Information from Insolvency Professionals is Exempt Under RTI Act: IBBI [Read Notification]
Insolvency Professionals are legally obligated to maintain confidentiality and provide information to the IBBI in a relationship of trust and reliance
The Insolvency and Bankruptcy Board of India (IBBI) has dismissed an appeal, reiterating that information provided by Insolvency Professionals to the regulator is held in a fiduciary capacity and is exempt from disclosure under Section 8(1)(e) of the Right to Information (RTI) Act.
The order further clarified that the RTI Act is not a grievance redressal forum and that the appellant should use the specific review mechanisms provided under the IBBI regulations.
The Appellant, Nirav Tarkas, had filed an RTI application seeking certified copies of all correspondence and submissions made by the Liquidator of Euro Ceramics Limited to the IBBI. This information was in relation to a complaint he had filed against the Liquidator.
Aggrieved by the CPIO's denial, which claimed the information was exempt under a fiduciary relationship, the Appellant filed an appeal arguing that Section 8(1)(e) of the RTI Act had been wrongly applied. His appeal also raised specific grievances about the procedure of the complaint handling, questioning why he was not given an opportunity to rebut the Liquidator's averments.
The IBBI, represented by its First Appellate Authority, upheld the CPIO's decision. The Authority relied on a Supreme Court observation to establish that the relationship between the regulator (IBBI) and the Insolvency Professional is fiduciary in nature. This is because Insolvency Professionals are legally obligated to maintain confidentiality and provide information to the IBBI in a relationship of trust and reliance. Therefore, the information sought by the Appellant was held in a fiduciary capacity and was rightfully exempt from disclosure under Section 8(1)(e) of the RTI Act.
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The Authority further noted that the Appellant had failed to demonstrate any larger public interest that would necessitate disclosure. Crucially, the order distinguished between seeking information and redressing a grievance, stating that the RTI Act is not a grievance forum.
The Appellant's dissatisfaction with the complaint-handling process, the order suggested, should be addressed by filing a review under the specific provisions of the IBBI (Grievance and Complaint Handling Procedure) Regulations, 2017, rather than through an RTI application.
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