Central Information Commission
Ankit Baweja (Authorized Signatory Rbl ... vs Reserve Bank Of India on 25 May, 2022
Author: Neeraj Kumar Gupta
Bench: Neeraj Kumar Gupta
के ीयसूचनाआयोग
Central Information Commission
बाबा गंगनाथ माग ,मुिनरका
Baba Gangnath Marg, Munirka
नई द ली, New Delhi - 110067
ि तीयअपीलसं या/Second Appeal No. CIC/RBIND/A/2020/126185
Mr. Ankit Baweja (RBL Bank) ... अपीलकता /Appellant
VERSUS
बनाम
CPIO ... ितवादी/Respondent
Reserve Bank of India
Department of Supervision, Centre-1
World Trade Centre, Cuffee Parade,
Colaba, Mumbai
Relevant dates emerging from the appeal:-
RTI : 25-11-2019 FA : 16-03-2020 SA : 08-09-2020
Hearing: 29-09-2020
CPIO : 11-02-2020 FAO : 16-05-2020
&17-05-2022
ORDER
1. The instant matter has been listed before the Commission for hearing on 29.09.2020, wherein the Commission made following observations:-
"The Commission after adverting to the facts and circumstances of the case, and perusal of records observes that the appellant bank had prayed for interim order restraining the CPIO from releasing the information sought in terms of RTI. In terms of prayer, the second appeal is admitted and keeping in view the urgency the operation of CPIOs reply dated 11.2.2020 and FAA's order dated 16.5.2020 are stayed till further orders"Page 1 of 15
2. Inview of the above, the matter was thus adjourned and listed today for further hearing.
Hearing:
3. Adv. Anand Shankar Jha (Counsel for the Appellant Bank) attended the hearing in person. The respondent, Shri Abhay Kumar, CPIO/General Manager attended the hearing through video-conferencing. The original RTI applicant was not present despite notice.
4. The respondent submitted their written submissions and the same has been taken on record.
5. The Counsel for the appellant has referred the reply provided by CPIO and order passed by the FAA and submitted that the CPIO, RBI and FAA had violated the principles of natural justice, as they had not given any personal hearing to the Appellant Bank before passing their decisions in the matter. No reasons were given for not offering personal hearing in the first appeal. The counsel for the appellant prayed before the Commission that the FAA order dated 16.05.2020 should be set-aside for want of reasons and/or should wait for the outcome of the decision of Hon'ble Supreme Court in W.P. No. 1159/2019. The FAA in its order has mentioned that the interim order passed in Reserve Bank of India vs. Jayantilal Mistry & Ors. would apply only to those banks which are parties to the petition, namely, HDFC Bank Limited, Axis Bank Limited, ICICI Bank, Yes Bank Limited and State Bank of India. As the appellant was not a party in that case, it would not be possible for the appellant to take benefit of that order. He further submitted that the information sought by the RTI applicant was completely exempted as the information sought includes commercial information received in fiduciary capacity, disclosure of information sought is specifically prohibited under various legislations and is specifically exempted under Section 8 (1) (b), Section 8 (l) (d) and Section 8(1)
(h) of the RTI Act. The disclosure of personal information of the banks and its customers violated the right to privacy as guaranteed under the Right to life as enshrined under the Article 21 of the Constitution of India. Such disclosure Page 2 of 15 would cause serious prejudice to the market value and reputation of the Appellant Bank and its customers.
6. The representative of the Reserve Bank of India while presenting their case inter alia submitted that the applicant, Shri Kabir Agarwal, vide RTI application dated 25.11.2019 inter alia, sought, details of top 100 accounts of loan defaulters with highest amounts of outstanding debt as on 31.10.2019 etc. They further submitted that the then CPIO issued the notice under Section 11(1) read with Section 11(2) of the Right to Information Act, 2005 (RTI Act) to the third party i.e. appellant bank informing that RBI was required to disclose the information sought by Shri Kabir Agarwal, enabling appellant to make written submission within 30 days from the date of receipt of the notice as to whether the information sought by the applicant might be disclosed or not along with reasons for the same. After considering the response from Appellant Bank, the CPIO decided to disclose the list of top 100 accounts of loan defaulters with highest amounts of outstanding debt as on 31.10.2019 etc. to the applicant. He further submitted that the Hon'ble Supreme Court in RBI vs. Jayantilal N. Mistry & Ors (2016) 3 SCC 525 observed that :-
"RBI is clearly not in any fiduciary relationship with any bank. RBI ought to act with transparency and not hide information that might embarrass individual banks. It is duty bound to comply with the provisions of the RTI Act and disclose the information sought by the applicant."
The FAA also observed that the list of borrowers as reported under CRILC by banks forms part of the record maintained by the Reserve Bank and the same is in the possession of the Reserve Bank. Hence the same may be disclosed by RBI. The FAA concluded that there was no merit in the appeal of the appellant and accordingly dismissed the bank's appeal.The respondent further contended that in order to withhold any information sought by the applicant under the RTI Act, such information should fall within any of the exempted items under Section 8 and 9 of the RTI Act. The respondent also contended that the list of such defaulters is reported every quarter along with their names and amount outstanding. It is an automatic compilation and such information is readily available with the Reserve Bank of India.
Page 3 of 15Decision:
7. The Commission, after hearing the submissions of both the parties and after perusal of records, observes that the original RTI applicant has sought information regarding names and details of top 100 accounts of loan defaulters with highest amounts of outstanding debt as on 31.10.2019. Further, he has asked for top 100 non-performing asset accounts with highest amounts of outstanding debt as on 31.10.2019 with details of total amounts that are owed by non-performing asset accounts in the country.The CPIO, Reserve Bank of India had issued notices under Section 11(1) and 11(3) to the appellant bank intending to disclose the information. Aggrieved by the decision of the CPIO, the appellant bank had filed first appeal with the First Appellate Authority. The FAA had also dismissed the first appeal of the appellant bank summarily. The Commission observes that the RTI applicant had insisted for disclosure of information as per Jayantilal N. Mistry's case. The Appellant Bank contested that the information sought as a whole is exempted from disclosure under Section 8 (1) (b), Section 8(1) (d) and 8(1) (h) 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 takes note of the submissions made by the Bank that the information, proposed to be disclosed is in the nature of credit information and the same was supplied to the Reserve Bank of India in fiduciary capacity as the Regulator under the provisions of the Banking Regulation 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 174 (a) of the Act, clearly mentions that "no credit information shall be disclosed to any 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 Page 4 of 15 such data will not be disclosed or shared against their right to privacy/commercial interest.
9. 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:-
"79. In another case, where the respondent P.P. Kapoor sought information inter alia about the details of default in loans taken from public sector banks by industrialists, out of the list of defaulters, top 100 defaulters, names of the businessmen, firm name, principal amount, interest amount, date of default and date of availing the loan etc. The said information was denied by the CPIO mainly on the basis that it was held in fiduciary capacity and was exempt from disclosure of such information. Allowing the appeal, the CIC directed for the disclosure of such information. The CIC in the impugned order has rightly observed as under:-I wish government and its instrumentalities would remember that all information held by them is owned by citizens, who are sovereign. Further, it is often seen that banks and financial institutions continue to provide loans to industrialists despite their default in repayment of an earlier loan." This Court in UP Financial Corporation vs. Gem Cap India Pvt.Ltd., AIR 1993 SC 1435 has noted that:
"Promoting industrialization at the cost of public funds does not serve the public interest, it merely amounts to transferring public money to private account'. Such practices have led citizens to believe that defaulters can get away and play fraud on public funds. There is no doubt that information regarding top industrialists who have defaulted in repayment of loans must be brought to citizens' knowledge; there is certainly a larger public interest that could be served on ....disclosure of the same. In fact, information about industrialists who are loan defaulters of the country may put pressure on such persons to pay their dues. This would have the impact of alerting Citizens about those who are defaulting in payments and could also have some impact in shaming them."
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 Page 5 of 15 obligation to ensure operational discipline and support remedial framework. Hence its observations, guidance, directions or remedial actions are an outcome of own functioning.
10. Keeping in view the broader nature of business carried out between a customer and the bank, the Commission takes note of the observations passed by the Supreme Court 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 6 of 15 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 Court in Bihar Public Service Commission v. SaiyedHussain 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 Page 7 of 15 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."
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 Page 8 of 15 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."
11. 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 applicant for complete disclosure which may include inadvertent disclosure of financial, transactional and operational data of the clients of the Bank etc. 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 GirishRamchandra 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 Page 9 of 15 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 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 a statutory authority but while analyzing and assessing their Page 10 of 15 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 the information in the hands of public authority even in the discharge of statutory obligations is protected under fiduciary relationship.
12. There are apparently two set of such information which have been shared by the bank with the regulator under statutory obligation. First is the information/data of clients relating to their business/commercial operations, financial transactions, business and commercial strategy which is shared by clients with financial institutions in full trust and confidence and is held by them in fiduciary capacity, protected from disclosure under the RTI Act in their hands. Second set is the information relating to business strategy, decisions, transactions, other operational data etc. of financial institution which may have bearing on their competitive position and also enjoys the exemption from disclosure in their hands, if it is a public authority or otherwise, under the RTI Act. The Commission is of the view that the exemption of disclosure of certain information under Section 8(1) of the RTI Act, 2005 in the hands of financial institutions does not evaporate once such data/information is shared, in good faith and trust, with the regulator under statutory obligations. This aspect is not the ratio of Hon'ble Supreme Court in Jayantilal Mistry's judgment and decision of the regulator to consider redacting such data/information while disclosing the reports is to be aligned with this and other judicial pronouncements of Supreme Court and High Courts covering such aspects.
13. The Commission further observes that orders simpliciter irrespective of the different objections raised by the appellant bank apparently lacked application of mind or reasons on the part of the CPIO. Rejection or acceptance of the specific objections raised by them was not spelt out in the order which have been passed without giving an opportunity of hearing to them. The Commission further observes that the CPIO is at best free to take decisions on disclosure of information as per provision of RTI Act, 2005 giving a reasoned orders on the objections filed. The CPIO while issuing notice under Section 11 of the RTI Act has given the opportunity to the Appellant Bank to file their objections, if any, against disclosure of information sought but has not found it Page 11 of 15 necessary to give them an opportunity of hearing. While not doing so, the CPIO has not passed any reasoned order covering his deliberations on their objections, his understanding of law or jurisprudence in deciding specific objections, in favor of disclosure etc. Order passed by the CPIO is cryptic, without any reference to objections raised by the Appellant Bank. Similarly, the FAA instead of passing a speaking order have also given a cryptic order to the Appellant Bank. The CPIO and the FAA are expected to apply their mind before issuing the order of intent of disclosing the information. Further, no opportunity of personal hearing was given to the appellant nor speaking order have been passed by FAA for not giving opportunity of hearing or elaborating reasons for accepting /not accepting their objections in his decision in the appeal. The Commission is of the view that every objection should be dealt and rejected/accepted with a reason and reasons for not giving opportunity of personal hearing should be well reasoned too in view of wider implications.
14. The Commission observes that rightful claims of the RTI applicant has to be adjudicated in the light of specific objections filed by the Institution,various judicial pronouncements of Hon'ble Supreme Court and High Courts providing guidance on such matters. Opportunity of hearing should necessarily be provided and orders passed by the CPIO and the FAA otherwise should be reasoned, speaking and clear. In the present case, such order should enumerate the principles for disclosure or non-disclosure of details of top 100 accounts of loan defaulters or various types of data, personal information, commercially sensitive information of clients or institution, specifically excluded disclosures under various Acts, etc.
15. The Commission in this context refer to the judgment of the Hon'ble Delhi High Court in decision in J P Aggarwal v. Union of India (WP (C) no. 7232/2009 it has held that:
"The PIO is expected to apply his / her mind, duly analyse the material before him / her and then either disclose the information sought or give grounds for non-disclosure."
Furthermore, in OM No. 20/10/23/2007-IR dated 09.07.2009, while elaborating on the duties and responsibilities of the FAA, it was stated that:
Page 12 of 15"3. Deciding appeals under the RTI Act is a quasi judicial function. It is, therefore, necessary that the appellate authority should see that the justice is not only done but it should also appear to have been done. In order to do so, the order passed by the appellate authority should be a speaking order giving justification for the decision arrived at.
5..............................The Act provides that the first appellate authority would be an officer senior in rank to the CPIO. Thus, the appellate authority, as per provisions of the Act, would be an officer in a commanding position vis a vis' the CPIO. Nevertheless, if, in any case, the CPIO does not implement the order passed by the appellate authority and the appellate authority feels that intervention of higher authority is required to get his order implemented, he should bring the matter to the notice of the officer in the public authority competent to take against the CPIO. Such competent officer shall take necessary action so as to ensure implementation of the RTI Act. "
16. The Commission has also taken a detailed view in file nos. CIC/RBIND/A/2021/152460 & Ors. dated 05.05.2022 wherein issues of redaction, ratio of Jayantilal Mistry case and other related issues are discussed in detail. Perusal of the relevant paragraphs in Jayantilal Mistry judgment make it clear that the fundamental rights enshrined upon the citizens in form of right to information are not absolute and that the right to information may not draw precedence over right to privacy. Therefore, the Courts need to strike a balance between the rights as well as protections guaranteed to a citizen under Article 19 of the Constitution. Hon'ble Supreme Court of India hasheld that the disclosure of information relating to banks and financial institutions may be allowed taking into account the circumstances and nature of information sought for and not in a blanket manner. The Commission advised the CPIO to consider taking the relevant references from the said order while deciding the cases.
17. 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 Page 13 of 15 required to adjudicate such RTI application 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 Bank and submissions made by applicant to reach the decision in favor or against on case to case basis. He has to factor the observation of Hon'ble Supreme Court in Jayantilal Mistry case, Commission's judgment dated 05.05.2022 and other relevant judgments, some of which have been referred in this order as well. Hence, with these observations the order passed by the CPIO and FAA in this matter is set aside and the case is being remanded to the CPIO for adjudication afresh.The above directions of the Commission should be complied within a period of 30 days from the date of receipt of this order. In case, the appellant/applicant is aggrieved with the order of the CPIO, they are at the liberty to file first appeal before the First Appellate Authority and afterwards second appeal before the Commission.
18. With the above observations, the appeal is disposed of.
19. Copy of the decision be provided free of cost to the parties.
नीरजकु मारगु ा)
Neeraj Kumar Gupta (नीरजकु ा
सूचनाआयु )
Information Commissioner (सू
दनांक / Date : 17-05-2022
Authenticated true copy
(अिभ मािणतस यािपत ित)
S. C. Sharma (एस. सी. शमा ),
Dy. Registrar (उप-पंजीयक),
(011-26105682)
Page 14 of 15
Addresses of the parties:
1. CPIO
Reserve Bank of India
Department of Supervision, Centre-1
World Trade Centre, Cuffee Parade, Colaba,
Mumbai-400005
2. Mr. Ankit Baweja
3. Mr. Kabir Agarwal
Page 15 of 15