In Brief
The Supreme Court dismissed a special leave petition challenging SEBI's refusal to supply certain documents before issuing a Show Cause Notice. The Court held that at the opinion-formation stage (Rule 3), SEBI need not disclose all documents or furnish its opinion to the noticee. The principles of natural justice require disclosure of relied-upon documents only during the actual inquiry stage, not at the pre-inquiry stage. Confidential or third-party sensitive documents may be withheld provided they are not relied upon in the final order. A two-tier adjudication process exists: noticees need not be heard before deciding to proceed with inquiry, but must receive a fair hearing during the actual inquiry phase.
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