Central Information Commission
Sandip Kumar vs Indian Oil Corporation Limited (Iocl) on 18 July, 2024
Author: Heeralal Samariya
Bench: Heeralal Samariya
के न्द्रीय सूचना आयोग
Central Information Commission
बाबा गंगनाथ मार्ग, मुनिरका
Baba Gangnath Marg, Munirka
नई दिल्ली, New Delhi - 110067
द्वितीय अपील संख्या / Second Appeal No. CIC/IOCLD/A/2023/617548
Shri Sandip Kumar ... अपीलकर्ता/Appellant
VERSUS/बनाम
CPIO, and Chief GM (Planning and Economic ...प्रतिवादीगण /Respondent
Studies), Indian Oil Corporation Limited, Mumbai
Date of Hearing : 10.06.2024
Date of Decision : 16.07.2024
Chief Information Commissioner : Shri Heeralal Samariya
Relevant facts emerging from appeal:
RTI application filed on : 14.11.2022
PIO replied on : 16.12.2022
First Appeal filed on : 15.01.2023
First Appellate Order on : 03.02.2023
2ndAppeal/complaint received on : 12.04.2023
Information soughtand background of the case:
The Appellant filed an RTI application dated 14.11.2022 seeking information on following points:-
"Indian Oil Corporation:-
Please provide Provident Fund Trust and Pension Trust Investment Details from 1-Jan-2020 to 31-Oct-2022. I require this information for all the Provident Fund Trust and Pension Fund Trust you have. Please Provide:-
1) Name of Security Bought
2) Their ISIN No
3) Purchase Yield (YTM)
4) Purchase Price
5) Value Date / Date of Investment
6) Quantum in Lakh/Crores
7) Name of Counterparty/Broker/Advisor from where it was bought"
The CPIO and Chief GM (Planning and Economic Studies), IOCL Head Office, Mumbai vide letter dated 16.12.2022 replied as under:-
Page 1 of 11"Ans. Indian Oil Corporation Ltd & The PF Trust for employees of IOCL(MD) are separate legal entities and Investment decision of the PF Trust is being taken independently by Board of Trustees holding fiduciary responsibility in line with the rules/guidelines issued by the PF Authorities. As per section 2 definition of public authority is provided as under: Section2 (h): "public authority" means any authority or body or institution of self- government established or constituted -
1. (a) by or under the Constitution;
2. (b) by any other law made by Parliament;
3. (c) by any other law made by State Legislature;
4. (d) by notification issued or order made by the appropriate Government, and includes Any
1. (i) body owned, controlled or substantially financed;
2. (ii) non-Government organization substantially financed, directly or indirectly by funds provided by the appropriate Government;
It is very evident that PF Trust does not come under purview of subclause (a) to
(c). Further, PF Trust would not be covered under subclause (d) of Section 2(h) of Act as Trust is funded by contribution of members and member are their beneficial owners, Hence it is very evident that PF Trust is not financed or substantially financed by appropriate Government. In view of the above, as PF Trust is not public authority, it is not falling under RTI Act. Hence no information pertaining to the PF trust can be provided."
Dissatisfied with the response received from the CPIO, the Appellant filed a First Appeal dated 15.01.2023. The FAA vide order dated 03.02.2023 stated as under:-
"I have examined the queries, reply given by the Respondent to the queries, contents of the Appeal and comments of the Respondent.
I am of the view that the Respondent has rightly replied to the queries raised by the Appellant under the RTI Act. Hence, there is nothing to interfere with the reply provided by the Respondent.
In view of the above, the Appeal is dismissed."
Aggrieved and dissatisfied, the Appellant approached the Commission with the instant Second Appeal.
A written submission has been received from the CPIO and CGM (Planning and Economic Studies), IOCL Mumbai wherein it was inter alia stated that the information provided in their reply dated 16.12.2022 is correct.
Facts emerging in Course of Hearing:
Appellant: Present Page 2 of 11 Respondent: 1. Shri Sandeep Gonsalves, Chief Manager (Finance)
2. Shri Arindam Bag, CPIO and Manager (Planning/ Co-ordination) The Appellant stated that satisfactory response was not provided to him, till date. He contested the response of the CPIO where it was mentioned that PF Trust for employees of IOCL (MD) is not a public authority u/s 2 (h) of the RTI Act, 2005 by stating that the Provident Fund Trust (PF Trust) manages employee's money in fiduciary responsibility. It is Employees money. 12% is deducted from Employees salary and GOI/IOCL contributes another 12% of the Basic Salary which is then invested under this PF trust to generate returns. All these investment transactions are done in excel, calculated and checked in excel before finalising the trade. Thereafter Deal Confirmation is made and exchanged before the settlement. The PF trust faces continuous inflow and outflow of funds, it is near to impossible to keep track without excel or any related software. However, despite the overwhelming larger public interest of transparency in disclosure of investments made of PF funds collected from the employees, the concerned office is not disclosing the details.
Shri Arindam Bag reiterated the reply provided to the Appellant and stated that Indian Oil Corporation Ltd & The PF Trust for employees of IOCL(MD) are separate legal entities and Investment decision of the PF Trust is being taken independently by Board of Trustees holding fiduciary responsibility in line with the rules/guidelines issued by the PF Authorities. He argued that the PF Trust is not a public authority as per Section 2 (h) of the RTI Act, 2005 as it does not come under the purview of sub-clause (a) to (c) of Section 2 (h). Further, PF Trust would not be covered under sub-clause (d) of Section 2(h) of Act as Trust is funded by contribution of members and member are their beneficial owners. Hence it is very evident that PF Trust is not financed or substantially financed by appropriate Government. In view of the above, as PF Trust is not public authority, it is not falling under RTI Act. Hence no information pertaining to the PF trust was provided.
Decision:
Keeping in view the facts of the case and the submissions made by both the parties, the Commission is of the view that the PF Trust for employees of IOCL (MD), Mumbai is a public authority as defined u/s 2 (h) of the RTI Act, 2005 for the reasons mentioned as follows.
At the outset Section 2 (h) of the RTI Act, 2005 which defines a public authority is reproduced below:
Section2 (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;Page 3 of 11
(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;
In the present instance, it has to be examined if the PF Trust falls under any of the above mentioned categories to be classified as a public authority.
To establish this, the Commission would briefly touch upon the background of the constitution of PF Trusts. The PF Trusts owe their existence to Section 17 of the Employees' Provident Fund and Miscellaneous Provisions (EPF & MP) Act, 1952 and the Employees Provident Fund Scheme, 1952. As per Section 17 of the EPF & MP Act, 1952 the exemption is primarily granted by the appropriate government from certain provisions of the Act and the Employees Provident Fund Scheme, 1952 on the condition that the rates of contribution are not less favourable than those specified in section 6 of the EPF & MP Act, 1952 and the employees are also in enjoyment of other provident fund benefits which on the whole are not less favourable to the employees than the benefits provided under this Act or any Scheme in relation to the employees in any other establishment of a similar character.
The relevant provisions are mentioned as under:
"Section 17 (1) The appropriate Government may, by notification in the Official Gazette and subject to such conditions as may be specified in the notification, 2 [exempt, whether prospectively or retrospectively, from the operation] of all or any of the provisions of any Scheme--
(a) any [establishment] to which this Act applies if, in the opinion of the appropriate Government, the rules of its provident fund with respect to the rates of contribution are not less favourable than those specified in section 6 and the employees are also in enjoyment of other provident fund benefits which on the whole are not less favourable to the employees than the benefits provided under this Act or any Scheme in relation to the employees in any other 3 [establishment] of a similar character; or............................"
On examination of the provisions of the EPF & MP Act, 1952 and EPF Scheme 1952, it is clear for the following reasons that IOCL (a public authority) substantially finances and controls the affairs of the PF Trust which also owes its existence to IOCL:
1. Firstly, the control over the affairs of the PF Trust is established by the fact that the Board of Trustees which is vested with the administration of the PF Trusts is constituted by the concerned employer as per Section 17 (1A) (b) of the EPF & MP Act, 1952.Page 4 of 11
2. Secondly, Clause 27AA of the EPF Scheme, 1952 mentions the terms and conditions for grant of exemption. In Para 1 it is clearly stated that the Board of Trustees is established by the employer under his Chairmanship for the management of the Provident Fund.
3. Thirdly, as per Para 7 of Clause 27AA of EPF Scheme, 1952 the employer shall bear all the expenses of the administration of the Provident Fund and also make good any other loss that may be caused to the Provident Fund due to theft, burglary, defalcation, misappropriation or any other reason.
4. Fourthly as per Para 24 (a) of Clause 27AA of EPF Scheme, 1952 expenses for re-audit as directed by CPFC or the RPFC shall be borne by the employer.
5. Fifthly, as per Para 26 of Clause 27AA of EPF Scheme, 1952 the employer in relation to the exempted establishment shall provide for such facilities for inspection and pay such inspection charges as the Central Government may from time to time direct under clause (a) of subsection (3) of section 17 of the Act within 15 days from the close of every month.
6. Sixthly as per Para 28 of Clause 27AA of EPF Scheme, 1952, In the event of any loss to the trust as a result of any fraud, defalcation, wrong investment decisions etc. the employer shall be liable to make good the loss.
7. Seventh, as per Para 1 of Clause 79C of the EPF Scheme, 1952 the board of trustees should consist of not less than two and not more than six representatives each of the employers and employees. As per Para 4 of Clause 79C of the EPF Scheme, 1952 the employer shall nominate one of his representatives on the board to be the Chairman thereof. In the events of equality of votes, the Chairman may exercise a casting vote.
In addition, Clause 27AA of EPF Scheme, 1952 stipulates several other duties/ responsibilities of the employer with respect to the PF Trust which further establishes the control of the employer i.e., IOCL over PF Trusts.
The legal position with regard to meaning of the terms "owned/ controlled or substantially financed" u/s 2 (h) (d) (i) of the RTI Act, 2005 has been settled by the Hon'ble Supreme Court in its decision dated 07/10/2013 (Civil Appeal No 9017 of 2013 Thalappalam Ser. Coop. Bank Ltd and ors VS State of Kerala and ors.) as under:-
"31. The RTI Act, therefore, deals with bodies which are owned, controlled or substantially financed, directly or indirectly, by funds provided by the appropriate government and also non-government organizations substantially financed, directly or indirectly, by funds provided by the appropriate government, in the event of which they may fall within the definition of Section 2(h)(d)(i) or (ii) respectively. As Page 5 of 11 already pointed out, a body, institution or an organization, which is neither a State within the meaning of Article 12 of the Constitution or instrumentalities, may still answer the definition of public authority under Section 2(h)d (i) or (ii).
(a) Body owned by the appropriate government - A body owned by the appropriate government clearly falls under Section 2(h)(d)(i) of the Act. A body owned, means to have a good legal title to it having the ultimate control over the affairs of that body, ownership takes in its fold control, finance etc. Further discussion of this concept is unnecessary because, admittedly, the societies in question are not owned by the appropriate government.
(b) Body Controlled by the Appropriate Government A body which is controlled by the appropriate government can fall under the definition of public authority under Section 2h(d)(i). Let us examine the meaning of the expression "controlled" in the context of RTI Act and not in the context of the expression "controlled" judicially interpreted while examining the scope of the expression "State" under Article 12 of the Constitution or in the context of maintainability of a writ against a body or authority under Article 226 of the Constitution of India.
The word "control" or "controlled" has not been defined in the RTI Act, and hence, we have to understand the scope of the expression 'controlled' in the context of the words which exist prior and subsequent i.e. "body owned" and "substantially financed" respectively. The meaning of the word "control" has come up for consideration in several cases before this Court in different contexts. In State of West Bengal and another v. Nripendra Nath Bagchi, AIR 1966 SC 447 while interpreting the scope of Article 235 of the Constitution of India, which confers control by the High Court over District Courts, this Court held that the word "control" includes the power to take disciplinary action and all other incidental or consequential steps to effectuate this end and made the following observations : "The word 'control', as we have seen, was used for the first time in the Constitution and it is accompanied by the word 'vest' which is a strong word. It shows that the High Court is made the sole custodian of the control over the judiciary. Control, therefore, is not merely the power to arrange the day to day working of the court but contemplates disciplinary jurisdiction over the presiding Judge.... In our judgment, the control which is vested in the High Court is a complete control subject only to the power of the Governor in the matter of appointment (including dismissal and removal) and posting and promotion of District Judges. Within the exercise of the control vested in the High Court, the High Court can hold enquiries, impose punishments other than dismissal or removal, ..."
32. The above position has been reiterated by this Court in Chief Justice of Andhra Pradesh and others v. L.V.A. Dixitulu and others (1979) 2 SCC 34. In Corporation of the City of Nagpur Civil Lines, Nagpur and another v. Ramchandra and others (1981) 2 SCC 714, while interpreting the provisions of Section 59(3) of the City ofNagpur Corporation Act, 1948, this Court held as follows :
Page 6 of 11"4. It is thus now settled by this Court that the term "control" is of a very wide connotation and amplitude and includes a large variety of powers which are incidental or consequential to achieve the powers-vested in the authority concerned......."
33. The word "control" is also sometimes used synonyms with superintendence, management or authority to direct, restrict or regulate by a superior authority in exercise of its supervisory power. This Court in The Shamrao Vithal Cooperative Bank Ltd. v. Kasargode Pandhuranga Mallya (1972) 4 SCC 600, held that the word "control" does not comprehend within itself the adjudication of a claim made by a co-operative society against its members. The meaning of the word "control" has also been considered by this Court in State of Mysore v. Allum Karibasappa & Ors. (1974) 2 SCC 498, while interpreting Section 54 of the Mysore Cooperative Societies Act, 1959 and Court held that the word "control" suggests check, restraint or influence and intended to regulate and hold in check and restraint from action. The expression "control" again came up forconsideration before this Court in Madan Mohan Choudhary v. State of Bihar & Ors. (1999) 3 SCC 396, in the context of Article 235 of the Constitution and the Court held that the expression "control" includes disciplinary control, transfer, promotion, confirmation, including transfer of a District Judge or recall of a District Judge posted on excadre post or on deputation or on administrative post etc. so also premature and compulsory retirement. Reference may also be made to few other judgments of this Court reported in Gauhati High Court and another v. Kuladhar Phukan and another (2002) 4 SCC 524, State of Haryana v. Inder Prakash Anand HCS and others (1976) 2 SCC 977, High Court of Judicature for Rajasthan v. Ramesh Chand Paliwal and Another (1998) 3 SCC 72, Kanhaiya Lal Omar v. R.K. Trivedi and others (1985) 4 SCC 628, TMA Pai Foundation and others v. State of Karnataka (2002) 8 SCC 481, Ram Singh and others v. Union Territory, Chandigarh and others (2004) 1 SCC 126, etc.
34. We are of the opinion that when we test the meaning of expression "controlled" which figures in between the words "body owned" and "substantially financed", the control by the appropriate government must be a control of a substantial nature. The mere 'supervision' or 'regulation' as such by a statute or otherwise of a body would not make that body a "public authority" within the meaning of Section 2(h)(d)(i) of the RTI Act. In other words just like a body owned or body substantially financed by the appropriate government, the control of the body by the appropriate government would also be substantial and not merely supervisory or regulatory. Powers exercised by the Registrar of Cooperative Societies and others under the Cooperative Societies Act are only regulatory or supervisory in nature, which will not amount to dominating or interfering with the management or affairs of the society so as to be controlled. Management and control are statutorily conferred on the Management Committee or the Board of Directors of the Society by the respective Page 7 of 11 Cooperative Societies Act and not on the authorities under the Cooperative Societies Act.
35. We are, therefore, of the view that the word "controlled" used in Section 2(h) (d)(i) of the Act has to be understood in the context in which it has been used visà-vis a body owned or substantially financed by the appropriate government, that is the control of the body is of such a degree which amounts to substantial control over the management and affairs of the body.
SUBSTANTIALLY FINANCED
36. The words "substantially financed" have been used in Sections 2(h)
(d)(i) & (ii), while defining the expression public authority as well as in Section 2(a) of the Act, while defining the expression "appropriate Government". A body can be substantially financed, directly or indirectly by funds provided by the appropriate Government. The expression "substantially financed", as such, has not been defined under the Act. "Substantial" means "in a substantial manner so as to be substantial". In Palser v. Grimling (1948) 1 All ER 1, 11 (HL), while interpreting the provisions of Section 10(1) of the Rent and Mortgage Interest Restrictions Act, 1923, the House of Lords held that "substantial" is not the same as "not unsubstantial" i.e. just enough to avoid the de minimis principle. The word "substantial" literally means solid, massive etc. Legislature has used the expression "substantially financed" in Sections 2(h)(d)(i) and (ii) indicating that the degree of financing must be actual, existing, positive and real to a substantial extent, not moderate, ordinary, tolerable etc.
37. We often use the expressions "questions of law" and "substantial questions of law" and explain that any question of law affecting the right of parties would not by itself be a substantial question of law. In Black's Law Dictionary (6th Edn.), the word 'substantial' is defined as 'of real worth and importance; of considerable value; valuable. Belonging to substance; actually existing; real: not seeming or imaginary; not illusive; solid; true; veritable. Something worthwhile as distinguished from something without value or merely nominal. Synonymous with material.' The word 'substantially' has been defined to mean 'essentially; without material qualification; in the main; in substance; materially.' In the Shorter Oxford English Dictionary (5th Edn.), the word 'substantial' means 'of ample or considerable amount of size; sizeable, fairly large; having solid worth or value, of real significance; sold; weighty; important, worthwhile; of an act, measure etc. having force or effect, effective, thorough.' The word 'substantially' has been defined to mean 'in substance; as a substantial thing or being; essentially, intrinsically.' Therefore the word 'substantial' is not synonymous with 'dominant' or 'majority'. It is closer to 'material' or 'important' or 'of considerable value.' 'Substantially' is closer to 'essentially'. Both words can signify varying degrees depending on the context.
Page 8 of 1138. Merely providing subsidiaries, grants, exemptions, privileges etc., as such, cannot be said to be providing funding to a substantial extent, unless the record shows that the funding was so substantial to the body which practically runs by such funding and but for such funding, it would struggle to exist. The State may also float many schemes generally for the betterment and welfare of the cooperative sector like deposit guarantee scheme, scheme of assistance from NABARD etc., but those facilities or assistance cannot be termed as "substantially financed" by the State Government to bring the body within the fold of "public authority" under Section 2(h)
(d)(i) of the Act. But, there are instances, where private educational institutions getting ninety five per cent grantin-aid from the appropriate government, may answer the definition of public authority under Section 2(h)(d)(i)....."
In terms of the ratio laid down in the abovementioned judgement it is clear that IOCL (a public authority) exercises substantial control over the affairs of the PF Trust as it exercises substantial control in the affairs of the management of the trust as per the provisions laid down in EPF & MP Act, 1952 and EPF Scheme 1952. The funding provided by the IOCL to the PF Trust is also substantial in nature since in terms of Para 7 of Clause 27AA of EPF Scheme, 1952 it bears all the expenses of the administration of the Provident Fund and also make good any other loss that may be caused to the Provident Fund due to theft, burglary, defalcation, misappropriation or any other reason.
The Commission also refers to a decision of a co-ordinate bench in Nihar Ranjan Das vs Steel Authority of India Ltd., CIC/SAIL1/A/2020/114150 decided on 07.12.2021 which pertained to similar factual matrix. The Commission in the said matter held that Hindustan Steel Limited Contributory Provident Fund is a public authority u/s 2 (h) of the RTI Act, 2005. The relevant extracts of the order are as under:
9. The Commission, after hearing the submissions of both the parties and after perusal of records, observes that the appellant has sought the details of investment of HSLCPF Trust and the issues related thereto.
The Commission further observes that the respondent claimed that the HSLCPF Trust is not a public authority as the same functions independently without any control of the respondent over it. However the respondent failed to appraise the Commission that as to how HSLCPF Trust does not come under the definition of Section 2 (h) of the RTI Act, 2005.
10. It is an admitted fact that the HSLCPF Trust is constituted by the RSP for the benefit of its employees and the management of their PF contributions along with the contribution of the employer to function purely for their interest. Rules and regulations for the management of this HSLCPF Trust have been framed by the management of the public authority in consultation of their stake holders and represented through the trade unions which are also recognized by the public authority.
Page 9 of 1111. As per the rules of the EPF Trust, functional autonomy has been provided to the HSLCPF Trust so that it is independent of the commercial bearing of the public authority. This functional autonomy envisaged in the rules and regulations made by the public authority should not be construed as if it is an organization independent of the public authority and is not a public authority. It is clear that the origin of the Trust lies in the public authority as it could not have come into existence on its own without being created by the management of the RSP. Further the CGM, Finance, is the ex-officio Chairman as per the rules, which clearly indicates that the HSLCPF Trust comes under the ambit of Section 2(h) of the RTI Act, 2005, which reads as under:
....................
14. The Commission observes that HSLCPF Trust came into existence only by an initiative of the public authority to watch the interest of its own employees. The rules and regulations of its operations provides an autonomy from the direct control of the RSP management, yet its constitution and methods of nomination of trustees is controlled by the public authority. Since the very purpose of its constitution is to protect the benefits of its employees/ beneficiaries and to invest their money for the optimum returns. Hence the Commission finds that the HSLCPF Trust is an entity which is fully covered under section 2(h)(i) of the RTI Act, 2005, as an entity controlled by the public authority. Moreover, a beneficiary seeking the information about the investments made from his money into various financial products should not be denied or rather should be shared with all the beneficiaries' suo-moto as part of an annual report/ documents prepared by the entity. Hence denial of information by the HSLCPF Trust is bad in law.
15. In view of the abovementioned ratios, facts & circumstances, the Commission therefore directs the respondent that if the appellant is their employees and bonafide beneficiary, the information sought should be shared with him as per the provisions of the RTI Act, 2005. If in case the information sought by the appellant has any commercial bearing upon the respondent the same should be denied under the relevant provisions of the Act. The abovementioned direction should be complied by the respondent within a period of 30 days from the date of receipt of this order under the intimation to the Commission.
In the light of the above observations, the Commission is of the view that the PF Trust for employees of IOCL(MD) came into existence only by an initiative of the public authority to watch the interest of its own employees. The rules and regulations of its operations as per the EPF & MP Act, 1952 and Employment Provident Fund Scheme, 1952 provides an autonomy from the direct control of the IOCL management, yet its constitution and methods of nomination of trustees is controlled by the public authority. The issues raised Page 10 of 11 are also pertaining to the larger public interest of all the beneficiaries since the very purpose of constitution of the trust is to protect the benefits of its employees/ beneficiaries and to invest their money for the optimum returns. Hence the Commission finds that the PF Trust for employees of IOCL (MD) is an entity which is fully covered under section 2(h)(i) of the RTI Act, 2005, as an entity controlled and substantially financed by the public authority.
The Commission therefore directs the CPIO and Chief GM (Planning and Economic Studies), IOCL Head Office, Mumbai to re-examine the RTI application and provide only such information which is not exempted from disclosure under Section 8 (1) of the RTI Act, 2005 to the Appellant and also suo motu disclose the same on their website in the interest of all the beneficiaries and for the sake of transparency and accountability in the affairs of the PF Trust.
In the event the information sought is not readily available with him/ her, the CPIO is also directed to take recourse of Section 5 (4) of the RTI Act, 2005 to obtain it from the concerned custodian of records and ensure compliance with the above direction within 30 days from the date of receipt of this order under intimation to the Commission.
The instant Second Appeal stands disposed off as such.
Heeralal Samariya (हीरालाल सामरिया) Chief Information Commissioner (मुख्य सूचना आयुक्त) Authenticated true copy (अभिप्रमाणित सत्यापित प्रति) S. K. Chitkara (एस. के . चिटकारा) Dy. Registrar (उप-पंजीयक) 011-26186535 Page 11 of 11 Recomendation(s) to PA under section 25(5) of the RTI Act, 2005:-
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