Central Information Commission
Smt.Ashwini Dixit vs Reserve Bank Of India on 12 March, 2012
CENTRAL INFORMATION COMMISSION
Club Building (Near Post Office)
Old JNU Campus, New Delhi - 110067
Tel: +91-11-26161796
Decision No. CIC/SG/A/2011/003293/17640
Appeal No. CIC/SG/A/2011/003293
Relevant Facts emerging from the Appeal:
Appellant : Mr. Ashwini Dixit,
C/o Mr. M.L. Goud, Advocate,
C.No. 36, Collectorate Compound,
Kanpur City, Uttar Pradesh
Respondent : Mr. A. Udgata,
CPIO & CGM (UBD),
Reserve Bank of India (RBI),
Central Office, 1st Floor, Garment House,
Worli, Mumbai-400018
RTI application filed on : 25/07/2011
PIO replied on : 23/08/2011
First Appeal filed on : 06/09/2011
First Appellate Authority order of : Not enclosed
Second Appeal received on : 18/11/2011
Information sought:
1. Action taken by RBI against scams/economic inconsistencies of United Mercantile Cooperative Bank Ltd. (the "Bank") along with the daily progress reports.
2. Number of extension counters which can be opened by the Bank-as authorized by RBI along with details of expenditure incurred in opening the same. Did the Bank adopt any tender procedure in relation to such counters and if yes, provide description of such tenders.
Reply of Public Information Officer (PIO):
1. Yes, inspection of the Bank in relation to scams/economic inconsistencies was done.
Based on the inconsistencies mentioned in the inspection report, clarification was sought from the Bank vide letter dated 08/07/2011. Further, information sought was based on the observations/conclusions of the inspection report, which is confidential in nature. The report is finalized based on the information received from the Bank, which was given to RBI in confidence. Moreover, disclosure of the inspection report would adversely affect the banking system of the country. The information sought was exempt under Sections 8(1)(a) and (e) of the RTI Act.
2. The Bank was given permission to open five counters. Information regarding the expenditure incurred and whether any tender procedure was adopted is not available with RBI.
Grounds for First Appeal:
Page 1 of 14Incomplete and unsatisfactory information provided by PIO.
Order of the First Appellate Authority (FAA):
Not enclosed.
Grounds for Second Appeal:
Incomplete and unsatisfactory information provided by PIO.
Relevant Facts emerging during Hearing held on 27 January 2012: The following were present:
Appellant: Mr. Ashwini Dixit via video-conference from NIC Studio-Kanpur; Respondent: Mr. B. S. Bohra, Assistant Legal Officer on behalf Mr. A. Udgata, CPIO & CGM (UBD) via video-conference from NIC Studio-Mumbai.
Both parties were heard. They made detailed submissions before the Commission in support of their contentions. Both parties were directed to send their written submissions to the Commission by email at [email protected] before 30/01/2012.
The decision was reserved at the hearing held on 27/01/2012.
Decision announced on 12 March 2012:
Submissions from both parties were received and perused by the Commission. It was observed that information as per record has already been provided in relation to query 2. The issue before this Bench is whether the information sought in query 1 is exempt from disclosure under Sections 8(1)(a) and (e) of the RTI Act.
At the outset the Respondent has submitted that the information sought is based on the scrutiny conducted by RBI in exercise of its powers under Section 35(1A) of the Banking Regulation Act, 1949 (the "B.R. Act"). Disclosure of inspection reports and the information submitted to RBI or collected by RBI in terms of Section 27 of the B.R. Act would be detrimental to the interest of depositors, public and banking policies.
Section 22 of the RTI Act expressly provides that the provisions of the RTI Act shall have effect notwithstanding anything inconsistent therewith contained in the Official Secrets Act, 1923, and any other law for the time being in force or in any instrument having effect by virtue of any law other than the RTI Act. Section 22 of the RTI Act, in no uncertain terms, lays down that the RTI Act shall override anything inconsistent contained in any other law. The High Court of Delhi in Union of India v. Central Information Commission & Anr. 2009 (165) DLT 559 has held that-
"Section 22 of the RTI Act gives supremacy to the said Act and stipulates that the provisions of the RTI Act will override, notwithstanding anything to the contrary contained in the Official Secrets Act or any other enactment for the time being in force. This non-obstante clause has to be given full effect to, in compliance with the legislative intent. Wherever there is a conflict between the provisions of the RTI Act and another enactment already in force on the date when the RTI Act was enacted, the provisions of the RTI Act will prevail..."
From the above submissions as well as on a bare perusal of the provisions of the B.R. Act cited by the Respondent, there appear to be restrictions on access to information held by or under the Page 2 of 14 control of RBI. This is prima facie inconsistent with the RTI Act, which mandates disclosure of information unless exempted under Sections 8 and 9 of the RTI Act. Therefore, in accordance with Section 22 of the RTI Act, the Commission holds that the provisions of the RTI Act shall override the provisions of the B.R. Act as regards furnishing information. Consequently, whether or not information should be furnished has to be examined in light of Sections 8 and 9 of the RTI Act only.
Before examining the applicability of the exemption provisions in the instant matter, it must be mentioned that the Respondent-public authority has sought a stay on the orders of this Bench in several matters-which has been granted by the Hon'ble High Courts. It appears that an ex-parte interim stay has been obtained in seven such matters. The Respondent has, in his submissions, stated that all these seven matters pertain to the issue of whether inspection reports are protected from disclosure under Section 8 of the RTI Act, which has not been conclusively determined and is pending before the Courts. Given the above, the Respondent has referred to the observations of the Supreme Court of India in B. Banerjee v. Anita Pan and Kamal Lal Ghosal & Ors. v. Ena Dutta AIR 1975 SC 1146 and submitted that multiplicity of litigation must be avoided to the extent possible as a matter of public policy.
The Commission has perused the stay orders. It is relevant to mention that all the matters cited by the Respondent do not pertain to the specific issue of protection of inspection reports under Section 8 of the RTI Act. None of the stay orders enumerates the reasons/grounds on the basis of which the Commission's orders were stayed. Since no reasons have been advanced for the grant of stay, it is not possible for the Commission to ascertain the same. Moreover, the Respondent has also not produced any evidence to show that the High Courts have granted a stay on the specific issue of disclosure of inspection reports under the RTI Act. The Commission is a statutory authority set up specifically for the purpose of adjudicating on matters relating to the RTI Act. Given the above, the Commission must continue to discharge the duty placed upon it and authoritatively resolve issues arising under the RTI Act.
Further, the Respondent has also stated that when compared to Section 27 of the B.R. Act, though there could be a difference in the language of the corresponding statute of different countries, the approach adopted seems to be uniform (as that adopted by RBI) inasmuch as disclosure of inspection report is concerned. The Respondent has cited the position prevalent in the United States-which has been perused by the Commission. This is mentioned in the Freedom of Information Act Guide, May 2004 by US Department of Justice which contains analysis of various court judgments. Exemption 8 of the Freedom of Information Act protects matters that are "contained in or related to examination, operating, or condition reports prepared by, on behalf of, or for the use of an agency responsible for the regulation or supervision of financial institutions". As per the Guide, the US courts have discerned two major purposes underlying Exemption 8, which are 1) "to protect the security of financial institutions by withholding from the public reports that contain frank evaluations of a bank's stability" and 2) "to promote cooperation and communication between employees and examiners". Based on the same, the courts have given an expansive interpretation to Exemption 8 to include bank examination reports and related documents prepared by state regulatory agencies.
It is relevant to mention that the RTI Act does not contain any provision which is similar to Exemption 8 of the Freedom of Information Act. The Indian Parliament consciously decided not to incorporate any provision that would exempt any information "contained in or related to examination, operating, or condition reports prepared by, on behalf of, or for the use of an Page 3 of 14 agency responsible for the regulation or supervision of financial institutions". While drafting the RTI Act, the Parliament was aware of the exemption provisions incorporated by different countries in their respective laws/regulations, but it was a conscious choice of the Indian Parliament to give a progressive interpretation to the Citizen's Right to Information. It must also be pointed out that the Parliament was influenced by various judgments of the Supreme Court of India extolling and championing the cause of the Citizen's fundamental Right to Information. It therefore framed the RTI Act to represent the aspirations of the Citizens of India for a participatory democracy which recognized the supremacy and sovereignty of the individual citizen. Events of the last few years have shown the US Government subsidizing financial institutions in billions of dollars at the cost of the US Nation. It may be argued that India's Parliament was more sagacious in this respect, by not barring public scrutiny of the reports of financial institutions.
Having mentioned the above, this Bench will now examine whether the information sought in query 1 is exempt from disclosure under Sections 8(1)(a) and (e) of the RTI Act:
The Respondent has argued that the information sought is exempt from disclosure under Section 8(1)(a) of the RTI Act. It has been submitted that any misreading or out of context appreciation of the observations made in the inspection reports may be hazardous and lead to cascading effect on all other entities which may have exposure to such bank or share business relations with such bank. The consequences may be irreversible and may result in dilution of confidence of the banking system. The adverse market reactions to such sensitive information may be phenomenal and may be of systemic risk to the economy, banks being the backbone of the economy. In this context, reliance has been placed on Paragraph 16 of the decision of a Full Bench of the Commission in R. R. Patel v. RBI CIC/MA/A/2006/00406 and 00150 dated 07/12/2006.
At the outset it must be mentioned that in R. R. Patel's Case, the Full Bench was considering the specific issue of disclosure of RBI's inspection report of a cooperative bank. One of the issues before the Bench was whether the inspection report was exempt from disclosure under Section 8(1)(a) of the RTI Act. The Full Bench relied on a decision of the Punjab & Haryana High Court in RBI v. Central Government Industrial Tribunal (dated 07/05/1958) which had observed that-
"In an integrated economy like ours, the job of a regulating authority is quite complex and such an authority has to decide as to what would be the best course of action in the economic interest of the State. It is necessary that such an authority is allowed functional autonomy in decision making and as regards the process adopted for the purpose". Based on the above, the Full Bench, in Paragraph 16, ruled inter alia that "In view of this, and in light of the earlier discussion, we have no hesitation in holding that the RBI is entitled to claim exemption from disclosure u/s 8(1)(a) of the Act if it is satisfied that the disclosure of such report would adversely affect the economic interests of the State. The RBI is an expert body appointed to oversee this matter and we may therefore rely on its assessment. The issue is decided accordingly".
From a plain reading of the above, it appears that the Full Bench was of the view that if RBI concluded that disclosure of inspection reports would adversely affect the economic interests of the State, the said information may be denied under Section 8(1)(a) of the RTI Act. There is no observation that the Full Bench had come to this conclusion by itself. Further, the observations of the Punjab & Haryana High Court in RBI v. Central Government Industrial Tribunal (dated 07/05/1958) relied on by the Full Bench were made much before the advent of the RTI Act and cannot therefore, be a guide for deciding on the applicability of exemptions under the RTI Act.
Page 4 of 14Furthermore, the RBI in R. R. Patel's Case claimed that if inspection reports of banks were to be disclosed it would affect the economic interests of the State. The Full Bench decision appears to rely on the submissions of the Deputy Governor of RBI provided vide letter dated 21/09/2006 and were as follows:
"(i) Among the various responsibilities vested with RBI as the country's Central Bank, one of the major responsibilities relate to maintenance of financial stability. While disclosure of information generally would reinforce public trust in institutions, the disclosure of certain information can adversely affect the public interest and compromise financial sector stability.
(ii) The inspection carried out by RBI often brings out weaknesses in the financial institutions, systems and management of the inspected entities. Therefore, disclosure can erode public confidence not only in the inspected entity but in the banking sector as well.
This could trigger a ripple effect on the deposits of not only one bank to which the information pertains but others as well due to contagion effect.
(iii) While the RBI had been conceding request for information on actions taken by it on complaints made by members of the public against the functioning of the banks and financial institutions and that they do not have any objection in giving information in respect of such action taken or in giving the substantive information pertaining to such complaints provided such information is innocuous in nature and not likely to adversely impact the system.
(iv) However, disclosure of inspection reports as ordered by the Commission in their decision dated September 6, 2006 would not be in the economic interest of the country and such disclosures would have adverse impact on the financial stability.
(v) It would not be possible to apply section 10(1) of the Act in respect of the Act in respect of the inspection report as portion of such reports when read out of context result in conveying even more misleading messages."
Thus RBI argued that it did not wish to share the information sought as some of it could "adversely affect the public interest and compromise financial sector stability". RBI was unwilling to share information which might bring out the 'weaknesses in the financial institutions, systems and management of the inspected entities'. It was further contended that 'disclosure can erode public confidence not only in the inspected entity but in the banking sector as well. This could trigger a ripple effect on the deposits of not only one bank to which the information pertains but others as well due to contagion effect'. It appears that the RBI argued that citizens were not mature enough to understand the implications of weaknesses, and RBI was the best judge to decide what citizens should know. Citizens, who are considered mature enough to decide on who should govern them, who give legitimacy to the government, and framed the Constitution of India must be given selective information about weaknesses exposed in inspection, to ensure that they have faith in the banking sector. They must see the financial and banking sector only to the extent which RBI wishes.
It follows that if RBI made mistakes, or there was corruption, citizens should suffer. This appears to go against the basic tenets of democracy and transparency. Similar arguments have now been raised by the Respondent in the present matter as well. This Bench would like to remember Page 5 of 14 Justice Mathew's clarion call in State of Uttar Pradesh v. Raj Narain (1975) 4 SCC 428 - "In a government of responsibility like ours, where all the agents of the public must be responsible for their conduct, there can be but few secrets. The people of this country have a right to know every public act, everything that is done in a public way by their public functionaries. They are entitled to know the particulars of every public transaction in all its bearing. Their right to know, which is derived from the concept of freedom of speech, though not absolute, is a factor which should make one wary when secrecy is claimed for transactions which can at any rate have no repercussion on public security".
It is also worthwhile remembering the observations of the Supreme Court of India in S. P. Gupta v. President of India & Ors. AIR 1982 SC 149:
"It is axiomatic that every action of the government must be actuated by public interest but even so we find cases, though not many, where governmental action is taken not for public good but for personal gain or other extraneous considerations. Sometimes governmental action is influenced by political and other motivations and pressures...
At times, there are also instances of misuse or abuse of authority on the part of the executive. Now, if secrecy were to be observed in the functioning of government and the processes of government were to be kept hidden from public scrutiny, it would tend to promote and encourage oppression, corruption and misuse or abuse of authority, for it would all be shrouded in the veil of secrecy without any public accountability. But if there is an open government with means, of information available to the public there would be greater exposure of the functioning of government and it would help to assure the people a better and more efficient administration. There can be little doubt that exposure to public gaze and scrutiny is one of the surest means of achieving a clean and healthy administration. It has been truly said that an open government is clean government and a powerful safeguard against political and administrative aberration and inefficiency...
This is the new democratic culture of an open society towards which every liberal democracy is evolving and our country should be no exception. The concept of an open government is the direct emanation from the right to know which seems to be implicit in the right of free speech and expression guaranteed under Article 19(1)(a). Therefore, disclosure of information in regard to the functioning of Government must be the rule and secrecy an exception justified only where the strictest requirement of public interest so demands...
Even though the head of the department or even the Minister may file an affidavit claiming immunity from disclosure of certain unofficial documents in the public interest, it is well settled that the court has residual powers to nevertheless call for the documents and examine them. The court is not bound by the statement made by the minister or the head of the department in the affidavit. While the head of the department concerned was competent to make a judgment on whether the disclosure of unpublished official records would harm the nation or the public service, he/she is not competent to decide what was in the public interest as that it the job of the courts. The court retains the power to balance the injury to the State or the public service against the risk of injustice, before reaching its decision on whether to disclose the document publicly or not."Page 6 of 14
In the judgment quoted above, the Supreme Court has clearly stated that even if a head of department or Minister filed an affidavit claiming public interest in nondisclosure of certain information, the court would have to determine what was in Public interest. By the same logic, the Information Commission cannot abdicate its duty in this matter to the judgment of the department. The idea that citizens are not mature enough to understand and will panic and harm their own interests, is repugnant to democracy. The case for transparency is that when Citizens are watching and monitoring Institutions, they are forced to be on their toes, and will continuously improve. In 1982, the Supreme Court saw the new democratic culture of an open society towards which every liberal democracy was evolving. Twenty years later, this culture has grown stronger and become more vibrant across the globe. It is not out of place to state that India has perhaps been a shining example and inspiration for the people of Asia and Africa for democratic liberties and rights. The Constituent Assembly had agonizing debates on whether all Indians should have the right to vote and showed great vision in decreeing universal suffrage.
For over 60 years citizens have handled their democratic rights in a mature fashion, punished leaders who showed tendencies of trampling their rights, and again given them power once the leaders had learnt their lessons not to trifle with the liberties of the sovereign citizens of India. 'We the people' gave ourselves the Constitution of India, nurtured it and will take it forward. The fundamental rights of citizens, enshrined in the Constitution of India cannot be curbed on a mere apprehension of a public authority. The Supreme Court of India has recognized that the Right to Information is part of the fundamental right of citizens under Article 19 of the Constitution of India. Any constraint on the fundamental rights of citizens has to be put with great care even by Parliament. The exemptions under Section 8 and 9 of the RTI Act are the constraints put by Parliament and adjudicating bodies have to carefully consider whether the exemptions apply before denying any information under the RTI framework.
It is pertinent to mention that in R. R. Patel's Case, the Full Bench did not come to any specific conclusion that disclosure of inspection reports would prejudicially affect the economic interests of the State. Instead it left it to RBI to determine whether disclosure of the said information would attract Section 8(1)(a) of the RTI Act. This was primarily on the basis that RBI is an expert body and that any decision taken by it must necessarily be relied upon by the Commission and be the sole decisive factor. No legal reasoning whatsoever was given by the Full Bench for concluding the above. There is no evidence or indication that the Commission after taking cognizance of RBI's views had come to the same conclusion. If the position of the Full Bench is to be accepted, it would lead to a situation where RBI would have the final say in whether information should be provided to a citizen or not. Extending this logic, all public authorities could be the best judge of what information could be disclosed, since they are likely to be experts in matters connected with their working. In such an event the Commission would have no role to play, and be redundant. Parliament evidently expected that the Commission would independently decide whether the exemptions are applicable. This is the position of the Supreme Court in S.P. Gupta's Case as well. It may take the view of RBI into account, but the ultimate decision on whether any exemption would apply or not must be of the Commission.
The Full Bench in R.R. Patel's Case did not give any independent finding that the disclosure of information would affect the economic interests of the State in its decision. This would completely negate the fundamental right to information guaranteed to the citizens under the RTI Act. In the case being considered by the Full Bench, it decided to accept the judgment of RBI. It is open to a Commission to defer to a judgment of another body, in a particular case, but this cannot establish any principle of law, and would apply only to the specific matter.
Page 7 of 14It is apparent from the scheme of the RTI Act that the Commission is a quasi- judicial body which is responsible for deciding appeals and complaints arising under the RTI Act. The Commission cannot abdicate its responsibilities under the RTI Act to RBI on the ground that the latter is an expert body. The Commission cannot rely solely on the decision of the public authority and must look into the merits of the case itself. It must determine, on its own, whether the denial of information by the PIO was justified as per Sections 8 and 9 of the RTI Act. Since the Full Bench has not recorded any comment which shows that it consciously agreed that Section 8(1)(a) of the RTI Act was applicable in such matters, it does not establish any legal principle or interpretation which can be considered as a precedent or ratio. Thus the decision is applicable only to the particular matter before it, and does not become a binding precedent.
Furthermore, the Full Bench in R. R. Patel's Case was constituted to reconsider two decisions dated 06/09/2006 of Professor M. M. Ansari, then Information Commissioner. As described above, the issues to be reconsidered by the Full Bench included whether the claim of RBI for exemption under Section 8(1)(a) of the RTI Act in respect of inspection of reports could be held justified. Prof. Ansari had already decided these and ordered disclosure of information. The Full Bench relied on the Supreme Court's decision in Grindlays' Bank v. Central Government Industrial Tribunal AIR 1981 SC 606 and noted that when a review is sought due to a procedural defect, the inadvertent error committed by a tribunal must be corrected ex debito justitiae to prevent the abuse of its power and such power is inherent in every court or tribunal. On this basis, the Full Bench proceeded to review the decisions of Professor M. M. Ansari, then Information Commissioner.
The Supreme Court of India in Patel Narshi Thakershi & Ors. v. Sri Pradyumansinghji AIR 1970 SC 1273 has noted - "It is well settled that the power to review is not an inherent power. It must be conferred by law either specifically or by necessary implication". In Kuntesh Gupta v. Mgmt. of Hindu Kanya Mahavidyalaya, Sitapur & Ors. AIR 1987 SC 2186, the Supreme Court observed - "It is now well established that a quasi judicial authority cannot review its own order, unless the power of review is expressly conferred on it by the statute under which it derives its jurisdiction". It must be noted that a three- Judge Bench of the Supreme Court in Kapra Mazdoor Ekta Union v. Mgmt. of M/s Birla Cotton Appeal (Civil) No. 3475/2003 decided on 16/03/2005 held:
"...it is apparent that where a Court or quasi judicial authority having jurisdiction to adjudicate on merit proceeds to do so, its judgment or order can be reviewed on merit only if the Court or the quasi judicial authority is vested with power of review by express provision or by necessary implication. The procedural review belongs to a different category. In such a review, the Court or quasi judicial authority having jurisdiction to adjudicate proceeds to do so, but in doing so commits a procedural illegality which goes to the root of the matter and invalidates the proceeding itself, and consequently the order passed therein. Cases where a decision is rendered by the Court or quasi judicial authority without notice to the opposite party or under a mistaken impression that the notice had been served upon the opposite party, or where a matter is taken up for hearing and decision on a date other than the date fixed for its hearing, are some illustrative cases in which the power of procedural review may be invoked. In such a case the party seeking review or recall of the order does not have to substantiate the ground that the order passed suffers from an error apparent on the face of the record or any other ground which may justify a review. He has to establish that the procedure Page 8 of 14 followed by the Court or the quasi judicial authority suffered from such illegality that it vitiated the proceeding and invalidated the order made therein, inasmuch the opposite party concerned was not heard for no fault of his, or that the matter was heard and decided on a date other than the one fixed for hearing of the matter which he could not attend for no fault of his. In such cases, therefore, the matter has to be re-heard in accordance with law without going into the merit of the order passed. The order passed is liable to be recalled and reviewed not because it is found to be erroneous, but because it was passed in a proceeding which was itself vitiated by an error of procedure or mistake which went to the root of the matter and invalidated the entire proceeding. In Grindlays Bank Ltd. vs. Central Government Industrial Tribunal and others (supra), it was held that once it is established that the respondents were prevented from appearing at the hearing due to sufficient cause, it followed that the matter must be re-heard and decided again."
From a combined reading of the above decisions, it is clear that a quasi-judicial authority can review a decision on merits only if it is vested with power of review by express provision or by necessary implication. The powers of the Commission are limited under the RTI Act and there are no provisions conferring the right to review. It is clear from the Full Bench ruling in R. R. Patel's Case that it was reviewing the two decisions of Professor M. M. Ansari, then Information Commissioner on merits. The Full Bench certainly did not have the power to do so given the provisions of the RTI Act and the law laid down by the Supreme Court in this regard. In fact, the Supreme Court in the Kapra Mazdoor Ekta Union Case clearly considered and clarified the ruling in the Grindlays' Bank Case (relied upon by the Full Bench). It appears that the Full Bench reviewed the issues based on merits in R. R. Patel's Case in ignorance of the law laid down by the Supreme Court in Kapra Mazdoor Ekta Union Case. Therefore, for the reasons detailed above, the R. R. Patel Case is per incuriam and is consequently, not binding on this Bench, since Prof. M.M. Ansari's decision was overturned wrongly.
Having laid down the above, this Bench has examined the contention of the Respondent in the present matter that the information sought in query 1 is protected under Section 8(1)(a) of the RTI Act. While this Bench has considered RBI's judgment in the present matter, whether exemption under Section 8(1)(a) of the RTI Act will apply or not, must be decided by the Commission.
Section 8(1)(a) of the RTI Act exempts-"information, disclosure of which would prejudicially affect the sovereignty and integrity of India, the security, strategic, scientific or economic interests of the State, relation with foreign State or lead to incitement of an offence". The information sought pertains to action taken by RBI against scams/economic inconsistencies of the United Mercantile Cooperative Bank Ltd. (Bank) along with the daily progress reports. It is unlikely that disclosure of information sought in query 1 would prejudicially affect the sovereignty and integrity of India, the security, strategic or scientific interests of the State, or relation with foreign State, or lead to incitement of an offence. Hence it must be examined whether the economic interests of the State are likely to be prejudicially affected by disclosure of the information.
This Bench is unable to understand how disclosing information about the action taken by RBI against scams/economic inconsistencies of the United Mercantile Cooperative Bank Ltd. along with the daily progress reports would affect the economic interests of the Indian Nation. Financial stability of a nation cannot lie solely on public confidence in banks/financial Page 9 of 14 institutions, and certainly not where banks/financial institutions holding public funds are involved in irregularities. The submissions of the Respondent appear to suggest that the economic state of this Nation is extremely fragile and therefore, the information sought should not be disclosed. This Bench is not convinced with the argument that disclosure of information would lead to any harm to the economic interests of India; in fact it would help to improve the fundamental strength of the economic foundations of the country and safeguard against sudden disruptions, which could be caused if all the information was not available to public. This Bench therefore cannot leave such a decision to the wisdom of RBI. Disclosure would lead to greater public faith in Government and the financial institutions. Hence the Commission does not agree with the contention of the PIO that the information is exempt under Section 8 (1) (a) of the RTI Act.
The Respondent has also submitted that the information sought was protected under Section 8(1)
(e) of the RTI Act. The Respondent has argued that in the economic interest of the State and to discharge the responsibilities attached to fiduciary relationship, RBI as the regulator of banks would not be able to disclose the inspection report, file notings, correspondence related to the same and the information submitted to RBI or collected by RBI in terms of Section 27 of the B.R. Act until the matter is judicially determined finally. Section 8(1)(e) of the RTI Act exempts from disclosure "information available to a person in his fiduciary relationship, unless the competent authority is satisfied that the larger public interest warrants the disclosure of such information".
This Bench, in a number of decisions, has held that the traditional definition of a fiduciary is a person who occupies a position of trust in relation to someone else, therefore requiring him to act for the latter's benefit within the scope of that relationship. In business or law, we generally mean someone who has specific duties, such as those that attend a particular profession or role, e.g. doctor, lawyer, financial analyst or trustee. Another important characteristic of such a relationship is that the information must be given by the holder of information who must have a choice - as when a litigant goes to a particular lawyer, a customer chooses a particular bank, or a patient goes to particular doctor. An equally important characteristic for the relationship to qualify as a fiduciary relationship is that the provider of information gives the information for using it for the benefit of the one who is providing the information. All relationships usually have an element of trust, but all of them cannot be classified as fiduciary. Information provided in discharge of a statutory requirement, or to obtain a job, or to get a license, cannot be considered to have been given in a fiduciary relationship.
Information provided by banks/ institutions subordinate to RBI is done in fulfillment of statutory compliance. This would not create any fiduciary relationship as such between RBI and the subordinate banks/ institutions. The criteria defining a fiduciary relationship, as described above, must be satisfied which does not appear to have been done in the present matter. Inspections, audits and investigations are done by RBI officers as part of statutory duty and banks have to undergo this in compliance with statutory requirements. Therefore, Section 8(1)(e) of the RTI Act may not be attracted.
The Respondent has cursorily argued that the information sought is protected under Section 8(1)
(d) of the RTI Act. Section 8(1)(d) of the RTI Act exempts from disclosure- "information including commercial confidence, trade secrets or intellectual property, the disclosure of which would harm the competitive position of a third party, unless the competent authority is satisfied that larger public interest warrants the disclosure of such information;". In order to claim the Page 10 of 14 exemption under Section 8(1)(d) of the RTI Act, the PIO must establish that disclosure of the information sought (which may include commercial or trade secrets, intellectual property or similar information) would result in harming the competitive position of a third party. As per Section 19(5) of the RTI Act, the burden of establishing the applicability of the exemption lies on the PIO. The Respondent has not adduced any arguments to show how the nature of the information sought falls within the ambit of Section 8(1)(d) of the RTI Act. Further, no explanation has been given to establish that the information if disclosed would affect the competitive position of a third party, if any. The burden required to be discharged by the Respondent under Section 19(5) of the RTI Act has not been done.
Section 8(2) of the RTI Act states, "Notwithstanding anything in the Official Secrets Act, 1923 nor any of the exemptions permissible in accordance with sub-section (1), a public authority may allow access to information, if public interests in disclosure outweighs the harm to the protected interests". The RBI is a regulatory authority which is responsible for inter alia monitoring subordinate banks and institutions. Needless to state significant amounts of public funds are kept with such banks and institutions. Therefore, it is only logical that the public has a right to know about the functioning and working of such entities including any lapses in regulatory compliances. Merely because disclosure of such information may adversely affect public confidence in defaulting institutions, cannot be a reason for denial of information under the RTI Act. If there are certain irregularities in the working and functioning of such banks and institutions, the citizens certainly have a right to know about the same. The best check on arbitrariness, mistakes and corruption is transparency, which allows thousands of citizens to act as monitors of public interest. There must be transparency as regards such organisations so that citizens can make an informed choice about them. In view of the same, this Bench is of the considered opinion that even if the information sought was exempted under Sections 8(1)(a), (d) or (e) of the RTI Act,-as claimed by the Respondent,- Section 8(2) of the RTI Act would mandate disclosure of the information sought.
At this juncture, it is relevant to refer to the conclusion and recommendation of the Full Bench in the R. R. Patel Case in Paragraph 21 - "Before parting with this appeal, we would like to record our observations that in a rapidly unfolding economics scenario, there are public institutions, both in the banking and non-banking sector, whose activities have not served public interest. On the contrary, some such institutions may have attempted to defraud the public of their moneys kept with such institutions in trust. RBI being the Central Bank is one of the instrumentalities available to the public which as a regulator can inspect such institutions and initiate remedial measures where necessary. It is important that the general public particularly the shareholders and the depositors of such institutions are kept aware of RBI's appraisal of the functioning of such institutions and taken into confidence about the remedial actions initiated in specific cases. This will serve the public interest. The RBI would therefore be well advised to be proactive in disclosing information to the public in general and the information seekers under the Right to Information Act, in particular. The provisions of Section 10(1) of the RTI Act can therefore be judiciously used when necessary to adhere to this objective".
From a plain reading of the above, it follows that the Full Bench had independently come to the above conclusion after applying its mind. It had-,at Paragraph 21,- clearly stated that a larger public interest was likely to be served by disclosure of the said information. It suggested that RBI should disclose most of this information in a proactive manner. The Full Bench had effectively given a recommendation to RBI to disclose this information under Section 4 of the RTI Act. This Bench agrees with the conclusion arrived at by the Full Bench that the disclosure Page 11 of 14 of the appraisal of financial institutions by RBI and remedial measures must be shared with public in a proactive manner. Public interest would be served by such disclosure as the Bench had concluded on its own, without relying on RBI. It is unfortunate that RBI appears to have taken no steps to proactively disclose this information in the last five years.
However, once the Full Bench had recorded its finding of a public interest in disclosure it should have given reasons why it did not order disclosure as per the provisions of Section 8(2) of the RTI Act. It appears to have overlooked the provisions of Section 8(2) of the RTI Act. The Full Bench had arrived at the conclusion that there was a larger public interest in disclosure, but did not give any directions based on this finding, nor did it give any reasons for not giving any directions. If the Full Bench had considered the provisions of Section 8(2) of the RTI Act, it would have ruled that the requisite information should be disclosed. It may be pointed out that in view of the above, the ruling in R. R. Patel's Case is per incuriam as it was rendered without considering the statutory provision of Section 8(2) of the RTI Act.
At this juncture, it may be mentioned that the Respondent has cited Paragraphs 12 and 34 of the Supreme Court's decision in Central Board of Secondary Education & Anr. v. Aditya Bandopadhyay & Ors. MANU/SC/0932/2011 dated 09/08/2011 and submitted that the RTI Act itself recognises the fact that since revelation of certain information is likely to conflict with other public interests, there is a need to harmonise these conflicting interests. The said paragraphs have been reproduced as follows:
"...Certain safeguards have been built into the Act so that the revelation of information will not conflict with other public interests which include efficient operation of the governments, optimum use of limited fiscal resources and preservation of confidential and sensitive information..." (Paragraph 12) "...The Courts and Information Commissioners enforcing the provisions of RTI Act have to adopt a purposive construction, involving a reasonable and a balanced approach which harmonizes two objects of the Act, while interpreting Section 8 and the other provisions of the Act:" (Paragraph 34) The Supreme Court of India has clearly observed that the Commission must adopt a purposive construction which harmonizes the objects of the RTI Act viz. ensuring that the right to information does not conflict with several other public interests. Needless to state, such harmonious construction must be within the purview of the RTI Act and cannot go beyond it. From the contention of the Respondents it appears that the Commission must adopt a harmonious construction that would entail reading in fetters to the Right to Information hitherto not envisaged by the Parliament in the RTI Act. Such an interpretation could clearly not have been intended by the Supreme Court as it would be against the basic tenet of separation of powers; since the Parliament is the sole body which can legislate.
The Preamble to the RTI Act recognizes the conflicting interests and has harmonized them. The Supreme Court of India had itself recognized the Citizen's Right to Information as a fundamental right. All Citizens can exercise their fundamental right to information from all public authorities, without having to give any purpose or reasons. A PIO must provide the information within 30 days unless it falls under the exemptions of Section 8 (1) or 9 of the RTI Act. As an illustration, there is no exemption for 'confidential' information, unless it has been provided by a foreign Government. No PIO, Commission or Court can allow a public authority to claim that Page 12 of 14 'confidential' information will not be provided, since it is meant for internal consumption only. If a matter is pending in Court, information cannot be denied. Unless it can be established that disclosure of information will impede the process of investigation or prosecution of offenders, mere continuing investigation or prosecution of a case cannot be a ground for denial. If some personal information appears to be exempt since disclosure may amount to an unwarranted invasion on the privacy of an individual, it would have to be determined if it would have been denied to Parliament. Thus, all denial of information would have to be justified by the provisions of the RTI Act.
The RBI appears to imply that the Supreme Court's judgment/decision referred by it expects Courts and Commissions to go beyond the words of the RTI Act in harmonizing various interests. The Commission is convinced that the Hon'ble Supreme Court could never have meant this. Lawmaking is the exclusive domain of the Parliament and legislatures, and Courts and Commissions are duty bound to interpret the laws within the boundaries set by the laws. The Courts may rule that a law is ultra vires. But without such a ruling, they are duty bound to interpret the laws as per the words and intent of the law as it stands. Any other position would challenge the basic structure of the Constitution, and the Supreme Court could not have done this. Therefore, the argument of the Respondent is devoid of merit.
To summarise:
1. The Commission rules that the information sought by the appellant does not fall within the exemptions of Section 8(1) (a), (d) or (e).
2. The Commission also finds that there is a larger public interest in disclosure of the information.
3. The Full Bench decision in R.R. Patel v. RBI is per incuriam for the reasons elaborated above. However, the Commission agrees with the observations of the Full Bench in Paragraph 21 as regards there being a larger public interest in disclosure of the information sought.
4. The Commission, being an adjudicatory authority set up under the RTI Act, must ensure that the right to information of citizens is effected but at the same time, specific interests mentioned in Sections 8(1) and 9 of the RTI Act are protected-as mandated by the Supreme Court of India in the Aditya Bandopadhyay Case. The limits are however set by the RTI Act as passed by Parliament.
In the present matter, the Commission has adopted this approach and is of the opinion that the information sought in query 1 is not exempt under Sections 8(1)(a), (d) and (e) of the RTI Act,-as claimed by the Respondent. Even if it had been exempt, Section 8(2) of the RTI Act would mandate disclosure of the information sought. Citizens have a right to know about the functioning of Banks including any regulatory lapses. If there are irregularities in the functioning of a Bank pursuant to which action has been taken by RBI- as sought in query 1, citizens certainly have a right to know about the same. A larger public interest would be served by disclosing this information- under Section 8(2) of the RTI Act. The Nation's interest would be better served through transparency and exposure of arbitrary, wrong, corrupt or illegal acts.
In this regard, reference may be made to a decision of the Commission cited by the Appellant in Anil Kumar Sharma v. Registrar of Companies, M.P. & C.G. CIC/MA/A/2007/00783 dated 26/12/2007 wherein the Commission allowed disclosure of information on the basis that the matter pertained to alleged corruption and therefore information must be disclosed in larger public interest. The other decisions cited by the Appellant viz. Eureka Forbes Limited v.
Page 13 of 14Allahabad Bank & Ors. Civil Appeal No. 4029/2010 (@SLP (C) No. 3883 of 2008) and M.J. Rao v. Bank of India CIC/SM/A/2010/001325/SG/ dated 09/09/2011 are not relevant to the present matter.
The Appeal is allowed. The PIO is directed to provide the complete information as per record in relation to query 1 to the Appellant before 10 April 2012.
Notice of this decision be given free of cost to the parties.
Any information in compliance with this Order will be provided free of cost as per Section 7(6) of RTI Act.
Shailesh Gandhi Information Commissioner 12 March 2012 (In any correspondence on this decision, mention the complete decision number.)(SH) Page 14 of 14