Gujarat High Court
Gvfl Ltd vs Arvindbhai Singhi on 13 July, 2022
Author: Aravind Kumar
Bench: Aravind Kumar, Ashutosh J. Shastri
C/LPA/720/2020 ORDER DATED: 13/07/2022
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/LETTERS PATENT APPEAL NO. 720 of 2020
In
R/SPECIAL CIVIL APPLICATION NO. 8353 of 2006
With
CIVIL APPLICATION (FOR DIRECTION) NO. 1 of 2020
In
R/LETTERS PATENT APPEAL NO. 720 of 2020
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GVFL LTD
Versus
ARVINDBHAI SINGHI
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Appearance:
MR DHAVAL DAVE SR. ADVOCATE with UDIT N VYAS(9255) for the
Appellant(s) No. 1,2
MR SHIVANG M SHAH(5916) for the Respondent(s) No. 2
MR. AUM M KOTWAL(7320) for the Respondent(s) No. 1
MS SHREE KOTWAL(11177) for the Respondent(s) No. 1
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CORAM:HONOURABLE THE CHIEF JUSTICE MR. JUSTICE ARAVIND KUMAR
and
HONOURABLE MR. JUSTICE ASHUTOSH J. SHASTRI
Date : 13/07/2022
ORAL ORDER
(PER : HONOURABLE THE CHIEF JUSTICE MR. JUSTICE ARAVIND KUMAR)
1. In this intra-court appeal, the order of the learned Single Judge dated 22.05.2020 passed in Special Civil Application 8353 of 2006 has been challenged where-under, order passed by the Gujarat State Information Commission (hereinafter referred to "State Commission" for short), holding that petitioner is, 'public authority' as defined under Section 2(h) of Right to Information Act, 2005 (for short "Act 2005"), is under challenge. Page 1 of 13 Downloaded on : Sat Dec 24 20:58:23 IST 2022
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2. Succinctly stated facts are on 08.11.2005, an application came to be filed by the first respondent herein, before the first petitioner soliciting certain information referred to thereunder which was not granted and, thereafter it was followed by another application dated 10.11.2005 in the prescribed format requesting, the first petitioner thereunder to furnish information as sought for therein. First petitioner by communication dated 22.11.2005 addressed to the State Commission intimated that the first petitioner is not a 'public authority' within the meaning of Act 2005 and it is an autonomous body, as such, furnishing of the information as sought for by the first respondent herein, under the provisions of Act 2005 does not arise. It was also contended that it is not even a Government Company within the meaning of provisions of Companies Act, 1956 and hence, sought for filing of the said application filed by the first respondent.
2.1. However, the respondent no. 1, not being satisfied with the said stand of the first petitioner addressed a communication dated 06.12.2005 to second respondent, which was treated as a Page 2 of 13 Downloaded on : Sat Dec 24 20:58:23 IST 2022 C/LPA/720/2020 ORDER DATED: 13/07/2022 complaint under the provisions of Section 18 of Act 2005 and by order dated 07.03.2006, it was held that the petitioner no. 1 as well as petitioner no. 2 is a 'public authority' within the meaning of Section 2(h) of Act 2005. This order was carried by the appellants herein, namely writ applicants in Special Civil Application 8353 of 2006. The learned Single Judge by impugned order after examining the rival contentions and the expressions 'substantial', 'body controlled' occuring in Section 2(h) of the Act arrived at a conclusion that it was not possible to hold that petitioners who are substantially financed by the companies owned by the State Government and as such, it cannot be said to be 'public authority' and it came to be held by the learned Single Judge that writ applicants are covered by the definition of 'public authority', as defined under Section 2(h) (d)
(i) of the Act 2005. Hence, this intra-court appeal.
3. We have heard Shri Dhaval Dave, learned Senior Advocate appearing for the appellants, Shri Aum Kotwal, learned counsel appearing for first respondent and Shri Shivang M. Shah, learned counsel appearing for respondent 2. Page 3 of 13 Downloaded on : Sat Dec 24 20:58:23 IST 2022
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4. It is the contention of Mr. Dhaval Dave, learned Senior Advocate appearing for the appellants that learned Single Judge committed a serious error in arriving at a conclusion that writ applicants are 'public authority' and said finding is contrary to the provisions of the Companies Act. He would also draw attention of the Court to the certificate issued by the Ministry of Law, Justice and Company Affairs, where-under, it is stated that the Company does not fall within the ambit of Section 617 or Section 619B of the then Companies Act, 1956. He would also draw attention of the Court to the additional affidavit dated 25.11.2020 of the President of the first applicant Company filed to contend that even the share holding pattern does not disclose that appellant being a Government Company so as to bring it within the sweep of Section 2(h) of Act 2005 by construing them as a 'public authority. Hence, he prays for the appeal being allowed.
5. Per contra, the learned advocates appearing for the respondents would support the impugned order, and they would hasten to add that prayer sought for by the original applicant namely, the first respondent has been satisfied and Page 4 of 13 Downloaded on : Sat Dec 24 20:58:23 IST 2022 C/LPA/720/2020 ORDER DATED: 13/07/2022 the information which was sought for has been obtained through Registrar of Companies (ROC) by filing appropriate application before the said authority and the same would satisfy claim of the applicant i.e. the first respondent. Hence, they have prayed for setting aside the order being passed. However, in the same breath, they would contend that order passed by the learned Single Judge does not suffer from any infirmity and the fact that writ appellant being a Government Company has been taken note of and as such, they have sought for affirming the order passed by the learned Single Judge and prayed for dismissal of the appeal.
6. Having heard the learned advocates appearing for the parties and on perusal of the case papers and after bestowing our careful and anxious consideration to the rival contentions raised at the bar, as also perusal of the impugned order, we are of the considered view that following points would arise for our consideration.
(1) Whether the impugned order suffers from any infirmity calling interference at the hands of this Court? (2) What order ?
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C/LPA/720/2020 ORDER DATED: 13/07/2022 Re-Point No. 1 - The facts narrated herein-above would suffice to answer the Point No.1. Hence, we would not burden this judgment by repeating the facts. In order to answer the point formulated herein-above, it would be necessary to extract the definition of 'public authority' as defined under clause (h) of Section 2 of Act 2005 and it reads thus.
"2(h) "public authority" means any authority or body or institution of self-government established or constituted,-
(a) by or under the Constitution;
(b) by any other law made by Parliament;
(c) by any other law made by State Legislature;
(d) by notification issued or order made by the appropriate Government, and includes any-
(i) body owned, controlled, or substantially financed;
(ii) non-Government Organisation substantially financed, directly or indirectly by funds provided by the appropriate Government."
6.1. A plain reading of the above provision would indicate that any authority or body or institution of self-government, established or constituted by or under the Constitution, by any Page 6 of 13 Downloaded on : Sat Dec 24 20:58:23 IST 2022 C/LPA/720/2020 ORDER DATED: 13/07/2022 other law made by Parliament, by any other law made by State Legislature, by notification issued or order made by the appropriate Government and includes any body owned, controlled and substantially financed, apart from non- government organisation substantially financed would be a 'public authority'.
6.2. Section 617 of the Companies Act, 1956 defines the 'Government Company' as under :-
Section 617. Definition of "Government Company"- For the purposes of [this Act] Government company means any company in which not less than fifty-one per cent of the [paid up share capital] is held by the Central Government, of by any State Government or Governments, or partly by the Central Government and partly by one or more State Governments [and includes a company which is a subsidiary of a Government company as thus defined]."
6.3. Section 2(45) of the Companies Act, 2013 defines a 'Government Company' as under :-
"2(45) "Government Company" means any company in which not less than fifty-one per cent of the paid-up share capital is held by the Central Government or by any State Government or Governments, or partly by the Central Government and partly by one or more State Governments, and includes a company which is a subsidiary company of such a Government company."
6.4. A conjoint reading of the above provisions would clearly indicate that a institution to be brought under the scope and Page 7 of 13 Downloaded on : Sat Dec 24 20:58:23 IST 2022 C/LPA/720/2020 ORDER DATED: 13/07/2022 ambit of the Act 2005, such Company should be a body or institution of self-government or established or constituted under the Constitution or by any law made by the Parliament or by any law made by the State Legislature. It also includes a body owned, controlled and substantially financed by the appropraite Government. This aspect has received attention of the learned Single Judge by referring to the decision of the Hon'ble Apex Court in the case of Thalappalam Service Cooperative Bank Limited and Ors., v. State of Kerala and Ors., reported in (2013) 16 SCC 82, where-under it came to be held as under :-
"46. The words substantially financed have been used in Sections 2(h)(d)(i) & (ii), while defining the expression public authority as well as in Section 2(a) of the Act, while defining the expression appropriate Government. A body can be substantially financed, directly or indirectly by funds provided by the appropriate Government. The expression substantially financed, as such, has not been defined under the Act. Substantial means in a substantial manner so as to be substantial. In Palser v. Grimling (1948) 1 All ER 1, 11 (HL), while interpreting the provisions of Section 10(1) of the Rent and Mortgage Interest Restrictions Act, 1923, the House of Lords held that substantial is not the same as not unsubstantial i.e. just enough to avoid the de minimis principle. The word substantial literally means solid, massive etc. Legislature has used the expression substantially financed in Sections 2(h)(d)(i) and (ii) indicating that the degree of financing must be actual, existing, positive and real to a substantial extent, not moderate, ordinary, tolerable etc. Page 8 of 13 Downloaded on : Sat Dec 24 20:58:23 IST 2022 C/LPA/720/2020 ORDER DATED: 13/07/2022
47. We often use the expressions questions of law and substantial questions of law and explain that any question of law affecting the right of parties would not by itself be a substantial question of law. In Black's Law Dictionary (6th Edn.), the word 'substantial' is defined as 'of real worth and importance; of considerable value; valuable.
Belonging to substance; actually existing; real: not seeming or imaginary; not illusive; solid; true; veritable. Something worthwhile as distinguished from something without value or merely nominal. Synonymous with material.' The word 'substantially' has been defined to mean 'essentially; without material qualification; in the main; in substance; materially.' In the Shorter Oxford English Dictionary (5th Edn.), the word 'substantial' means 'of ample or considerable amount of size; sizeable, fairly large; having solid worth or value, of real significance; sold; weighty; important, worthwhile; of an act, measure etc. having force or effect, effective, thorough.' The word 'substantially' has been defined to mean 'in substance; as a substantial thing or being; essentially, intrinsically.' Therefore the word 'substantial' is not synonymous with 'dominant' or 'majority'. It is closer to 'material' or 'important' or 'of considerable value.' 'Substantially' is closer to 'essentially'. Both words can signify varying degrees depending on the context.
48. Merely providing subsidiaries, grants, exemptions, privileges etc., as such, cannot be said to be providing funding to a substantial extent, unless the record shows that the funding was so substantial to the body which practically runs by such funding and but for such funding, it would struggle to exist. The State may also float many schemes generally for the betterment and welfare of the cooperative sector like deposit guarantee scheme, scheme of assistance from NABARD etc., but those facilities or assistance cannot be termed as substantially financed by the State Government to bring the body within the fold of public authority under Section 2(h)(d)(i) of the Act. But, there are instances, where private educational institutions getting ninety five per cent grant-in-aid from the appropriate government, may answer the definition of public authority under Section 2(h)(d)(i)." Page 9 of 13 Downloaded on : Sat Dec 24 20:58:23 IST 2022
C/LPA/720/2020 ORDER DATED: 13/07/2022 6.5. The learned Single Judge committed serious error in not noticing the fact that the expression 'substantial' occurring in sub-clause (i) of clause (d) of Section 2(h) of Act 2005, not being attracted to the facts that has unfolded in the present case inasmuch as there was no material placed on record to establish that the petitioners' Company was substantially financed by the State or instrumentality of State. It would be of benefit to note at this juncture itself that in the additional affidavit dated 25.11.2020 filed by the President of the first appellant Company it is clearly stated that share holding of appellant Company is by Gujarat Industrial Investment Corporation Limited of 41.74% by holding shares of 4,60,021/- and this share holding cannot be construed as there being substantial financial support extended either by the State Government or the instrumentality of the State. In the absence of any positive material being available, the learned Single Judge ought not to have held that writ applicants were 'substantially financed', by the appropriate government, so as to bring the appellant Company within the sweep of Section 2(h) of Act 2005. In fact, there are other share holders other than Gujarat Industrial Investment Corporation Page 10 of 13 Downloaded on : Sat Dec 24 20:58:23 IST 2022 C/LPA/720/2020 ORDER DATED: 13/07/2022 Limited, which is reflected in the tabular column extracted in paragraph 4 of the said affidavit. Hence, we are of the considered view that facts on hand would disclose that writ applicant Company is not a substantially financed company by the Government of Gujarat or a body owned or controlled by the State/appropriate Government so as to bring it within the meaning of Section 2(h) of Act 2005.
6.6. Yet another factor which cannot go unnoticed is that the Ministry of Law Justice, Company Affairs by communication dated Nil, have certified that petitioner Company does not fall within the ambit of Section 617 or 619B of the Companies Act, 1956 which defines that for the purposes of the application of the Companies Act, 1956 a Government Company would mean and include in which not less than fifty-one per cent of the paid- up share capital is held by the Central Government or by any State Government or Governments or partly by the Central Government and partly by the State Government one or more State Governments and which includes a subsidiary of the Government Company. Hon'ble Apex Court in the matter of Heavy Engineering Mazdoor Union v. State of Bihar Page 11 of 13 Downloaded on : Sat Dec 24 20:58:23 IST 2022 C/LPA/720/2020 ORDER DATED: 13/07/2022 reported in AIR 1970 SC 82, has held that mere fact that entire share capital of a company is contributed by the Central Government and the fact that all its shares are held by the President and certain officers of the Central Government does not make the Company an agent either of the President or the Central Government. Be that as it may. In the facts obtained in the present case, it has been clearly noticed herein- above, not only from the records, but also from the averment made in the additional affidavit dated 25.11.2020 that appellant Company known and called as 'Gujarat Industrial Investment Corporation Limited' which is a wholly owned Government Company on account of its owning 41.7% of the shares in the petitioners Company cannot be held or construed as there being a substantial finance or having been substantially financed by State Government so as to bring within the sweep of Section 2(h) of Act 2005. In that view of the matter, the order of the learned Single Judge cannot be sustained.
7. We also notice that in the light of information which was sought for by the original applicants solicited from appellant herein, having been received through the office Registrar of Companies, nothing survives for the applicant to prosecute his Page 12 of 13 Downloaded on : Sat Dec 24 20:58:23 IST 2022 C/LPA/720/2020 ORDER DATED: 13/07/2022 claim, even otherwise under the Right to Information Act, 2005.
8. For the reasons aforestated, we proceed to pass the following : ORDER :
(1) Letters Patent Appeal is allowed. The order dated 22.05.2020 passed in Special Civil Application 8353 of 2006 is hereby set aside and Special Civil Application 8353 of 2006 is hereby allowed and order dated 07.03.2006 (Annexure-K) passed by the second respondent is hereby quashed.
(2) No order as to costs.
(3) Pending application if any, stands consigned to records.
(ARAVIND KUMAR,CJ) (ASHUTOSH J. SHASTRI, J) phalguni Page 13 of 13 Downloaded on : Sat Dec 24 20:58:23 IST 2022