The main legal point established in the judgment is that SEBI is authorized to call for CDRs from TSP under the SEBI Act, but the exercise of this power must be accompanied by specific safeguards to ensure the protection of individuals' privacy.

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 record