Disclosure in criminal proceedings requires production of investigative material where fairness, natural justice, and fair trial are at stake.

The SC held that the High Court should have addressed the disclosure application before proceeding on limitation, because the manner of prosecution and the material relied on were relevant to delay and cognizance. It further held that the first opinion of Justice (Retd.) B.N. Srikrishna, the Malegam report, and the second opinion were part of an inconclusive investigative exercise and could not be withheld as privileged in the criminal proceedings. Fairness, natural justice, transparency, and the right to a fair trial required disclosure, and selective partial production was impermissible. The impugned order was set aside and disclosure directed.

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Issues: (i) Whether the appeal was maintainable and whether the High Court ought to have adjourned the interim application for disclosure to be heard along with the revision; (ii) Whether the appellant was entitled to disclosure of the first opinion of Justice (Retd.) B.N. Srikrishna, the report of Y.H. Malegam, and the second opinion of Justice (Retd.) B.N. Srikrishna in the criminal proceedings.

Issue (i): Whether the appeal was maintainable and whether the High Court ought to have adjourned the interim application for disclosure to be heard along with the revision.

Analysis: The dispute arose from a long-pending regulatory and criminal sequence concerning alleged irregularities dating back to the early 1990s. The impugned order did not decide the interim application on merits and deferred it to be heard with the revision. The Court held that, in the peculiar facts, the High Court ought to have considered the disclosure application before addressing limitation, because the manner in which prosecution was initiated and the material relied upon were relevant even to the question of delay and cognizance. The Court therefore entertained the appeal rather than treating the impugned order as a mere inconsequential adjournment.

Conclusion: The appeal was maintainable and the challenge to the High Court's approach succeeded.

Issue (ii): Whether the appellant was entitled to disclosure of the first opinion of Justice (Retd.) B.N. Srikrishna, the report of Y.H. Malegam, and the second opinion of Justice (Retd.) B.N. Srikrishna in the criminal proceedings.

Analysis: The Court held that SEBI's own stand showed the investigation report was inconclusive and that further expert opinions were obtained as part of the fact-finding exercise. On that basis, the subsequent opinions and report formed a continuation of the investigative material and could not be withheld by invoking legal privilege. The earlier rejection during settlement proceedings did not bar disclosure in the present criminal context. The Court further held that fairness, natural justice, transparency, and the right to a fair trial required disclosure, and that selective disclosure of excerpts while withholding the rest amounted to impermissible cherrypicking. The plea that disclosure was premature under the criminal procedure regime was rejected.

Conclusion: The documents were required to be disclosed to the appellant and SEBI could not refuse production on the grounds of privilege or prematurity.

Final Conclusion: The impugned order was set aside and the respondents were directed to furnish the requested documents to the appellant, thereby vindicating the appellant's right to disclosure in aid of a fair and transparent adjudicatory process.

Ratio Decidendi: Where a regulator relies on further expert opinions and reports as an extension of an inconclusive investigation to support prosecution, those materials cannot be withheld as privileged against the accused when disclosure is necessary to ensure natural justice, fair trial, and transparency, and selective partial disclosure is impermissible.

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