Central Information Commission
T. V. Sudhakar vs Reserve Bank Of India on 15 September, 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/2022/105509
T. V. Sudhakar
(Kotak Mahindra Bank) ......अपीलकता/Appellant
VERSUS
बनाम
CPIO, ........ तवाद गण/Respondent
Reserve Bank of India,
Department of Supervision,
World Trade Centre-1, Cuffe
Parade, Colaba, Mumbai-400005,
MH.
Date of Hearing : 05/09/2023
Date of Decision : 14/09/2023
INFORMATION COMMISSIONER : Saroj Punhani
(Note: The instant appeal has been filed by the third party i.e. Kotak Mahindra
Bank aggrieved by an order passed by the FAA, RBI).
Relevant facts emerging from complain:
RTI application filed on : 18/07/2021
CPIO replied on : 02/09/2021
First appeal filed on : 23/09/2021
First Appellate Authority order : 12/11/2021
2nd Appeal/Complaint dated : 04/02/2022
1
Information sought:
The RTI applicant Brajesh Kumar filed an RTI application dated 18.07.2021 seeking following information:
"Required inspection report of:
HDFC Bank for 2017-18, 2018-19, 20219-20.
Kotak Mahindra Bank for 2017-18, 2018-19, 20219-20."
In response, the CPIO vide its letter dated 02.09.2021 issued a notice u/s. 11(3) of the RTI Act to the Appellant i.e. Kotak Mahindra Bank.
"Please refer to our letter No. JSJ(116)101.12.001/2021-22 (Vol.05) dated August 13, 2021 wherein we had issued a notice under Section 11(1) read with Section 11(2) of the Right to Information Act, 2005 with respect to captioned RTI request to enable you to make a written submission as to whether the information may be disclosed or not along with reasons for exemption from disclosure under any clause of RTI Act, 2005.
After considering your response dated 20.08.2021 to the above notice, we intend to provide the Risk Assessment Reports for the years 2017-18 and 2018-19 and Inspection Report for the year 2018-19 of your bank to the applicant.(Copies of the RAR-Section II (including Annex)-2018 and RAR-2019 of your bank are attached after redacting the information exempt from disclosure under section 8(1)(j) and 8(1)(h), respectively of the RTI Act, 2005) Hence, a Notice under Section 11(3) of the RTI Act. 2005 is hereby given apprising you of the decision taken in the matter."
Being dissatisfied, the Appellant bank through its authorized representative filed a First Appeal dated 23.09.2021. The FAA vide order dated 12.11.2021 upheld the reply of CPIO and appeal was dismissed accordingly.
Feeling aggrieved and dissatisfied, the Appellant bank approached the Commission with the instant Second Appeal.
Relevant Facts emerging during Hearing:
The following were present:-2
Appellant: Adv Ayesh Gandhi representative of the Appellant bank present through Video-Conference.
Respondent: Vivek Mittal, Manager; Honey Dhiman, Legal Officer present through Video-Conference.
Original RTI applicant: Not Present.
The written submissions of the Appellant bank and the Respondent are taken on record.
The Counsel for the Appellant Bank referred to 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. He further submitted that a careful appreciation of the grounds of appeal would reveal that the FAA failed to appreciate the legal position and other attendant factors while deciding on the application made by the RTI Applicant. As elucidated in the grounds of appeal, this is a matter of serious concern for the Bank and any disclosure of the Information would cause serious loss, injury and prejudice to the Bank. He further submitted that in accordance with the provisions enshrined under sec. 8(1) (d), information including of commercial confidence which has the propensity to harm the competitive position of third party is exempted and as the banking sector is based on commercial trust and confidence, any disclosure without the consent of the concerned customer will not only impact the faith of investors in banks but will also harm the competitive position of the concerned customer. Therefore, the information sought is exempted from disclosure under Section 8(1)(a), (d), (e) and
(j) of the RTI Act.
The Respondent submitted that the information sought by the original RTI applicant is part of records maintained by RBI and liable to be disclosed by RBI in accordance with RTI Act. Further, as per Jayantilal Mistry's case, complete information can be disclosed to the RTI applicant.
Decision:
In the facts of the instant case, it is pertinent to note that a decision of a coordinate bench of the Commission in the matter of various third-party banks vs. RBI vide File No. CIC/RBIND/A/2021/152460 + Ors. dated 05.05.2022 covers a detailed discussion inter alia on the same nature of information sought for from the RBI and 3 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 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 4 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 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 5 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 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 / 6