Supreme Court Stays Delhi High Court Verdict Declaring NSE A 'Public Authority' Under RTI Act

The Bench of Justices Vikram Nath and Sandeep Mehta issued notice on an appeal filed by the NSE and directed that the interim stay on the operation of the CIC's June 7, 2007 order shall continue until further orders.

The Court also extended the interim protection that had remained in force during the pendency of the proceedings before the Delhi High Court.

Appearing for the NSE, Solicitor General Tushar Mehta argued that the exchange is a private company and cannot be treated as a "public authority" merely because it is regulated by the Securities and Exchange Board of India (SEBI).

Mehta submitted that nearly 40% of the shareholding is domestic, while 27% is held by foreign investors, underscoring its private character.

Referring to Section 2(h) of the RTI Act, he argued that the NSE was neither established nor constituted by the Government nor created under any law enacted by Parliament.

"I am a company... kindly see the definition of public authority," Mehta submitted.

He further contended that the issue was covered by the Supreme Court's decision in Thalappalam Service Cooperative Bank Ltd., which interpreted the scope of "public authority" under the RTI Act.

Court Observations

During the hearing, Justice Vikram Nath remarked: "These are days of transparency."

When Mehta responded that the NSE already discloses substantial information on its website, the Bench observed: "Still, it is not going to stand for very long anyhow."

Following the submissions, the Court issued notice and stayed the operation of the Delhi High Court's judgment pending further consideration.

Background

The dispute traces back to June 7, 2007, when the Central Information Commission (CIC) held that the NSE is a "public authority" under Section 2(h) of the RTI Act, observing that it performs significant public functions in the securities market and is subject to deep and pervasive governmental control.

The NSE challenged the CIC's order before the Delhi High Court, contending that it was incorporated as a private company on November 27, 1992, and though recognised as a stock exchange by SEBI, it was neither established nor constituted by the Government.

On April 15, 2010, a Single Judge upheld the CIC's decision.

The NSE's appeal was dismissed on July 1, 2026, when a Division Bench affirmed that the exchange qualifies as an "authority" within the meaning of the first part of Section 2(h) of the RTI Act.

The High Court held that it was unnecessary to examine whether the NSE also qualified as an "institution of self-government", observing that it was already covered by the statutory definition of an "authority."

The Division Bench further ruled that a stock exchange cannot legally function without governmental recognition and that the recognition granted by SEBI is deemed to be an order of the Central Government, as SEBI exercises delegated powers under the Securities Contracts (Regulation) Act.

Rejecting the NSE's reliance on Delhi Stock Exchange v. K.C. Sharma, the High Court held that the finding regarding deep and pervasive governmental control was based on the statutory framework governing stock exchanges and applied equally to the NSE.

With the Supreme Court's latest order, the operation of the Delhi High Court's judgment has been stayed, and the interim stay against the CIC's 2007 order declaring the NSE a public authority under the RTI Act will continue until further orders.