Capital market regulator Securities and Exchange Board of India (Sebi) can seek call data records from telecom service providers (TSPs) regarding any person against whom an investigation is being carried out, the Bombay High Court ruled today.
The court, however, advised caution in the exercise of such power, in order to avoid possible misuse and violation of an individual's right to privacy.
"Such a power cannot be exercised by Sebi for conducting a fishing enquiry. It cannot be a blanket power to hunt out information without any pending inquiry or investigation. This power can only be exercised by Sebi in respect of any person against whom any investigation or inquiry is being conducted," the court observed.
"Further, such information can be called for only by an officer duly authorised by Sebi to call for information with regard to call data records from the telecom service provider," it said, adding that before calling for such information, it should record the opinion of the authorised officer in the file.
Call data records are an important evidence for Sebi investigations, especially in cases relating to insider trading and frauds.
However, the Indian Council of Investors, which represent the investing public had filed a PIL seeking to restrain the regulator from calling for call data records (CDRs) from telecom service providers like MTNL and Vodafone.
It alleged that such action violates and infringes the fundamental right of privacy of an individual and was also prohibited under the Indian Telegraph Act.
Responding to the petition, SEBI's assistant legal advisor Sumit Agrawal said in its affidavit that the regulator has not tapped or intercepted calls during the investigation, but has only called for data that was already available in the records of the telecom providers.
Sebi also said that telecom service providers have not always cooperated in providing information about call data records and that it had acted wherever information was furnished.
The department of telecommunications has drawn up the list of enforcement agencies, including the Intelligence Bureau, the Narcotics Control Bureau, the Directorate of Enforcement, the Central Bureau of Investigation, the Central Board of Direct Taxes, the Central Economic Intelligence Bureau and the Directorate of Revenue Intelligence, which can have the power.
He said the government has notified an ordinance empowering SEBI to seek CDRs.
A High Court bench of Chief Justice Mohit Shah and Justice M S Sanklecha accepted Sebi's stand that the power in Sebi to call for the CDRs from TSPs was always available and in case there was any doubt or ambiguity, the same is removed by the Securities Law (Amendment) Ordinances issued in 2013 and 2014.