The Supreme Court threw out Mahua Moitra's public interest litigation on Thursday, refusing to order the Securities and Exchange Board of India to reveal the ultimate beneficial owners of Alternative Investment Funds and Foreign Portfolio Investors. The bench, comprising Justices BV Nagarathna, R Mahadevan, and DK Upadhyaya, made clear that the judiciary cannot create a regulatory mechanism from scratch. They stated bluntly that without an existing legal framework, the court has no authority to issue a mandamus for full public disclosure.
Moitra, represented by senior advocate Prashant Bhushan, argued that the lack of transparency allows these entities to manipulate share prices, leaving innocent retail investors vulnerable. Bhushan contended that the court has the power to direct SEBI to disclose actual beneficiaries even in the absence of a specific law, citing the need to protect market integrity. The petitioner's core demand was simple: force SEBI, which regulates India’s securities markets, to publish portfolio holdings and ownership details of AIFs and FPIs to ensure investor awareness.
The bench, however, pushed back on the procedural approach. They questioned why a parliamentary issue was being brought before the top court. The justices noted that if a legal regime existed and SEBI failed to comply, the court could certainly intervene. But in a vacuum of legislation, judicial overreach is not an option. They disposed of the plea, effectively closing the door on this specific judicial route for market transparency.
The court’s direction points Moitra toward the legislative path. They suggested she raise the matter in Parliament, where a discussion and subsequent law could establish the necessary disclosure mandates. For now, the status quo remains: SEBI continues to regulate AIFs and FPIs without the pressure of mandatory public beneficial ownership reporting. The next move lies with the legislature, not the judiciary.