1. The Conflict

Duty of Disclosure: To beneficiaries / shareholders / clients - you must proactively share material information affecting their interest. Under Indian Trusts Act, S.57 - beneficiary has right to inspect trust accounts and documents.

Duty of Confidentiality: To settlor, to other beneficiaries, to the trust itself - you must keep trust deliberations, other beneficiaries' entitlements, settlor's letter of wishes, commercially sensitive information, confidential.

Failure on one side = Breach of trust for non-disclosure
Failure on other side = Breach of trust / privacy for wrongful disclosure

Courts use a 4-prong test to identify fiduciary relationship which triggers this balance: (1) no conflict rule (2) no profit rule (3) undivided loyalty rule (4) duty of confidentiality - as laid down in CPIO, Supreme Court of India v. Subhash Chandra Agarwal, Civil Appeal No. 10044 of 2010 (2019).

2. Legal Framework in India

• Indian Trusts Act - S.57, S.60: Beneficiary right to information is not absolute. Trustee may refuse disclosure of reasons for discretionary decisions.
• RTI Act - S.8(1)(e): Protects information available to a person in fiduciary relationship, unless competent authority is satisfied that larger public interest warrants disclosure. S.8(2) - public interest override.
• Companies Act, 2013 - S.166(2),(3): Director must act in good faith for company, duty of confidentiality to company vs duty to nominator.
• Banker-Customer: Fiduciary confidentiality with Tournier v National Provincial exceptions.
• Article 21 - Privacy: Justice K.S. Puttaswamy (2017) - confidentiality is part of privacy, must be balanced.

3. When Disclosure Wins Over Confidentiality - Case Laws

A] Trustee Found in Breach FOR NOT Disclosing

1. Bhojwani v Bhojwani - Singapore Court of Appeal
Most cited. Sole trustee of a Will trust failed to disclose existence of trust to his three sons - discretionary beneficiaries - for almost 20 years. First-instance court found breach. Appellate Court upheld: a trustee was found to have been in breach of trust for failing to disclose the existence of a trust to discretionary beneficiaries. Failure to balance in favour of secrecy = breach.

2. In the matter of an application for information about a trust [2013] SC (Bda) 16 Civ - Supreme Court of Bermuda
Trust deed provided that no information was to be disclosed to beneficiaries without protector's consent. Beneficiary applied. Court ordered disclosure anyway. Held protector clause cannot oust court's supervisory jurisdiction.

3. In the matter of the B Family Trust [2013] JRC 136 - Royal Court of Jersey
Court noted point made in Privy Council case of Schmidt v Rosewood Trust Ltd [2003] 2 AC 709: Beneficiary's right to seek disclosure is not just proprietary right, it is one aspect of court's inherent jurisdiction to supervise and intervene in administration of trust. Court ordered disclosure despite confidentiality argument.

4. Union of India v. CIC & P.D. Khandelwal - Delhi High Court, 30 Nov 2009
Court affirmed S.8(1)(e) exempts information in fiduciary relationship from disclosure, provided that larger public interest does not outweigh exemption. Created balancing test: Fiduciary confidentiality yields if public interest larger.

5. CPIO, Supreme Court of India v. Subhash Chandra Agarwal (2019) - Supreme Court of India
Landmark 5-judge bench. Deliberately balanced judicial independence, confidentiality and RTI. Held fiduciary relationship casts positive obligations - fiduciary should protect beneficiary and not promote personal self-interest. Information held by CJI on assets of judges - Court ordered disclosure test based on public interest.

4. When Confidentiality Wins Over Disclosure - Case Laws

6. Londonderry's Settlement, Re [1964] 3 All ER 855 - Court of Appeal, England
Core conflict: trustees' discretion without obligation to disclose reasons vs beneficiaries' proprietary interest in trust documents. Held: While beneficiaries have right to inspect trust documents, they have NO right to see trustees' deliberations, minutes, reasons for discretionary decisions, or correspondence revealing reasoning. This protects confidentiality of decision-making.

7. SEBI v. Central Information Commissioner & Ors - Bombay High Court (Justice M.S. Sonak bench)
Upheld SEBI's fiduciary duty to confidentiality under S.8(1)(e) RTI Act and emphasized mandatory compliance with third-party rights under S.11 before disclosure. Investigation files containing third-party sensitive commercial data cannot be disclosed without hearing third party.

8. Tournier v National Provincial and Union Bank of England [1924] 1 KB 461
Still the foundation. Banker's duty of confidentiality vs duty to disclose. Established 4 exceptions where disclosure allowed: (a) under compulsion of law (b) duty to public (c) in interest of bank (d) with express/implied consent of customer. Referenced in all Guernsey/Indian trustee cases balancing trustee's own interests vs confidentiality.

9. Oil Field Instrumentation India Pvt. Ltd. v. Xcalibur Multiphysics Group - Bombay High Court
Private confidentiality clause cannot, without proper examination and protective measures, be relied upon to defeat a binding direction for disclosure issued by a court. Court's disclosure direction trumps contract.

10. GVFL Ltd vs Anubhav Singhi - 22 May 2020 (Gujarat HC)
Public interest test would have to be applied keeping in mind fiduciary relationship, invasion of right to privacy and breach of duty of confidentiality owed to candidate or information provider. Dismissed appeal to protect startup investor confidentiality.

5. The Court's Balancing Test - How to Decide

Indian Courts now apply this 3-step test from Subhash Agarwal + SEBI cases:

Step 1 - Is there fiduciary relationship? Apply 4 principles - trust, reliance, superior power, dependence.

Step 2 - Is information exempt? Under S.8(1)(e) RTI or trust law privilege - is it reason for discretion, other beneficiary's entitlement, settlor's letter of wishes marked confidential?

Step 3 - Public Interest Override (S.8(2)): Even if exempt, does larger public interest warrant disclosure? Is there inequality in distribution, risk of further dispute, fraud, or beneficiary kept in dark?

Practical Rule for Trustees/Directors:

• Always Disclose: Existence of trust, trust deed (redacted), annual accounts, assets, liabilities, your decisions that affect calling beneficiary.
• Never Disclose (without consent/court order): Reasons for exercise of discretion (Londonderry), confidential info about other beneficiaries, settlor's confidential letter of wishes, legal advice privilege.
• Conditional Disclosure: Use Confidentiality undertaking + Redaction + Summary - as done in Volaw case - trustee ordered to enter into written undertaking to obtain consent of Royal Court before disclosing confidential material to any beneficiary.

Failure to do this = personal liability. In Bhojwani, trustee was ordered to account and pay compensation for 20 years non-disclosure.