Central Information Commission
Mrajay Chadha vs Ndmc, Gnct Delhi on 1 September, 2014
CENTRAL INFORMATION COMMISSION
ROOM NO. 329, SECOND FLOOR, C-WING
August Kranti Bhawan, Bhikaji Cama Place,
New Delhi-110066
Tel. No. 91-11-26717356
F.No. CIC/DS/A/2013/001664-YA
F.No. CIC/DS/A/2013/001684-YA
Date of Hearing : 23.07.2014
Date of Decision : 01.09.2014
Appellant : Shri Ajay Chadha
Delhi
Respondent : Dr. R.S. Agarwal, Dir./MS
Dr. Arun Sahar , CMO (Med.)
Dr. Sandeep Bhatnagar,
Charak Palika Hospital, NDMC
&
Shri D.D. Gupta, CPIO, GM(P)
MDD Medical System,
(Third Party)
New Delhi
Information Commissioner : Shri Yashovardhan Azad
Relevant fact emerging from appeal:
RTI Applications filed on : 21.05.2013
PIO replied on : 19.08.2013 & 18.06.2013
First Appeals filed on : 25.06.2013
First Appellate Authority (FAA) orders on : No order
Second Appeals received on : 03.09.2013 & 02.09.2013
Information sought:
The appellant had sought copies of financial and technical bids, of a third party, for a tender.
Relevant facts emerging during hearing:
As the appellant and respondent authority, in the above mentioned appeals, are same and subject matter of the case is similar, the same are being heard and decided Page 1 of 6 together. The appellant is not present. The appellant filed two RTI applications on 21.05.2013 seeking the above information. The PIO in both of his replies stated that as the third party has refused to give consent to disclose the information sought, same cannot be provided to the appellant. The FAA disposed of none of the first appeals in the above mentioned cases.
The third party stated that the appellant is the Director of a rival Company and that he will misuse the company documents. He stated that the Company was one of the participants in the said tender for installation of Fabricated /Modular Operation Theatres and that the appellant's company was not an L1 bidder. The third party also stated that the person/entity that has bid the lowest in a tender out of all the pre- qualified bidders is called L1. Typically, the entire or the majority quantity / work is then offered to the L1 bidder. Where other qualifying bidders are also offered part of the quantity / work, they are then required to match the price and conditions offered by the L1 bidder.
The respondent stated that the Delhi High Court, in a Writ Petition filed by the appellant's Company against the Respondent Authority, for quashing/setting aside of the corrigendum issued by NMDC by which conditions of eligibility in the said tender were changed, dismissed the appellant's case as there was no merit in the same.
The third party urged that the appellant has already lost in the high court and that the RTI applications were an effort to seek information at the time when the litigation in High Court was pending. Further, he stated that the High Court imposed a cost of Rs. 50,000/- on the appellant's company on finding that the appellant's conduct was not proper. On query by the Commission whether the said contract has been awarded as on date or not, the respondent replied in the affirmative.
The Third Party urged that the financial/technical bid may not be disclosed, the same was affirmed by the Respondent Authority.
Decision:
In the instant case, information sought by the appellant relates to financial/technical bids of a third party, which have been treated as confidential by the Respondent Authority and the third party itself. The sum-total of respondents' arguments is that appellant has tried to project his personal interest as public interest in order to force the third party to share with him all the confidential information to defend its position in the law suit by the appellant.
Having considered aforementioned submissions of the PIO, the Commission is of the view that the information as sought for by the appellant relates to commercial confidence, trade secrets of a third party, the disclosure of which would harm the Page 2 of 6 competitive position of the third party and disclosure of which is exempted under the provisions of Section 8(1) (d) of the RTI Act.
Section 8(1)(d) of the RTI Act exempts from disclosure- "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 is satisfied that larger public interest warrants the disclosure of such information. From a plain reading of Section 8(1)(d) of the RTI Act it follows that the PIO is exempted from furnishing information including commercial confidence, trade secrets, intellectual property, the disclosure of which would harm the competitive position of a third party. Therefore, in order to come within the exemption under Section 8(1)(d) of the RTI Act, the critical test to be applied is whether the disclosure of the information sought would harm the competitive position of a third party.
In the instant case, it is evident that the Third Party to whom the information relates, have objected to the disclosure of the information in toto. The protection afforded by virtue of the exemption from disclosure enacted under Section 8(1) (d) of the RTI Act cannot be lifted or disturbed unless the appellant is able to justify how such disclosure would be in 'larger public interest'. The burden of establishing that the information sought was exempted from disclosure under Section 8(1)(d) of the RTI Act, however, shall lie on the PIO.
In the instant case, the PIO has not replied invoking the appropriate exemption clause u/s 8(1)(d). The PIO in response to both the RTI applications has merely stated that the information, as denied by the third party, cannot be provided to the appellant. The PIO's replies dt. 19.08.2013 & 18.06.2013 were, in effect, an order u/s 11(3) of the RTI Act.
The FAA, too, has not disposed of the appeals when it should have passed a speaking order to determine whether information on financial/ technical bids should not be disclosed u/s 8(1)(d) as the information relates to commercial confidence, trade secrets or intellectual property, the disclosure of which would harm the competitive position of a third party, disclosure of which has no relationship to any public activity or interest or which would cause unwarranted invasion of the privacy of the individual he was satisfied that the larger public interest justifies the disclosure of such information; or whether CPIO intended to disclose the information relating to third party. Commissioner, NDMC is requested to take notice of the fact that the FAA has not disposed of the first appeals in the above cases, for suitable action.
Keeping in view the information sought, i.e., copies of financial and technical bids of a third party, the Commission would like to draw the attention of both parties to the Black's Law Dictionary, 4th Rev. Edn., definition for the terms 'bid' and 'technical' as:-Page 3 of 6
"BID. An offer to perform a contract for work and labor or supplying materials at a specified price."
"TECHNICAL. Belonging or peculiar to an art or profession. Technical terms are frequently called in the books "words of art."
The Delhi High Court's decision in Bharat Sanchar Nigam Ltd. vs Shri Chander Sekhar (LPA No. 900/2010), was also of the view that the bidders in the technical part may reveal to the tender calling institution their technology and processes evolved and developed by them and which technology and processes may not otherwise be in public domain and which the bidder may not want revealed to the competitors and which technology/processes the bidder may be using works for the other clients also and which technology/processes if revealed to the competitors may lead to the bidder losing the competitive edge in subsequent awards of contracts. The relevant portion of the judgment is reproduced as under:-
"10. ...The vendor's object is to get the bidders to bid "blind" in the hope that then they will bid more than they would if they knew how far other bidders had gone. Additionally, from each bidder's point of view his own bid is confidential and not to be disclosed to any other bidder, and he makes his bid in the expectation, encouraged by the invitation to submit a sealed bid, that his bid will not be disclosed to a rival. If, therefore, a rival has disclosed to him by the vendor the amount of another's bid and uses that confidential information to pitch his own bid enough to outbid the other, this is totally inconsistent with the basis on which each bidder has been invited to bid, and the rival's bid is not a good bid; likewise if the rival adopts a formula that necessarily means that he is making use of what should be confidential information (viz. the bid of another) in composing his own bid. In such a case, the amount of the other's bid is being constructively divulged to him. The process of inviting tenders has an element of secrecy − since nobody knows what would be the bid of the competitor, every one will try to show preparedness for the best of the terms which will be acceptable to the institution calling the tenders....
11. ... If it were to be held that a bidder by virtue of participating in the tender becomes entitled to all particulars in the bids of all the bidders, the possibility of unscrupulous businessmen participating in the tender merely for acquiring such information, cannot be ruled out. Such disclosure may lead to the competitors undercutting in future bids. We may at Page 4 of 6 this stage notice that the Freedom of Information Act prevalent in United States of America as well as the Freedom of Information Act, 2000 in force in United Kingdom, both carve out an exception qua trade secrets and commercial or financial information obtained from a person and which is privileged or confidential. The tests laid down in those jurisdictions also, is of "if disclosure of information is likely to impair government's ability to obtain necessary information in future or to cause substantial harm to competitive position of person from whom information is obtained".
It has been held that unless persons having necessary information are assured that it will remain confidential, they may decline to cooperate with officials and the ability of government to make intelligent wellinformed decisions will be impaired. Yet another test of whether the information submitted with the bids is confidential or not is of "whether such information is generally available for public perusal "and of whether such information "is customarily made available to the public by the business submitter". If it is not so customarily made available, it is treated as confidential.
13. What thus emerges is that a balance has to be struck between the principle of promoting honest and open government by ensuring public access to information created by the government on the one hand and the principle of confidentiality breach whereof is likely to cause substantial harm to competitive position of the person from whom information is obtained and the disclosure impairing the government's ability to obtain necessary information in future on the other hand....
14. Questions also arise as to the information contained in the bids / tenders of the unsuccessful tenderers. Often it is found that the same is sought, to know the method of working and to adversely use the said information in future contracts. Generally there can be no other reason for seeking such information.
15. Once we hold that the information of which disclosure is sought relates to or contains information supplied by a third party and which the third party may claim confidential, the third party information procedure laid down in Section 11 of the Act is attracted...
Page 5 of 6In the instant case, the appellant has not succeeded in establishing that the information sought regarding the technical bid of the tender is in larger public interest. It being so, the information is exempted from disclosure under Sections 8(1)(d) of the RTI Act. However, limited financial information as to the financial quotation/price quoted by the third party in the said tender be provided to the appellant, as the disclosure of the same, at this belated stage is not going to cause any harm to any of the parties.
The Commission u/s 19(8)(a)(v) directs the respondent authority to take steps to provide adequate training to CPIOs & FAAs so that they can discharge their duties with greater responsibility and do not commit errors that can change the course of private litigation in favour of a particular party.
With these observations, the appeals are disposed of accordingly.
(Yashovardhan Azad) Information Commissioner Authenticated true copy. Additional copies of orders shall be supplied against application and payment of the charges prescribed under the Act to the CPIO of this Commission.
(Braham Dutt Harit) Dy. Secretary & Dy. Registrar Page 6 of 6