SC upholds Sinha's appointment as SEBI chief

The Supreme Court Friday upheld the appointment of U.K. Sinha as the head of market regulator SEBI as it thrashed the plea questioning his integrity and described his appointment as transparent and in accordance with procedures.

Upholding Sinha's appointment, the apex court bench of Justice S.S. Nijjar and Justice Pinaki Chandra Ghose in their judgement noted that the proposal was sent to the Appointments Committee of the Cabinet (ACC) on the express approval of the then finance minister Pranab Mukherjee who is renowned for his transparency in the performance of official functions.

"It is also to be noticed that the proposal was sent to the ACC on the express approval of the then finance minister. It is noteworthy that the then finance minister was Pranab Mukherjee. He is renowned for his transparency in the performance of his official functions. He is at present the President of India," said Justice Nijjar, writing for the bench.

"In our opinion, the petitioner has unjustifiably attacked the integrity of the entire selection process. It is virtually impossible to accept the submission that respondent No. 6 (Omita Paul - currently secretary to President Mukherjee) was able to influence the decision-making process which involves the active participation of the ACC, a high powered search-cum-section committee with the final approval of the finance minister and the prime minister," the judgement said.

The court also thrashed the contention that Sinha gave up his high wage job as chairman and managing director, Unit Trust of India Asset Management Company in order to become SEBI chief to misuse his position.

"It is not abnormal for people of high integrity to make a sacrifice financially to take up the position of honour and service to the nation. In any event, we are of the opinion, the acceptance by Sinha of lesser salary as chairman of SEBI cannot ipso facto lead to the conclusion that he accepted the position for the purpose of abusing the authority of chairman, SEBI", the judgement said appreciating Sinha's decision as a sacrifice.

The court which said it could have thrown out the PIL at the threshold itself on the grounds of maintainability, said, "In our opinion, the petition does not satisfy the test of utmost good faith which is required to maintain public interest litigation."

It further said, "We have been left with the very unsavoury impression that the petitioner is a surrogate for some powerful phantom lobbies."

"The proposition is so absurd the allegations with regard to mala fide could have been thrown out at the threshold," the court said, adding, "We have, however, examined the entire issue not to satisfy the ego of the petitioner, but to demonstrate that it is not entirely inconceivable that a petition disguised as 'public interest litigation' can be filed with an ulterior motive or at the instance of some other person who hides behind the cloak of anonymity even in cases where the procedure for selection has been meticulously followed."

The court said, "It is a well-known fact that in recent times, SEBI has been active in pursuing a number of cause celebre against some very powerful business houses. Therefore, the anxiety of these business houses for the removal of the present chairman of SEBI is not wholly unimaginable."

It further said, "We make the aforesaid observations only to put on record that the present petition could have been dismissed as not maintainable for a variety of reasons. However, we have chosen to examine the entire issue to satisfy our judicial conscience that the appointment to such a high-powered position has actually been made fairly and in accordance with the procedure established by law."

Having said, the court dismissed the PIL, saying, "We find no merit in this petition which is accordingly dismissed."