Central Information Commission
K V C Janaki Rama Rao vs Reserve Bank Of India on 30 May, 2022
Author: Neeraj Kumar Gupta
Bench: Neeraj Kumar Gupta
के ीय सूचना आयोग
Central Information Commission
बाबा गंगनाथ माग,मुिनरका
Baba Gangnath Marg, Munirka
नई द ली, New Delhi - 110067
ि तीय अपील सं या/Second Appeal No. CIC/RBIND/A/2020/127103
Mr. KVC Janaki Rama Rao ... अपीलकता/Appellant
(Canara Bank)
VERSUS
बनाम
CPIO ... ितवादी/Respondent
Reserve Bank of India
Department of Supervision, Centre-1
World Trade Centre, Cuffe Parade,
Colaba, Mumbai-400005
Relevant dates emerging from the appeal:-
RTI : 22-05-2019 FA : 12-02-2020 SA : 15-09-2020
Hearing : 28.09.2020,
23.10.2020,
CPIO : 29-01-2020 FAO : 05-03-2020
02.02.2021, 19-05-
2022
ORDER
1. The instant matter was lastly listed before the Commission on 02.02.2021 vide which the Commission had observed that "The Commission after adverting to the facts and circumstances of the case, hearing both parties and perusal of records, observes that the issue of disclosing financial statements, inspection reports of banks including private and PSU banks was sub judice before the Supreme Court. Both parties had agreed to wait until further directions of the Supreme Court. Therefore, any direction of the Commission may preempt the issue even though the appellant was not party to the case pending before the Supreme Court (as revealed during the course of hearing). However, it may be premature to adjudicate the matter under the circumstances. Accordingly, the matter is adjourned".
2. The instant matter is listed today for further hearing.
Page 1 of 11Hearing:
3. The appellant was represented through Shri Elango Subramaniam, Divisional Manager who attended the hearing through video-conferencing. The respondent, Shri Abhay Kumar, General Manager & CPIO along with Shri Dayanand, Assistant Legal Advisor attended the hearing through video- conferencing. The original RTI applicant was not present despite notice.
4. The written submissions of the respondent are taken on record.
5. The representative of the appellant submitted that the "RBI has, under its Master Circular on Prudential norms on Income Recognition Asset Classification and Provisioning pertaining to Advances advised the Banks either to make full provision as per the extant guidelines or write-off such categories of bad and doubtful debts which were chargeable to income tax and claim applicable tax benefits by evolving appropriate methodology in consultation with their auditors/tax consultants. In the subject matter, the appellant has not written off the accounts furnished by the CPIO in the list as envisaged by the RBI in the above said circular. He further submitted that in tune with the said RBI guidelines and to avail the tax benefits, Bank has put in place a Policy with respect to the Doubtful and Loss assets. The accounts which are enumerated under the list sent to the appellant under subject letter of CPIO have been fully provided for at Head Office level as per the extant RBI guidelines. All these accounts are still accounted for and outstanding in the books of the branches of the Bank as Non-Performing Assets. Bank is actively pursuing for recovery in these accounts under the provisions of the SARFAESI Act, RDB Act or the IBC, 2016. Hence these accounts are not falling under the ambit of the information sought by the applicant. He stated that Section 8(1) (d) of the RTI Act postulates that there shall be no obligation to give any information, 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".
6. The respondent submitted that the RTI applicant has specifically sought names and addresses of corporate houses/others whose loan have been written off exceeding Rs. 50 crores bank-wise and year-wise. As the appellant bank has reported these details under the CRILC, the same is part of records maintained by RBI and liable to be disclosed by RBI in accordance with RBI Act. Further, as per Jayantilal Mistry's case, complete information can be disclosed to the RTI applicant.
Page 2 of 11Decision:
7. The Commission, after hearing the submissions of both the parties and after perusal of records, observes that the RTI applicant Shri D C Gupta had sought information regarding "Total amount of bad loans written off each financial year beginning from 2013-14 to 2018-19 by various banks; Name(s) of the corporate houses/others with complete address of their establishments whose loans have been written off exceeding Rs 50 crore and above bank wise and year wise from 2013-14 to 2018-19" The CPIO, Reserve Bank of India had issued notice under Section 11(1) and 11(3) to the bank w.r.t disclosure of information regarding 'Amount technically/prudentially Written Off is more than Rs. 50 crore, as reported under Central Repository of Information on Large Credits (CRILC) by bank as on March 2015, March 2016, March 2017, March 2018 and March 2019'. Aggrieved by the decision of the CPIO, the said bank had filed first appeal with the First Appellate Authority. But the FAA had also dismissed the first appeal of the bank summarily. Being aggrieved with the order of the FAA, bank had filed second appeal before this Commission.
8. The bank has categorically contested that the CPIO had informed that he intends to provide the List of borrower-wise Technical/Prudential Write Offs accounts which was not sought by the original RTI applicant. Hence the order of CPIO and FAA to provide Technically Written Off accounts is beyond the jurisdiction of CPIO/FAA. The appellant further contested that Bank is actively pursuing for recovery in these accounts under the provisions of the SARFAESI Act, RDB Act or the IBC, 2016. Hence these accounts are not falling under the ambit of the information sought by the applicant.
9. The Commission takes note of the submissions made by the Bank that large amount of data relating to its clients including their identity, financial transactions etc. of bank is shared with the regulator, without any redaction or withholding the information, in good faith that these will be objectively analysed in discharge of their statutory obligations to make fair judgment on their functioning without affecting their competitive position. To this extent, there is an element of trust and confidence in sharing the data, both financial and operational, between the RBI and the bank. The information and data of the clients in the hands of Bank also has the element of trust and confidence that such data will not be disclosed or shared against their right to privacy/commercial interest.
10. The Commission further takes note of the submissions made by the Bank that the information, proposed to be disclosed is in the nature of credit information and the same was supplied to the Reserve Bank of India in fiduciary capacity as the Regulator under the provisions of the Banking Page 3 of 11 Regulation Act as well as Master Circular on Prudential norms on Income Recognition Asset Classification and provisioning pertaining to Advances. The large amount of data relating to its clients including their identity, personal details etc. is shared with the regulator, without any redaction or withholding the information, in good faith that these will be objectively analysed in discharge of their statutory obligations to make fair judgment on their functioning without affecting their competitive position.To this extent, there is an element of trust and confidence in sharing the data, both financial and operational, between the RBI and the bank. The information and data of the clients in the hands of Bank also has the element of trust and confidence that such data will not be disclosed or shared against their right to privacy/commercial interest.
11. Keeping in view the broader nature of business carried out between a customer and the bank, the Commission takes note of the observations passed by the Supreme Court in Central Board Of Sec. Education &Anr. vs Aditya Bandopadhyay & Ors [2011 (8) SCC 497] vide order dated 09.08.2011 examined and explained the expression 'fiduciary relationship', and have illustrated a few relationships where parties were involved in an act of fiduciary capacity including 'customers' in the following words:
"20. The term `fiduciary' and `fiduciary relationship' refer to different capacities and relationship, involving a common duty or obligation. 20.1) Black's Law Dictionary (7th Edition, Page 640) defines `fiduciary relationship' thus:
A relationship in which one person is under a duty to act for the benefit of the other on matters within the scope of the relationship. Fiduciary relationships - such as trustee-beneficiary, guardian-ward, agent- principal, and attorney-client - require the highest duty of care. Fiduciary relationships usually arise in one of four situations : (1) when one person places trust in the faithful integrity of another, who as a result gains superiority or influence over the first, (2) when one person assumes control and responsibility over another, (3) when one person has a duty to act for or give advice to another on matters falling within the scope of the relationship, or (4) when there is a specific relationship that has traditionally been recognized as involving fiduciary duties, as with a lawyer and a client or a stockbroker and a customer."
"39. The term "fiduciary" refers to a person having a duty to act for the benefit of another, showing good faith and candour, where such other person reposes trust and special confidence in the person owing or Page 4 of 11 discharging the duty. The term "fiduciary relationship" is used to describe a situation or transaction where one person (beneficiary) places complete confidence in another person (fiduciary) in regard to his affairs, business or transaction(s). The term also refers to a person who holds a thing in trust for another (beneficiary). The fiduciary is expected to act in confidence and for the benefit and advantage of the beneficiary, and use good faith and fairness in dealing with the beneficiary or the things belonging to the beneficiary. If the beneficiary has entrusted anything to the fiduciary, to hold the thing in trust or to execute certain acts in regard to or with reference to the entrusted thing, the fiduciary has to act in confidence and is expected not to disclose the thing or information to any third party."
While taking into consideration the fact that the customers give their financial information to the banks in confidence and with complete faith that may not be divulged as a result of disclosure by others, the following observations passed by the Supreme Court in Bihar Public Service Commission v. Saiyed Hussain Abbas Rizwi and Anr.[ (2012) 13 SCC 61] may be relied upon:
"The satisfaction has to be arrived at by the authorities objectively and the "consequences of such disclosure have to be weighed with regard to the circumstances of a given case. The decision has to be based on objective satisfaction recorded for ensuring that larger public interest outweighs unwarranted invasion of privacy or other factors stated in the provision. Certain matters, particularly in relation to appointment, are required to be dealt with great confidentiality. The information may come to knowledge of the authority as a result of disclosure by others who give that information in confidence and with complete faith, integrity and fidelity. Secrecy of such information shall be maintained, thus, bringing it within the ambit of fiduciary capacity. Similarly, there may be cases where the disclosure has no relationship to any public activity or interest or it may even cause unwarranted invasion of privacy of the individual. All these protections have to be given their due implementation as they spring from statutory exemptions. It is not a decision simpliciter between private interest and public interest. It is a matter where a constitutional protection is available to a person with regard to the right to privacy. Thus, the public interest has to be construed while keeping in mind the balance factor between right to privacy and right to information with the purpose sought to be achieved and the purpose that would be served in Page 5 of 11 the larger public interest, particularly when both these rights emerge from the constitutional values under the Constitution of India."
As emphasized by the Supreme Court in the judgment of Central Public Information Officer, Supreme Court of India vs. Subhash Chandra Agarwal in its judgment dated 13.11.2019, right to privacy and right to information have to be treated as co-equals and none can take precedence over the other, rather a balance needs to be struck. The following observations may also be relied upon in that regard:
"42. Privacy, it is uniformly observed in K.S. Puttaswamy (supra), is essential for liberty and dignity. Therefore, individuals have the need to preserve an intrusion-free zone for their personality and family. This facilitates individual freedom. On the question of invasion of personal liberty, the main judgment has referred to a three-fold requirement in the form of - (i) legality, which postulates the existence of law (RTI Act in the present case); (ii) need, defined in terms of a legitimate State aim; and
(iii) proportionality, which ensures a rational nexus between the objects and the means to be adopted to achieve them. The third requirement, we would observe, is achieved in the present case by Sections 8(1)(j) and 11 of the RTI Act and the RTI Act cannot be faulted on this ground. The RTI Act also defines the legitimate aim, that is a public interest in the dissemination of information which can be confidential or private (or held in a fiduciary relationship) when larger public interest or public interest in disclosure outweighs the protection or any possible harm or injury to the interest of the third party."
Further in K.S. Puttaswamy and Anr. v. Union of India and Ors. [(2017) 10 SCC 1], the Supreme Court observed as under:
"623. An individual has a right to protect his reputation from being unfairly harmed and such protection of reputation needs to exist not only against falsehood but also certain truths. It cannot be said that a more accurate judgment about people can be facilitated by knowing private details about their lives - people judge us badly, they judge us in haste, they judge out of context, they judge without hearing the whole story and they judge with hypocrisy. Privacy lets people protect themselves from these troublesome judgments."Page 6 of 11
12. In view of the above, the Commission is of the view that these judicial pronouncements have to be factored while deliberating all the claims of the applicant for complete disclosure which may include inadvertent disclosure of financial, transactional and operational data of the clients of the Bank etc. Further, in Naresh Trehan vs Rakesh Kumar Gupta [W.P.(C) 85/2010 & CM Nos.156/2010 & 5560/2011], the Delhi High Court made the following observations:
"...It is, thus, essential that information relating to business affairs, which is considered to be confidential by an assessee must remain so, unless it is necessary in larger public interest to disclose the same. If the nature of information is such that disclosure of which may have the propensity of harming one's competitive interests, it would not be necessary to specifically show as to how disclosure of such information would, in fact, harm the competitive interest of a third party. In order to test the applicability of Section 8(1)(d) of the Act it is necessary to first and foremost determine the nature of information and if the nature of information is confidential information relating to the affairs of a private entity that is not obliged to be placed in public domain, then it is necessary to consider whether its disclosure can possibly have an adverse effect on third parties."
The Supreme Court while deciding upon issues relating to personal information of an individual in terms of his income tax returns passed the following observations in Girish Ramchandra Deshpande v. Central Information Commr. [(2013) 1 SCC 212] :
"12. The petitioner herein sought for copies of all memos, show-cause notices and censure/punishment awarded to the third respondent from his employer and also details viz. movable and immovable properties and also the details of his investments, lending and borrowing from banks and other financial institutions. Further, he has also sought for the details of gifts stated to have been accepted by the third respondent, his family members and friends and relatives at the marriage of his son. The information mostly sought for finds a place in the income tax returns of the third respondent. The question that has come up for consideration is:
whether the abovementioned information sought for qualifies to be "personal information" as defined in clause (j) of Section 8(1) of the RTI Act.Page 7 of 11
13. We are in agreement with the CIC and the courts below that the details called for by the petitioner i.e. copies of all memos issued to the third respondent, show cause notices and orders of censure/punishment etc. are qualified to be personal information as defined in clause (j) of Section 8(1) of the RTI Act. The performance of an employee/officer in an organization is primarily a matter between the employee and the employer and normally those aspects are governed by the service rules which fall under the expression "personal information", the disclosure of which has no relationship to any public activity or public interest. On the other hand, the disclosure of which would cause unwarranted invasion of privacy of that individual. Of course, in a given case, if the Central Public Information Officer or the State Public Information Officer of the Appellate Authority is satisfied that the larger public interest justifies the disclosure of such information, appropriate orders could be passed but the petitioner cannot claim those details as a matter of right.
14. The details disclosed by a person in his income tax returns are "personal information" which stand exempted from disclosure under clause (j) of Section 8(1) of the RTI Act, unless involves a larger public interest and the Central Public Information Officer or the State Public Information Officer or the Appellate Authority is satisfied that the larger public interest justifies the disclosure of such information."
The aforementioned observations make it clear that the data has been shared by the individuals with the Income Tax Department which is seeking such information as a statutory authority but while analyzing and assessing their income keeps this data secured in the fiduciary capacity and hence it is protected from disclosure. It is applicable not only for individuals but for other legal entities recognizable under Income Tax Act. Further, it has been observed that the information in the hands of public authority even in the discharge of statutory obligations is protected under fiduciary relationship.
13. There are apparently two set of such information which have been shared by the bank with the regulator under statutory obligation. First is the information/data of clients relating to their business/commercial operations, financial transactions, business and commercial strategy which is shared by clients with financial institutions in full trust and confidence and is held by them in fiduciary capacity, protected from disclosure under the RTI Act in their hands. Second set is the information relating to business strategy, decisions, transactions, other operational data etc. of financial institution which may have bearing on their competitive position and also enjoys the exemption from Page 8 of 11 disclosure in their hands, if it is a public authority or otherwise, under the RTI Act. The Commission is of the view that the exemption of disclosure of certain information under Section 8(1) of the RTI Act, 2005 in the hands of financial institutions does not evaporate once such data/information is shared, in good faith and trust, with the regulator under statutory obligations. This aspect is not the ratio of Hon'ble Supreme Court in Jayantilal Mistry's judgment and decision of the regulator to consider redacting such data/information while disclosing the reports is to be aligned with this and other judicial pronouncements of Supreme Court and High Courts covering such aspects.
14. The Commission further observes that orders simpliciter irrespective of the different objections raised by the appellant bank apparently lacked application of mind or reasons on the part of the CPIO. Rejection or acceptance of the specific objections raised by them was not spelt out in the order which have been passed without giving an opportunity of hearing to them. The Commission further observes that the CPIO is at best free to take decisions on disclosure of information as per provision of RTI Act, 2005 giving a reasoned orders on the objections filed. The CPIO while issuing notice under Section 11 of the RTI Act has given the opportunity to the Appellant Bank to file their objections, if any, against disclosure of information sought but has not found it necessary to give them an opportunity of hearing. While not doing so, the CPIO has not passed any reasoned order covering his deliberations on their objections, his understanding of law or jurisprudence in deciding specific objections, in favor of disclosure etc. Order passed by the CPIO is cryptic, without any reference to objections raised by the Appellant Bank. Similarly, the FAA instead of passing a speaking order have also given a cryptic order to the Appellant Bank. The CPIO and the FAA are expected to apply their mind before issuing the order of intent of disclosing the information. Further, no opportunity of personal hearing was given to the appellant nor speaking order have been passed by FAA for not giving opportunity of hearing or elaborating reasons for accepting /not accepting their objections in his decision in the appeal. The Commission is of the view that every objection should be dealt and rejected/accepted with a reason and reasons for not giving opportunity of personal hearing should be well reasoned too in view of wider implications.
15. The Commission observes that rightful claims of the RTI applicant has to be adjudicated in the light of specific objections filed by the Institution, various judicial pronouncements of Hon'ble Supreme Court and High Courts providing guidance on such matters. Opportunity of hearing should necessarily be provided and orders passed by the CPIO and the FAA otherwise should be reasoned, speaking and clear. In the present case, such order should enumerate Page 9 of 11 the principles for disclosure or non-disclosure of details of top 100 accounts of loan defaulters or various types of data, personal information, commercially sensitive information of clients or institution, specifically excluded disclosures under various Acts, etc.
16. The Commission has also taken a detailed view in file nos. CIC/RBIND/A/2021/152460 & Ors. dated 05.05.2022 wherein issues of redaction, ratio of Jayantilal Mistry case and other related issues are discussed in detail. Perusal of the relevant paragraphs in Jayantilal Mistry judgment make it clear that the fundamental rights enshrined upon the citizens in form of right to information are not absolute and that the right to information may not draw precedence over right to privacy. Therefore, the Courts need to strike a balance between the rights as well as protections guaranteed to a citizen under Article 19 of the Constitution. Hon'ble Supreme Court of India has held that the disclosure of information relating to banks and financial institutions may be allowed taking into account the circumstances and nature of information sought for and not in a blanket manner. The Commission advised the CPIO to consider taking the relevant references from the said order while deciding the cases.
17. The Commission further observed that the appellant bank has specifically taken a defense that the accounts which are enumerated under the list sent to them under subject letter of CPIO have been fully provided at Head Office level as per the extant RBI guidelines. All these accounts are still accounted for and outstanding in the books of the branches of the Bank as Non-Performing Assets and the Bank is actively pursuing for recovery in these accounts under the provisions of the SARFAESI Act, RDB Act or the IBC, 2016. Hence these accounts are not falling under the ambit of the information sought by the applicant and exempted under Section 8(1)(d) of the RTI Act.
18. 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.
19. Hence, with these observations the Commission partially allowed the second appeal of the appellant bank with the extent that the information sought by the RTI applicant on point no. 2 of the RTI application is exempted from disclosure under Section 8(1)(d), (e) and 8(1)(j) of the RTI Act, the disclosure of which would affect the competitive position of the bank and also personal information of third party.
20. With the above observations, the order passed by the CPIO and FAA in this matter is set aside and the RTI application specifically on point no. 1 is Page 10 of 11 being remanded to the CPIO for adjudication afresh, as the gross amount in the matter (as sought on point no. 1 of the RTI application) can always be furnished to the applicants under the RTI Act. The above directions of the Commission should be complied within a period of 30 days from the date of receipt of this order. In case, the appellant/applicant is aggrieved with the order of the CPIO, they are at the liberty to file first appeal before the First Appellate Authority and afterwards second appeal before the Commission.
21. With the above observations, the appeal is disposed of.
22. Copy of the decision be provided free of cost to the parties.
नीरज कु मार गु ा)
Neeraj Kumar Gupta (नीरज ा
सूचना आयु )
Information Commissioner (सू
दनांक / Date : 19-05-2022
Authenticated true copy
(अिभ मािणत स यािपत ित)
S. C. Sharma (एस. सी. शमा),
Dy. Registrar (उप-पंजीयक),
(011-26105682)
Addresses of the parties:
1. CPIO
Reserve Bank of India
Department of Supervision, Centre-1
World Trade Centre, Cuffe Parade,
Colaba, Mumbai-400005
2. Mr. KVC Janaki Ram Rao
3. Mr. D.C. Gupta (Original Appellant)
Page 11 of 11