SEBI cannot build a criminal case on an investigation report and then keep that very document out of the accused’s reach. The Delhi High Court has drawn a clear line: if an investigation report fuels the decision to prosecute, it must be disclosed.
The ruling came in a challenge by Siddharth Shankar, one of the accused in a criminal complaint filed by the market regulator. The trial court had earlier refused to direct SEBI to share its investigation report, accepting the regulator’s claim that the document was merely “internal” and not relied upon in the complaint. The High Court disagreed—and decisively so.
Justice Neena Bansal Krishna noted that under SEBI’s own regulatory framework, the investigation report is not a side note or a background memo. It is the starting point. The Board examines this report to determine whether violations exist and whether enforcement action, including prosecution, should follow. A document that performs such a central role, the Court held, cannot be treated as dispensable or confidential once criminal proceedings begin.
According to the Court, withholding the report deprives the accused of the ability to meaningfully defend himself. Fair hearing, the judgment stressed, is not compatible with selective disclosure—especially when the prosecution’s very satisfaction is rooted in material kept hidden from the defence.
The case arose from a complaint filed by SEBI against Kassa Finvest Pvt. Ltd. and its directors for alleged violations of securities laws. When the matter reached the pre-charge stage, Shankar sought access to the investigation report and related material, arguing that these documents were essential to test the legality and basis of the prosecution. SEBI resisted, and the trial court sided with the regulator. That order has now been set aside.
The High Court leaned on the Supreme Court’s reasoning in T. Takano v. SEBI, reiterating that disclosure obligations in criminal law extend beyond documents formally annexed to a complaint. Any material that bears a direct nexus to the decision to prosecute—and is relevant to discharge or defence—must be shared.
The judgment also framed the issue in constitutional terms. Information asymmetry between the prosecution and the accused, the Court observed, strikes at the heart of Article 21’s guarantee of a fair process. Regulatory confidentiality cannot be used as a shield to erode basic criminal law safeguards.
At the same time, the Court acknowledged that genuinely sensitive information may require protection. But the answer, it said, lies in calibrated redactions—not blanket refusal.
With these observations, the High Court directed SEBI to supply the investigation report to the accused in accordance with law, making it clear that prosecutions cannot rest on documents that remain invisible to the defence.
