Adani Row: Supreme Court refuses to accept Centre's sealed cover suggestion on panel

The SC said the interests of Indian investors need to be protected against market volatility in the backdrop of the Adani stocks rout and asked the Centre to consider setting up a panel of domain experts.

The Supreme Court on Friday refused to accept sealed cover suggestions from the Centre, while hearing the Adani-Hindenburg issue.

"We want to ensure transparency. In case we take your suggestions from sealed cover, it automatically means the other party won't know," Chief Justice DY Chandrachud said.

"We want full transparency for the protection of investors. We will form a committee. There will be a sense of confidence in the court," the CJI added.

Giving primacy to investors' interest, the bench, also comprising justices P S Narasimha and J B Pardiwala ruled out the possibility of any sitting judge overseeing the functioning of the proposed panel.

"We are closing it for orders," it said after the hearing which lasted for nearly an hour. After receiving the note from Solicitor General on the members and remit (scope) of the proposed panel, the bench said, "Just one thing.., you know, if we accept the set of suggestions from you in a sealed cover that means the other side has not seen them. Even if we don't accept your suggestion, they will not know which of your suggestions we have accepted and which we have not. Then there may be an impression that well, this is a government appointed committee which the Supreme Court has accepted..."

"So we want to maintain the fullest transparency in the interest of protecting the investors. We will appoint a committee of our own which might be altogether better and that will promote the sense of transparency and confidence in the process," the bench said.

The court said if it were to accept the suggestions then the contents of the sealed cover report will have to be disclosed to the other side so that there is a sense of transparency and confidence in the process. This is what we have suggested the remit which we have made absolutely objectively so as to ensure that the whole thing is holistically looked into and examined, said the SG. At the outset, the law officer said there were two intentions in his mind.

"A. Truth comes out and a holistic view is presented before your Lordships. And, B. No unintended impact on the securities markets etc because your lordships are aware that it is an emotion driven market," he said.

Referring to the SEBI reports, the bench said it has been averred that the market impact of the Adani issue is "almost zero".

"Irrespective of the status of the impact, there can't be any denial of the fact that there has been losses suffered (by the investors)," the bench said.The Central government had agreed to set up a panel of domain experts to look into strengthening the regulatory mechanisms for the stock market.

Till now, four PILs have been filed in the top court on the issue by lawyers M L Sharma, Vishal Tiwari, Congress leader Jaya Thakur and Mukesh Kumar, who claims to be a social activist. Adani Group stocks have taken a beating on the bourses after the Hindenburg Research made a litany of allegations, including fraudulent transactions and share-price manipulation, against the business conglomerate.

The Adani Group has dismissed the charges as lies, saying it complies with all laws and disclosure requirements.