How to declare a Public Authority....an important order of CIC

[karira]

On many threads in this forum as well as in individual posts/queries raised by members, doubts are raised whether "A" or "B" is a Public Authority under the RTI Act and as to how exactly does one decide whether any entity is a Public Authority.

Please see:

RTI India - Threads Tagged with public authority
RTI India - Threads Tagged with substantially financed

In a recent order http://cic.gov.in/CIC-Orders/AT-09092008-06.pdf Hon’ble IC Shri A. N. Tiwari has discussed this issue very exhaustively.

The matter was whether National Co-operative Consumers’ Federation of India Ltd. (NCCF), and National Agriculture Co-operative Marketing Federation of India Ltd. (NAFED) are Public Authorities or not.

The full order/decision is attached to this post.

For the benefit of members and guests, the summary of the arguments as follows:

1. NCCF claimed that it is a multi state cooperative society and if all such cooperative
societies were brought under the RTI Act, it will be a contravention of the MSCS Act.
NCCF was a business organisation, it did not receive any funding from the government
and that "only" 78% of its share capital was held by the government and that too on a
"redeemable basis" which government could take out any time. Various High Courts
had ruled time and again that NCCF is neither a instrumentality or an agency of the
State.

2. NAFED just said that they were a multi state cooperative society under the MSCS Act.

3. The Department of Agriculture and Cooperation, Ministry of Agriculture, using
various arguments and sections of various cooperative acts claimed that both NCCF
and NAFED were not Public Authorities.

4. CIC, in order to make a final decision relied on

-Government holds 78% of the shareholding in NCCF. It is immaterial whether that is redeemable or not and whether Government will ever exercise its right to redeem its shareholding.
-GOI has also got the powers for “suppressing” the Board of Directors of NCCF
-It also relied on various provisions of the MSCS Act like sections 11, 61,77, 78, 79. 80, 81, 82, 83, 86, 89, 93, 98, 122, 123 to conclude that not only the Government has a important role in the affairs of such Societies but also the Registrar of Cooperative Societies exercised overall control in the formation, functioning, auditing and winding up of such societies.
-Serving IAS Officers were appointed as CEO’s of both NCCF and NAFED.
-Membership of NAFED is restricted to State level Cooperative Marketing Federations which in turn are totally controlled by the State Governments.
-Although the Board of NAFED has only 1 director from GOI, all the other directors are from the State level federations and therefore Government nominees.
Therefore they are directly or indirectly controlled by the Government (State or Centre)
-NAFED is the central nodal agency of GOI to undertake procurement of oilseeds and pulses under the Price Support Scheme (PSS). 100% of losses incurred by NAFED are supported by GOI. NAFED is also the central nodal agency to procure other agricultural and horticultural commodities under the Market Intervention Scheme (LIS) and losses are fully paid for by GOI.

• CIC also relied on two important High Court Decisions:

a)Civil Writ Petition Nr. 2626 of 2008 in the Punjab and Haryana High Court (DAV College Trust and Management Society v/s The Director of Public Information & Othrs. The High Court had ruled that a crucial touchstone for determining whether an organization qualifies to be a public authority is whether it performs a public duty.

b)Madras High Court WCA No. 811 of 2008 dated 05/08/2008 which had Page 8 of 10 has rules that the expression “Public Authority” under Section 2(h)(d)(i) should be construed liberally so that the authorities like the appellant (TNRDC) who are controlled and substantially financed, directly or indirectly by the Government come within the purview of the RTI Act. In this connection it may be mentioned that the Tamil Nadu Road Development Limited which has been held to be a “Public
Authority” is a joint venture Company wherein the Tamil Nadu Industries
& Development Corporation and IL&FS have equal share-holding.

5. NAFED also argued that as per a judgement of the Delhi High Court
in case NAFED Vs. NPFCMFIEU; LPA No.330 of 1999, where the subject of
NAFED being a State in its instrumentality role was discussed, and it was held
that NAFED did not comprise a State.
CIC did not buy this view stating that the concept of “Public Authority” has come
into existence only after the RTI Act came into being. In any case being called a
“State” or not had no bearing on a entity being a Public Authority or not. The
matter before the Delhi High Court was not to decide whether NAFED was a PA
or not, it was some other matter. Therefore NAFED taking recourse to that
argument was totally unjustified.
6. Section 2(h), among other criteria, states that to be designated as a ‘public
authority’, a body should be “owned, controlled or substantially financed
directly or indirectly by funds provided by the appropriate government. ”

The CIC declared both NAFED and NCCF as Public Authorities, concluding by saying:
Before parting with this appeal, it is felt necessary to comment on the
conspicuous anxiety exhibited by NAFED and NCCF to remain outside the pale of
the RTI Act. It did not take much effort to decipher that couched in technical
language, the claim of these two organizations to be left out of the jurisdiction of
the RTI Act, was principally aimed at escaping the rigours of transparency and
accountability, which the RTI Act imposes on public authorities. For organizations
unmistakably devoted to public service and making copious use of public funds for
their activities and run, either directly or indirectly, by government servants, such
anxiety to be out of the RTI Act surely does no good to their public image.
NAFED and NCCF will do well to re-assess their stated positions regarding the RTI
Act. There is lot to be gained in terms of improving public perception about an
organization by adherence to transparency and accountability norms by the simple
act of subjecting the organization to the provisions of the RTI Act. An impression
that an organization values transparency and accountability does wonders to the
organizational image. Apart from this, since these two organizations use public
funds for public good, the citizen has a right to know whether or not NAFED and
NCCF have discharged their allotted functions with diligence and propriety.
Keeping the two organizations outside the purview of RTI Act would amount to
denying to the public something which is acknowledgedly its right. I would urge
the NAFED and the NCCF managements to coolly reflect on these matters.

[Dr.R.K.D.Goel]

06.10.2008
This is a very good Judgment of CIC. Recently (Not naming) in Vadodara a Officer of Municipal Corporation Vadodara said to me that they are Autonomous Authority (Body)and should not come under RTI Act 2005.
This Judgment will clarify the officer that a Municipal Commissioner of a Municipal Corporation is a IAS officer appointed by the State government only with full control and financial help from the State Government.

The Municipal Corporation of Vadodara does't believe in Transparency and Accountability as are the objectives of the RTI Act 2005.

The Municipal Commissioner of VMC Vadodara who is a IAS officer appointed by the State Government of Gujarat is very much a PUBLIC AUTHORITY under RTI Act 2005.
Dr.R.k.D.Goel Vadodara.

[karira]

NCCF has gone to the High Court on this decision of the CIC and got a Stay order.

This is as per information derived from the attached order of CIC:

http://cic.gov.in/CIC-Orders/PB-18112008-28.pdf

The representative of the respondent who appeared for the hearing has also submitted before the Commission that on a writ petition, case came up for hearing on 3.11.2008 and the court was pleased to stay the operation of the decision given by the Commission in F.No. CIC/AT/C/2007/00320, holding NCCF as a public authority. In view of this, it is not possible for the Commission to entertain this appeal on account of the stay granted by the court. A copy of the submissions made before the Commission has been handed over to the appellant during the hearing itself as ordered by the Commission. In these lines, the appeal is disposed of.