SEBI Investigations and RTI: Delhi High Court Affirms Section 8(1)(h) Shield; SCORES Status Is Sufficient Disclosure

Case: Srishti Rustagi v. Securities and Exchange Board of India (SEBI) & Ors., LPA 306/2025

Court: High Court of Delhi, Division Bench (Devender Kumar Upadhyay, CJ and Tushar Rao Gedela, J)

Date: Reserved on 15 September 2025; Delivered on 18 September 2025

Citation: 2025 DHC 8242-DB

Introduction

This Letters Patent Appeal (LPA) arises from a challenge to the denial of information by SEBI under the Right to Information Act, 2005 (RTI Act) regarding an alleged insider trading probe triggered by a market complaint. The appellant, an investor-complainant, had filed a complaint on the SEBI SCORES portal concerning the Offer for Sale (OFS) of equity shares of respondent no. 3 (WABCO India Ltd.). While SEBI partially disposed of the complaint—stating that 97% of the OFS allocation had gone to domestic mutual funds and that data did not corroborate the allocation-related allegations—it forwarded the insider trading allegations for examination by the concerned division.

The appellant thereafter sought, through RTI, the status of “ongoing internal investigation,” a copy of a “speaking order” on part-disposal, and a direction for time-bound completion of the investigation. The Central Public Information Officer (CPIO) declined, invoking Section 8(1)(h) of the RTI Act (impeding investigation) and emphasized that SEBI treats such complaints as market intelligence, examines them confidentially, and publishes regulatory action post-conclusion on its website. The First Appellate Authority and the Central Information Commission (CIC) affirmed this approach. A writ petition was dismissed by the Single Judge on 24 December 2024, leading to the present appeal.

The core issues were: (i) whether SEBI is obligated under RTI to disclose details or “status” of an internal investigation triggered by a complaint; (ii) whether a “speaking order” must be supplied upon part disposal of a complaint; and (iii) whether the Court should mandate time-bound completion of SEBI’s investigation.

Summary of the Judgment

The Division Bench dismissed the appeal and affirmed the Single Judge’s order. It held that:

SEBI had already provided the “status” of the complaint: the SCORES portal conveyed the outcome on the OFS-allocation issue and indicated that the insider trading allegation had been forwarded to the concerned division. The complaint’s status remains accessible under “View Complaint Status” on the SCORES portal.
Details of any ongoing examination or investigation are exempt from disclosure under Section 8(1)(h) of the RTI Act because disclosure may impede the process, compromise confidentiality, affect evidence collection, cause unwarranted market speculation, and harm third parties.
SEBI’s practice of treating complaint inputs as “market intelligence” is legitimate; regulatory actions, if any, are published post-investigation on the SEBI website. This satisfies transparency obligations in the circumstances.
There is no basis to direct SEBI to complete an investigation in a time-bound manner on the facts presented, nor to require a more elaborate “speaking order” beyond what the portal already conveys for part disposal.

Analysis

Statutory and Regulatory Framework

RTI Act, 2005, Section 8(1)(h): Exempts information “which would impede the process of investigation or apprehension or prosecution of offenders.” The burden is on the public authority to show how disclosure would impede the process.
SEBI’s investigative mandate: SEBI conducts confidential examinations and investigations to detect, deter, and prosecute securities law violations, including insider trading and market manipulation. Pre-emptive disclosures can compromise these functions in price-sensitive markets.
SCORES portal: SEBI’s online grievance redressal platform through which complainants can file and track complaints (“View Complaint Status”).

Precedents Cited

The Division Bench judgment does not cite prior judicial decisions. Instead, it upholds the orders under the RTI process (CPIO, First Appellate Authority, CIC) and the Single Judge’s reasoning anchored in Section 8(1)(h) and SEBI’s confidentiality rationale.

Note: Although not cited here, the approach aligns with the broader judicial understanding that while transparency is the rule under RTI, exemptions—especially where disclosure would impede investigations—must be applied with reasoned justification, and that post-conclusion transparency through published enforcement orders is an appropriate balance in sensitive regulatory spheres like securities markets.

Legal Reasoning

Disaggregating “status of complaint” from “details of investigation”:
The appellant’s RTI query sought “status about the ongoing internal investigation.” The Bench noted that the “status of complaint” had already been communicated and is accessible on SCORES. Crucially, the Court distinguished between a complainant’s entitlement to know how a complaint has been handled (status/part-disposal) and a non-entitlement under RTI to the nature and details of any resulting confidential investigation.
Section 8(1)(h) exemption squarely applies:
SEBI reasoned that disclosure could impede investigation by fueling market speculation, compromising evidence collection, and harming third parties—concerns that carry specific gravity in capital markets where information is price-sensitive. The Division Bench found these reasons “cumulatively sufficient,” thereby satisfying the statutory threshold for exemption.
“Market intelligence” treatment is legitimate:
SEBI treats complaint inputs as “market intelligence” to be examined holistically and confidentially. This characterization justified non-disclosure pending determination. The Court accepted SEBI’s consistent practice of publishing enforcement outcomes post facto on its website as a calibrated transparency mechanism.
No right to a “speaking order” for part disposal of a complaint:
The complaint was “partly disposed” with reasons: the OFS allocation allegation was negated by data (97% to domestic mutual funds), and the insider trading aspect was forwarded. The Bench did not find any legal obligation on SEBI to issue a fuller quasi-judicial “speaking order” on the portal for such complaint handling.
No mandamus for time-bound investigation:
Absent exceptional circumstances, the Court declined to direct SEBI to complete an investigation within a judicially imposed timeline, particularly where the underlying RTI dispute concerned disclosure, not demonstrable investigative inaction or illegality.

Impact and Implications

For RTI requests to SEBI: Requesters can expect to receive the complaint’s status and links to eventual enforcement orders, but not interim or granular details of ongoing examinations/investigations. Framing RTI queries to seek pre-decisional investigative records will likely meet a Section 8(1)(h) bar.
For SEBI’s investigative integrity: The judgment fortifies SEBI’s confidentiality in handling market intelligence and ongoing probes, reducing the risk of undermining evidence-gathering or precipitating market volatility through premature disclosures.
For complainants and whistleblowers: SCORES remains the primary avenue to track complaint handling; patience is needed until SEBI concludes examinations. The decision discourages expectations of rolling, granular updates about investigative steps through RTI.
For market participants and third parties: The Court’s emphasis on avoiding unnecessary harm to third parties recognizes reputational and market risks from disclosing unverified allegations or incomplete investigative material.
For CIC and CPIO practice: The decision endorses reasoned reliance on Section 8(1)(h) where disclosure could impede market abuse investigations. It also reflects good practice: point requesters to publicly accessible status (SCORES) and post-investigation enforcement orders.
Beyond SEBI: The logic is likely to be persuasive for other financial regulators and enforcement bodies handling sensitive, price-moving investigations, consolidating a consistent approach to RTI exemptions where “impediment” is demonstrable.

Complex Concepts Simplified

SCORES: SEBI’s online platform for investor complaints. It logs complaints and displays their handling history and status through “View Complaint Status.”
Offer for Sale (OFS): A mechanism allowing promoters or large shareholders to sell shares through the stock exchange platform in a transparent, time-bound window. Allocation patterns can be sensitive and closely regulated.
Section 8(1)(h), RTI Act: An exemption that permits non-disclosure of information if disclosure “would impede” investigation or prosecution. “Impediment” covers risks such as evidence tampering, witness influence, market disruption, or premature reputational harm.
Market intelligence: Tips, complaints, alerts, and analytical leads used by regulators to identify potential violations. Typically confidential, since premature exposure can compromise inquiries and affect markets.
Enforcement orders: Final decisions by SEBI (or its adjudicating officers/Whole Time Members) imposing directions, penalties, disgorgement, or other measures after due process. These are publicly available on SEBI’s website.
Letters Patent Appeal (LPA): An intra-court appeal against decisions of a Single Judge to a Division Bench in High Courts where such jurisdiction is preserved by Letters Patent/Statutes.

Practical Notes and Guidance

For RTI Applicants

Use SCORES to track the complaint under “View Complaint Status.” Preserve registration numbers and passwords provided on filing.
Frame requests to seek:
- Final, concluded enforcement orders (if any) and their URLs on the SEBI site;
- Generic procedural information or published circulars/manuals, rather than case-specific investigative detail;
- Non-investigative material not covered by Section 8 exemptions.
Avoid seeking real-time or interim investigative updates; these are likely exempt under Section 8(1)(h).
If you seek reasons for “part disposal,” rely on the portal’s recorded rationale. Courts are unlikely to require a more elaborate “speaking order” for complaint-handling steps.

For SEBI CPIOs and Appellate Authorities

When invoking Section 8(1)(h), record clear, case-tailored reasons (e.g., risk to evidence collection, third-party harm, market volatility).
Proactively guide applicants to:
- SCORES “View Complaint Status” for complaint handling history;
- SEBI’s “Enforcement Orders” webpage for actions taken post-investigation.
Consider partial disclosure when feasible without impeding investigations (Section 10 severability), while safeguarding confidential intelligence and third-party interests.

For Listed Companies and Market Intermediaries

Recognize that investigations are confidential; refrain from assuming that lack of disclosure implies closure or exoneration. Monitor SEBI’s enforcement page for outcomes.
Maintain robust compliance and recordkeeping to respond to regulators without risking inadvertent disclosure obligations under RTI.

Case Timeline at a Glance

09 Sep 2021: Complaint filed on SCORES regarding OFS allocation and insider trading at WABCO India Ltd.
28 Sep 2021: SCORES communicates part disposal—data does not corroborate allocation allegation; insider trading issue forwarded to concerned division.
29 Mar 2022: RTI application seeking status of “ongoing internal investigation.”
26 Apr 2022: CPIO reply—treats inputs as market intelligence; examinations confidential; actions, if any, published on SEBI site.
15 Sep 2023: First Appellate Authority dismisses appeal; emphasizes confidentiality and portal access to status.
09 Sep 2024: CIC dismisses second appeal; finds CPIO’s reply appropriate and status furnished.
24 Dec 2024: Single Judge dismisses writ petition; upholds Section 8(1)(h) exemption.
18 Sep 2025: Division Bench dismisses LPA; affirms Single Judge’s order.

Conclusion

The Delhi High Court’s decision in Srishti Rustagi v. SEBI consolidates a clear operational principle for RTI in the securities regulation context:

Complainants are entitled to know how their complaint has been handled, which SEBI duly conveys through the SCORES portal.
Details of ongoing examinations or investigations are protected under Section 8(1)(h) of the RTI Act when disclosure could impede the process, especially in sensitive and price-responsive markets.
SEBI’s practice of treating complaint inputs as market intelligence and disclosing only final enforcement actions achieves a proportionate balance between transparency and investigative integrity.
Courts will not readily compel “speaking orders” at the complaint-handling stage or impose time-bound directives for investigations in the absence of exceptional circumstances.

In the broader legal landscape, the ruling provides a measured template for reconciling RTI’s transparency mandate with the confidentiality necessary for effective market regulation. It reassures regulators about the sanctity of their investigative processes while preserving public transparency at the point of final, reasoned enforcement action.