SC delivers on Adanis and Election Commissioners!

 By Vivekanand Jha

New Delhi: Two significant rulings of far-reaching implications – one on the fraud allegations against the Adani Group by a US research firm Hindenburg, and another on the rule of appointment of Chief Election Commissioner and Election Commissioners –  marked the day at the Supreme Court today. 

On the issue of the Adani Group-Hindenburg row, a three-judge bench comprising Chief Justice of India DY Chandrachud, Justice PS Narasimha and Justice JB Pardiwala, today directed the Securities and Exchange Board of India (SEBI) to investigate the manipulation of stock prices and violation of Section 19 of SEBI rules, and asked it to submit a status report on its ongoing investigation within two months.

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The apex court also ordered setting up a panel to be headed by retired judge Abhay Manohar Sapre to probe the issue and sought its report within two months. The panel also includes retired Justice JP Devdhar, veteran banker KV Kamath, former SEBI chief OP Bhat, lawyer Somasekhar Sundaresan and Infosys co-founder Nandan Nilekani.

Hindenburg Research has accused the Adani Group of decades of “brazen” stock manipulation and accounting fraud. The lawyer duo Manohar Lal Sharma and Vishal Tiwari had filed petitions on this issue in the Supreme Court, along with a Congress leader Jaya Thakur. The Supreme Court had reserved its order on February 17, 2023.

Earlier, during the last hearing, the court had refused to accept the Union government-suggested names of experts for the panel in a sealed cover on grounds of maintaining “transparency” in the case. While turning down the government’s suggestion, chief justice Chandrachud had said, “If we take names from the government, it would amount to a government-constituted committee. So we will appoint the committee and appoint members on our own”. 

Also, in another landmark judgment, a 5-judge Constitution Bench of the Supreme Court headed by Justice KM Joseph today unanimously laid down the rule of appointment of Chief Election Commissioner and Election Commissioners. As of now, appointments to the Election Commission are the central government’s prerogative. The bench ruled on a batch of petitions seeking a selection process similar to what is followed in the case of the Director, Central Bureau of Investigation (CBI), that the appointments would be made by the President of India on the advice of a committee comprising the prime minister, the leader of the Opposition and the Chief Justice of the Supreme Court. And, where there is no Opposition leader, it should be the leader of the largest opposition party. While reading out the judgment, Justice Joseph said this practice will be enforced until a law in this regard is made by the Parliament.

The Constitution bench, comprising Justices KM Joseph, Ajay Rastogi, Aniruddha Bose, Hrishikesh Roy and CT Ravikumar, stressed that the Election Commission has to be independent, and  Justice Rastogi also opined that the grounds for removal of Election Commissioners should be the same as that of the Chief Election Commissioner.