Somasekhar Sundaresan was not Adani's in-house counsel; conflict of interest allegations unsubstantiated: Supreme Court

The Supreme Court on Friday took strong exception to the objections raised with regard to inclusion of advocate Somasekhar Sundaresan in the expert committee constituted by the Supreme Court to examine allegations of fraud made against Adani Group of companies in the Hindenburg Research report..A bench of Chief Justice of India (CJI) DY Chandrachud with Justices JB Pardiwala and Manoj Misra said the claim made by the petitioner regarding conflict of interest on the part of Sundaresan was unsubstantiated. When petitioner's counsel advocate Prashant Bhushan pointed out that Sundaresan had appeared for the Adani Group as a lawyer in a matter before the Securities and Exchange Board of India (SEBI), the CJI said that the same was 17 years ago and that Sundaresan was not Adani's in-house counsel. "He was not an in-house counsel [of the Adani Group], he was a lawyer. And he appeared in 2006 and this conflict arises 17 years later. Someone appeared 17 years ago; there has to be some responsibility of the allegations being levelled. This is very unfair to the committee, and then people will stop working for court appointed committees," the CJI remarked.The Court explained that rather than only limiting the members of the expert committee to retired judges, the Court had appointed diverse people on the said committee so as to ensure that it has domain expertise. Further, it said that Bhushan was relying on only one such appearance of Sundaresan for Adani."You should have told on this on March 2, 2023 (when the committee was constituted) ... So a lawyer who appeared 17 years ago can now not be appointed to the committee? Like this, no High Court judge can be appointed who appears for an accused ever, if this is to be taken. How can this be allowed? You have not even attached any more instances, and then how do we take these unsubstantiated allegations on record?", the CJI added.Sundaresan has currently stopped his law practice since he has been cleared for appointment as a judge of the Bombay High Court..The top court was hearing a batch of petitions seeking examination of allegations of fraud made against Adani Group of companies in the Hindenburg Research report.The hearing today also saw the Court remark that the Securities Exchange Board of India (SEBI) cannot be expected to follow what newspaper reports have in order to decide about Adani's alleged conduct.The case before the Court is tied to allegations that Adani had inflated its share prices. After these allegations (part of a report by short-seller Hindenberg Research) were published, it led to a sharp fall in the share value of various Adani companies, reportedly to the tune of $100 billion.Earlier this year, the Supreme Court asked SEBI to independently investigate the matter, apart from constituting an expert committee headed by retired Justice AM Sapre to also look into the matter.The expert committee in its report released in May, found no prima facie lapse on the part of the SEBI in the matter.One of the petitioners, Anamika Jaiswal, had alleged a conflict of interest on part of the expert committee members, and concealment of facts by the regulatory body..Advocate Bhushan today pointed out that Sundaresan had appeared for Adani several times, and has also been part of many SEBI committees. Therefore, the allegations of conflict of interest should be considered even if it is minor.The Supreme Court, however, seemed unconvinced by the argument. "He was on the financial sector law reform committee of the previous government," the CJI pointed out.Solicitor General (SG) Tushar Mehta, appearing for SEBI, pointed out that Sundaresan had, in fact, been critical of SEBI in the past."He was very critical of SEBI," the SG said. The Court eventually proceeded to reserve its judgment in the matter..The Central government cleared the appointment Sundaresan an additional judge of the Bombay High Court on Thursday. Sundaresan was recommended for elevation by the Bombay High Court Collegium in October 2021. Subsequently, in February 2022, the Supreme Court Collegium had also recommended his name.However, on November 25, 2022, the Central government opposed his elevation. The apparent reason given by the government at the time was that Sundaresan "aired his views in the social media on several matters which are the subject matter of consideration before the courts."However, the Supreme Court Collegium backed Sundaresan and reiterated its recommendation to elevate him as a judge back in January this year.Ten months later, the government cleared his file.