Central Information Commission
Shristi Padia vs Reserve Bank Of India on 20 June, 2022
Author: Neeraj Kumar Gupta
Bench: Neeraj Kumar Gupta
के ीयसूचनाआयोग
Central Information Commission
बाबागंगनाथमाग ,मुिनरका
Baba Gangnath Marg, Munirka
नई द ली, New Delhi - 110067
ि तीयअपीलसं या/Second Appeal Nos. CIC/RBIND/A/2021/623347
CIC/RBIND/A/2021/128799
Ms. Shristi Padia ... अपीलकता /Appellant
(CRIF High Mark Credit Information
Services Pvt. Ltd.)
VERSUS
बनाम
CPIO ... ितवादी/Respondent
RBI, Department of Non-Banking
Supervision Central Office, 2nd Floor,
Centre-1 World Trade Centre, Cuffe
Parade, Colaba, Mumbai-400005
Relevant dates emerging from the appeal:-
SA : 31-05-2021
RTI : 09-06-2020 FA : 29-10-2020
Hearing: 05-07-2021,
CPIO : 01-10-2020 FAO : 30-12-2020 24-05-2021, 30-09-
2021 &13-06-2022
ORDER
CIC/RBIND/A/2021/623347
1. The above mentioned matter had been listed before the Commission for hearing on 05-07-2021 and 24-05-2021, wherein the Commission made following observations:-
"The Commission directs the appellant o file their written submissions before the Commission within 2 days from the date of receipt of this order. The Commission further directs the original applicant to file written submissions. That a copy of the said written submissions filed by the parties should be shared with all the other parties to the case. In view Page 1 of 10 of the above, the Commission adjourns the present matter and hearing of the case be fixed after 1 week."
CIC/RBIND/A/2021/128799
2. The above mentioned matter had been listed before the Commission for hearing on 30-09-2021, wherein the Commission made following observations:-
"The Commission after adverting to the facts and circumstances of the case, and perusal of records, observes that the appellant bank has prayed for interim order restraining the CPIO from releasing the information in terms of prayer i.e., the appellant would suffer irreparable loss if the information is disclosed. In terms of the prayer, the second appeal is admitted and keeping in view of the urgency, the operation of the CPIO's reply dated 01.10.2020 and FAA's order dated 29.10.2020 is stayed till further orders. The matter may be posted for hearing as soon as possible."
3. In view of the above, the aforesaid matters were thus adjourned and listed today for further hearing.Since, the cause of action has arisen from the same RTI application and orders of CPIO and FAA, therefore both the above matters are clubbed together in the interest of justice.
Hearing:
4. Adv. Gaurav Jangle (Counsel for the Appellant) attended the hearing through video-conferencing. The respondent, Shri Vinod Kumar, Representative of CPIO/Deputy General Manager attended the hearing through video- conferencing. Shri Basant Soni (Original Applicant) attended the hearing through video-conferencing
5. The written submissions of the parties are taken on record.
6. The Counsel for the appellant has referred the reply provided by CPIO and order passed by the FAA and submitted that the CPIO, RBI and FAA had violated the principles of natural justice, as they had not given any personal hearing to the Appellant before passing their decisions in the matter. No reasons were given for not offering personal hearing neither in CPIO's reply nor in FAO. The appellant has filed the captioned Second Appeals challenging the Order issued by the Ld. FAA, RBI as the Ld. FAA has failed to observed that the applicant has sought disclosure of the said Inspection Reports which are exempted under section 8 of the RTI Act, 2005, more particularly section 8 (1) Page 2 of 10
(a), section 8 (1) (d) and section 8 (1) (j) inter alia since the contents of the said Inspection Reports sought to be disclosed contains extremely sensitive/ confidential information in relation to the business of the appellant including trade secrets, its customers as well as details of the Appellant's commercial transactions and details regards to Appellant's regulatory compliances, which bear no relation with public activity and/ or larger public interest, and disclosure of the same would cause prejudice to the Appellant and its competitive position in the market and will also affect customer's confidence in the Appellant. The disclosure of information sought will be violative of Article 14 and Article 19 (1) (g) of the Constitution. The RTI Act was enacted to increase the transparency and accountability in functioning of the public authorities. The RTI Act does not apply to private entities such as the Appellant, as the Appellant is not covered within the definition of "public authorities" as defined under section 2 (h) of the RTI Act. It is further submitted that Section 14 of the Credit Information Companies (Regulation) Act, 2005 has specified the functions of a Credit Information Company and accordingly the Appellant collects, processes and disseminates the credit information to the banks and financial institutions which are regulated by RBI for the purposes of mitigation of risks of the said banks and financial institutions. The RBI in pursuance to Section 12 of the Credit Information Companies (Regulation) Act, 2005 conducts a detail inspection of the Credit Information Companies accordingly prepares an inspection report which contains the certain observations and/ or recommendations by the RBI which are vital and relevant for the business of the Appellant.
7. The Appellant has further submitted that the Ld. First Appellate Authority ought to have considered that the Credit Information Companies (Regulation) Act, 2005 was brought into force after the RTI Act, 2005 i.e., with effect from 14th December, 2006. It is significant to note that Section 28 of the Banking Regulations Act, 1949 came to be amended by the Credit Information Companies (Regulation) Act, 2005. Therefore, it is a clear indication that the RTI Act, 2005 cannot override the provisions mentioned in the Credit Information Companies (Regulations) Act, 2005. Further, the said RTI Act cannot override and infringe the right to confidentiality and non disclosures of the person/entity seeking credit information from the Appellant, especially when there is a specific Agreement to protect the confidentiality and non- disclosure of that person/entity.
Page 3 of 108. The representative of the Reserve Bank of India while presenting their case inter alia submitted that the applicant, Shri Basant Soni, vide above RTI applications inter alia, sought, copy of Audit/ Inspection Reports from year 2007-2019 etc. They further submitted that the then CPIO issued the notice under Section 11(1) read with Section 11(2) of the Right to Information Act, 2005 (RTI Act) to the third party i.e. appellant informing that RBI was required to disclose the information sought by Shri Basant Soni, enabling appellant to make written submission within 10 days from the date of receipt of the notice as to whether the information sought by the applicant might be disclosed or not along with reasons for the same. After considering the response from Appellant, the CPIO decided to disclose the details of Audit/ Inspection Reports from year 2007-2019etc. to the applicant. He further submitted that the Hon'ble Supreme Court in RBI vs. Jayantilal N. Mistry & Ors (2016) 3 SCC 525 observed that :-
"RBI is clearly not in any fiduciary relationship with any bank. RBI ought to act with transparency and not hide information that might embarrass individual banks. It is duty bound to comply with the provisions of the RTI Act and disclose the information sought by the applicant."
The FAA duly considered the contentions of the appellant. FAA observed that the interim order of the Supreme Court as quoted by the appellant was against disclosure of inspection reports/ risk assessment reports etc. of banks including State Bank of India and not of a credit information company like the appellant. As such, it would not be possible for the appellant to take benefit of that order. As regards, appellant's contention that it is not a public authority as defined in the Act, FAA observed that RBI which holds information is a public authority. RBI collects information from banks and other entities regulated by it, including the appellant in exercise of its power under the relevant statute. Further due to Covid-19 pandemic, their office was working with limited resources which caused delay in providing reply/ issuing notice under section 11 of RTI Act.
9. The original applicant submitted that the respondent Reserve Bank of India was duty bound to disclose the information sought by the applicant in his above RTI applications as per Jayantilal Mistry case and in compliance of this order should suo moto upload these reports under section 4 (1) of RTI Act. He stated that the Reserve Bank of India was creator of reports and it acted as a guardian of public interest. Therefore, as per the judgment of Hon'ble Supreme Court of India dated 16.12.2015 and as per order dated 28.04.2021 complete information should be disclosed to the RTI applicant. He stated that there was Page 4 of 10 no ambiguity in Jayantilal Mistry's case and there was a larger public interest in disclosing the information. He has further referred para no. 96 of one judgment passed by the Hon'ble Supreme Court of India in "Namit Sharma vs. Union of India" wherein it was held that:-
"This takes us to discuss the kind of duties and responsibilities that such high post is expected to perform. Their functions are adjudicatory in nature. They are required to give notice to the parties, offer them the opportunity of hearing and pass reasoned orders. The orders of the appellate authority and the Commission have to be supported by adequate reasoning as they grant relief to one party, despite opposition by the other or reject the request for information made in exercise of a statutory right."
Therefore, they have followed the mandate of Hon'ble Supreme Court's judgment while passing the orders. Further he has contested the delay caused by the CPIO while issuing notice under section 11 of RTI Act as well as by the FAA while deciding the first appeal. He alleged that the notice under section 11 of RTI Act could have been sent through an email also; therefore the CPIO has wilfully caused delay in completing the proceeding. He also submitted that after the order passed in Jayantilal Mistry's case, there was no requirement of issuing notice under section 11 of the RTI Act. Therefore the CPIO has erroneously sent notice under section 11 of the RTI Act. He also alleged that the respondent is in connivance with the third party, therefore an unreasonable delay has been caused.
Decision:
10. The Commission, after hearing the submissions of both the parties and after perusal of records, observes that the original RTI applicant has sought information regarding copy of Audit/ Inspection Reports from the year 2007 to 2019. Further, he has asked to publish these reports on the website of the RBI in terms of judgment of the Hon'ble Supreme Court in the case of RBI vs. Jayantilal Mistry (2016) (3) SCC (525) and Girish Mittal vs. Parvati vs. Sundaram (2019 SCC Online SC 607).The CPIO, Reserve Bank of India had issued notices under Section 11(1) and 11(3) to the appellant intending to disclose the information. Aggrieved by the decision of the CPIO, the appellant had filed first appeal with the First Appellate Authority. The FAA had also dismissed the first appeal of the appellant summarily. The Commission Page 5 of 10 observes that the RTI applicant had insisted for disclosure of information as per Jayantilal N. Mistry's case and as per section 4 (1) of RTI Act. The Appellant contested that the information sought as a whole is exempted from disclosure under Section 8 (1) (a), Section 8(1) (d) and 8(1) (j) of the RTI Act. Despite the Appellant's specific requests, no opportunity of personal hearing was provided in the matter. The Ld. FAA has erred in concluding that it was not necessary to provide personal hearing in the matter. This is a clear violation of principles of natural justice.
11. The contention of the original applicant is that although the CPIO and FAA has passed a reasoned order and the mandate of Supreme Court's judgment duly considered while passing the order in the above RTI Applications, but on every stage whether issuing notice under section 11 of the RTI Act or taking decision on response filed to the notice under section 11 of the RTI Act, the CPIO did not adhere with the prescribed time limits as per the provisions of the RTI Act. Even FAA took unreasonably long time in deciding the first appeal and suo moto instead of disclosing information gave extra time to file second appeal and made a suggestion to take stay order on disclosing the requested information from the appropriate forum. He has further alleged that considerable delay has been caused by the CPIO as he could sent the notice under section 11 of RTI Act through an email also, therefore he wilfully caused delay in completing the proceedings. He objected to notice under section 11(1) of RTI Act sent by the CPIO as bad in view of law laid down by the Hon'ble Supreme Court in Jayantilal's case and other referred judgments. In response, the RBI submitted that due to Covid-19 pandemic, they were working with limited resources during that time; still they have expeditiously decided the above RTI Applications. They had to provide reasonable time to the appellant to file second appeal as per the principles of Natural Justice. Therefore, they have provided reasoned and fair order while dealing with the above RTI Applications in view of Jayantilal Mistry's case along with other judicial pronouncement of Supreme Court.
12. The Commission observes that it is already a settled position in Jayantilal Mistry's case that RBI is not fiduciary in relationship with the banks and financial institution irrespective of these being public or private entities. These Credit Rating Financial Institutions take transactional, financial & operational data of clients to analyze their functioning and rate them within the broad framework. Hence, inspection/ audit reports of these institutions will reflect on such data of clients viz. credit & repayment history, names and information of their operational and financial transactions etc, entrusted by the clients to their Page 6 of 10 respective Credit Rating Financial Institutions which may get interspersed in these reports and have to be examined in the light of para no. 77 of the same judgment and various other judicial pronouncements protecting right to privacy and protection of commercial interests. Therefore, the CPIO, Reserve Bank of India has rightly invited objections but not expressed his reasoned view that to what extent he is agreeing or disagreeing by the objections of the Appellant while sharing the proposed redacted report for disclosure in some cases. The Commission is of the view that these reports are not a simple set of information as inspection and audit report consists of data about client including their credit, financial & operational transactions etc, its analysis, judgment and observations on the data provided by the clients as well as of institutions on their functioning, regulatory compliance, deficiencies and strengths, suggestions for course of correction, penal action as per provisions of the law etc., and may be much more which the Commission may not be in a position appreciate in toto at this stage.
13. The Commission further noted the Hon'ble Supreme Court of India in Reserve Bank of India V/s Jayantilal N. Mistry case clarifies that the functional relationship between a regulator and a regulated entity is not fiduciary. On the other hand the relationship is based on a statutory obligation to ensure operational discipline and support remedial framework. Hence its observations, guidance, directions or remedial actions are an outcome of own functioning based on the analysis of the data shared by the regulated entity.
14. There are apparently two set of such information which has been shared by the Credit Rating Institutions with the regulator under statutory obligation. First is the information/data of clients relating to their business/commercial operations, financial transactions, business and commercial strategy which is shared by clients with financial institutions in full trust and confidence and is held by them in fiduciary capacity, protected from disclosure under the RTI Act in their hands. Second set is the information relating to business strategy, decisions, transactions, other operational data etc. of financial institution which may have bearing on their competitive position and also enjoys the exemption from disclosure in their hands, even if it is a public authority or otherwise, under the RTI Act. The Commission is of the view that the exemption of disclosure of certain information under Section 8(1) of the RTI Act, 2005 in the hands of financial institutions does not evaporate once such data/information is shared, in good faith and trust, with the regulator under statutory obligations. This aspect is not the ratio of Hon'ble Supreme Court in Jayantilal Mistry's judgment and decision of the regulator to consider redacting such data/information while disclosing the reports is to be aligned with this and other judicial pronouncements of Supreme Court and High Courts covering such aspects.
Page 7 of 1015. The Commission further observes that by passing such orders simplicitors shows non-application of mind but also ensure that their orders are may not be questioned further with specific facts and points of law. Rejection or acceptance of the specific objections raised by the appellant was not spelt out in the order which have been passed without giving an opportunity of hearing to the appellant.The Commission further observes that the CPIO is at best free to take decisions on disclosure of information as per provision of RTI Act, 2005 giving a reasoned orders on the objections filed. The CPIO while issuing notice under Section 11 of the RTI Act has given the opportunity to the Appellant to file their objections, if any, against disclosure of information sought but has not found it necessary to give them an opportunity of hearing. While not doing so, the CPIO has not passed any reasoned order covering his deliberations on their objections, his understanding of law or jurisprudence in deciding specific objections, in favor of disclosure etc. Order passed by the CPIO is cryptic, without any reference to objections raised by the Appellant. Similarly, the FAA instead of passing a speaking order has also given a cryptic order to the Appellant. The CPIO and the FAA are expected to apply their mind before issuing the order of intent of disclosing the information. Further, no opportunity of personal hearing was given to the appellant nor speaking order have been passed by FAA for not giving opportunity of hearing or elaborating reasons for accepting /not accepting their objections in his decision in the appeal. The Commission is of the view that every objection should be dealt and rejected/accepted with a reason and reasons for not giving opportunity of personal hearing should be well reasoned too in view of wider implications.
16. The Commission observes that rightful claims of the RTI applicant has to be adjudicated in the light of specific objections filed by the Institution, various judicial pronouncements of Hon'ble Supreme Court and High Courts providing guidance on such matters. Opportunity of hearing should generally be provided and orders passed by the CPIO and the FAA otherwise if denied or not given be reasoned, speaking and clear. In the present case, order by CPIO should enumerate the principles for disclosure or non-disclosure of inspection reports or part thereof which may include personal information, commercially sensitive information of clients or institution and hence specifically excluded disclosures under various Acts, etc.
17. In light of the above observations and considering all the facts and circumstances of the above mentioned cases, the Commission is of the view that contour of the arguments are identical as held in the Full Bench judgment of this Page 8 of 10 Hon'ble Commission passed in file no. CIC/RBIND/A/2021/152460 & Ors. vide order dated 05.05.2022. It has been observed that there are minor variations in the matters in hand when compared with the matters already decided by the Commission as above.
18. It has already been stated supra that detailed view in file nos. CIC/RBIND/A/2021/152460 & Ors. dated 05.05.2022 wherein issues of redaction, ratio of Jayantilal Mistry case and other related issues are discussed in detail. Perusal of the relevant paragraphs in Jayantilal Mistry judgment make it clear that the fundamental rights enshrined upon the citizens in form of right to information are not absolute and that the right to information may not draw precedence over right to privacy. Therefore, the Courts need to strike a balance between the rights as well as protections guaranteed to a citizen under Article 19 of the Constitution. Hon'ble Supreme Court of India has held that the disclosure of information relating to banks may be allowed taking into account the circumstances and nature of information sought for and not in a blanket manner. The Commission advised the CPIO to consider taking the relevant references from the said order while deciding the above mentioned cases.
19. Further, the Commission has already outlined the deficiency in the conduct of the CPIO/FAA while hearing such matters and hence is of the opinion that due care has to be taken by according opportunity of personal hearing and making reasoned order with reference to the objections in the hands of the CPIO and later in the hands of FAA, if any appeal is preferred. Hence, the CPIO will be required to adjudicate such RTI applications in the light of the observations of the Commission afresh. The Commission also expects that the CPIO will take view on various objections filed by the Appellant and submissions made by applicant to reach the decision in favor or against on case to case basis. He has to factor the observation of Hon'ble Supreme Court in Jayantilal Mistry case, Commission's judgment dated 05.05.2022 and other relevant judgments. Hence, with these observations the order passed by the CPIO and FAA in these matters is set aside and the case is being remanded to the CPIO for adjudication afresh in line with the Commission full bench decision passed in file nos. CIC/RBIND/A/2021/152460 & Ors. dated 05.05.2022. In case, the appellant/applicant is aggrieved with the order of the CPIO, they are at the liberty to file first appeal before the First Appellate Authority and afterwards second appeal before the Commission.
20. With the above observations, both the appeals are disposed of.
Page 9 of 1021. Copy of the decision be provided free of cost to the parties.
नीरजकु मारगु ा)
Neeraj Kumar Gupta (नीरजकु ा
सूचनाआयु )
Information Commissioner (सू
दनांक / Date : 13-06-2022
Authenticated true copy
(अिभ मािणतस यािपत ित)
S. C. Sharma (एस. सी. शमा ),
Dy. Registrar (उप-पंजीयक),
(011-26105682)
Addresses of the parties:
1. CPIO
RBI, Department of Supervision
Centre-1, World Trade Centre,
Cuffe Parade, Colaba, Mumbai-400005
2. Ms. Shristi Padia (Appellant)
3. Mr. Basant Kumar Soni (Original Applicant)
Page 10 of 10