Central Information Commission
Karan Dev Singh Kesar vs Reserve Bank Of India on 3 October, 2023
Author: Saroj Punhani
Bench: Saroj Punhani
के ीय सूचना आयोग
Central Information Commission
बाबागंगनाथमाग , मुिनरका
Baba Gangnath Marg, Munirka
नई द ली, New Delhi - 110067
File No : CIC/RBIND/A/2022/630327
Karan Dev Singh Kesar
(J & K Bank Limited) ......अपीलकता /Appellant
VERSUS
बनाम
CPIO,
Reserve Bank of India
Department of Supervision,
Central Office, World Trade Centre 1,
Cuffe Parade, Colaba,
Mumbai 400005 .... ितवादीगण /Respondent
Date of Hearing : 21/09/2023
Date of Decision : 27/09/2023
INFORMATION COMMISSIONER : Saroj Punhani
(Note: The instant appeal has been filed by the third party i.e. J & K Bank
Limited aggrieved by an order passed by the FAA, RBI).
Relevant facts emerging from appeal:
RTI application filed on : 17/03/2020
CPIO replied on : 04/05/2022
First appeal filed on : 16/03/2022
1
First Appellate Authority order : 21/04/2022
2nd Appeal/Complaint dated : 31/05/2022
Information sought:
The RTI applicant Rahul Aggarwal filed an RTI application dated 17.03.2020 seeking following information:
"Provide me list of 50 Bank Defaulters as on date as per record of RBI."
In response, the CPIO vide its letter dated 04.05.2022 issued a notice u/s. 11(3) of the RTI Act to the Appellant i.e. J & K Bank Limited.
Being dissatisfied, the appellant bank through its authorized representative filed a First Appeal dated 16.03.2022. FAA's order dated 21.04.2022, upheld the reply of CPIO.
Feeling aggrieved and dissatisfied, the appellant bank approached the Commission with the instant Second Appeal.
Relevant Facts emerging during Hearing:
The following were present:-
Appellant: Adv A K Pandit rep of Appellant present through Video-Conference. Respondent: Sangeeta Sheoran, Manager and Abhijeet Kaushal, Legal Officer present through Video-Conference.
Original RTI applicant: Not Present.
The written submissions of the Appellant and the Respondent are taken on record.
The rep. of the Appellant bank, during the hearing, reiterated the contents of their written submissions, which are reproduced herein below:
"2. It is submitted that the Respondent no.1 while passing the impugned order dated 21.04.2022 have failed to apply its judicial mind and also failed to provide the reasons as to why the list of top 50 Bank Defaulters as on date as per records of RBI be disclosed to the Applicant and why the aforesaid details does not come under the purview of the exemption under Section 8(1)(d) & 8 (1) (b) of the RTI Act 2 2005. 3. It is to be submitted that the Borrower holds a fiduciary relationship with the Appellant Bank providing such information to the RTI Applicant comes within the ambit of Section 8(1)(d) of the RTI Act Therefore the aforesaid information is exempted in respect of Section 8(1)(d), Section 8(1)(e), Section 8(1) (h) & Section 8(1)(3) of the RTI Act, 2005. Furthermore, it is to be noted that the disclosure of such information may affect the business vis-à-vis commercial confidence of the Bank and will shake the imago of the Bank. The Appellant Bank relied on the interim order dated 18.12.2019 passed by the Hon'ble Supreme Court in RBI v. Jayantilal N. Mistry Miscellaneous Application No. (s). 2342 of 2019 in T.C. (C) No. 91/2015 wherein, the Hon'ble Supreme Court directed the Reserve Bank of India not to disclose the sensitive information under RTI Act, 2005 until further orders. 4. It is submitted that reference shall be placed upon the decision of Central Information Commission in Second Appeal No. CIC/RBIND/A/2020/692517 titled as Jammu and Kashmir Bank (Through Authorised Signatory, Vivek Gupta) v. CPIO, wherein the Hon'ble CIC observed that "the information, proposed to be disclosed in the nature if credit information and the same was supplied to the RBI in fiduciary capacity as the regulator under the provisions of the Banking Regulations Act as well as the Credit Information Companies Regulation Act, 2005 (CICRA). Under the provisions of CICRA there is a specific bar on the disclosure of such Credit Information. Further Section 17(4) of the Act, clearly mentions that "no credit information shall be disclosed to any other person other than its specified users." The large amount of data relating to its clients including their identity, personal details etc. is shared with the regulator, without any redaction or withholding the information, in good faith that these will be objectively analysed in discharge of their statutory obligations to make fair judgment on their functioning without affecting their competitive position. To this extent, there is an element of trust and confidence in sharing the data, both financial and operational, between the RBI and the Bank. The information and data of the clients in the hands of bank also has the element of trust and confidence that such data will not be disclosed or shared against their right to privacy/ commercial interest." From perusal of the abovementioned decision of the CIC, it is categorically stated that the as per Section 17(4) of CICRA, the Bank cannot provide Credit Information regarding the Borrower to the general public as the Information sought by the RT! Applicant is of nature of commercial confidence, the disclosure of which will harm the competitive position of third party, is also a nature of personal information the disclosure of which would have no relationship to any public interest or activity and the same would cause unwarranted invasion of the privacy of the individual and further, the said information is also available to the bank in fiduciary relationship with its customers. As such, the Bank is exempted from disclosing the said information under Section 8(1)(d), Section 3 8(1)(c) & Section 8(1)) of the RTI Act, 2005. Copy of the order passed by Central Information Commission in Second Appeal No. CIC/RBIND/A/2020/692517 titled as Jammu and Kashmir Bank (Through Authorised Signatory, Vivek Gupta) v. CPIO is hereby annexed and marked as Annexure - A. It is submitted that interim order dated 18.12.2019 passed by the Hon'ble Supreme Court of India in Reserve Bank of India v Jayantilal Mistry and Ors. Transferred Case (Civil) No. 91 of 2015 and IIDFC Bank Ltd. and Ors. v. Union of India and Ors. Writ Petition (C) No. 1159 of 2019, wherein, the Hon'ble Supreme Court directed the RBI not to release the Financial Inspection Reports of the Banks. It is to he noted that a Bank's Inspection Report also contains the assessed value of all the NPA Accounts as well. In view of the same, if the details of a Borrower and the details of the NPA accounts are disclosed, the same would result in violation of the interim order dated 18.12.2019 passed by the Hon'ble Supreme Court of India. It is to be submitted that the Appellant Bank has already initiated recovery measures before the appropriate forum under the four corners of law and disclosure of the same will causo a great prejudice to the Appellant Bank in further proceedings and for the persons information hus sought by the RTI Applicant may take undue benefit from the same.
7. It is further submitted that interim order dated 18.12.2019 passed by the Hon'ble Supreme Court of India is an industry specific order which is applicable on all the Banks irrespective of whether they are party to the Petition or not. 8. It is also submitted that Respondent no.I has not given any reason for passing the Impugned order and has failed to apply its judicial mind that disclosure of such requested Information would affect the business vis Edit Sign a vis Commercial Confidence, which is specifically prescribed in Section 8 (1)(d) of the RTI Act 2005, of the Appellant Bank and ultimately harm the competitive position of the Appellant Bank. 9. It is further submitted that the Hon'ble Supreme Court of India in Central Board of Secondary Education and Anr. V Aditya Bandopadhyay and Ors. (2011) SC 0932 while discussing the nature of fiduciary relationships relied upon several decisions and explained the terms "fiduciary" and "fiduciary relationship" as thus: "39. The Term "fiduciary" refers to a person having a duly to act for the benefit of another, showing good faith and candour, where such other person reposes must and special confidence In the person owing or discharging the duty. The term "fiduciary relationship" is used to describe a situation or transaction where one person (beneficiary) places complete confidence in another person (fiduciary) in regard to his affairs, business or transaction (s). The term also refers to a person who holds a thing in trust for another (beneficiary). The beneficiary is expected to act in confidence and for the benefit and advantage of the beneficiary and use good faith and fairness in dealing with the beneficiary or the things belonging to the beneficiary. If the beneficiary has entrusted anything 4 to the fiduciary to hold the thing in trust or to execute certain acts in regard to or with reference to the entrusted thing, the fiduciary has to act in confidence and is expected not to disclose the thing or information to any third party." Therefore any information falling under the purview of Section 8 (e) of the R11 Act 2005 would be exempted from disclosure. 10. It is submitted that the Hon'ble Supreme Court of India in Central Public Information Officer, Supreme Court of India v. Subhas Chandra Agarwal (2019)BMLJ222 has categorically held that under Clauses 8 (e), (b), (c), (f), (g) and (h) to Clause I of Section 8 of the RTI Act 2005 an absolute exemption from the obligation of disclosure under the RTI Act 2005 is provided. Therefore any Information coming under the purview of Section 8 (1) under the aforesaid clauses would be absolutely exempted from disclosure. 11. It is further submitted that the Respondent no.2 has failed to appreciate the fact that the list of top 50 Bank Defaulters as on date as per records of RBI which are ought to be disclosed are the post mortem of Appellant Bank and if such Information contained in the reports are exposed to the public at large, it will harm the interest of the Bank which in turn will have a direct impact on the economy of the country as the Banks are the backbone in shaping the economy of the country".
The Respondent, during the hearing, reiterated the contents of their written submissions and submitted that the information sought by the original RTI applicant is part of records maintained by RBI and liable to be disclosed by RBI in accordance with RTI Act. Further, as per Jayantilal Mistry's case, complete information can be disclosed to the RTI applicant.
Decision:
In the facts of the instant case, it is pertinent to note that a decision of a coordinate bench of the Commission in the matter of various third-party banks vs. RBI vide File No. CIC/RBIND/A/2021/152460 + Ors. dated 05.05.2022 covers a detailed discussion inter alia on the reliance placed by RBI on the Jayantilal Mistry case; the pendency of the averred Writ petition before the Apex Court. Suffice to say that the issues raised in the instant case are encapsulated in that same discussion of the coordinate bench in the following manner:
"39. A comprehensive view has to be taken on the objection filed by the institutions. These objectives has to be deliberated and adjudicated in the light of Jayantilal Mistry's case and other judicial pronouncements relevant in such matter, some of which have been referred by the Commission in the above parts as well. The Commission while examining various objections realize that the Writ 5 Petitions filed before the Hon'ble Supreme Court of India is seeking directions of the Supreme Court for non-disclosure of certain aspects of these audit/inspection report and any such guidance in these Writ Petitions will have direct bearing and provide further clarity to the CPIO/FAA in adjudicating various aspects of disclosure/non-disclosure of reports or the information/data which are part of these reports under the provisions of the RTI Act. The Commission takes note that all the cases/second appeals filed herein are based on interpretations of RBI Vs. Jayantilal Mistry case and other relevant judicial pronouncements requesting for full disclosure vis-à-vis with exemptions under Section 8(1) of the RTI Act for non- disclosure of full or parts of these reports.
40. In view of the above observations, the Commission is of the view that the reports generated in the hands of regulatory public authority in discharge of its statutory obligations are information under Section 2 (f) of the RTI Act, as the regulator and the regulated entities are not governed by fiduciary relationship. The orders of the Commission to their effect has been upheld by the Hon'ble Supreme Court in Jayantilal Mistry's case and the position is unchanged even today. Various objections filed by banks/financial institutions, to be examined, analyzed and adjudicated upon, are related to various data and information submitted to the Reserve Bank of India by these financial institutions explaining their operations, commercial decisions, clients data etc. under statutory obligations can be disclosed as such. There are apparently two set of such information which have been shared by the 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 institutions have been bearing on their competitive position which also enjoys the exemption from disclosure in their hands, if it is a public authority or otherwise, under the RTI Act. Some of such data, on case to case basis be sensitive enough for protection of national interest. The Commission is of the view that the protection of disclosure of 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 obligation. Various observations of Hon'ble Supreme Court in Jayantilal Mistry's case also does not indicate so and decision of the regulator to consider redacting such data/information while disclosing the reports is aligned with this and other judicial pronouncements of Supreme Court and High Courts.6
41. 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 Banks and Financial Institutions and submissions made by applicant to reach the decision in favour or against redaction of various parts of the report on case to case basis. He has to factor the observation of Hon'ble Supreme Court in Jayantilal Mistry case and other relevant judgments, some of which have been referred in this order as well. Hence, with these observations the orders passed by the CPIO and FAA in these matters are set aside and the cases are being remanded to the CPIO for adjudication afresh. (Emphasis Supplied)
42. It is amply clear that Writ Petition Nos. 1159/2019 and 768/2021 and others tagged are admitted in Hon'ble Supreme Court wherein guidance and direction has been sought on non-disclosure of certain type of information which are essentially the part of the Annual Inspection Report/RAR, etc. These petitions also seek protection of interim communication between regulator and the regulated entity in the process of finalization of these reports or otherwise. It is obvious that decision in these Writ Petitions will provide clarity and guidance to the Public Authority on redaction/non-disclosure of a set of information inspite of being part of these reports which are open to disclosure. At this stage, any decision by the Public Authority will amount to pre-judging the issues pending admitted Writ Petitions before the Hon'ble Supreme Court. Various banks, financial institutions, respondent public authority and the RTI applicant have already impleaded party and are presenting their arguments before the Apex Court.
43. Hence, any decision of redaction or disclosure of information, without waiting for decision in the Writ Petition Nos. 1159/2019 and 768/2021 and others tagged may cause irrevocable damage against right of privacy and protection of commercial interest. Hence, the respondent public authority if expedient may wait for the outcome in Writ Petition Nos. 1159/2019 and 768/2021 and others tagged or seek clarification from the Hon'ble Court and accordingly decide these RTI applications by following process as enumerated in the earlier paras by the Commission in the interest of principles of natural justice. While disclosing the information they should be cautious in taking a considerate view balancing right to privacy, protection of national and commercial interest on one hand vis-à-vis larger public interest. (Emphasis Supplied) 7
44. It is further observed that similar view has also been taken by the Division Bench of the Commission in file bearing nos. CIC/VS/A/2013/001488 and CIC/VS/A/2013/001805 dated 11.05.2017 wherein the Commission observed that 'Having considered the submissions of both the parties, the Commission observes that since a similar issue is pending adjudication before the Hon'ble Supreme Court in the matter of Central for Public Interest Litigation Vs. Housing & Urban Development Corporation Ltd. &Ors., it would be judicious to await the final outcome from the Hon'ble Supreme Court. However, on receipt of the final outcome from the Hon'ble Supreme Court in the matter, the appellant shall be at liberty to file second appeal afresh, if he so desires. The instant appeals are disposed of'."
The above decision is therefore applicable to the instant case and no separate line of adjudication is warranted in the matter. The stipulations contained in para 41 & 43 to which emphasis has been supplied as above stands endorsed to the Respondent CPIO in the instant case as well and necessary action be taken in this regard.
The appeal is disposed of accordingly.
Saroj Punhani (सरोज पुनहािन) हािन) Information Commissioner (सूचना आयु ) Authenticated true copy (अिभ मािणत स#यािपत ित) (C.A. Joseph) Dy. Registrar 011-26179548/ [email protected] सी. ए. जोसेफ, उप-पंजीयक दनांक / 8