Sebi has power to seek call data records from telecom operators, but with certain safeguards. - holds Bombay High Court

 Thus, there can be no dispute that the SEBI is authorized
under the SEBI Act to call for CDRs from the TSP. However, this
power is capable of misuse and can violate a citizen's right to privacy
guaranteed by Article 21 of the Constitution. Therefore, it is made
clear that 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 enquiry is being conducted. Further,such
information can be called for only by an officer duly authorized by
SEBI to call for information with regard to CDRs from the TSP. SEBI
had issued delegation order dated 3 May 2010 which, inter alia,
delegates power to the following officers:
S.No. Officer Nature of delegation
1. ED/Investigating Authority Calling for information and record
from any bank, any other authority or
Board or corporation under Section
11(2)(ia)
2. DGM with the approval of
ED
Exercising powers under Section 11(3)
3. Investigating Authority
(original power)
Conduct/undertake investigation under
Section 11C

Further, as a safeguard, it would be necessary that
before calling for such information, an opinion be recorded on the
file by the authorized officer, calling for the records indicating the
reason why he considers it necessary to call for the CDRs. We are
inclined to read this safeguard into the provisions of Section 11 and
11C(3) because Section 11C(8), while authorizing the Chairman of
SEBI to take coercive measure for obtaining the relevant information
not supplied, though called for, requires the Chairman to record
reasons for authorizing such coercive measures. It would, therefore,
stand to reason that before calling for CDRs from TSPs also, the
authorized officer must be satisfied that it is necessary to call for
such information. All the above safeguards are necessary to ensure
that the privacy of an individual cannot be invaded by calling for the
CDRs save and except in accordance with law.
19. Having heard the learned counsel for the parties, we are
of the view that the provisions of Section 11(1), 11(2)(i) & (ia) (as
amended by Ordinances promulgated by President of India on 16
July 2013, 16 September 2013 and 28 March 2014), Sections 11(3),
11C(3) and 11C(8) of the SEBI Act confer powers on SEBI to call for
information and record of CDR of Tower Location from Telecom
Service Providers, whether in public sector or in private sector.
However, such power is to be exercised after complying with the
following safeguards;

(i) such CDRs or information regarding tower location can
be called for only in respect of the person against
whom any investigation or enquiry is being conducted
by SEBI,
(ii) the information may be called for only by an officer
who is duly authorized by SEBI as per the delegation
order,
(iii) before calling for such information, the opinion of such
authorized officer should be recorded in the file
indicating application of mind to the effect that CDRs
and/or information regarding tower location would be
relevant for any investigation or enquiry by SEBI in
respect of any transaction in securities, and
(iv) the CDRs of any such subscriber and information
regarding tower location is a matter of confidentiality
and privacy and therefore such privacy cannot be
invaded except in accordance with law.
20. In our opinion, therefore, the safeguards indicated above
are very important and mandatory and SEBI shall henceforth
scrupulously observe the same before calling for any CDRs and/or
information regarding tower location.

IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
PIL NO. 29 OF 2013
Indian Council of Investors .. Petitioner
V/s.
Union of India & Ors. .. Respondents

CORAM: MOHIT S. SHAH, C.J. &
M.S.SANKLECHA,J.
DATE : 22 APRIL 2014.



This public interest litigation has been filed by the Indian
Council of Investors essentially seeking the following directions to
respondent no.2 – Securities and Exchange Board of India (SEBI):(
a) to cease, desist and refrain from calling for Call Data
Records (CDRs) and details of tower location from
Telecom Service Providers (TSP);

(b) to disclose the names of its officials who had called for
such information from TSP and to take necessary action
against such officials; and
(c) to disclose on oath all investigation, adjudication,
prosecution and other action that may have been taken
and is being taken on the basis of CDRs collected.
The petitioner Council has also alleged that the action of
calling for CDRs from TSP by SEBI violates and infringes the
fundamental right of privacy available to citizens of India.
2. The petitioner is a company incorporated under section
25 of the Companies Act, 1956 and claims to be promoting,
protecting and safeguarding the interest of investors of primary and
secondary markets with various authorities including SEBI.
3. SEBI is a Board constituted and established by the
Central Government under Section 3 of the Securities and Exchange
Board of India Act, 1992 (SEBI Act). It has primarily been
constituted to protect the interest of the investors in securities, to
promote and regulate the security market.
4. The grievance in the petition as filed is not only in
respect of CDRs and details of tower location from such TSP but also
the action of SEBI of seeking to intercept and monitor the calls. This
is specifically pleaded in ground (i) of the petition as under:

“ Respondent No.2 being a Government body, ought to
have realized that such sensitive information of citizens of the
country by seeking to intercept, call monitor as well as calling
for Call Data Records of its telephones/cellphones cannot be
just randomly sought for as per the whims and fancies of the
junior officers of Respondent No.2. A proper reasoned order
is required to be passed by an appropriate authority
designated for this purpose before any such activity such as
call interception and monitoring is done or call records are
sought for of the citizens of the country, even if the agency/
organization / body is empowered by law to call for such
CDR details. An appropriate authority designated of the
agency empowered by law for this purpose is required to
apply its mind and after considering the merits of the case
and justification for seeking to intercept and monitor calls of
ordinary citizens ought to pass orders interception, call
monitoring as well as call Data Records of various citizens.”
(emphasis supplied)
However, the allegation in respect of intercepting and
monitoring calls has been denied by SEBI. In the affidavit in reply
dated 3 May 2013 filed on behalf of SEBI, it has been specifically
stated as under:
“ It is further submitted that SEBI who has been
mandated by the parliament to protect the interest of
investors and regulate the securities market, has been
continuously conducting surveillance and undertaking
investigations to trace the facts associated with anomalies
noticed in the functioning of the capital market. While
conducting investigations, SEBI calls for information from
several entities including telephone call records of suspected
persons from telecom service providers. It is further
submitted that SEBI has not tapped or intercepted calls
during the process of its investigation. SEBI has only called
for data that was already available in the records of the
telecom providers. The data received has been utilized for
the purpose of investigations only and for any malafide
intentions.

In reply to Ground (B), (C) and (E), it is admitted
that interception and monitoring of telephone conversation
can be done only by the agencies that have been empowered
by the government in this regard. However, SEBI has not
tapped or sought interception of telephone communications
and has only sought call data records from telecom service
providers. The telecom service providers have provided these
call data records willingly / voluntarily and where and when
SEBI's request for data was refused by the telecom service
providers, SEBI has taken no legal action to either seek /
attain the data or file any legal proceedings against these
operators.”
(emphasis supplied)
5. At the hearing, learned counsel for the petitioner
concedes that the petitioner Council is not making and/or pressing
its allegation about interception and/or monitoring of calls by or at
the instance of SEBI. The above allegation in the petition is
attributed by the Counsel to loose drafting. The grievance of the
petitioner is only confined to SEBI calling for CDRs and details of
tower location from the TSP. We also find that the prayer clauses in
the petition are also confined only to CDRs. Accordingly, the only
issue being agitated before us and being considered by us is the
power of SEBI to call for CDRs from Telecom Service Providers
(TSP).
6. Mr. Darius Shroff, learned counsel for the petitioner has
raised the following contentions:
(a) SEBI, being a creature of SEBI Act, has no powers to call for
any CDRs from TSP conferred upon it. The calling of such
information would amount to violation of fundamental right

of citizens to privacy. Thus, in violation of Article 21 of the
Constitution of India;
(b) In any view of the matter, SEBI is prevented/prohibited from
calling for any records such as CDRs from any TSP in view of
Section 5(2) of the Indian Telegraph Act, 1885. Thus, seeking
and receiving CDRs from the TSP is in breach of the law and
the Officers responsible for the same be proceeded with in
accordance with law; and
(c) The Officers of the SEBI and the Government of India are also
of the view that SEBI does not have powers to call for CDRs.
In fact, the correspondence between SEBI and Government of
India and inter se between various Ministries of
Government of India and notings on the files obtained under
the Right to Information Act all clearly indicate that they were
all conscious of the absence of power of SEBI to call for such
information from service providers. It is only in the above light
that suggestions were made to specifically confer that power
on SEBI by proposing to amend section 5(2) of the Indian
Telegraph Act, 1885 by empowering SEBI to exercise powers
referred to in the said provision and have access to CDRs.
However, no such amendment has been made nor has SEBI
been included in the list of authorities upon whom such
powers are conferred under section 5(2) of the Telegraph Act.
It is therefore vehemently submitted that SEBI is acting
illegally in calling for CDRs from such service providers.

7. Mr. Darius Khambata, learned Senior Counsel appearing
for SEBI and Mr. Parag Vyas, learned Counsel appearing for UOI have
in reply made the following submissions:
(a) The SEBI has been constituted under the SEBI Act for
protection of Investors in the Security Market, the regulation
and promotion of Securities Market. In the above view, the
SEBI Act has conferred power upon SEBI to call for
information from any person including TSP. The powers of
SEBI to call for information is traceable to Section 11 subsection
(1), subsection
(2) (i) & (ia) and subsection
(3) of
the SEBI Act. Besides, such power is part of power to
investigate under Section 11C(3) of the SEBI Act. Thus, SEBI
is entitled to call for CDRs from TSP;
(b) Without prejudice to the above, it is submitted that it has
incidental to its functions of protecting investors, power to call
for information from TSP in respect of pending investigation.
Therefore, de hors the specific powers under the SEBI Act SEBI
has inherent power to call for information such as CDRs. At
times, the TSPs have given and at others declined to provide
information about CDRs. SEBI has acted wherever information
is furnished but not taken any action against TSP not providing
the CDRs.

(c) Section 5(2) of the Indian Telegraph Act, 1885 has no
application in respect of calling for CDRs from TSP. The above
provision only applies to intercepting calls and/ or prohibiting
calls/ messages. It has no application in respect of calling for
CDRs from TSP. The action of calling for CDRs from TSP in no
manner violates any fundamental rights of the citizens as it is
only a static record of calls having already been made to a
particular telephone/ mobile number from a particular
number. The record of CDRs is called for only in a pending
investigation;
(d) Power is only delegated to high ranking officers or
investigating officers.
(e) The correspondence between SEBI, the Government and
various Ministries was with regard to specifically empowering
SEBI to call for CDRs from TS, this was for the reason that in
the absence of a specific provision, some of the TSPs did not
provide the CDRs. Therefore, out of abundant caution, a
specific provision would enable SEBI in obtaining the CDRs
from the TSP ;
(f) Without prejudice, in any case, the understanding of the SEBI
Officials or of the Government of the legal provision will not
decide the issue whether SEBI has the necessary powers or not;
and

(g) Reliance is also placed on the provisions of the Ordinances
issued by Government of India issued on 16 July 2013, 16
September 2013 and 28 March 2014 in support of the
contention that the power to call for information has been
expanded by introducing the words “any person” which would
also include TSP. It is submitted that since such information is
called for only for the purposes of investigation, there is no
question of any misuse or abuse of the power or infringement
of any fundamental right to privacy. In the first place, SEBI
does not intercept or monitor any call online.
All that SEBI
calls for is static information about the CDRs and, therefore,
there is no attempt to infringe the right to privacy of any
person or investor.
In view of the above, it is submitted that the petition be
dismissed.
8. Before dealing with the rival submissions, it would be
convenient to refer to a few provisions of the SEBI Act relevant to
the issue as under:“
11. Functions of Board.— (1) Subject to the provisions of
this Act, it shall be the duty of the Board to protect the interests
of investors in securities and to promote the development of,
and to regulate the securities market, by such measures as it
thinks fit.
(2) Without prejudice to the generality of the foregoing provisions,
the measures referred to therein may provide for—

(a) to (h) …............
(i) calling for information from, undertaking inspection,
conducting inquiries and audits of the stock exchanges, mutual
funds, other persons associated with the securities market ,
intermediaries and selfregulatory
organisations in the
securities market;
(ia) calling for information and record from any bank or any
other authority or board or corporation established or
constituted by or under any Central, State or Provincial Act in
respect of any transaction in securities which is under
investigation or inquiry by the Board;
(j) to (l) ….........
(la) calling from or furnishing to any such agencies, as may
be specified by the Board, such information as may be
considered necessary by it for the efficient discharge of its
functions.
(m) …..
(3) Notwithstanding anything contained in any other law
for the time being in force while exercising the powers under
clause (i) or clause (ia) of subsection
(2) or subsection
(2A),
the Board shall have the same powers as are vested in a civil
Court under the Code of Civil Procedure, 1908 (5 of 1908)
while trying a suit, in respect of the following matters, namely:(
i) the discovery and production of books of account and
other documents, at such place and such times as may be
specified by the Board;
(ii) summoning and enforcing the attendance of persons and
examining them on oath;
(iii) inspection of any books, registers and other documents of
any person referred to in section 12, at any place;
(iv) inspection of any book, or register or other document or
record of the company referred ton in subsection
(2A);

(v) issuing commissions for the examination of witnesses or
documents.
11CInvestigation.
11C. (1) & (2) …....
(3) The Investigating Authority may require any intermediary
or any person associated with securities market in any manner
to furnish such information to, or produce such books, or
registers, or other documents, or record before it or any person
authorized by it in this behalf as it may consider necessary if
the furnishing of such information or the production of such
books, or registers, or other documents, or record is relevant or
necessary for the purposes of its investigation.
(4) to (7) …......
(8) Where in the course of investigation, the Investigating
Authority has reasonable ground to believe that the books,
registers, other documents and record of, or relating to, any
intermediary or any person associated with securities market in
any manner, may be destroyed, mutilated, altered, falsified or
secreted, the Investigating Authority may make an application
to the Judicial Magistrate of the first class having jurisdiction
for an order for the seizure of such books, registers, other
documents and record.”
(emphasis supplied by petitioner)
9. The President of India promulgated an Ordinance on 18 July
2013, continued by Ordinance of 16 September 2013 (which lapsed on
16 January 2014 and 16 March 2014) and fresh Ordinance was
promulgated on 28 March 2014 which inter alia substituted Section
11(2)(ia) as under:“(
ia) calling for information and records from any person
including any bank or any other authority or board or
corporation established or constituted by or under any
Central or State Act which, in the opinion of the Board,
shall be relevant to any investigation or inquiry by the
Board in respect of any transaction in securities.”
(emphasis supplied)

Section 11C (8) was also substituted to read as under:“
Where in the course of an investigation, the Investigating
Authority has reason to believe that any person or enterprise,
as the case may be, to whom a notice under subsection
(3)
has been issued or might be issued, (
a) has omitted or failed to provide the information or
produce documents as required in the notice; or
(b) may not provide the information or produce
documents which shall be useful for, or relevant to, the
investigation; or
(c) may destroy, mutilate, alter, falsify or secrete the
information or documents useful for, or relevant to, the
investigation,
then, the Chairman may, after being satisfied that it
is necessary so to do, after recording the reasons thereof in
writing, authorise the Investigating Authority or any other
officer of the Board (the officer so authorized being
hereinafter referred to as the authorized officer), to:
(i) enter and search, with such assistance, as may be
required, the building, place, vessel, vehicle or aircraft
where such information or documents are expected or
believed to be kept...”
(emphasis supplied)
10. Section 5 of Indian Telegraph Act, 1885 reads as under:“
5. Power for Government to take possession of licensed
telegraphs and to order interception of messages.—
(1) …. …. ….
(2) On the occurrence of any public emergency, or in the
interest of the public safety, the Central Government or a
State Government or any officer specially authorized in this
behalf by the Central Government or a State Government
may, if satisfied that it is necessary or expedient so to do in
the interests of the sovereignty and integrity of India, the
security of the State, friendly relations with foreign states or

public order or for preventing incitement to the commission
of an offence, for reasons to be recorded in writing, by order,
direct that any message or class of messages to or from any
person or class of persons, or relating to any particular
subject, brought for transmission by or transmitted or
received by any telegraph, shall not be transmitted, or shall
be intercepted or detained, or shall be disclosed to the
Government making the order or an officer thereof mentioned
in the order:
Provided that the press messages intended to be
published in India of correspondents accredited to the Central
Government or a State Government shall not be intercepted
or detained, unless their transmission has been prohibited
under this sub-section.”
(emphasis supplied)
11. We have considered the rival submissions. SEBI was
constituted under the SEBI Act, 1992 with the objective of protecting
the interest of investor in securities, development and regulation of
Security market. Thus, the purpose and object of the SEBI is to
ensure that the markets are wellregulated
and investors are not
cheated because of manipulation of the security market by a few
unscrupulous investors who for personal gain seek to destroy the
sanctity of the security market. Section 11(1) of the SEBI Act, states
that the function of SEBI is to protect investors in securities, promote
and regulate the Security Market. Section 11(2) of the SEBI Act, sets
out without prejudice to the generality of Section 11(1) of the SEBI
Act the measures which can be undertaken by SEBI for the purpose
of achieving its objective/ mandate of protecting the investor and
regulating the market. It is well settled that whenever the expression
“without prejudice to the generality of the provisions of subsection
(1)” is used, it only means that the provisions following this

expression are not interpreted to curtail the generality of the power
found in the earlier subsection.
Thus, the powers of the SEBI under
Section 11(1) of the SEBI Act is sufficiently broad for the protection
of investors in securities.
12. Moreover, Section 112(
i) and (ia) of SEBI Act even
before the amendment by the Ordinances did empower SEBI to call
for information from persons associated with the securities market or
under Section 11(2)(ia) of the SEBI Act from the agencies specified
by SEBI with the objective to ensure clear and transparent
transactions in the securities market. Further, under Section 11 (3)
of the SEBI Act, SEBI has the powers of a Civil Court while
exercising its power for calling information from any person under
Section 11(2) (i) or (ia) of the SEBI Act and direct the authority
concerned to produce documents, if so required, by the SEBI in the
course of its investigation. Moreover, Section 11C (3) of the SEBI Act
which was introduced into the SEBI Act in 2002 also empowered
SEBI during the course of investigation to require any person
associated with the securities market to produce documents, books
etc. which is considered necessary for the purpose of investigation.
13. However, the objection of the petitioner is that the
aforesaid provisions do not empower SEBI for calling for CDRs from
TSP either under Section 11(2)(i) or (ia) of the SEBI Act. This is for
the reason that the TSP is not associated with Security Market nor
abs 13 of 21

are all the TSPs constituted under a Central, State or Provincial Act.
This according to the petitioner is further supported by (information
obtained through Right to Information Act) letter dated 24 June
2009 of Chairman of SEBI to the Department of Economic Affairs
seeking to make them eligible to access emails
and CDRs from TSP.
Further, correspondence also seems to indicate the view of the
officers that SEBI is not empowered to call for CDRs from the TSP.
14. So far as powers of SEBI as existing prior to the
amendments made by the Ordinances is concerned, we find that the
Supreme Court in Sahara India Real Estate Corporation Limited
and others v/s. Securities and Exchange Board of India and
another 2013(1) SCC 1 while considering the powers of SEBI has
made the following significant observations:“
303.1 Subsection
(1) of Section 11 of the SEBI Act
casts an obligation on SEBI to protect the interest of investors
in securities, to promote the development of the securities
market, and to regulate the securities market, 'by such
measures as it thinks fit'. It is therefore apparent that the
measures to be adopted by SEBI in carrying out its obligations
are couched in openended
terms having no prearranged
limits. In other words, the extent of the nature and the
manner of measures which can be adopted by SEBI for giving
effect to the functions assigned to SEBI have been left to the
discretion and wisdom of SEBI. It is necessary to record here
that the aforesaid power to adopt 'such measures as it thinks
fit' to promote investors' interest, to promote the development
of the securities market and to regulate the securities market,
has not been curtailed or whittled down in any manner by
any other provisions under the SEBI Act, as no provision has
been given overriding effect over subsection
(1) of Section 11
of the SEBI Act.

303.2 Coupled with the clear vesting of the power with
SEBI referred to above, subsection
(2) of Section 11 of the
SEBI Act illustratively records the measures which can be
adopted by SEBI. For the present controversy, reference may
be made to clauses (i) and (ia)
of subsection
(2) which
ordain that SEBI would be at liberty to call for information
from or undertake inspections of, or conduct inquiries, or
audits into 'stock exchanges', 'mutual funds', and 'other
persons associated with the securities market', 'intermediators',
and 'selfregulatory
organization in the securities
market. The power to call for information was expressly
extended to 'banks' any other authority or board or
corporation', in respect of any transaction in securities which
is under investigation or inquiry (at the hands of SEBI) by
adding clause (ia)
to subsection
(2), Subsection
(2A)
of
Section 11 of the SEBI Act extents to SEBI the power to inspect
(in addition to power already delineated in subsection
(2) of
Section 11 referred to above) books, registers or other
documents or records 'of any listed public company or a public
company' which intends to get its securities listed on any
recognized stock exchange.
303. Subsection
(3) of Section 11 of the SEBI Act vests with
SEBI the same powers as are conferred on a civil Court, in the
manner of discovery and production of books of account and
other documents, summoning and enforcing the attendance of
persons and examining them on oath, inspection of any
books, registers or other documents. The power
aforementioned specifically governs matters relating to calling
for information already referred to hereinabove (under
clauses (i) and (ia)
of subsection
(2), and subsection
(2A)
of Section 11.
303.4 to 308…. ….
309. From a collective perusal of Sections 11, 11A,
11B
and
11C
of the SEBI Act, the conclusions drawn by SAT that
on the subject of regulating the securities market and
protecting interest of investors in securities, the SEBI Act is a
stand alone enactment and SEBI's powers thereunder are not
fettered by any other law including the Companies Act, is fully
justified.
(emphasis supplied)

Thus, the power of SEBI is very wide even de hors the
amendments by the ordinances and is entitled to take such measures
as it deems fit to protect the investors.
15. The President of India issued Ordinances on 16 July
2013 (lapsed), 16 September 2013 (lapsed) and 28 March 2014
wherein Section 11(2) (ia) of the SEBI Act was substituted to enable
SEBI to call for information/ record from “any person” as opposed to
the earlier provisions, empowering SEBI to call for information only
from an Authority or board or Corporation established under an Act.
Further, the Ordinance dated 28 March 2014 has also substituted
Section 11C(8) of the SEBI Act by giving powers to SEBI to enforce
its requests for the documents/ records from any person when not
made available during the course of Investigation. Thus, the power
in SEBI to call for the CDRs from TSP 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.
16. So far as the understanding of the officers of SEBI and
the officers of the Government of India is concerned, we find that in
case of recent Acts, their understanding/ interpretation is of no avail.
The principle of contemporaneous exposito is only applicable to old
statutes and can have no application to the SEBI Act which is as
recent as 1992. It is well settled that the interpretation/
understanding of legal provisions by officers of the Government
cannot be the basis for construing/ interpreting the legislation. The

function of interpreting legislative measures is vested in Court and
this obligation on its part cannot be outsourced to the construction
put on the provisions by the executive. This view is fully supported
by the decision of the Supreme Court in B. K. Garad and Others
v/s. Nasik Merchants Coop.
Bank Ltd. AIR 1994 SCC 192. In the
above case, the Supreme Court observed as under :“
It is the function of the Court to construe legislative
measures and in reaching the correct meaning of a statutory
provisions, opinion of executive branch is hardly relevant.
Nor can a Court abdicate in favour of such opinion.”
We also take note of the submission on behalf of SEBI
that the correspondence was being exchanged only so as to
specifically authorize SEBI to call for CDRs from TSP and also for
providing the consequence of not furnishing the CDRs. This became
necessary for the reason that at times, the TSP did not furnish
information of CDRs when asked for on the ground that there was
no specific provision in the SEBI Act for calling for CDRs.
17. The next objection of the petitioner is that SEBI is
prevented/prohibited from calling CDR from any TSP by virtue of
Section 5(2) of the Indian Telegraph Act 1885. We have reproduced
Section 5(2) of the Indian Telegraph Act, 1885 herein above and do
not find any prohibition to calling of CDRs from any TSP. It only
only prohibits an authority not authorized by Central Government
from intercepting and/or prohibiting the sending of calls/messages.
The calling of static information like CDRs from a TSP does not in

any manner violate Section 5(2) of the Indian Telegraph Act, 1885.
Thus, on the face of it, we do not find the above objection
sustainable.
18. Thus, there can be no dispute that the SEBI is authorized
under the SEBI Act to call for CDRs from the TSP. However, this
power is capable of misuse and can violate a citizen's right to privacy
guaranteed by Article 21 of the Constitution. Therefore, it is made
clear that 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 enquiry is being conducted. Further,such
information can be called for only by an officer duly authorized by
SEBI to call for information with regard to CDRs from the TSP. SEBI
had issued delegation order dated 3 May 2010 which, inter alia,
delegates power to the following officers:
S.No. Officer Nature of delegation
1. ED/Investigating Authority Calling for information and record
from any bank, any other authority or
Board or corporation under Section
11(2)(ia)
2. DGM with the approval of
ED
Exercising powers under Section 11(3)
3. Investigating Authority
(original power)
Conduct/undertake investigation under
Section 11C

Further, as a safeguard, it would be necessary that
before calling for such information, an opinion be recorded on the
file by the authorized officer, calling for the records indicating the
reason why he considers it necessary to call for the CDRs. We are
inclined to read this safeguard into the provisions of Section 11 and
11C(3) because Section 11C(8), while authorizing the Chairman of
SEBI to take coercive measure for obtaining the relevant information
not supplied, though called for, requires the Chairman to record
reasons for authorizing such coercive measures. It would, therefore,
stand to reason that before calling for CDRs from TSPs also, the
authorized officer must be satisfied that it is necessary to call for
such information. All the above safeguards are necessary to ensure
that the privacy of an individual cannot be invaded by calling for the
CDRs save and except in accordance with law.
19. Having heard the learned counsel for the parties, we are
of the view that the provisions of Section 11(1), 11(2)(i) & (ia) (as
amended by Ordinances promulgated by President of India on 16
July 2013, 16 September 2013 and 28 March 2014), Sections 11(3),
11C(3) and 11C(8) of the SEBI Act confer powers on SEBI to call for
information and record of CDR of Tower Location from Telecom
Service Providers, whether in public sector or in private sector.
However, such power is to be exercised after complying with the
following safeguards;

(i) such CDRs or information regarding tower location can
be called for only in respect of the person against
whom any investigation or enquiry is being conducted
by SEBI,
(ii) the information may be called for only by an officer
who is duly authorized by SEBI as per the delegation
order,
(iii) before calling for such information, the opinion of such
authorized officer should be recorded in the file
indicating application of mind to the effect that CDRs
and/or information regarding tower location would be
relevant for any investigation or enquiry by SEBI in
respect of any transaction in securities, and
(iv) the CDRs of any such subscriber and information
regarding tower location is a matter of confidentiality
and privacy and therefore such privacy cannot be
invaded except in accordance with law.
20. In our opinion, therefore, the safeguards indicated above
are very important and mandatory and SEBI shall henceforth
scrupulously observe the same before calling for any CDRs and/or
information regarding tower location.

21. We also make it clear that we are rendering this decision
in light of the provisions of the SEBI Act as amended by Ordinances
issued by President of India on 16 July 2013, 16 September 2013
and 28 March 2014.
22. If any CDRs or information regarding tower location have
been called for any period not covered by above Ordinances, we do
not express any opinion as in this public interest litigation, the
petitioner Council cannot espouse the cause of persons whose CDRs
have been called for by SEBI for the purposes of investigation or
enquiry in respect of any transaction in securities.
23. The PIL is accordingly disposed of in the above terms.
CHIEF JUSTICE
(M.S. SANKLECHA, J.)

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