PUBLIC AUTHORITY under RTI

[sidmis]

PUBLIC AUTHORITY under RTI
by Sri Sailesh Gandhi Sunday, July 6, 2008

Whereas there is a clear understanding that all Citizens can avail of the Right to Information, there is some lack of clarity about which institutions have been mandated to give information by the Right to Information Act.

Most of this arises because of the arrogance of many who think they cannot be answerable to the Common Citizen of India. They forget that the Citizen is the sovereign of this democracy. The RTI act lays down that all ‘public authorities’ have to provide information to the Citizen. Public authority has been defined by Section 2 (h) of the act as follows:
“h) public authority means any authority or body or institution of self government established or constituted,—
(a) by or under the Constitution ;
(b) by any other law made by Parliament;
(c) by any other law made by State Legislature;
(d) by notification issued or order made by the appropriate Government,
and includes any--
(i) body owned, controlled or substantially financed;
(ii) non-Government organisation substantially financed,
directly or indirectly by funds provided by the appropriate Government;”
Effectively a) , b) and c) and d) mean any authority or body which we consider as Government in common parlance- all Ministries and their departments, Municipal Bodies, Panchayats, and so on. This also includes Courts, Universities, UPSC, Public Sector Undertakings like Nationalised Banks, LIC, and UTI amongst others.
All Stock Exchanges and SEBI are Public authorities and subject to RTI.

The issue of coverage of Stock exchanges has been settled in a well reasoned order by a full bench decision of the Central Commission in appeal 2006/00684 & CIC/AT/A/2007/00106.

It is worth remembering that establishments of the Parliament, Legislatures, Judiciary, President and the Governors have also been brought under the surveillance of the Common Citizen. It is unfortunate that some ‘Constitutional functionaries’ and other bodies have been displaying their arrogance and ignorance by claiming that they are above the law.

Subclause d (i), and (ii) together mean any non-government organisations which are substantially owned, controlled or financed directly or indirectly by the Government would be covered. Thus aided schools and colleges are Public Authorities, as also any trusts or NGOs which have significant Government nominees; or Companies where the Government either owns substantial stake, or has given substantial finance, are directly covered under the RTI Act. Substantial finance must take into account tax-incentives, subsidies and other concessions as well.

There is some confusion about the words substantial finance. This confusion also prevails in some of the decisions of the Information Commissions as well. Let us again look at the relevant words carefully:
2 “h) public authority means any authority or body….
(d)…..and includes any--
(j) body owned, controlled or substantially financed;
(ii) non-Government organisation substantially financed,
directly or indirectly by funds provided by the appropriate Government;”

The finance could be either as investment or towards the expenses, or both. The way in which the words have been placed, indicates that perhaps (i) relates to investments and (ii) relates to the running expenses.

Thus every institution which is owned by the Government is clearly covered. By any norms, whenever over 50% of the investment in a body belongs with any entity, it is said to be owned by that entity. Since bodies owned by Government have been mentioned separately, the words ‘controlled’ and ‘substantially financed’ will have to be assigned some meaning not covered by ownership. Thus it is evident that the intention of the Parliament is to extend the scope of the right to other organisations, which are not owned by it. No words in an Act can be considered to be superfluous, unless the contradiction is so much as to render a significant part meaningless or they violate the preamble.

Therefore it becomes necessary to consider a situation where an entity may be controlled by Government without ownership or substantial finance. Such a situation exists when a Charity Commissioner or Registrar of Societies appoints an administrator to run the affairs of a Trust or Society, or a Court Liquidator takes over administration of some body. The interpretation given by some that ‘control’ means any kind of control like that excercised by the Registrar of Societies over Cooperative societies , or by RBI on all private banks is too wide, and certainly not supported by the law. If we take this very wide interpretation, all Companies are controlled by the Registrar of Companies, all Sales tax dealers by the Sales tax authorities, and all factories by the Inspector of factories and so on. By this logic, all Companies, sales tax dealers and factories amongst others will have to give information under the RTI Act. Such a wide interpretation is clearly not intended in the law.

Let us now consider what are the implications of the words ‘substantially financed.’ It is obvious that as per Section 2 (h) (i) ‘ body …substantially financed’ would be a body where the ownership may not lie with the Government, nor the control. Hence clearly the wording ‘substantially financed’ would have to be given meaning at less than 50% holding. The Company Law gives significant rights to those who own 26% of the shares in a Company. Perhaps this could be taken to define the criterion of ‘substantial finance’. The finance could be as equity, or subsidies in land or concessions in taxation.

Similarly some definition is required where the State provides money for the running expenses of an Institution as covered under (ii). Presently, aided schools and colleges have all clearly been accepted as ‘Public authorities’ though there appears to be no clarity in the matter of NGOs and other organisations which are receiving significant amounts of finance.

The key approach and philosophy of the RTI act appears to be that since the State acts on behalf of the Citizens, wherever the State gives money, the Citizen has a right to know. In my opinion if the money given for the running expenses is over 1 crore the body should be considered as receiving ‘substantial finance’ and is covered in the definition of a ‘Public authority’.

At times it has been argued that to be a Public authority, a body must meet the criterion of being a ‘State’ against which a writ is maintainable. If the intention of the Parliament was to restrict the right to bodies which are the ‘State’, it would have said so, since the concept is well established. The term ‘Public Authority’ is broader and more generic than the word ‘State’ under Article 12 of the Constitution. Hence the intention of the Parliament was clearly based on giving the Citizens,- its masters,- the right to information over all entities owned by them, as well as where their money is being invested or spent.

Sailesh Gandhi

Satyamevajayate: 'Public Authority' in RTI

[murgie]

This article was very illuminating. But the position regarding stock exchanges is still in limbo. To the best of my knowledge, the exchanges' appeal against CIC's ruling that they are PAs has not yet been finally settled by the court. Corrections most welcome.

If "maintainability of a writ petition" was sufficient to declare a stock exchange a PA, then at least in Maharashtra the exchanges do not have a leg to stand on, as in Writ Petition 3791 of 2004 (before the RTI Act) in the Bombay High Court, on which it ruled on February 18, 2005, the Bombay Stock Exchange was very much a party, and whether a writ was maintainable against it was never an issue. (The matter dealt with a plea by a group of academics, including me, that BSE make available for academic research at least the same kind of stale but detailed data that NSE has been making available for many years. While the court ruled in our favour, we are not one whit closer to getting the Order implemented, but that is a separate matter altogether.)

I am not a lawyer, but maybe this criterion has also not been deemed sufficient. Best,

Murgie

[taurus]

The article is very informative. It is a good analysis. However, I beg to differ on one aspect. The contention that if the money given for the running expenses is over 1 crore the body should be considered as receiving ‘substantial finance’ and is covered in the definition of a ‘Public authority’ appears to be arbitrary. It should not be in terms of absolute money terms. It should be a percentage of the total running expenses. We may say that if the Govt funds meet more that say 25% of the running expenses then they may be considered as public authority instead of mentioning a fixed amount.

[karira]

If one looks at only the previous CIC decisions on this subject, the definition of PA has covered (besides the points highlighted in the article and by Murgie and Taurus):

1. Board of Governors or Executive or Managing Committee
(If more Government nominees, more the "control")
2. Provision of free or leased Government land at very low cost (DIAL)
3. Utilisation of Government resources or facilities (like stadiums) (DDCA)
4. Indirect control through Officers or Ministers family members (Sanskruti School)
5. If the Authority performs a "public service" (Bombay High Court declared BIAL as a Public Authority even though AAI has a minority stake in it - although in a matter not related to RTI - because it performs a Public Service)
6. Same as item 5 above for DISCOMS

It matters a lot how a appellant argues his case in front of CIC/SIC and presents the facts in the "right perspective".