Is NSE A Public Authority? Delhi High Court Says Yes Under RTI Act

In a recent ruling, the Delhi High Court declared the National Stock Exchange of India (NSEI) a public authority under the Right to Information (RTI) Act, 2005. The division bench comprising Justice C. Hari Shankar and Justice Om Prakash Shukla gave the judgement ending the 16-year legal battle.

The court dismissed the NSEI appeal and emphasised that institutions that are performing public functions cannot operate behind a veil of corporate secrecy. It underscored that for such authorities, transparency is not just a statutory obligation but a constitutional right. This verdict makes the stock exchange answerable to the public, as citizens can seek institutional data from the NSE.

Case Background

The legal battle started back in 2010, when a single-judge bench of the Delhi High Court ruled that NSEI fell within the definition of a public authority under Section 2(h) of the RTI Act. The NSEI challenged this ruling. Its core argument was that if a company is incorporated under the Companies Act and manages securities in the public interest, can it be classified as a public authority controlled by or established by the government?

Arguments

The counsel representing the NSEI argued that the exchange is a private incorporated limited company. It is not owned or funded by the government. The counsel contended that although the Securities and Exchange Board of India (Sebi) exercises regulatory oversight, it should not be considered a “control”.

On the other side, the respondents maintained that the single judge analysis was correct because NSEI performs public functions and operates under government-delegated powers.  

Court Observation

The court observed that, according to Section 2(h) of the RTI Act, a body that is owned, controlled, or substantially financed by the government qualifies to be called a public authority. Referring to the precedent of Delhi Stock Exchange vs. K C Sharma, the bench noted that the government exercised control over the DSE. It noted, “… it is clear that the NSEI qualifies as a “public authority” under clause (i) of the second part of Section 2(h) of the RTI Act.”

It also noted that while the order under Section 4(3) was issued by Sebi, it should be treated as an order from the central government. It stated, “We also agree with the learned Single Judge that, though the order under Section 4(3) of the SCRA was issued by the SEBI, it has to be treated as an order of the Central Government, as the SEBI was acting, while issuing the order, as a delegatee of the Central Government under Section 29 of the SCRA.”

Court Judgment

The Division Bench upheld the single judge’s ruling in 2010 and dismissed the NSEI appeal. It concluded that NSEI qualifies as a public authority under both as an institution constituted by a government order (via Sebi), and as a body controlled by the appropriate government. Thus, NSE is now legally mandated to comply with the transparency requirement of the RTI Act.