Central Information Commission
Mr.Mahendra Singh vs Ministry Of Railways on 17 September, 2010
Central Information Commission
CIC/AD/A/2010/000783
CIC/AD/A/2010/000847
Dated: September, 17, 2010
Name of the Applicant : Shri Mahender Singh
Name of the Public Authority : North Western Railway, Jodhpur
It has been decided to club the two captioned cases as the Applicant is the same in both cases
and also since the Respondents representing the Railways Housing Cooperative Society in the
first case i.e. CIC/AD/A/2010/000783 and those representing the Northern Railway Consumer
Society in the second case i.e. CIC/AD/A/2010/000847 had relied on the same documents viz. the
Indian Railways Establishment Manual, Volume II, Chapter XXIII in support of their contentions
submitted during the hearing. Both the cases viz. CIC/AD/A/2010/000783 & CIC/AD/A/2010/000847
were heard on 21.7.10.
Adjunct to the CIC Decision of even No. dated 21.7.2010
Background
1. Based on the submissions of the parties and the documents on record, the Commission passed the captioned order dated 21.07.2010 in the Case No. CIC/AD/A/2010/000783, relevant extracts whereof are as follows:
"On perusal of the information, it was observed that available information had been furnished by the PIO, NW Rly along with some information furnished by the Society on 20.11.09. However, for the remaining information i.e. against points 2 and 3 which is available only with the Society, the Respondent stated that the same could not be obtained as the Society was not a Public Authority since it is not regulated by the Railway Administration and is governed by the byelaws of the Societies, subject to control and sanction by the Registrar under the State Act or the relevant provisions. However, it was noted by the Commission that the Society Office is situated on Railway land and that telephone and other facilities are being provided by the Railways to the Society office. Hence the Commission would like to probe further into the matter of whether the Rly.
Housing Cooperative Society is a Public Authority or not and hence invites comments of the PIO, NW Rly Jodhpur as also those of the third party i.e. the said Society in this connection, including reasons why the Society cannot be considered s a Public Authority as defined under section 2(h) of the RTI Act.
The Commission directs the Appellant, the PIO and Appellate Authority of NW Rly, Jodhpur and also the third party (i.e, the Rly, Housing Cooperative Society) to be present at a hearing to be held on 27.8.2010 at 2.30 p.m. along with their comments. The PIO, NW Rly. Jodhpur to forward a copy of this order containing the hearing notice to the Railway Housing Cooperative Society".
In the case no. CIC/AD/A/2010/000847, the following order was passed:
".....In this connection, the Commission noted that the service conditions of the employees, officers and servants of the Consumer Society are not regulated by the Railway Administration and are governed by the byelaws of the Societies, subject to control and sanction by the Registrar under the State Act or the relevant provisions. However, it was also noted that the Society Office is situated on Railway land and that telephone and other facilities are being provided by the Railways to the Society office. Hence the Commission would like to probe further into the matter of whether the Rly. Consumer Society is a Public Authority or not and hence invites comments of the PIO, NW Rly. Jodhpur as also those of the third party ie. the said Society in this connection, including reasons why the Society cannot be considered as a Public Authority as defined under Section 2(h) of the RTI Act. The Commission therefore directs the Appellant, the PIO and Appellate Authority of NW Rly, Jodhpur and also the third party (i.e. the Rly, Consumers Society ) to be present at a hearing to be held on 27.8.10 at
2.45p.m. The PIO, NW Rly. Jodhpur to forward a copy of this order containing the hearing notice to the Railway Consumers Society...."
2. The Bench of Mrs. Annapurna Dixit, Information Commissioner, scheduled the hearing for August 27, 2010.
3. Shri Ashok Kumar Mehta, PIO, Shri Basant Singh, APO/Nodal Officer represented the Public Authority and Shri Ghan Shyam Sharma from RHCS, Jodhpur in the case No. CIC/AD/A/2010/000783.
Shri Ashok Kumar Mehta, PIO, Shri Basant Singh, APO/Nodal Officer from the Public Authority and Shri Sohan Lal from RCS in the case No. CIC/AD/A/2010/000847.
4. The Applicant was not present during the hearing.
Decision
5. The Commission took cognizance of the documents placed before them including the Rules governing the Consumer CoOperative Societies (Or CoOperative Stores) as laid down under the Indian Railways Establishment Manual, Volume II, Chapter XXIII. It is pertinent at this point to therefore discuss the salient features of the said Rules, relevant extracts whereof are as follows:
"CONSUMER COOPERATIVE SOCIETIES (OR COOPERATIVE STORES) 2303. Organisation. Consumer cooperative societies referred to in this Chapter mean retail societies which provide for the needs of their members.
The work relating to organisation, supervision routing inspection, etc. of consumer co operative societies and giving guidance to them and developing their activities is the responsibility of the Railway Administrations. This work will be under the overall control of the Chief Personnel Officers at the headquarter and they will ensure necessary co ordination in the division through the Divisional Personnel Officer, who in turn should keep a close watch on the work of the welfare inspectors one of whose essential duties to look after the cooperative societies. The welfare Inspectors should be given training in the principles and practice of 'Cooperation' by the cooperative inspectors attached to the railways according syllabus approved by the Railway Board. The welfare inspectors should associate themselves with the cooperative inspector during the latter's visit to the societies and learn as much as possible from him of the technique of organisation, supervision, etc., of consumer societies and acquaint themselves with the type of work that is required to be done by them. One welfare Inspector should be placed incharge of each centre for attending to all the items of work relating to that particular society. The welfare inspectors should submit to the Chief Personnel Officers through the Divisional Personnel Officers monthly report showing the work actually done by them in connection with the organisation development etc., of the cooperative Societies.
Railway Administrations should submit to the Railway Board a quarterly report in form No. 79 of appendix 9 about the progress made in developing cooperative activity by the welfare Inspectors. These reports should be for the quarters ending 31st March, 30th June, 30th September and 31st December of each year and should be submitted within a month from the close of the quarter.
2304. There should normally be only one cooperative store functioning at a junction station between two or more railways to be established under the auspices of the railway working the station who should bear all debits on account of grant of subsidy. To open branches of the main store, accommodation may be provided by the other railway for whose staff, branches are proposed to be opened. In case a nonrailway building is rented for the branch, the cost of rent will be borne by the working railway under whose auspices the main store is established.
2305. Classification. The consumer cooperative societies should be classified as follows:
1. Small cooperative stores with a membership below one thousand;
2. Big cooperative stores with a membership of one thousand and above.
The area of operation of each store will be fixed on the following principles: a. Competition between different stores should be avoided, i.e. the jurisdiction of one society should not overlap with that of the other;
b. A small store will generally have an area of operation covering a radius of about 32 Kms and minimum of six hundred railway servants residing therein; c. the area of operation of the store must lie within the territorial boundary of the State in which the head office is situated.
2306. Membership
1. Membership shall be open to all serving railway servants. A Railway servant desiring to become a member shall be required to purchase at least one share. The value of each share shall not be less than Rs. 10. They should also pay an admission fee of 50 Paise or Re. 1,as may be provided in the byelaws of ,the society.
2. Retired or exRailway servants should not be permitted to become members or to continue as such beyond a limited period.
3. Relatives and nominees of retired railway servants should not be allowed to derive any benefit of membership and their share money should not be accepted but refunded, if necessary.
2307. Management. Railway cooperative societies shall be managed as under: The Management of the societies will be carried on through a management committee which will be formed from amongst the shareholders of the society;
1. The society will appoint a paid secretary who should supervise, subject to the control of the managing committee, the day to day working of staff and organize the business of the society;
2. The managing committee, may appoint subcommittees for supervising different activities of the society;
3. Subcommittees so appointed may be delegated final powers in certain matters but policy decisions taken by them must be confirmed by managing committees; and
4. The supreme authority must vest in the general body of shareholders; 2308. Taking part in the activities of Consumer Cooperative Societies by gazetted railway servants. Gazetted Railway servants can become members of consumer societies and also be elected as officebearers but they should not become exofficio officebearers unless the Railway Board so approve.
Note In respect of Railway men's consumer Cooperative societies made eligible for financial assistance referred to in items (i) and (ii) of para 2309 below, the above provision will not apply and in that case the General manager (or officer to whom the General manager delegates his powers in this respect) would nominate on the managing committee of the Railwaymen's Consumer Cooperative society Concerned, gazetted officers as official representatives upto one third of the strength of the Managing Committee or three Director whichever is less.
2309. Concessions. The following concessions are granted to these societies: i. Grant of Matching share capital contribution upto Rs. 2,500 (Per society) in the case of those Railwaymen's consumer cooperative Societies which have started functioning on and after 1.9.1963 as also in the case of such of dormant societies which cased to function for want of finance and in the opinion of the Railway Administration could be revived by the grant of this concession. The power to sanction this rests with the General Managers which may be redelegated by them to Chief Personnel Officers but not to any authority lower than him.
(NO. 63/E (Coop)/40/26 Pt.dt.5.6.69) ii. Grant of interest bearing repayable working capital loan upto Rs. 10,000 per society to such of the Railwaymen 's Consume r Cooperative Societies which, for want of finances, are either not functioning progressively or cannot expand their scope of activity and take up additional activities like the opening of fair price shops. The actual amount of capital loan, however should be determined with specific reference to the actual need of the society. Cooperative Societies having more than one fair price shop may however be granted working capital loan @ Rs. 10,000 per fair price shop instead of Rs. 10,000 for the society as a whole. The power to sanction this loan is delegated to the General Managers subject to:
i. provision of funds by Railway administration for the allotment of which the Board should be approached in advance;
ii. fulfilment of conditions by the Railway consumer coop. Stores as laid down in para 2308 above and iii. the powers delegated may be redelegated to Chief Personnel Officers but not to any authority lower than him.
As to the authorities empowered to execute agreement form on behalf of the President of India for grant of interest bearing loan, para 16 of Part XVIII of the revised notification relating to the execution of contracts etc. issued by the Ministry of Law on 1.2.66 circulated to the Railways etc. vide Board's letter No. E(X)II62/CNT1 dt. 25.2.65 may be referred to.
(No. 63/E(Coop)/40/26 dt. 1.2.65, 64/E(Coop)/14/7 PT. Dt. 28.3.66, 63/E (Coop)/ 40/26/PT. Dt.5.6.69 and 74/E(Coop) 14/9/ Dt. 6.8.74) iii. Subsidy amounting to not more than half the administrative and establishment charges for the first three years, irrespective of whether the financial results of working of the society reveal a net profit or not subject to the condition that the state cooperative Department concerned certifies that the society is functioning properly; iv. Subsidy amounting to not more than half the administrative and establishment charge incurred in respect of fair price shop section in the case of the Railwaymen's Consumer Cooperative Societies which were in existence for more than 3 years from the date they started fair price shops section subject to the proviso that the concession will not be for more than 3 years from the date of starting fair price shop; v. a. Provision of suitable accommodation on payment of nominal rent of Re. 1 p.a. (plus actual municipal taxes) should be charged from such of the Railway men's Consumer Cooperative societies, which run fair price shops. b. rent to be charged from such of the Railmen's Consumer Cooperative Societies, which do not run fair price shops should be only the out of pocket expenses in the way of maintenance charges and municipal taxes but should not include any element of depreciation and of interest. In this case rent calculated at the above rates should be recovered in terms of para1960E. (No. 63/E (Coop)/40/25 dt.303.64) i. provision of one ceiling fan for the society free of cost ; ii. Supply of water and electricity at concessional rates . iii. Recovery of dues on account of credit sales from the salary bills of railway servants; iv. Recovery of share money in lumpsum or by instalments from salary bills of Railway servant;
v. Special passes and special casual leave to the members of the managing committee for attending meetings of the committee or board of directors or a subcommittee. vi. Privilege passes and privilege ticket order to the employees of the societies;
vii. Medical facilities to the staff of the societies;
All reasonable assistance should be afforded in the matter of giving quarters to the staff of the Railwaymen's Consumer Cooperative stores (including the fair price shops run by them) wherever it is considered absolutely essential and where the towns and villages are situated far away from the railway colonies, reasonable rent i.e., as for outsiders being recovered when ever feasible to spare quarter.
Note The concessions of additional subsidy and nominal rent of Re. 1/ P.M. to the Railwaymen's Consumer Cooperative Societies, are intended to be allowed to such of the societies which continue to trade in the items of commodities normally covered by the fair price shop scheme for supply to their member and other railway employees even during the period when the fair price shop sections are temporarily closed down during a year according to the policy of the State Governments. Such broken periods should be reckoned for the purpose of additional subsidy for the maximum period of 3 years and that the broken periods wherein the Consumer Cooperative Societies do not effect sales of the items normally covered by the fair price shops scheme should be excluded for this purpose.
2310. Subsidy. For the purpose of calculating the amount of subsidy to the consumer co operative societies the following, items shall be included: Establishment Charges:
a. Pay and allowances of the staff, including monthly allowances to the secretary and other office bearers, as also society's contribution to a duly constituted employees Provident Fund, if any subject to the following exceptions: i. Cost of staff appointed for maintaining the accounts of credit given to members by way of credit sales; and ii. Honoraria which shall be paid out of the net profits after the end of the year; b. travelling allowance to staff and officebearers by way of conveyance charges, if any; c. Contingent expenses claimed by the staff and officebearers by way of conveyance charges. If any;
d. Sitting fee , if any, paid to members of the managing committee or those of the board for attending meeting of the managing committee or board of directors;
Administrative Charges
(e) Rates and taxes excluding charges on account of water and electricity;
This does not include sales tax, transport charges, insurance premia, purchase of stationery and books, printing of forms, postal expenses and audit fees etc. and municipal tax payable on the building owned by such a cooperative society shall also be excluded.
Note (1) All consumer cooperative societies registered after 12th August 1949 despite the fact that they were working as unregistered organisations prior to that date, should be considered eligible for the subsidy provided they fulfil other conditions.
(2) No subsidy will be paid to the societies towards the rent that will be borne by them with effect from 1st October 1958.
(3) Any subsidy, grant in aid etc. which for all intents and purposes is an "income" of Railwaymen's Consumer Cooperative Society should be taken into account for accounting purposes and shown in the annual profit and loss accounts separately for their relevant period.
(No. E(Coop)/55 Taxes/1 Dt. 16.3.1956 & 65/E (COOP)/34/1 Dt. 19.9.1967) 2311. Procedure for payment of subsidy.
i. The following procedure is prescribed for expediting the payment of subsidy. Shortly after the close of each quarter of the year, i.e. ending 30th September, 31st December, 31st March and 30th June the consumer cooperative societies should, in the first instance, make a application in Form No. 80 of appendix 9, to the General Manager, though the respective Registrar of cooperative societies giving therein the different items as laid down in paragraph 2310. The registrar of Cooperative Societies, while forwarding the application of society to the General Manager of the railway will attach a certificate in form No. 81 (Section A) of appendix 9 as to whether the society has been working properly or not. If the claim is supported by the Registrar of Cooperative Societies which shall include a certificate signed by an Assistant Registrar, Deputy Registrar or Joint Registrar on behalf of the Registrar, the papers should be passed on to the Cooperative inspector attached to the railway who will visit the society shortly there after, scrutinise each items carefully with the vouchers and see whether these are in order. In the event of an item, the claim for which is not covered by the Railway Board's instructions referred to above, it should, for the time being, be excluded though the matter can be settled later by making a reference to the Railway Board. The paper along with the inspector's certificate in Form No. 81 (Section B) of Appendix 9 should he passed on to the Financial Adviser and Chief Account Officer for payment without further scrutiny. In case the Registrar does not give a certificate of satisfactory working the society's claim should be rejected and the society informed accordingly.
ii. However, for payment of subsidy in terms of para 2309 (iv) production or a certificate of the Registrar of Cooperative Societies is not necessary. Instead, Co operative /Welfare Inspector in addition to giving a certificate in Form No. 81 (Section B) should also give a certificate in Form No. 81 (Section A). Such a certificate will be countersigned by the officer under whose signature the subsidy bill is drawn. In the certificate to be recorded in Form No. 81 (Section B) the following may be added at the end.
" To the best of my knowledge and belief, there is no reasonable suspicion of corrupt practices in the working of the above Railway men's Consumer Cooperative society."
(No. 64/E (Coop)/9/6 dt. 1557) 2312. Allocation of subsidy. The expenditure incurred in connection with the grant of subsidy should be booked under the subdetailed head J.421subsidy to Cooperative stores.
2313. Accommodation. Where convenient suitable existing premises may be offered to the consumer Cooperative societies on rent. If these are not available, private accommodation may be taken ensuring that the rent is responsible and the accommodation is not excessive. If neither of the course is feasible, new building may be constructed with Railway Board's sanction. The buildings should be so designed as to admit of their conversion into staff quarters later, if necessary. In the newly established railway colonies it should be possible to provide accommodation to consumer cooperative societies where provision for construction of a market exists; where however, a market is not provided the construction of building for allotment to the society on a reasonable rent should be dealt with separately for each case on merits and with the prior approval of the Railway Board.
2314. Recovery of rent. - Railwaymen
's
Consumer Coop. Societies as well as any
agency authorised by State Govts. to run fair price shop will be charged nominal rent of Re. 1/ per annum (Plus actual municipal taxes) which also includes the rent of electrical installations provided in the building so licensed. In the case of Railwaymen's consumer Coop. Societies which do not run fair price shops, the rent to be charged should only cover maintenance charges @ 2.5% per annum on the capital cost w.e.f. 235.66. Municipal and other taxes payable under local laws are to be recovered in addition. In case of Railway buildings, constructed after 26.5.50. the service charges paid to the local bodies in lieu of municipal taxes should be recovered from the societies allotted with such accommodation. The rent will be recovered from the existing as well as from the new societies whether they are housed in railway buildings which are already available in buildings which are specifically for the purpose as under:
Rent Payable During the first year from 1st Oct. Nil 1958 or the date of inauguration of the Society whichever is later.
Do. Second onefourth
year
Do. Third Half rent
year
Do. Fourth Three
year fourths rent
Do. Fifth year: Full rent.
onwards
2315. Minor alterations to buildings. Minor structural alterations may be carried out by the railways to building allotted to consumer societies so as to make them suitable for locating their shops.
2316. Lease of Railway land. Land, if surplus to railway requirement may be licensed on nominal rent to the consumer cooperative societies for the purpose of construction of their own building subject to the condition laid down in paragraph 819, of the Indian Railway Code for the Engineering Department. The licence should include provision for resuming the land at short notice not exceeding a month. The buildings that may be put up by the societies on railway land should be according to specification approval by the Railway Administration concerned so that such buildings may be utilised for staff quarters later.
2317. Supply of equipment. No. equipment should be supplied to cooperative stores free of cost.
2318. Provision of Electric fans and charges for electricity and water. The co operative stores should not be charged for electrical installations and fittings as the rent for the accommodation covers the cost of electrification also. The expenditure for electrification should be met from the funds provided for staff amenities. Ceiling fans may be provided free of cost at not more than one in number per store, additions being paid for by the society concerned. The rate for consumption of electricity should be fixed on the same basis as far railway institutes.
2319. Rules of procedure for credit sales.
1. The consumer cooperative societies should encourage cash sales. If, however, credit sales are to be introduced there should be provision in the byelaws on the lines mentioned below:
i. The sales should generally be in cash; where however, credit sales are to be introduced, the society may, subject to the restrictions that may be prescribed in the behalf, allow at any one time the purchase of consumer goods on credit only up to the maximum value of the share subscribed by a railway servant even if not fully paid up plus the actual amount of the purchase deposits, if any, at his credit provided that he executes an agreement or an authority in favour of the Railway Administration to deduct from his monthly pay the amount due from him on account of the sales on credit. ii. The society shall pay to the Railway Administration from time to time , the fee levied by the later for the recovery of its dues from the salary bills of the member; iii. Every society shall obtain the approval of the Ministry of labour under Section 7(2)(i)) of the payment of wages Act, 1936, before introducing credit sales, in respect of the staff governed by that Act. The amount of credit sales should not exceed the limit prescribed by that Ministry under the Payment of Wages Act.
Note: No Amendments to the bye laws which would infringe the provision of the Payment of Wages Act, 1936 shall be made without the prior approval of the Central Government.
2. The various restrictions that may be imposed on the society in respect of credit sales by Railway Administrations are: i. The credit sales to the extent of full value of shares subscribed, plus the amount of purchase deposits may be allowed, in the case of those societies which are in a sound financial position and have surplus funds at their disposal and are not indebted to their members or nonmembers in the shape of loans or deposits etc. ii. The limit of restricted credits to the extent of 50% of the value of the share or shares subscribed by a member plus the amount of purchase deposits, if any at his credit, should be applied in all other cases.
3. After the necessary approval has been obtained, the society shall obtain in duplicate, an agreement in Form No. 82 from its, members and furnish one copy of it to the Railway Administration.
4. Refreshments viz., Tea, coffee, cooked meals, etc., served from canteens or any tea stall, etc., managed by the society, should be paid for in cash by the railway servants and no credit sales should be permitted in such cases.
5. Societies which are selling goods on credit and have not fallen in line with the above instructions will not be afforded the facility of recovery of their dues through salary bills.
6. No recovery of dues will be made if credit sales have been based on purchase deposits, since the dues in question can be set of by the cooperative societies against the deposits at the credit of any particular member.
7. The following procedure will be observed in connection with recovery of credit sale dues: i. Every society should prepare in triplicate a list as in Form No. 83 of its member making credit purchases, and forward it in duplicate to the respective Pay Bill Section of the Railway Administration not later than the 20th of each month which would, in turn, make the deduction from the salary bills in hand and pass one copy to the Accounts office for taking further action. The Account office will pass the bill and arrange to send a cheque for the consolidated amount to the society together with that copy of the list. The society should, on receipt of the cheque arrange to pass credit entries in respect of the recoveries.
ii. The Railway Administration will try to expedite the despatch of the recovered amount which should as far as possible be done within 30 days of receipt of the society's demand.
2320. Recovery of share money through salary bills. Deduction on account of share money in one lump or in instalments through salary bills can be permitted only in the case of those organisations which have been registered under the Cooperative Societies Act of the respective States and if the deductions have been otherwise authorised under the payment of wages Act, 1936.
The following procedure will be observed in this connection:
i. the consent of the railway servant who desires to pay the value of share/shares purchased by him through his salary bill be obtained by the society in Form No. 84 of Appendix 9 in duplicate. One copy of form will be furnished to the Railway Administration (bill preparing section) along with the first recovery list and the other copy will be kept by the society:
ii. The society should prepare in triplicate a list of recoveries in Form No. 85 of Appendix 9 and forward it in duplicate to the respective bill preparing section of the Railway Administration which will make the deductions from the salary bills of the Railway servants concerned and pass on one copy and the recovery list along with the bills (after filling in Column 6) to the Accounts Office. The Account Office will pass the bill and arrange to send a cheque for the consolidated amount to the society together with that copy of recovery list. The society on receipt of the cheque and the recovery list will arrange to check the correctness of the recoveries and make necessary entries in the register maintained for this purpose.
2321. Passes, Privilege Ticket Orders and Special Casual leave.
1. Special casual leave and special passes over the home and foreign lines are admissible to such railway servants as are members of managing committee of the consumer cooperative societies for attending the meetings of the managing committees including those of board of directors and sub committees of the cooperative societies but not for attending meeting of the shareholders whether general annual, ordinary or extraordinary. Special passes should not, however, be granted to the railway servants connected with the management of consumer cooperative societies organised at different centres on the railways, for going out to make purchases from the wholesale markets Railway employees who are managing committee member and office bearers of the Railwaymen's Credit /Consumer/Housing Cooperative Societies and are posted outside the Headquarters of the societies when attending the meeting of the Managing Committees, including those of Board of Directors and subcommittees of the Co operative Societies may be allowed Special Casual leave upto a maximum of 15 days in a calendar year plus the minimum period required for the journeys to attend such meetings.
This is applicable to Railway servants who being members of the Managing Committees of the Cooperative societies, have to remain absent from their duties on occasions enumerated:
a. To attend court in connection with cooperative matter; b. To contact and settle matters with Register or other State officials at the instance of the Railway Administration;
c. To attend any special meeting which may be convened by the Railway Administration; and d. To contact civil authorities for lifting of the weekly quota of fair price shops etc.
2. Privilege passes and privilege ticket orders that may be issued to the staff of the consumer cooperative stores are detailed in Railway servant (Pass) Rules, 1986.
3. Not more than one duty card pass may be granted to each retail society for its salesmen or managers where mobile van service is operated or up to places where sales depots or branches are located.
Note: In the case of Cooperative Credit Societies/Banks, special casual leave may be allowed as per actual requirements upto a maximum of 30 days in a calendar year. This increased limit would be applicable for attending meetings of the Managing committees and the Board of Directors but not for meeting of the subcommittees.
(No. E (G) 70 LEI/2 dt. 3971) 2322. Medical facilities. Free medical facilities as outpatients and indoor treatment as available in railway hospitals and dispensaries may be given to the staff of the consumer cooperative societies but at per capita basis in the case of members of their families, the per capita charge, being calculated on the basis of total expenditure on medical service incurred on railway servant and their families during the previous financial year.
2323. Byelaws. The cooperative societies shall adopt the model byelaws framed by the Railway Board in consultation with the Registrars of Cooperative Societies concerned, copies of which shall be obtainable from the Railway Administration or Cooperative Department of the States.
Guiding Principles 2324.
i. The societies should not incur expenditure which is not in the interest of promotion of their stated objects and for the purpose set forth in the byelaws particularly in view of the large number of concessions made to enable them to stand on their feet. The societies should, therefore, avoid all wasteful and unauthorized expenditure, e.g. making contributions to labour organisations or political bodies, giving farewell parties to outsiders etc. ii. With a view to strengthening their financial position, the consumer cooperative societies on railways should invest at least onethird of the reserve fund outside their business in Government securities or other approved forms of investment permitted by the rules farmed under the Cooperative Societies Act.
iii. In organising and running the societies, the following points need to be borne in mind:
a. They should not proliferate into number of branches organised as "onestop shopping facilities for the whole range of consumer needs." b. A judicious selection should be made of items to be sold with emphasis on high margin goods.
c. Close and constant watch should be kept on overheads which if unchecked, could erode into available margins, which are already low.
d. Maximum and minimum levels of stock should be prescribed in order to prevent over or under buying.
e. There should be a properly organised system of purchases based on reliable commercial intelligence and adequate expertise, a check on incoming material as regards quantity and quality and prompt, and effective system of stores accounting to keep a watch on inventories.
f. There should be a system of concurrent accounting and effective internal audit for detection as well as deterrence of mistakes and frauds.
g. A welldefined budget should be prepared for setting up standards of performance. h. There should be an experienced and alert management with a clear chart of responsibilities, who would be capable of inspiring confidence and enthusiasm and ensuring effective supervision at the floor and departmental level.
This requited that management should be entrusted to men of integrity and proven experience in the line.
(No. 70/E(Coop)/9/ 15dt. 171970 2325. The societies, should not be allowed to bid at auction sales of lost and unclaimed property on railways nor should they be permitted to work as supply contractors for railway's requirements. There is however, no objection to such cooperative societies as have acquired a certain amount of stability and are in a position to offer service in an efficient manner, being permitted to supply provisions, groceries, cereals, pulses etc., to the railway catering establishment and canteens and they should be considered along with others purely on the basis of competitive prices and quality of material.
2326. The system of selling goods through an outside agency should be discouraged as also the practice of employment of private agents on payments of commission to conduct the business of consumer societies. If any society functions in contravention of the above policy its recognition should be withdrawn and all facilities to it stopped.
2327. The consumer cooperative societies shall purchase and sell as far as possible, store of established quality e.g. Agmark edible oil and ghee etc. 2328 Registration under sales Tax Act. The societies should get themselves registered under the respective Sales Tax Acts and the tax should be recovered from the purchasers or included in the selling price and paid to the respective State Government in accordance with the law and practice of the State concerned.
2329. Dividend. A consumer society may not declare a dividend when it has sustained a loss in its working for a particular year.
2330. Rebate. The net profit earned by the society in any year shall be disposed of in accordance with the bye laws of the society. The society shall maintain a proper, and correct account of purchases made by every member and at the end of the year consolidate the total amount of purchases in each case. This account shall be utilised for calculating the share of rebate earned by the member on the purchases he makes. Rebate shall be paid after the audited financial statements are passed by general meeting and only if there is a surplusleft after making allocations to reserve fund, dividend etc., in accordance with the bye laws. If the dividend or debate is not claimed for 3 years from the date it becomes due, it shall be forfeited to the reserve fund of the society. Rebate shall be paid at higher rate on cash purchases than on purchases made on credit.
2331. Restrictions regarding collection of minimum share capital. No restriction other than what may have been fixed statutorily or through executive instructions by the State Government need be imposed by the railway on the consumer cooperative societies regarding the collection of minimum shares capital before the societies are recognised by the Railway Administration.
2332. Audit i. The audit of consumer cooperative societies should be done by the State Co operative Departments. Normally, the audit should be completed within six month of the close of the cooperative year ending 30th June. The Railway Administrations should keep a watch on the progress in auditing the societies and where necessary approach the Registrars of Cooperative Societies concerned for arranging timely audit. Any case of undue delay in completing the audit of societies should be brought to the notice of the Railway Board.
ii. In order to assist the auditors in the timely completion of audit, the railways should impress on the societies the need to keep their accounts uptodate and to close them soon after the close of the cooperative year. They should also ensure through the agency of the welfare Organisation, including the Personnel Officers that the societies have done so and have kept their accounts ready for check by the auditors. iii. Soon after the receipt of the audit report in each case, the Railway Administration should obtain two copies of the audited balance sheets and other final accounts (viz., statements of receipts and disbursements, trading and profit and loss accounts) from the societies concerned so as to facilitate a comparative study of the progress made by the societies during each year. One copy of these statements should also be submitted to the Railway Board for their information.
iv. The welfare Inspectors should check up during their visits to the societies whether the audit has been completed and audit reports received by the societies. If so, they should arrange for submission of the copies of the reports to the Railway Administrations on the spot. If not, they should meet the Assistant Registrar/ Auditor and arrange for the timely completion of audit.
2333. Progress Report. The cooperative inspectors as well as the consumer co operative societies should furnish their reports in regard to the organisation and registration of new societies and supervision of the copies of the existing societies as the case may be to the Railway Administration concerned, who should prepare monthly reports in form No. 86 of Appendix 9 on the basis of the above information and furnish the same to the Railway Board together with their own remarks about the general progress made by the consumer cooperative societies by the 10th of the month following that to which the report pertained.
2334. Scale for paid establishment. Standards to be followed ordinarily as regards the optimum size of the cooperative stores and the managerial personnel to be employed in each case are given below: i. A small store having a membership of at least three hundred but not exceeding one thousand, can be managed by a secretarycummanager with a committee of management for exercising supervision and deciding policy matters; ii. The bigger stores having a membership of over one thousand may require the services of a secretary and a manager to assist the governing body in managing the stores. The need for this will depend on the volume of business, the location of the clientele etc. if branches have to be opened at stations other than the headquarters, of the stores, staff for such branches will naturally have to be, found separately. The emphasis should, however, be on economy in expenditure.
2335. Training of staff i. Staff employed as managers and accountants should, be got properly trained in the Co operative Training Institute run by the Cooperative Department of the State in which the society is located. The cost of the training should either be borne by the employee himself or by society concerned and the railways will not incur any expenditure on that account except in the matter of giving free passes to the employees. For this purpose, one set of passes of appropriate class should be issued either to the manager or the accountant of each society per year from the place of working up to the training centre and return.
ii. With a view to disseminating knowledge to the members of the managing committee of the Railwaymen's Consumer Cooperative Societies and free flow of ideas of what is happening in one part of the country to such cooperative in other parts, Railway Administration should conduct "Cooperative Workshops" at the divisional or headquarters level under advice to the Railway Board. Where it is decided to conduct a seminar on a statewise basis, members of the Managing Committee of a Cooperative society located in the contiguous area but on a different railway may be invited by mutual consent of the concerned Railways.
Attendance in such workshops/ meetings/ seminars etc. organised by Railway Administrations is obligatory on the part of the railway employees and their absence from duty for the purpose would be treated "on tour"
(No. 67/E (Coop)/23/1.pt. dt. 27.10.67 E(Coop)/23/1.pt. dt. 31.08.68 67/E/(Coop)/23/1 dt. 16.09.68.) 2336. Quarters for staff. Wherever quarters are provided to the employees of the consumer cooperative societies rent shall be recovered in accordance with the provision of paragraph 1961 of the Indian Railway Code of the Engineering Department. (Revised Edition 1982).
2337. Deputation of Railway servants. Prior approval of the competent authority has to be taken whenever any railway servant is sent on deputation to work as paid secretary, manager, accountant etc., of a Cooperative store. The railway servant placed on deputation with a cooperative store will be on the usual "Foreign Service" terms and the requisite contributions towards leave, pension, provident fund, bonus, gratuity etc., will be paid by the cooperative societies concerned to the Railway Administration.
Note. The above provisions are also applicable in the case of railway servants to railway employees' Cooperative credit societies/Banks and paid secretaries or managers.
2338. Protective measures against defalcation and thefts.
1.Defalcation The following measures, shall inter alia be taken to check defalcation of money in Cooperative stores: i. Adequate security from the societies' staff handling cash and property should be obtained;
ii. Proper accounts should be maintained from day to day and examined in the monthly meetings of the managing committee of the societies;
iii. Once a week or fortnight, proper accounts should be obtained by the managing committees from the directors or office bearers who have taken advances for making purchases of stocks.
2. Thefts. Cooperative societies should make adequate arrangements for watch and ward by appointing a night watchman whose work should be supervised and checked by the office bearers periodically. Where the doors and windows of buildings provided by the Railway Administration require repairs or replacement, the matter should be brought to the notice of the administration without delay.
COOPERATIVE CREDIT SOCIETIES/BANKS 2339. The main object of Cooperative Credit societies is to encourage habit of thrift among members rather than provide loans to them at reasonable rate of interest. The rates of subscription recoverable from subscribers every month, rate of interest on the subscription, withdrawal of sum from compulsory thrift deposit, readmission of a member of a Co operative Credit Society, penal rate of interest in case of compulsory monthly subscription falling in arrears, deduction of amount due to a Society from the subscription at the time of making an advance from the compulsory deposit etc; should be as per bye law of respective registered Cooperative Credit Societies /Banks 2340. The following facilities are extended, to cooperative credit societies and banks i. Recovery of loans, bank deposits, and compulsory thrift deposits through the salary bills of the staff concerned;
ii. Privilege passes and privilege ticket order for the employees of the societies available over both home and foreign lines as per scale laid down in Railway Servant. (Pass) Rules 1986.
iii. Special casual leave and passes for member of the managing committee to attend meetings as laid down in paragraph 2921; Para 2321 of this edition. iv. Provision of accommodation at reasonable rent in railway premises in accordance with the provision contained in para 1960 of the code of Engineering Department (Revised edition of 1982).
v. Free publication of their notices in the weekly gazettes.
vi. Medical facilities in railway hospitals and health units to the staff and to the members of their families at a per capital charge, calculated on the basis of total expenditure on medical services incurred on toe railway servants and their families during previous financial year.
2341. Cooperative credit societies/banks should pay for railway accommodation under extent orders, as well as per for telephones, electricity, water, etc. 2342. In regard to the services rendered under item (i) of paragraph 2340, the Co operative credit societies and banks will pay for such recoveries as are made from the salaries /wages of railway servants concerned towards repayment of loans including interest thereon only and not in respect of deposits and mutual retirement benefit funds etc. For this purpose, the following standardised basis of charges has been laid down.
Societies/ Banks
(i) Having working capital of 25 Paise per hundred rupees of Rs. 2 Lakhs and above. loans recovered or fraction thereof.
(ii) Having working capital of 6 Paise per hundred rupees of loans
less than 2 lakhs recovered or fraction thereof.
Note: Monthly bills should be prepared against the societies concerned for the work done for them. These recoveries can however, be waived in respect of those societies which setup a welfare fund in accordance with the rules framed for the purpose.
2343. Prior sanction of the Railway Board should be taken if any credit society is to be organised on the Railways.
2344. Cooperative Housing societies. Railway servants whose income range between Rs. 701 and 1500 p.m. or Cooperative Housing Societies consisting of such Railway servants are eligible for loan under the low Income Group Housing Scheme for construction of houses. These loans will be available to them through the Head of Department. Not more than one loan or advance can be obtained by Railway servants from any Govt. source. In order that Railway servants might take advantage under either of these schemes, it would be desirable for Cooperative Housing Societies to acquire suitable land and allot it to members after development In this connection, the Societies might also take the help of State Government which have been advised by the Central Government to try to arrange, where possible, to acquire suitable sites and sell them after development to intending builders................................"
6. Before embarking on any discussion on the merits of the case, it is important to revisit the provisions of the definition clause under Section 2(h) of the RTI Act 2005 which reads as under:
"2. In this Act, unless the context otherwise requires -
(h) "public authority" means any authority or body or institution of selfgovernment established or constituted,
(a) by or under the Constitution;
(b) by any other law made by Parliament;
(c) by any other law made by State Legislature;
(d) by notification issued or made by the appropriate Government, and includes any
(i) body owned, controlled or substantially financed;
(ii) nonGovernment Organisation substantially financed, directly or indirectly by funds provided by the appropriate Government;"
7. It is also pertinent at this stage to remember that what may be a "Public Authority‟ for the purposes of the RTI Act need not be "State‟ under Article 12 or amenable to Article 226 of the Constitution because it is the context of transparency and accountability, of accessibility of its working to the public that controls the interpretation of the expression "public authority‟, not the amenability to judicial review of its decisions, as has been discussed in the celebrated judgment of KRISHAK BHARTI COOPERATIVE LTD. versus RAMESH CHANDER BAWA pronounced on 14.05.2010 wherein KRIBHCO, NCCF and NAFED were held to be "Public Authorities" within the meaning of Section 2 (h) of the RTI Act. The key words, as far as the RTI Act is concerned, are the opening words of Section 2 of the RTI Act 2005, which reads as: "unless the context otherwise requires". Therefore, the interpretation of the words "Public Authority" has to be in the context that has been laid out in the preamble, the long title and other provisions of the RTI Act itself. The KRIBHCO judgment as mentioned hereinabove observed as follows:
"....In the considered view of this Court, since Section 2 (h) (d) (i) RTI Act uses the word "controlled" without any qualification as to the degree of control, it is not to enough show that there is "no deep or pervasive control" over these entities by the appropriate Government. The question is not whether there is "deep" control, whether there is "dominance" by the appropriate government or whether the government's nominee directors are in "majority‟. If they are, no doubt, it would indicate that the entity is a "public authority‟ but if they are not, that does not mean that the entity is on that ground not a public authority for the purposes of the RTI Act. What may be a "public authority‟ for the purposes of the RTI Act need not be "state‟ under Article 12 or amenable to Article 226 of the Constitution.
Therefore, the HC concluded that that ".....The question is not whether there is "deep" and "pervasive" control of the bodies in question by the appropriate government, but whether there is the absence of any "control" over such bodies by the appropriate government.....". Taking cue from the settled law therefore, it is the opinion of the Commission that the "control" need not be "deep" and "pervasive" of the bodies in question by the appropriate government, since the law does not lay down any qualification as to the degree of control.
8. Coming to the next important aspect of financing of any organization, unlike the word "control"
which has been used without any qualification, the word "financing" has been clearly qualified by ""substantially" indicating a degree of financing. The judgment further lays down that while deciding whether an authority is a Public Authority, it is to be kept in mind that the word "substantial" is not synonymous with "dominant‟ or "majority‟. It is closer to "material" or "important" or "of considerable value." "Substantially" is therefore to be understood as being closer to "essentially".In the context of the RTI Act it would be sufficient to demonstrate that the financing of the body by the appropriate Government in not insubstantial. Hence the percentage of funding not being "majority" financing, is therefore immaterial. In other words, the financing may not be a "majority" one and yet be "substantial‟. Equally, as observed in the KRIBHCO judgment the fact that the institution or organization is not controlled and is autonomous is also not completely relevant:
" ...... In the context of the working of multistate cooperative societies, which by their very nature facilitate participatory decisionmaking through a network of elected bodies at different levels, the opening up of their working to public scrutiny through the RTI Act can only be in their best interests. Instead of shying away from the RTI Act, large multistate cooperative societies like KRIBHCO, NCCF and NAFED should view it as an opportunity...."
9. The recent judgment in the case of IFCI Ltd. versus Ravinder Balwani in the case of WP (C) 4596/2007 pronounced on 17.08.2010 also upheld the decision of the CIC, wherein the IFCI Ltd.
was held as a Public Authority on similar precincts.
10. While applying the similar rationale in this case, the Commission observes that upon perusal of the aforementioned Rules from the Indian Railways Establishment Manual in the light of the settled law as held in the various judgments passed on this issue including the aforementioned judgment of KRIBHCO, the position so emerges that the influence and involvement of the Railway Board and Railway Administration is evident in each sphere; from the Organisation to Management, Concessions, Subsidies, Medical facilities, Passes, Privilege Ticket Orders and Special Casual leave, Provision of Electric fans and charges for electricity and water, Supply of equipment and even the Quarters provided to the staff to Lease of Railway land. The fact that the Audit report and progress reports are to be submitted to the Railway Administration concerned etc. demonstrate the control of the Railway Administration on the Cooperative Society.
The 'substantial' (as explained in para 8 hereinabove) financing is evident in the various beneficial and subsidized facilities enjoyed by the Society and above all the fact that the Society deals with the money as well as interest/s of the employees and staff of the Public Authority exclusively is not contested. In the facts and circumstances of the case, it is therefore the considered opinion of the Commission that the control and influence of the Railway Board and Ministry of Railways upon the Railway Housing Cooperative Society and the Northern Railway Consumer Society is unquestionable as is the aspect of "substantial" financing. Also, both the societies cater to the welfare and interests of the public who are public servants working for the Ministry of Railways, and are governed by the Indian Railway Manual Rules. The Railway Housing Cooperative Society and the Northern Railway Consumer Society, therefore, are both fit to be declared Public Authorities. The spirit of the RTI Act in transparency for better governance, being pivotal in the functioning and existence of the organization, the provisions of Section 4 of the RTI Act 2005 must be adhered to by the Railway Housing Cooperative Society and the Northern Railway Consumer Society . The PIOs may be designated at the earliest as per provisions of Section 5 of the RTI Act and information be provided to the Appellant by the 15 th of November, 2010. The PIO, NW Railway, Jodhpur is hereby directed to forward a copy of this order to the concerned officers in both the Societies.
11. The Appeal at hand is thus disposed of on the above terms.
(Announced in open Court today, ie. 17th September, 2010) (Annapurna Dixit) Information Commissioner Authenticated true copy (G.Subramanian) Deputy Registrar Cc:
1. Shri Mahendra Singh Railway Traffic Colony Near Olympic Cinema Jodhpur
2. The PIO North Western Railway DRM's Office Jodhpur
3. The Appellate Authority North Western Railway DRM's Office Jodhpur
4. Officer Incharge, NIC