Central Information Commission
Nitin Kevalchand Bhandari vs Reserve Bank Of India on 7 July, 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/2022/113901
NITIN KEVALCHAND BHANDARI
(Ahmednagar Merchants Co-Op Bank Ltd.) ......अपीलकता /Appellant
VERSUS
बनाम
CPIO,
Reserve Bank of India, Department
of Regulation, Central Office, RTI Cell,
Central Office Building, 12th/13th
Floor, Shahid Bhagat Singh Marg,
Fort, Mumbai-400001, Maharashtra. .... ितवादीगण /Respondent
Date of Hearing : 23/06/2023
Date of Decision : 06/07/2023
INFORMATION COMMISSIONER : Saroj Punhani
(Note: The instant appeal has been filed by the third party i.e. Ahmednagar
Merchant's Co-op Bank Ltd. aggrieved by an order passed by the FAA, RBI).
Relevant facts emerging from appeal:
RTI application filed on : 12/08/2021
CPIO replied on : 24/09/2021 & 04/10/2021
First appeal filed on : 01/11/2021
First Appellate Authority order : 10/12/2021
2nd Appeal/Complaint dated : 15/03/2022
Information sought:
1The RTI applicant Shri Rajendra Kantilal Chopada filed an RTI application dated 12.08.2021 seeking the following information:
1) The copy of complaints received against renewal / extension of Mr. Suresh Hiralal Katariya a Chief Executive Officer of Ahmednagar Merchant' Co-op Bank Ltd., Ahmednagar in contravention of fit and proper Criteria determined by RBI.
2) The copy of show cause notice issued by RBI to Ahmednagar Merchant's Co-op Bank Ltd. Ahmednagar in reference to complaints filed by members of the bank.
3) The copy of reply/explanation submitted by Ahmednagar Merchant's Co-op Bank Ltd. Ahmednagar to RBI.
4) Copies of email and other correspondence between RBI and Ahmednagar Merchant's Co-op Bank Ltd., Ahmednagar in respect with extension of Mr. Suresh Hiralal Katariya as Chief Executive Officer of Ahmednagar Merchant's Co-op Bank Ltd. Ahmednagar
5) The copy of final order issued by RBI in respect with extension of Mr. Suresh Hiralal Katariya as Chief Executive Officer of Ahmednagar Merchant's Co-op Bank Ltd., Ahmednagar."
The CPIO vide its letter dated 24.09.2021 had sent a notice u/s. 11(1) of the RTI Act to the Appellant bank i.e. Ahmednagar Merchant's Co-op Bank Ltd. stating as under:
"At the outset, it is stated that applicant has suppressed the material facts from this Hon'ble authority that he is member of the bank and as our bank is co- operative society registered under Maharashtra Co-Operative Societies Act and is carrying on banking business, the rights of member are governed by section 32 of the said Act. The provisions of provisions section 32 (1) of Maharashtra Co- operative Societies Act are as follows:
32 (1) Every member of a society shall be entitled to inspect, free of cost, at the society's office during office hours, or any time fixed for them. purpose by the society, a copy of the Act, the rules and the bye-laws, the last audited annual balance sheet, the profit and loss account, a list of the members of the committee, a register of members, the minutes of general meetings, minutes of committee meetings and those portions of the books and records in which his transactions with the society have been recorded. Hence, we 2 submit that information sought by him is not covered by the provisions of section 32 of the said Act.
2) We further submit that information sought by him including copy of complaint received against renewal / extension of Mr. Suresh Hiralal Katariya as chief executive office of the bank and the copies of documents referred in the said letter are confidential documents and confidential information relating appointment of CEO of the bank. In this connection, your Honour's attention is invited to the provisions of sub section (d) of Section 8 of Right to Information Act which is as follows:
8 (d) - "information including commercial confidence, trade secrets or intellectual property, the disclosure of which would harm the competitive position of a third party, unless the competent authority as satisfied that larger public interest warrants the disclosure of such information".
3) We further submit that no public interest is involved in the matter. We also submit that if information sought for along with copies of documents are provided to the applicant, it is likely to be used by him with a view to harass the bank.
4) It may further be noted that in his application dated 12/8/2021 applicant has not mentioned as to for what purpose he wants said information. It may further be noted that the Hon'ble Supreme Court in the ruling reported in AIR 2013 SC (Stipp) 437 in the matter of Thalappalam Service Co-op Bank Ltd. & ors v. State of Kerala & Ors. has held that cooperative societies which are fonned under state co- operative societies, are not State and therefore Right to Information Act is not applicable to the co-operative societies. Considering this aspect, it is submitted that we have strong objection for supplying information / copies of documents sought for by the applicant.
We therefore request that application given by the applicant for calling information / copies of documents under Right to Information Act 2005 is given with malafide intention which may please be rejected."
The CPIO vide its letter dated 04.10.2021 had sent a notice u/s. 11(3) of the RTI Act to the Appellant bank i.e. Ahmednagar Merchant's Co-op Bank Ltd. stating as under:
"After considering your response (vide your letter Ref. No. HO/8945/2021- 22 dated September 24, 2021) to the above notice, it has been decided to disclose 3 information (details of which are given in our abovementioned letter dated September 16, 2021) after severing personal information under Section 8 (1) (g) and Section 8 (1) (j) of RTI Act, 2005. Hence a Notice under Section 11(3) of the RTI Act 2005 is hereby being served apprising you of the decision taken in the matter.
If you desire to prefer an appeal against this decision, the same may be preferred within 30 days to the First Appellate Authority in Reserve Bank of India, Shri Radha Shyam Ratho, Executive Director, Department of Regulation, Shahid Bhagat Singh Marg, Fort, Mumbai - 400001. In case any such appeal is preferred by you within the stipulated period, the same may be communicated to CP10, DOR, RBI."
Being dissatisfied, the Appellant Bank through its authorized representative filed First Appeal dated 01.11.2021. FAA's order, dated 10.12.2021, upheld the reply of the CPIO.
Feeling aggrieved and dissatisfied, the Appellant bank approached the Commission with the instant Second Appeal.
Feeling aggrieved and dissatisfied, the appellant approached the Commission with the instant Second Appeal.
Relevant Facts emerging during Hearing:
The following were present:-
Appellant: Shri Anand, Advocate representative of the Appellant bank present through Video-Conference.
Respondent: Shri Bhupendra Singh Kasva, Manager and Ms. Jeet Pathak, ALA present through Video-Conference.
RTI applicant: Present through Video-Conference.
The written submissions of the Appellant bank and the Respondent are taken on record.
The Representative of the Appellant Bank, during the hearing, reiterated the contents of their written submissions, which states as under: "The Applicant is a member of the bank and Section 32 of the Maharashtra Co. Op. Societies Act, deals with the rights of members to seek information, copies etc. The information sought by the Applicant is not covered by the provisions of Section 32 of the MCS Act and hence question of disclosing said information to the 4 applicant does not arise at all. The Applicant has not disclosed the purpose for which he has sought the information. The appellant submits that the information sought by the applicant is confidential and the same is in respect of commercial secrets of the business of the bank and Section 8 of RTI Act, specifically states that- "information including commercial confidence, trade secrets or intellectual property, the disclosure of which would harm the competitive position of a third party unless the competent authority are satisfied that larger public interest warrants the disclosure of such information." And the appellant bank apprehends that if such confidential information is disclosed, it would be misused and it may even go in the hands of the competitors of the bank and would also adversely affect moral of the customers including fixed deposit holders of the bank and ultimately it may affect stability of the bank. On the contrary there is no public interest involved in disclosure of the information sought for. The applicant is seeking confidential information of the bank. This itself shows that there is oblique motive behind seeking such information and that his application is not given with bonafide purpose. It is further submitted that reports of RBI are confidential documents and when copies of said reports are forwarded to the appellant bank, it is mentioned in para 4 of the covering letter that, "the bank may take necessary steps to insure confidentiality / secrecy in regard to the findings of the Inspection Reports. The security and safe custody of the report would be the sole responsibility of the bank. The copy of Inspection Report should not be submitted to any authority, including courts without prior written approval of RBI." Thus if said information is disclosed, it will amount to violation of RBI directions. 4. It is further submitted that the judgment of RBI vs Jayantilal N Mistry & others which is relied upon by the First Appellate authority has no application to the facts of the present case and hence said authority cannot be relied upon. It is also submitted that the matter regarding as to whether RBI is under obligation to disclose Inspection Reports to Third Party is pending before the Hon'ble Supreme Court and it is yet to be decided finally. Hence till the decision of said matter, the First Appellate Authority ought not have decided the First Appeal. 5. 6. It is also submitted that the Appellant Bank is a Co Operative Society registered under the MCS Act and hence it is a person and independent".
The Respondent, during the hearing, submitted that the information sought by the RTI applicant in his RTI application should be disclosed as per Jayantilal Mistry case.
The Respondent further submitted that the FAA, after going through the notices issued by the CPIO and the contention raised by the appellant in the appeal, vide order dated December 10, 2021 dismissed the appeal with the observation that 5 under the RTI Act, a public authority is expected to provide to the applicant information which it holds and in order to withhold any information sought by applicants under the RTI Act, such information should fall within any of the exempted items under sections 8 and 9 of the RTI Act. The FAA further observed that if any part of the requested information qualifies for exemption, the CPIO would be free to sever/ black out such part and provide the information. The FAA referred to and relied upon the judgement of the Hon'ble Supreme Court in Reserve Bank of India v. Jayantilal N Mistry & Ors. (2016) 3 SCC 525 and stated that in view of the said judgement of the Supreme Court, it would not be possible to claim exemption from disclosure under section 8(1)(d) and (e) of the RTI Act. It was also observed by the FAA that the exemption under Section 8(1)(j) is available in respect of "personal information" of an individual and the word 'personal information' used in Section 8(1)(j) may not cover the information relating to a body corporate. If the information includes details of "individuals", the same may be exempted information under section 8(1)(j) of the RTI Act, 2005.
The RTI applicant Shri Rajendra Kantilal submitted that since he is a member of the Appellant bank, therefore, he is entitled to get the information under the RTI Act.
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 same nature of information sought for from the RBI and the reliance placed by RBI on the Jayantilal Mistry case. 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 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 6 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.
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 7 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)
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 8 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 File No. CIC/RBIND/A/2021/152460 + Ors. dated 05.05.2022 stands endorsed to the Respondent CPIO with emphasis on para 41 & 43 supplied as above .
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 / 9