Central Information Commission
Girish Mittal vs Reserve Bank Of India on 31 October, 2022
Author: Neeraj Kumar Gupta
Bench: Neeraj Kumar Gupta
के ीय सूचना आयोग
Central Information Commission
बाबा गंगनाथ माग ,मुिनरका
Baba Gangnath Marg, Munirka
नई द ली, New Delhi - 110067
ि तीय अपील सं या/Second Appeal No. CIC/RBIND/A/2021/623035
CIC/RBIND/A/2018/623035
Mr. Girish Mittal ... अपीलकता /Appellant
VERSUS
बनाम
...!ितवादी/Respondents
Relevant dates emerging from the appeal:-
RTI : 17-03-2018 FA : 29-04-2018 SA : 06-05-2021
Hearing : 19.05.2020,
03.01.2022,
CPIO : 19-04-2018 FAO : 30-05-2018 26.04.2022,
06.09.2022 &
19-10-2022
ORDER
1. The instant matter was lastly listed before this Commission on 06.09.2022 vide which the Commission had directed vide order dated 09.09.2022:
Page 1 of 122. The matter is listed today for further hearing.
Hearing:
3. The appellant was not present despite notice. The respondent no. 1, Shri Vinod Kumar, DGM & APIO along with Ms. Uttara Srinivasan, Legal Officer attended the hearing through video-conferencing. The respondent no. 2, Ms. Apoorva Kaushik, Advocate for Axis Bank was personally present in the hearing. The respondent no. 3, Shri Ashok Kumar Mishra, DGM & CPIO, Jaseem Siddiqui, AGM (Law) and Shri Kunal Chauhan, Law Officer were personally present in the hearing.
4. The written submissions of the respondent no. 1 are taken on record.
5. The respondent no.1 submitted that the second appeal was filed by the appellant only on the part of furnishing of inspection reports of Axis Bank and Punjab National Bank. The respondent no. 1 submitted that redacted copy of inspection report of both the banks has already been provided to the appellant.
The contention of the appellant is that inspection report should be provided to him without any redaction.
6. The respondent nos. 2 and 3 have informed the Commission that writ petition nos. 1159/2019 and 768/2021 and other tagged matters were pending before the Hon'ble Supreme court. The respondents further submitted that vide order dated 30.09.2022, the Hon'ble Supreme Court of India had dismissed the IA of Shri Girish Mittal where the issue of maintainability was argued and the Hon'ble Court is of the view that the said writ petitions are maintainable and it is now pending for further guidance/consideration.
Page 2 of 12Decision:
7. The Commission, after hearing the submissions of the respondents and after perusal of records, observes that the RTI applicant Shri Girish Mittal had sought information regarding Inspection Reports made by Reserve Bank post completing the inspection, inter alia, pertaining to Axis Bank and Punjab National Bank. The Commission observes that the respondent no. 1 had already furnished to the appellant redacted copy of inspection report of respondent nos. 2 and 3. However the contention of the appellant is that the inspection reports should be provided in full without any severance. On the other hand, the respondent nos. 2 and 3 are aggrieved that the information sought as a whole is exempted from disclosure under Section 8(1)(d) and 8(1)(j) of the RTI Act and that the CPIO/FAA has not passed any reasoned order settling their objections nor gave any opportunity of hearing to them.
8. The Commission further noted the Hon'ble Supreme Court of India in Reserve Bank of India V/s Jayantilal N. Mistry case made observations which read as under:-
"the RBI does not place itself in a fiduciary relationship with the Financial institutions because, the reports of the inspections, statements of the bank, information related to the business obtained by the RBI are not under the pretext of confidence or trust. In this case neither the RBI nor the Banks act in the interest of each other. By attaching an additional "fiduciary" label to the statutory duty, the Regulatory authorities have intentionally or unintentionally created an in terrorem effect. RBI is a statutory body set up by the RBI Act as India's Central Bank. It is a statutory regulatory authority to oversee the functioning of the banks and the country's banking sector. Under Section 35A of the Banking Regulation Act, RBI has been given powers to issue any direction to the banks in public interest, in the interest of banking policy and to secure proper management of a banking company. It has several other far- reaching statutory powers".
It 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.
9. On the other hand, the Commission takes note of the submissions made by the Banks that large amount of data relating to its clients including their identity, business plans, decisions and financial transactions as well as institutional data such as business plans, trade secret, risk rating, requirement of Page 3 of 12 regulatory intervention, any unpublished price sensitive information etc. of banks 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. The Commission also appreciates that these institutions function in highly competitive, complex and global environment and the data being sought by the regulator is with the intention to draw conclusions on their functioning rather than disclosing the data shared by them in breach of right to privacy of individuals or cause adverse effect to their competitive position vis-à-vis others. To this extent, there is an element of trust and confidence in sharing the data, both financial and operational, between the RBI and the Banks. The information and data of the clients in the hands of Banks also has the element of trust and confidence that such data will not be disclosed or shared against their right to privacy/commercial interest and it is undisputed that clients enjoy fiduciary relationship with the Banks/Financial Institutions irrespective of these being public or private entities.
10. 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 irrespective of these being public or private entities. But contents of those reports viz. names of depositors/ borrowers, their transaction and financial history etc., mentioned in above para 20, entrusted by the clients to their respective banks or financial institutions are interspersed in these reports and have to be examined in the light of para nos. 77 of the same judgment and various other judicial pronouncements protecting right to privacy and protection of commercial interests. The Commission is of the view that it is not a simple set of information as inspection and audit report consists of data about client, borrowers and institution as mentioned in previous para beside, its analysis, judgment and observations on the analysis on the data provided by the banks on its 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. The Commission further observes that the Reserve Bank of India also acknowledged this and hence have opted for appropriate redaction. Even the Hon'ble Supreme Court of India in Jayantilal Mistry's case had observed that "71. We also understand that the RBI cannot be put in a fix, by making it accountable to every action taken by it. However, in the instant case the RBI is accountable and as such it has to provide information to the information seekers under Section 10(1) of the RTI Act, which reads as under:"Section 10(1) Severability --Where a request for access to information Page 4 of 12 is rejected on the ground that it is in relation to information which is exempt from disclosure, then, notwithstanding anything contained in this Act, access may be provided to that part of the record which does not contain any information which is exempt from disclosure under this Act and which can reasonably be severed from any part that contains exempt information."
11. The Commission while taking into consideration the contentions raised by the parties have taken note of the fact that inspection report as sought in the RTI application contain details of clients of the banks including their transaction and financial history which have been entrusted by them to their respective banks or financial institutions in a fiduciary capacity. Further, in Central Board Of Sec. Education &Anr. vs Aditya Bandopadhyay&Ors [2011 (8) SCC 497] vide order dated 09.08.2011 examined and explained the expression 'fiduciary relationship', and have illustrated a few relationships where parties were involved in an act of fiduciary capacity including 'customers' in the following words:
"20. The term `fiduciary' and `fiduciary relationship' refer to different capacities and relationship, involving a common duty or obligation. 20.1) Black's Law Dictionary (7th Edition, Page 640) defines `fiduciary relationship' thus:
A relationship in which one person is under a duty to act for the benefit of the other on matters within the scope of the relationship. Fiduciary relationships - such as trustee-beneficiary, guardian-ward, agent- principal, and attorney-client - require the highest duty of care. Fiduciary relationships usually arise in one of four situations : (1) when one person places trust in the faithful integrity of another, who as a result gains superiority or influence over the first, (2) when one person assumes control and responsibility over another, (3) when one person has a duty to act for or give advice to another on matters falling within the scope of the relationship, or (4) when there is a specific relationship that has traditionally been recognized as involving fiduciary duties, as with a lawyer and a client or a stockbroker and a customer."
"39. The term "fiduciary" refers to a person having a duty to act for the benefit of another, showing good faith and candour, where such other person reposes trust 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, Page 5 of 12 business or transaction(s). The term also refers to a person who holds a thing in trust for another (beneficiary). The fiduciary 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 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."
While taking into consideration the fact that the customers give their financial information to the banks in confidence and with complete faith that may not be divulged as a result of disclosure by others, the following observations passed by the Supreme in Court Bihar Public Service Commission v. Saiyed Hussain Abbas Rizwi and Anr.[ (2012) 13 SCC 61] may be relied upon:
"The satisfaction has to be arrived at by the authorities objectively and the "consequences of such disclosure have to be weighed with regard to the circumstances of a given case. The decision has to be based on objective satisfaction recorded for ensuring that larger public interest outweighs unwarranted invasion of privacy or other factors stated in the provision. Certain matters, particularly in relation to appointment, are required to be dealt with great confidentiality. The information may come to knowledge of the authority as a result of disclosure by others who give that information in confidence and with complete faith, integrity and fidelity. Secrecy of such information shall be maintained, thus, bringing it within the ambit of fiduciary capacity. Similarly, there may be cases where the disclosure has no relationship to any public activity or interest or it may even cause unwarranted invasion of privacy of the individual. All these protections have to be given their due implementation as they spring from statutory exemptions. It is not a decision simpliciter between private interest and public interest. It is a matter where a constitutional protection is available to a person with regard to the right to privacy. Thus, the public interest has to be construed while keeping in mind the balance factor between right to privacy and right to information with the purpose sought to be achieved and the purpose that would be served in the larger public interest, particularly when both these rights emerge from the constitutional values under the Constitution of India."Page 6 of 12
As emphasized by the Supreme Court in the judgment of Central Public Information Officer, Supreme Court of India vs. Subhash Chandra Agarwal in its judgment dated 13.11.2019, right to privacy and right to information have to be treated as co-equals and none can take precedence over the other, rather a balance needs to be struck. The following observations may also be relied upon in that regard:
"42. Privacy, it is uniformly observed in K.S. Puttaswamy (supra), is essential for liberty and dignity. Therefore, individuals have the need to preserve an intrusion-free zone for their personality and family. This facilitates individual freedom. On the question of invasion of personal liberty, the main judgment has referred to a three-fold requirement in the form of - (i) legality, which postulates the existence of law (RTI Act in the present case); (ii) need, defined in terms of a legitimate State aim; and
(iii) proportionality, which ensures a rational nexus between the objects and the means to be adopted to achieve them. The third requirement, we would observe, is achieved in the present case by Sections 8(1)(j) and 11 of the RTI Act and the RTI Act cannot be faulted on this ground. The RTI Act also defines the legitimate aim, that is a public interest in the dissemination of information which can be confidential or private (or held in a fiduciary relationship) when larger public interest or public interest in disclosure outweighs the protection or any possible harm or injury to the interest of the third party."
Further in K.S. Puttaswamy and Anr. v. Union of India and Ors. [(2017) 10 SCC 1], the Supreme Court observed as under:
"623. An individual has a right to protect his reputation from being unfairly harmed and such protection of reputation needs to exist not only against falsehood but also certain truths. It cannot be said that a more accurate judgment about people can be facilitated by knowing private details about their lives - people judge us badly, they judge us in haste, they judge out of context, they judge without hearing the whole story and they judge with hypocrisy. Privacy lets people protect themselves from these troublesome judgments."
In view of the above, the Commission is of the view that these judicial pronouncements have to be factored while deliberating all the claims of the applicants for complete disclosure which may include inadvertent disclosure of Page 7 of 12 financial, transactional and operational data of the clients of the Banks and Financial Institutions interspersed in RAR/Annual Audit reports etc.
12. Further, in Naresh Trehan vs Rakesh Kumar Gupta [W.P.(C) 85/2010 & CM Nos.156/2010 & 5560/2011], the Delhi High Court made the following observations:
"...It is, thus, essential that information relating to business affairs, which is considered to be confidential by an assessee must remain so, unless it is necessary in larger public interest to disclose the same. If the nature of information is such that disclosure of which may have the propensity of harming one's competitive interests, it would not be necessary to specifically show as to how disclosure of such information would, in fact, harm the competitive interest of a third party. In order to test the applicability of Section 8(1)(d) of the Act it is necessary to first and foremost determine the nature of information and if the nature of information is confidential information relating to the affairs of a private entity that is not obliged to be placed in public domain, then it is necessary to consider whether its disclosure can possibly have an adverse effect on third parties."
The Supreme Court while deciding upon issues relating to personal information of an individual in terms of his income tax returns passed the following observations in Girish Ramchandra Deshpande v. Central Information Commr. [(2013) 1 SCC 212] :
"12. The petitioner herein sought for copies of all memos, show-cause notices and censure/punishment awarded to the third respondent from his employer and also details viz. movable and immovable properties and also the details of his investments, lending and borrowing from banks and other financial institutions. Further, he has also sought for the details of gifts stated to have been accepted by the third respondent, his family members and friends and relatives at the marriage of his son. The information mostly sought for finds a place in the income tax returns of the third respondent. The question that has come up for consideration is:
whether the abovementioned information sought for qualifies to be "personal information" as defined in clause (j) of Section 8(1) of the RTI Act.
13. We are in agreement with the CIC and the courts below that the details called for by the petitioner i.e. copies of all memos issued to the third respondent, show cause notices and orders of Page 8 of 12 censure/punishment etc. are qualified to be personal information as defined in clause (j) of Section 8(1) of the RTI Act. The performance of an employee/officer in an organization is primarily a matter between the employee and the employer and normally those aspects are governed by the service rules which fall under the expression "personal information", the disclosure of which has no relationship to any public activity or public interest. On the other hand, the disclosure of which would cause unwarranted invasion of privacy of that individual. Of course, in a given case, if the Central Public Information Officer or the State Public Information Officer of the Appellate Authority is satisfied that the larger public interest justifies the disclosure of such information, appropriate orders could be passed but the petitioner cannot claim those details as a matter of right.
14. The details disclosed by a person in his income tax returns are "personal information" which stand exempted from disclosure under clause (j) of Section 8(1) of the RTI Act, unless involves a larger public interest and the Central Public Information Officer or the State Public Information Officer or the Appellate Authority is satisfied that the larger public interest justifies the disclosure of such information."
The aforementioned observations make it clear that the data has been shared by the individuals with the Income Tax Department which is seeking such information as an statutory authority but while analyzing and assessing their income keeps this data secured in the fiduciary capacity and hence it is protected from disclosure. It is applicable not only for individuals but for other legal entities recognizable under Income Tax Act. Further, it has been observed that such information in the hands of public authority even in the discharge of statutory obligations is protected under fiduciary relationship. The Commission is of the view that the data of the clients held by the banks in fiduciary capacity may be shared with the regulator under statutory obligations should not be disclosed by the regulator merely on the grounds that it is obtained for the purpose of supervision and regulation unless it is amply justified in the larger public interest.
13. The Commission further observes that the CPIO while issuing notice under Section 11 of the RTI Act has given the opportunity to the banks to file their objections, if any, against disclosure of RAR/Inspection reports/Audit Reports, etc. 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 or redaction etc. Page 9 of 12
14. The Commission observes that rightful claims of the RTI applicant has to be adjudicated in the light of specific objections filed by the banks, various judicial pronouncements of Hon'ble Supreme Court and High Courts providing guidance on such matters.
15. The Commission takes note that writ petition filed by the banks bearing W.P. (C) No. 1159/2019 before Hon'ble Supreme of India and the very fact that the Writ Petitions are admitted and permitted to be contested by the parties. However, no view has been taken till now by the Hon'ble Supreme Court of India.
16. 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. 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.
17. 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 Page 10 of 12 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.
18. Hence, any further 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 this RTI application 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.
19. With the above observations, the appeal is disposed of.
20. Copy of the decision be provided free of cost to the parties.
नीरज कु मार गु ा)
Neeraj Kumar Gupta (नीरज ा
सूचना आयु )
Information Commissioner (सू
दनांक / Date : 26-10-2022
Authenticated true copy
(अिभ मािणत स यािपत ित)
S. C. Sharma (एस. सी. शमा ),
Dy. Registrar (उप-पंजीयक),
(011-26105682)
Page 11 of 12
Addresses of the parties:
4. Mr. Girish Mittal
Page 12 of 12