Ashish Mahajan, vs Reserve Bank Of India on 10 December, 2021

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Central Information Commission

Ashish Mahajan, vs Reserve Bank Of India on 10 December, 2021

1. The issues (prayer) under consideration in the appeal dated 07.03.2019 filed by IndusInd Bank Ltd. (the appellant bank) as an aggrieved party against the order dated 04.02.2019 passed by the First Appellate Authority, are as under:-

a. Set aside the order dated 21.12.2018 passed by the CPIO and the order dated 04.02.2019 passed by the FAA;

b. Reject the RTI application filed by the RTI applicant.

2. Succinctly facts of the case are that the RTI applicant, Shri L N Gulati filed an application dated 26.10.2018 under the Right to Information Act, 2005 (RTI Act) before the Page 1 of 8 Central Public Information Officer (CPIO), Reserve Bank of India, Mumbai, seeking the following information.

i. To provide the details of main promoters of IndusInd Bank Ltd. i.e. their name, position, shareholding, change in shareholding since date of licensing details of their shareholding.

ii. To inform the details of penalties imposed of IndusInd Bank Ltd. for last three years and supply copies of RBI orders.

iii. To provide details violation of Prevention of Money Laundry Act by Induslnd Bank as observed by RBI during its inspection/reported to RBI by the Bank. The action taken against the bank by RBI in each instance of PML Act violation. iv. To inform Induslnd Bank's share of fee income out of the total income earned in the last three years. To give details of commission/fee earned out of foreign exchange business for last three years.

v. To inform how many cases of FEMA violations by Induslnd Bank have been observed by RBI/reported to RBI during last three years.

vi. How many cases of FEMA violation by Induslnd Bank have been referred by RBI to Enforcement Director for investigation? Kindly supply the details. vii. To inform whether IndusInd Bank have a succession planning/ Succession Plan for the post of MD & CEO. Has the same been submitted/reported to RBI and when? If yes, provide the details of Succession Plan.

viii. To inform of RBI policy/guidelines for private sector banks on succession planning/ succession plan for the post of MD & CEO. Copy of RBI policy/guidelines on the matter be supplied.

ix. To inform the periodicity of inspection of banks by RBI. Also inform under which section of RBI Act, 1942 Banks are inspected by RBI.

x. To inform when was Induslnd Bank inspected by RBI during last three financial years and also furnish the rating of Governance Standards given by RBI to Bank. xi. To inform details of level of compliance/non compliance by Induslnd Bank of RBI inspection observations during the last three years. To supply the details of action taken by RBI against Induslnd Bank for non compliance of its observation/inspection/direction.

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xii. To inform has RBI made any study/analysis of RBI's policy of separating the post of chairman and Managing Director in the banks. If yes, the details thereof be supplied. xiii. To inform instances of promoter being appointed as the non executive Chairman of private banks.

xiv. To inform has RBI took presence of Shri R Seshasayee part-time Chairman of the Induslnd Bank representing Promoter Group A serious corporate governance issue for the RBI? To supply RBI policy/instructions/guidelines on the issue. xv. To inform how many Directors are on the Board of Director of Induslnd Bank and out them who represent interest/specialization in Small Scale Industry, Agriculture, IT and Cyber Security area.

The CPIO issued notice under section 11 to the appellant on 19.11.2018 and then informed its decision u/s 11 (3) on 21.12.2018. Aggrieved with the response of the CPIO, the appellant filed first appeal on 14.01.2019. The First Appellate Authority (FAA) disposed of the first appeal vide its order dated 04.02.2019. Aggrieved by that, the appellant has filed a second appeal dated 07.03.2019 before this Commission which is under consideration.

3. The appellant filed the instant appeal dated 07.03.2019 inter alia on the grounds that the CPIO and FAA had failed to consider the plea of the appellant bank; that they were not a "public authority" and; that the mere masking of sentences/paragraphs did not amount to severing of information under section 10 (1) of the RTI Act; that the respondent authorities had failed to establish that the disclosure of the information was warranted in larger public interest. The appellant has requested the Commission to direct the CPIO/FAA not to disclose the information and set aside their orders.

4. The CPIO, RBI vide letter dated 19.11.2018 had issued notice to the appellant under section 11 (1) of the RTI Act and upon receipt of written submissions from the appellant bank on 30.11.2018, CPIO, RBI, intimated their decision to disclose the information vide letter dated 21.12.2018 after severing exempted information. The FAA, RBI vide order dated 04.02.2019 dismissed the first appeal and concurred with the decision taken by the CPIO.

Hearing on 23.04.2021 4.1. The appellant and on behalf of the respondent Shri Nishant Khosla, CPIO, Reserve Bank of India, Bandra, attended the hearing through audio conference.

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Interim order 4.2. The Commission has passed the following observations/directions on 28.06.2021:-

"5.1. Both parties inter alia submitted that hearing in Miscellaneous Application No

(s) 2342 of 2019 in TC (C) No. 91/2015 (Reserve Bank of India Vs. Jayantilal N. Mistry &Anr.)which was substantial in determination of the issues raised in this matter was last heard by the Apex Court on 09.04.2021 and that the judgment was reserved.

6. The Commission after adverting to the facts and circumstances of the case, hearing both the parties and perusal of records, notes that the judgment in Miscellaneous Application No (s) 2342 of 2019 in TC (C) No. 91/2015 (Reserve Bank of India Vs. Jayantilal N. Mistry &Anr.) which was last heard by the Apex Court on 09.04.2021, was reserved. Hence, in the interest of justice and acceding to the request of the parties, the matter is adjourned with status quo and the operation of the CPIO's decision dated 21.12.2018 and FAA's order dated 04.02.2019 shall remain stayed till further orders."

Hearing on 08.12.2021

5. Shri V.K. Gupta, Advocate on behalf of IndusInd Bank attended the hearing in person and on behalf of the respondent Ms. Rajshree Raj Pathak, Director and representative of CPIO, Shri Abhijeet Kaushal, Legal Officer, Reserve Bank of India, Bandra attended the hearing through video conference.

5.1. The counsel who appeared on behalf of the appellant bank inter alia submitted that except the information sought on point no. 2 of the RTI application the applicant had received the information. The applicant was aggrieved only for non-receipt of information against point no.2 of the RTI application. He stated that the applicant Shri L N Gulati, sought details of penalties imposed on IndusInd Bank Ltd. for the last three years and Page 4 of 8 copies of RBI orders in respect of point no.2 of the RTI application. The counsel stated that the appellant bank vide letter dated 30.11.2018 submitted various objections regarding non- disclosure of such information. However, the respondent failed to take cognizance of such objections and decided to disclose the information arbitrarily. The counsel further submitted that the aforesaid information could not be provided to the applicant for various reasons including that appellant bank was not a "public authority" within the meaning of section 2(h) of the Act; that the order dated 12.12.2017 passed by RBI imposing penalty on appellant was of confidential nature; that the RTI applicant might use the information contained in the order dated 12.12.2017 of RBI for some purpose which might harm the competitive position of the appellant bank and that same also contained personal information. Therefore, exemption from disclosure was claimed under section 8(1) (d) & (j) of the Act. It was also submitted the masked portion of sentences/paragraphs made by CPIO could be skillfully and intelligently uncovered or could be pierced through so as to access the so called portion of confidential information of the report. Moreover the portion of the report, even after masking, proposed to be disclosed contained certain information which was of confidential nature which could not be disclosed. Hence the counsel for the appellant bank emphatically objected even to disclose the order dated 12.12.2017 after redacting the confidential information.

5.2. The respondent while defending their case inter alia submitted that the RTI applicant Shri L. N. Gulati had raised fifteen queries seeking information regarding RBI policy on Appointment/Re-appointment MD & CEO of Private Sector Banks and banking related issues, particularly with respect to IndusInd Bank Limited. The CPIO, issued a notice under Section 11(1) read with Section 11(2) under RTI Act, 2005 to the appellant i.e., IndusInd Bank Limited, concerning query at Point No. 2 of the RTI application, wherein Shri Gulati had sought the details of penalties imposed on IndusInd Bank Limited for last three years and supply copies thereof. After considering the Page 5 of 8 response from IndusInd Bank Limited, the CPIO decided to disclose the Speaking Order dated 12.12.2017 passed by the Reserve Bank of India, after severing the information under Section 10(1) which was considered exempted from disclosure under Section 8 of the RTI Act, 2005. IndusInd Bank Limited was informed of the said decision vide a notice dated December 21, 2018 issued under Section 11(3) of the RTI Act, 2005. They informed that after considering all the objections raised by the appellant bank, they expressed their desire to disclose the information sought on point no. 2 of the RTI application after severing the information under Section 10(1) which was considered exempted from disclosure under Section 8 of the RTI Act, 2005. As regards the objection raised by the appellant bank that the RTI Act was not applicable to the appellant bank, as it was a private bank, the same was not found to be tenable in as much as the information sought by the applicant fell within the scope of the provisions of section 2 (f) of the RTI Act, in particular the clause "information relating to any private body which can be accessed by a public authority under any other law for the time being in force". Accordingly, it was decided by the respondent to disclose the speaking order dated 12.12.2017 passed in the matter of IndusInd bank after severing the exempted information in terms of section 10 of the RTI Act. Moreover, they also informed that information falling within the provisions of section 8 (1) (d) & (j) of the RTI Act had already been redacted and not decided to be disclosed.

5.3 Furthermore, the respondent contended that in the Hon'ble Supreme Court Miscellaneous Application No (s) 2342 of 2019 in TC (C) No. 91/2015 (Reserve Bank of India Vs. Jayantilal N. Mistry &Anr.) which was substantial in determination of the issues raised in this matter was last heard by the Apex Court on 09.04.2021 and that the judgment was reserved. Subsequently, aforesaid Miscellaneous Application was dismissed by the Supreme Court.

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6. The Commission after adverting to the facts and circumstances of the case, hearing both the parties and perusal of records observed that the only issue whereupon the appellant had objections was point no.2 i.e. the penalty imposed upon the IndusInd Bank for the last 3 years. Perusal of the pleadings made on behalf of the respondent no.1 (Reserve Bank of India) reveals that the 1st Appellate Authority after considering the response from the Appellant (IndusInd Bank) decided to disclose the information i.e.the speaking order dated 12.12.2017 passed by the RBI against the IndusInd Bank, and provided a copy of the order dated 12.12.2017 after redacting the exempted information by invoking provisions contained under Section 8(1) of the RTI Act. The Commission finds no infirmity in the decision dated 21.12.2018 given by the CPIO and order dated 04.02.2019 passed by 1st Appellant Authority and accordingly the appeal is dismissed.

Copy of the decision be provided free of cost to the parties.

Sd/-

(Suresh Chandra) (सुरेशचं ा) Information Commissioner (सूचनाआयु ) दनांक/Date: 10.12.2021 Authenticated true copy R. Sitarama Murthy (आर. सीताराममूत ) Dy. Registrar (उपपंजीयक) 011-26181927(०११-२६१८१९२७) Page 7 of 8 ADDRESSES OF THE PARTIES:

CPIO :

1. RESERVE BANK OF INDIA ENFORCEMENT DEPARTMENT, CENTRAL OFFICE, MEZZANINE FLOOR, MAIN BUILDING, FORT, MUMBAI - 400001

2. Sh. L.N. GULATI BW - 82B, SHALIMAR BAGH, DELHI - 110 088 THE F.A.A, RESERVE BANK OF INDIA, ENFORCEMENT DEPARTMENT, CENTRAL OFFICE, MEZZANINE FLOOR, MAIN BUILDING, FORT, MUMBAI - 400 001 SH. ASHISH MAHAJAN INDUSLND BANK LIMITED.

REGISTERED OFFICE: INDUSIND BANK LIMITED, 2401 GEN. THIMMAYYA ROAD (CANTONMENT), PUNE - 411 001, LNDIA Page 8 of 8

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