Supreme Court declines to hear plea on mutual fund advertisement campaigns

New Delhi: The Supreme Court on Friday refused to entertain a petition alleging that mutual fund advertisement campaigns such as ‘mutual funds sahi hai’ are misleading and create a false impression of assured financial safety for investors.

A bench comprising Justices Vikram Nath and Sandeep Mehta was hearing a plea challenging a September order of the Bombay High Court, which had dismissed a public interest litigation seeking directions to the Securities and Exchange Board of India (SEBI).

The PIL had sought the revocation of permission granted to the Association of Mutual Funds in India (AMFI) to conduct investor education and awareness programmes.
Before the high court, the petitioner had argued that AMFI should be restrained from continuing advertisement campaigns including ‘mutual funds sahi hai’, ‘mutual funds mein SIP sahi hai’ and ‘be patient and stay invested’.

He had contended that these campaigns do not adequately educate investors and fail to disclose the risks involved in buying and selling mutual fund products.

Appearing in person before the apex court, the petitioner said the high court had taken a “hasty decision”.

The bench noted that a similar PIL filed by the petitioner had previously been dismissed by the high court and that the Supreme Court had, in July this year, rejected his challenge to that order.

“That was a separate PIL on a slightly different issue. It was dismissed on maintainability, not on merits,” the petitioner said.

While declining to entertain the plea, the bench observed, “Don't worry. Let the others bother for themselves.”

In its September order, the Bombay High Court had said the petitioner failed to place any data on record to demonstrate how investors were allegedly being misled by the advertisements or the extent of such impact.

“There is no data from government or reliable sources which would otherwise show the gravity and seriousness involved. In these circumstances, the lack of material details, either accidental or deliberate, is sufficient to dismiss this PIL,” the high court had said.