Central Information Commission
Mrm Padmanabha Reddy vs Vijaya Bank on 25 January, 2016
Central Information Commission, New Delhi
File No. CIC/SH/A/2015/000981
Right to Information Act2005Under Section (19)
Date of hearing : 7th January 2016
Date of decision : 25th January 2016
Name of the Appellant : Shri M. Padamanabha Reddy,
Secretary, Forum for Good Governance,
H. No. 6169, Flat 204, G.K.R. Mansion,
Lakdikapool, Saifabad, Hyderabad,
A.P. 500004
Name of the Public Authority : Central Public Information Officer,
Vijaya Bank
Head Office, 41/2, M.G. Road,
Bangalore 560001
RTI Application filed on : 03/11/2014
CPIO replied on : 12/01/2015
First Appeal filed on : 08/12/2014
First Appellate Authority order on : __
2nd Appeal received on : 12/03/2015
The Appellant was represented by Shri M. Venkat Rao, who was present at the
NIC studio, Rangareddy.
On behalf of the Respondents, Shri Vishwajit, Chief Manager, was present at the
NIC studio, Bangalore.
Information Commissioner : Shri Sharat Sabharwal This matter pertains to an RTI application dated 3.11.2014, filed by the Appellant, seeking information on two points regarding loan defaulters. The information sought at point No.1 was regarding the number of defaulters as on 1.4.2014, amount involved and remarks. At point No.2, the Appellant sought information regarding the names and address of defaulters (with more than Rs. 5.00 crores as the amount due for repayment), the amount due, date of obtaining loan and remarks (any court cases etc.). Not having received a response from the CPIO, the Appellant filed an appeal to the First Appellate Authority on 8.12.2014. The CPIO responded on 12.1.2015. In response to point No.1, he stated that the number of defaulters was 1, 31, 450 and the amount involved was Rs. 3531.81 crores. Regarding the information at point No.2, the CPIO stated that the public authority had a fiduciary relationship with its account holders and borrowers and there was no public interest warranting disclosure of the information sought by the Appellant. Therefore, he denied the information in response to point No. 2. The Appellant approached the CIC in second appeal dated 26.2.2015 (received by the Commission on 12.3.2015), in which he stated that the Respondent bank being a nationalised bank, the money deposited in it is people's money. Therefore, if some unscrupulous persons obtain huge loans and do not repay, the ultimate loser are the people and information concerning such loan accounts should be disclosed. The Appellant questioned the decision of the CPIO to deny the information under Section 8 (1) (e). He also quoted the proviso to Section 8 (1) (j) of the RTI Act and stated that information which cannot be denied to Parliament shall not be denied to any person. He prayed for disclosure of the information sought by him at point No.2 in larger public interest.
2. During the hearing, the representative of the Appellant reiterated his request for disclosure of the information in larger public interest. In support of his request, he cited the Supreme Court judgment dated 16.12.2015 in Reserve Bank of India Vs. Jayantilal N. Mistry [Transferred case (Civil) No.91 of 2015].
3. The Respondents reiterated decision of the CPIO to deny the information in response to point No.2 of the RTI application, citing their fiduciary relationship with their borrowers. They further submitted that the above mentioned judgment of the Supreme Court dealt with the aspect of the relationship between the RBI and banks in respect of the information submitted by banks to the RBI in view of its regulatory functions and concluded that there is no fiduciary relationship between the RBI and the banks. However, the Supreme Court did not rule that there is no fiduciary relationship between the banks and their borrowers/account holders. In this context, they referred, in particular, to paragraph 58 of the above judgement of the Supreme Court. They further submitted that they make public the list of their borrowers, who are declared wilful defaulters or against whom DRT suits are filed or action is taken under the SARFAESI Act. The Respondents also stated that there may be cases where nonrepayment of a loan is because of certain factors beyond the control of the borrower. Therefore, disclosure of the information concerning defaulters could result in making public even those cases, where the bank is yet to reach the conclusion that the defaulter is a wilful defaulter or a suit is filed in DRT or action is taken under the SARFAESI Act.
4. We have considered the records and the submissions made by both the parties. We would first deal with the reference to the proviso to Section 8 (1) (j) of the RTI Act, made by the Appellant. The High Court of Delhi has ruled that a proviso cannot be torn apart from the main enactment, nor can it be used to qualify or set at naught the object of the main enactment. The court has further ruled that the proviso in this case is a guiding factor and not a substantive provision which overrides subsection 8 (1) (j) of the RTI Act. It does not undo or rewrite section 8 (1) (j) of the Act and does not itself create any new right. The purpose is only to clarify that while deciding the question of larger public interest, `public interest in the form of right to privacy' and `public interest in access to information' is to be balanced. In the light of the foregoing, the request of the Appellant for disclosure of the information sought at point No.2 of the RTI application has to be judged, interalia, on the yardstick of larger public interest.
5. We agree with the Respondents that in its above mentioned judgement, the Supreme Court held that the RBI was not in a fiduciary relationship with the banks submitting information to it in the light of its regulatory function. In this context, the Supreme Court made the following observations: "58. In the instant case, the RBI does not place itself in a fiduciary relationship with the Financial institutions (though, in word it puts itself to be in that position) because, the reports of the inspections, statements of the banks, information related to the business obtained by the RBI are not under the pretext of confidence or trust. In this case neither the RBI nor the banks act in the interest of each other. By attaching an additional "fiduciary" label to the statutory duty, the Regulatory authorities have intentionally or unintentionally created an in terrorem effect." While holding the above, the Supreme Court has also upheld the decision No.CIC/SM/A/2011/001376/SG/15684 dated 15.11.2011 of the Commission in P.P. Kapoor Vs. Reserve Bank of India. The decision dealt with a matter in which the Appellant had, interalia, sought the following information from the Reserve Bank of India: "2(b) Details of default in loans taken from public sector banks by industrialists. Out of above list of defaulters, top 100 defaulters, name of the businessmen, address, firm name, principal amount, interest amount, date of default and date of availing loan." In the above decision, while acknowledging that no fiduciary relationship existed between the RBI and the banks, the Commission found some merit in the argument that the information of its customers is held by a bank in a fiduciary capacity and if this information is disclosed to the RBI and subsequently furnished to the citizens under the RTI Act, it may violate the fiduciary relationship between the customers and the banks. Therefore, such information was exempted from disclosure under Section 8 (1) (e) of the RTI Act. However, the Commission then proceeded to examine the question that if a customer defaults in repayment, should the information about the default be also considered as information held in a fiduciary capacity. In this context, the Commission referred to section 8 (2) of the RTI Act that mandates that even where disclosure of information is protected by the exemptions under Section 8 (1) of the RTI Act, if public interest in disclosure outweighs the harm to such protected interests, the information must be disclosed under the RTI Act. Further, the Commission made the following observations, which also find a mention in the Supreme Court judgment, referred to above: "I wish government and its instrumentalities would remember that all information held by them is owned by Citizens, who are sovereign. Further, it is often seen that banks and financial institutions continue to provide loans to industrialists despite their default in repayment of an earlier loan. The Supreme Court of India in U. P. Financial Corporation v. Gem Cap India Pvt. Ltd. AIR 1993 SC 1435 has noted that "Promoting industrialisation at the cost of public funds does not serve the public interest; it merely amounts to transferring public money to private account". Such practices have led citizens to believe that defaulters can get away and play fraud on public funds. There is no doubt that information regarding top industrialists who have defaulted in repayment of loans must be brought to the citizens' knowledge; there is certainly a larger public interest that would be served on disclosure of the same. In fact, information about industrialists who are loan defaulters of the country may put pressure on such persons to pay their dues. This would have the impact of alerting Citizens about those who are defaulting in payments and could also have some impact in shaming them. RBI had by its circular DBOD No.BC/CIS/47/20.16.002/94 dated April 23, 1994 directed all banks to send a report on their defaulters, which it would share with all banks and financial institutions, with the following objectives:
1. To alert banks and financial institutions (FIs) and to put them on guard against borrowers who have defaulted in their dues to lending institutions.
2. To make public the names of the borrowers who have defaulted and against whom suits have been filed by banks/FIs."
In the light of the foregoing, the Commission gave the following decision: "In view of the arguments given above, the Commission is of the considered view that the details of defaulters of public sector banks should be revealed since it would be in larger public interest. Revealing these would serve the object of reining in such defaulters, warning Citizens about those who they should stay away from in terms of investments and perhaps shaming such persons/entities. This could lead to safeguarding the economic and moral interests of the Nation. The Commission is convinced that the benefits accruing to the economic and moral fibre of the Country, far outweigh any damage to the fiduciary relationship of bankers and their customers if the details of the top defaulters are disclosed.
Hence, in view of Section 8(2) of the RTI Act, the Commission rules that information on query 2(b) must be provided to the Appellant, since there is a larger public interest in disclosure. The Commission also directs the Governor, RBI to display this information on its website, in fulfillment of its obligations under Section 4 (1) (b) (xvii) of the RTI Act. This direction is being given under the Commission's powers under Section 19 (8) (a) (iii)"
The Commission, therefore, directed disclosure of the above mentioned information regarding details of defaulters.
6. The above decision of the Commission, upheld by the Supreme Court, is germane to the case before us. The only other issue that needs to be examined is the submission of the Respondents that there may be cases where nonrepayment of a loan is because of certain factors beyond the control of the borrower and, therefore, disclosure of the information concerning defaulters could result in making public even those cases, where the bank is yet to reach the conclusion that the defaulter is a wilful defaulter or a suit is filed in DRT or action is taken under the SARFAESI Act. In this context, we take note of the RBI DBOD No. BC/CIS/47/20.16.002/94 dated 23.4.1994 regarding the scheme for disclosure of information concerning borrowers of banks and Financial institutions. The circular defines the objectives of the scheme as: i ) to alert banks and financial institutions and to put them on guard against borrowers who have defaulted in their dues to lending institutions.
ii) to making public the names of the borrowers who have defaulted and against whom suits have been filed by banks /financial institutions.
Speaking of collection of information, the circular mentions the following accounts in the context of defaulters: doubtful assets, loss assets and suitfiled accounts. The above circular, therefore, identifies the type of accounts about which information is to be collected in the category of defaulters and does not cover any and every loan account in which repayment may have become overdue. The Respondents could follow the same criteria/categories while providing the information sought by the Appellant regarding defaulters.
7. In the light of the foregoing, the CPIO is directed to provide to the Appellant the information sought by him at point No.2 of his RTI application, while taking into account the conclusion drawn by us in the preceding paragraph (No.6). The above information should be provided, free of charge, within thirty days of the receipt of this order, under intimation to the Commission.
8. With the directions in paragraph 7 and the above observations, the appeal is disposed of.
9. Copies of this order be given free of cost to the parties.
Sd/ (Sharat Sabharwal) Information Commissioner Authenticated true copy. Additional copies of orders shall be supplied against application and payment of the charges prescribed under the Act to the CPIO of this Commission.
(Vijay Bhalla) Deputy Registrar