Within days of the government notifying an ordinance empowering theSecurities and Exchange Board of India(Sebi) to seek call data records, a public interest litigation , is likely to come up for hearing before the Bombay High Court on Wednesday.

The Indian Council of Investors, which has filed the PIL, has argued that the regulator cannot exercise such powers till the government amends the law or the department of telecommunications notifies Sebi as one of the authorised agencies which can seek such information from telecom service providers. An affidavit has also been filed in the Bombay High Court by Sebi's assistant legal adviser Sumit Agrawal saying that call data record is an important evidence for the regulator's investigation, especially in cases relating to insider trading and frauds.

In the US, the Securities and Exchange Commission has powers to do wire-tapping after securing an approval from judicial authorities. This has helped the US regulator to crack several insider trading cases notably, the high-profile one relating to hedge fund managers Raj Rajaratnam and Rajat Gupta. The recent ordinance does not provide similar powers to Sebi but only access to call data records.

Sebi has also said that it has never recorded conversations or contents of any communication. The regulator has asked for static data to prove circumstances and the nexus between insiders and traders, a person with knowledge of the issue said. He did not want to be named given the sensitivity of the issue. Sebi will have powers to seek information, such as telephone call data records, from any persons or entities in respect to any securities transaction being investigated by it, the government had said in a recent press statement. According to lawyers, in view of the ordinance, the appeal may be dismissed. Advocate General Darius Khambatta is representing Sebi, while law firm Ashok Purohit & Co is advising the petitioner Indian Council of Investors.

Lawyers also appear to be divided over whether Sebi can exercise these powers with some of them of the view that the ordinance has not explicitly empowered Sebi to call for telephone records. But other lawyers counter this by saying that the ordinance provides for Sebi to call for information from any person. The term "any person" will include not only telecom companies but many others such as email service providers, electronic communicators or any other medium, they say going by the wording in the ordinance. "I still have doubt whether Sebi can call for telephone records under the ordinance as the Sebi Act is in addition to and not in derogation of other laws of the land," MS Sahoo, ex member of Sebi and now secretary of institute of Company Secretaries of India says. (Economic Times)