistry: Supreme Court Upholds RTI Disclosure in Banking Sector

The case of Reserve Bank of India vs. Jayantilal N. Mistry & Others revolved around the applicability of the Right to Information (RTI) Act, 2005 to the Reserve Bank of India (RBI) and private banks regarding disclosure of financial information. The Supreme Court had earlier ruled that the RBI must disclose information concerning banks, rejecting the claim that such information was held in a fiduciary capacity. However, multiple banks filed applications seeking to recall this judgment, citing concerns over privacy and financial confidentiality.

Background of the Case

The dispute began when the respondents sought information under the RTI Act about RBI’s inspection reports, risk assessment reports, and annual financial inspection reports of banks. The RBI refused, citing exemptions under Section 8(1)(a), (d), and (e) of the RTI Act, which deal with national security, commercial confidence, and fiduciary relationships.

The matter was transferred to the Supreme Court, which ruled in Reserve Bank of India v. Jayantilal N. Mistry (2016) that the RBI was obligated to disclose such information, as it was not in a fiduciary relationship with banks but had a duty to act in the public interest.

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Petitioners’ Arguments

Private banks, including HDFC Bank and the State Bank of India, filed miscellaneous applications arguing that:

• They were not heard when the original judgment was delivered.
• The ruling compromised the right to privacy of banks and their customers, citing Justice K.S. Puttaswamy v. Union of India (2017).
• The judgment was per incuriam (delivered without considering relevant legal precedents).
• Disclosure of sensitive financial information could harm public confidence in the banking system.

Respondents’ Arguments

The respondents countered that:

• The RBI was the sole decision-maker regarding disclosure, and banks were aware of the proceedings but did not intervene.
• The judgment aimed to enhance transparency and accountability in the financial sector.
• Allowing banks to recall the decision would set a precedent for reopening settled cases.

Supreme Court’s Findings

The Supreme Court, in its judgment delivered by Justices L. Nageswara Rao and Vineet Saran, ruled:

• Applications for recall of a judgment should not be a substitute for a review petition.
• Banks had ample opportunity to join the original case but did not do so.
• The RBI’s duty is to uphold public interest, not to shield banks from scrutiny.
• The dismissal of recall applications does not prevent banks from pursuing other legal remedies.

Judgment and Conclusion

The Court dismissed all miscellaneous applications, stating:

“The applications styled as recall are essentially applications for review. The nomenclature given to an application is of absolutely no consequence—what is of importance is the substance of the application.”

With this decision, the Supreme Court reinforced the principle of transparency in the financial sector while maintaining that established judicial rulings cannot be overturned merely because affected parties later express concerns.

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Petitioner Name: Reserve Bank of India.
Respondent Name: Jayantilal N. Mistry & Another.
Judgment By: Justice L. Nageswara Rao, Justice Vineet Saran.
Place Of Incident: India.
Judgment Date: 28-04-2021.

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