Central Information Commission
Mrsubhash Chandra Agrawal vs Planning Commission on 25 June, 2015
Central Information Commission
2nd Floor, August Kranti Bhawan
Bhikaji Cama Place, New Delhi-110066
F.No.CIC/SS/C/2013/000275
Present:
Complainant : Shri Subhash Chandra Agrawal
Respondent : Shri S.N. Murthy Vaddadi,
Senior Additional Director,
Construction Industry Development Council.
Intervener : Shri R.K. Jain
Date of Hearing : 9th December, 2014
Date of decision : 25th June, 2015
ORDER
This matter was taken up on 09.12.2014 in the context of the status of the Construction Industry Development Council (the CIDC) under the Right to Information Act, 2005 (the Act).
2. When the hearing started, Shri R.K. Jain moved an application dated 08.08.2014 for tagging his complaint nos. CIC/RM/C/2014/000317 and 000485 with the present case. Shri Jain appealed that he may otherwise be permitted to intervene in the matter.
3. As the facts of the present case and the cases of Shri Jain would be different, the request for tagging was not accepted. The issue whether the CIDC or the Kendriya Bhandar is a public authority or not under the Act has to be decided on the facts and circumstances of each case. However, Shri Jain was allowed to intervene in the present matter.
4. The relevant facts of the case are that Shri Subhash Chandra Agrawal sought information under the Act from the CPIO, CIDC vide his application dated 08.04.2013, inter alia, about file-notings/correspondence/documents, etc., regarding establishing of CIDC by Planning Commission/ Government of India/others concerned.
15. As Shri Agrawal did not receive any information, he filed a complaint dated 21.05.2013 under section 18 of the Act in this Commission.
6. When the matter was earlier heard on 07.01.2014, this Commission considered it appropriate to have a feedback about the status of the CIDC from the Planning Commission also, so as to decide the question whether the CIDC falls within the meaning of 'public authority' defined under section 2(h) of the Act. The Planning Commission, the CIDC and the complainant submitted their comments in the matter.
7. The issue to be decided in this case is as to whether the CIDC is a 'public authority' under section 2(h) of the Act.
8. During the hearing, Shri Jain filed a chart containing the list of relevant dates and also a letterhead of the CIDC.Shri Jain, relying on O.M. dated 24.01.2014 of the Planning Commission, submitted that the CIDC was established by an order dated 11.04.1996 and that one time non-refundable corpus of Rs.2.74 crores was provided by the Planning Commission in November, 1997 while the initial corpus of the CIDC was Rs. 3 crores. He further submitted that by an O.M. dated 11.04.1996 of the Planning Commission, all the Ministries/Departments of the Central and State Governments/UTs as well as all PSUs, institutions and other organisations concerned were asked to extend their cooperation and support to the CIDC. Earlier, up to 2007, the Chairman of the Board of Governors of the CIDC was nominated by the Dy. Chairman of the Planning Commission and that the Chairman was also heading the Managing Committee of the CIDC. He further submitted that in view of this, the CIDC was a part of the Government organisation and it was like an arm of the Planning Commission. On this, Shri Vaddadi clarified that the Deputy Chairman, Planning Commission is the Patron and not the Chairman of the CIDC as stated by Shri Jain.
9. Shri Jain further submitted that the status of the CIDC has to be seen as in 2005 when the Act was brought into force. He further submitted that the Act being a social legislation required to be liberally construed.
10. Shri Jain repeatedly submitted that the CIDC was dependent initially for a period of 10-12 years on the interest of the corpus. Therefore, the CIDC may be said to be under the control and management of the Planning Commission. He further submitted that the judgement dated 07.10.2013 of the apex court in the matter of Thalappalam Service Cooperative Bank Ltd. vs State of Kerala & Ors, has no applicability to the present case. He prayed that the CIDC should be declared a 'public authority' under the Act particularly when there are complaints of corruption.
211. Shri S.C. Agrawal submitted, inter alia, that -
(a) the CIDC has not provided complete details about land, building and initial funding;
(b) the Office Memorandum dated 11.04.1996 of the Planning Commission establishes that the CIDC has been set up by an order of the Planning Commission;
(c) out of the total corpus funds of Rs.6.43 crores, Rs.2.47 crores was given by the Planning Commission, which comes to nearly 38.4 per cent of the corpus fund;
(d) the Planning Commission played a major part in carrying on commercial activities of the CIDC resulting in huge surplus of Rs.1.91 crores in the year 2012-13 and Rs. 2.31 crores in the year 2011-12;
(e) the CIDC was associated in preparation of the Five Year Plans and dealing with foreign countries;
(f) the annual reports of CIDC are presented in the Parliament;
(g) the Act was introduced with the aim to check corruption in the system;
(h) the CIDC and the Planning Commission are in connivance in suppressing the disclosure of the information. The officers of the CIDC are using the name of 'the Planning Commission (Government of India)' on their visiting cards. For the purpose, he submitted a copy each of the visiting cards of Dr. P.S. Rana, Chairman and Shri S.N.Murthy Vaddadi, Sr. Addl. Director of CIDC;
(i) the Planning Commission has no power to decide whether the CIDC is a public authority or not; and
(j) taking into account the above submissions, the CIDC may be declared a 'public authority' under the Act.
12. Shri S.N. Murthy Vaddadi, Sr. Additional Director, CIDC submitted that the CIDC is a society registered under the Societies Registration Act,1860 formed by various constituents of construction industry primarily comprising construction companies and industry associations as per the order dated 11.04.1996 of the Planning Commission. The CIDC started functioning with a corpus of Rs.3 crores contributed by member construction companies. It is not substantially financed by the Government; merely a corpus of Rs.2.74 crores was provided. The CIDC could only utilise the interest earned from the corpus and the annual membership fee. There were no other activities carried out by the CIDC which could earn money. On a query by the bench, Shri 3 Vaddadi informed that the CIDC imparts training and other educational programmes for construction workers in affected areas so that they could get employment. He further submitted that training is a major activity for skill development. They conduct studies, quality control of buildings, arrange symposium etc. The CIDC has centres all over the country and has attained self-sufficiency in funds. Its turnover in 2012-13 was 18.72 crores and in 2011-12, it was 17.94 crores and the surplus during the years was 1.91 and 2.31 crores, respectively. The reserves stood at 11.61 crores and corpus at 6.43 crores as on 31.03.2013. The CIDC is now self-sufficient and independent of any government funding and therefore, cannot be termed as 'public authority' under the Act.
13. Two weeks were granted to the CIDC to submit written submissions, if any, and one week thereafter was granted to the complainant to file his submissions thereto. No written submissions have been received so far from the complainant or the respondent. However, the intervener has filed a written note dated 09.02.2015 drawing attention of this Commission to the order dated 02.02.2015 of the High Court of Delhi in W.P.(C) No.3110/2011 etc. - Mother Dairy Fruit and Vegetable Pvt. Ltd. vs Hatim Ali & anr. etc.
14. The CIDC vide covering letter dated 26/05/2015 sent certain particulars indicating (i) the initial corpus fund; (ii) Bye Laws of CIDC; (iii) Balance Sheet for the years 2012-13 and 2013-14 and ; (iv) Copy of annual reports.
Discussion:
15. We have gone through the contents of the complaint and the material submitted by the parties from time to time and considered the arguments presented by the parties during the hearing.
16. Before elaborating on the decision of the core issue of whether the CIDC is a Public authority, it is imperative to revisit the definition of the term 'public authority' as laid down in clause (h) of Section 2 of the Act, which reads as under:-
"....2(h)."Public authority" means any authority or body or institution of self government 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 order made by the appropriate Government.
and includes any -
(i) body owned, controlled or substantially financed;
(ii) non-Government Organization substantially financed,
directly or indirectly by funds provided by the appropriate Government;"4
17. Putting CIDC to the test of the aforesaid definition, it is found that undisputedly the CIDC owes its origin to the office order No. 13019/9/95- PAMD dated 11.04.1996 of the Planning Commission of the Government of India thereby fulfilling the condition of the section 2 (h)(d) of the RTI Act, as detailed above. It may also be noted that at the point of its inception, in order to support the Council, all the Ministries/ Departments of the Central and State Governments/UTs as well as all PSUs, institutions and other organisations concerned were asked to extend their cooperation and support to the CIDC. Thus not only at the time of creation, but even subsequently for its operation, CIDC owed allegiance to the Planning Commission, Govt. Of India.
18. Moving ahead to the next criteria of finance, control etc. determining the status of an organisation under the RTI Act, within the sweep of section 2(h) of the Act.the Commission applies the observation of the Apex Court in the case of Thalappalam Service Co operative Society, which reads as follows:
"31. The RTI Act, therefore, deals with bodies which are owned, controlled or substantially financed, directly or indirectly, by funds provided by the appropriate government and also non- government organizations substantially financed, directly or indirectly, by funds provided by the appropriate government, in the event of which they may fall within the definition of section 2(h)(d)(i) or (ii) respectively ...
...36...A body can be substantially financed, directly or indirectly by funds provided by the appropriate Government. The expression "substantially financed", as such, has not been defined under the Act. "Substantial" means "in a substantial manner so as to be substantial." ..."The word "substantial" literally means solid, massive etc. Legislature has used the expression "substantially financed" in sections 2(h)(d)(i) and (ii) indicating that the degree of financing must be actual, existing, positive and real to a substantial extent, not moderate, ordinary, tolerable etc...
...38. Merely providing subsidiaries, grants, exemptions, privileges etc., as such, cannot be said to be providing funding to a substantial extent, unless the record shows that the funding was so substantial to the body which practically runs by such funding and but for such funding, it would struggle to exist."
19. The facts of the case at hand reveal that the CIDC has admitted that out of the total corpus fund of Rs.6.43 crores, Rs.2.74 crores were given by the Planning Commission, which comes to nearly 38.4 per cent of the corpus 5 fund. In addition to the above admission by CIDC, among the documents submitted on 26/05/2015 by CIDC, the first attachment details the total initial corpus fund collected during 1996-97 as Rs. 1,99,40,000/-. The said tabular representation of the initial corpus further shows that out of the said total corpus of Rs. 1,99,40,000/-, the sum of Rs. 72,00,000/- was contributed by organisations like Power Finance Corporation Ltd., HUDCO, Army Headquarters, Airport Authority of India which are either Govt of India undertaking or Govt entities. Thus government funding to the extent of atleast 36% of total initial corpus existed even before the Planning Commission provided the 2.47 crores in 1997. The Balance Sheet as on March 1998, submitted by the Respondent (CIDC) reveals that the operation of CIDC during 1997 resulted in a deficit (loss) of Rs. 8,77,834.10. However, upon receipt of the grant of finance of Rs. 2.47 crores from the Planning Commission during 1997, the surplus/profit as per Income and Expenditure of accounts as on 31.03.1998 stood at Rs. 4,92,403.36. The contribution by the Planning Commission in 1998 was actually the lion's share of the total capital, viz. [Rs. 2,47,00,000/- out of Rs. 5,08,60,000/- = 48%]. Thus out of the total corpus in 1998, 48% (by the Planning Commission) + 36% (calculated above) = 84% of the finance was evidently either received from the Government itself or out of its agencies/departments. The Govt funding as on date admittedly continues to the extent of the 2.47 crores. Not to overlook that even investments made by the Respondent has been entirely in Government departments/sources like Indian Railways Corporation, MTNL, NTPC and Maharashtra Krishna Valley Development Corporation. It is thus evident from the above analysis of the CIDC's records that without the financial aid of the Planning Commission, the CIDC was a loss incurring entity, struggling to exist and but for the financial aid received from the Government of India and its sources, it could not have sustained. Such is the impact and undeniable support and importance of the Planning Commission by virtue of this initial contribution that despite an amendment in the Articles of Association in 2007, whereby the clause 5.2 stood altered and the role of the Planning Commission to head CIDC as its Chairman was modified, the status of the Planning Commission as the Permanent member of CIDC continues unaltered without any entrance or annual subscription on account of having funded major share in the initial corpus, as per clause 2.1.
20. On this particular point, the Commission finds it relevant to refer to a decision of the Punjab & Haryana High Court on 25/02/2008 in a case titled DAV College Trust and vs. Director of Public Instruction. The High Court while deciding whether the petitioner is a public authority as defined under the RTI Act, held:
"... Once a body is substantially financed by the Government, the functions of such body partake the character of public authority'. The definition of expression 'public authority' itself shows that 'public authority' would include any organization body owned, controlled or substantially financed directly or indirectly by funds provided by the Government or even the non-government 6 organisation which is substantially financed. The petitioner has claimed that they are getting only 45% grant-in-aid after admitting that initially the grant-in-aid paid to them was to the extent of 95%. If on account of policy of the Government the grant-in-aid to the extent of 95% which was given initially allowing the petitioner to build up its own infrastructure and reducing the grant-in-aid later would not result into an argument that no substantial grant-in-aid is received and therefore it could not be regarded as 'public authority'. Therefore, we do not find any substance in the stance taken by the petitioner that it is not a 'public authority'..."
21. Likewise, the Delhi High Court while deciding the case of Mother Dairy Fruit & Veg. Pvt. Ltd. vs. Hatim Ali & Anr [WP No. 3110/2011 dated 02/02/2015] as mentioned above is also pertinent on this issue, wherein a conclusion on this aspect has been arrived at in the light of the observations of the Apex Court decision on Thalappalam Services. Co operative Bank, as follows:
"35. The question whether a body is substantially financed by a Central Government has to be viewed in the facts of each case. In the present case, it is not disputed that the undertakings of Mother Dairy were initiatives that were conceived as a part of Operation Flood Programme. During the period 1979-1999, the Central Government granted grants amounting to Rs.13.6 crores for Mother Dairy, Delhi alone. In addition, loans to the extent of Rs.31.71 crores were granted by the Central Government for the Mother Dairy Initiative in Delhi. Undoubtedly, the undertakings, which now vest with the petitioner were substantially funded by the Central Government at the material time. The edifice of the petitioner's substratum was built by such funding. The petitioner's entire share capital vests with the NDDB. Since the petitioner's undertaking had been set up by funds provided by the Central Government."...
...37. "...It is relevant to note that the expression "substantially financed" is suffixed by the words "directly" or "indirectly". Thus, the finances indirectly provided by an appropriate Government would also have to be considered while determining whether a body has been substantially financed by an appropriate Government. The test to be applied is whether funds provided by the Central Government, directly or indirectly, are of material or considerable value to the body in question. In the present case, the basic infrastructure of the petitioner's undertakings were promoted by funds provided by the Central Government; whether the said funds found their way through NDDB or otherwise is not material. Thus, in my view, the petitioner would also be a public authority on account of being substantially financed by the Central Government."7
22. Having thus discussed the well established legal position on the aspect of finance of the organisation governing the status of an organisation as a 'public authority' as understood under RTI Act, the only other aspect to be dealt with is that of control of the organisation. There is unanimity of opinion that upto 2007, the Chairman of the Board of Governors of the CIDC was nominated by the Dy. Chairman of the Planning Commission and that the Chairman was also heading the Managing Committee of the CIDC. The Planning Commission continues to be a permanent member of the CIDC, with total exemptions regarding entrance and/or annual subscriptions. Presently, the Planning Commission is represented in CIDC's Governing body by Adviser (Transport), Planning Commission. Interesting, thirteen (13) out of the total twenty eight (28) members on the Governing Body of CIDC are either Govt servants or from some or the Government institution/body/department. The Planning Commission's letter/Office Memorandum dated 24/01/2014 reveals that Respondent CIDC had been involved intimately with the preparation of the 12th Plan in as much as the CIDC has supported the Planning Commission in drafting the 12th Plan chapter on construction as well as organising the Indo-Japanese Forum on Construction in November 2012.It has further been elaborated by the Director (Transport), Planning Commission that in the absence of any Ministry for construction, the CIDC acts as a platform for the Planning Commission to help in addressing the constraints of the construction industry.
It has been stated by the CIDC that the annual reports of CIDC are presented in the Parliament, which indicates that the Government exercises control over the CIDC. Moreover, the record reveal that the officers of the CIDC are making use of the Planning Commission's name, i.e., by printing the name of the 'Planning Commission, Government of India' on their visiting cards, as does the website.
23. The Memorandum of Association submitted by the CIDC demonstrates that the Planning Commission, after consultation with various agencies concerned, had decided to set up the Construction Industry Development Council as the "Apex National Agency" concerned with all aspects of Construction Industry. As we see it, the CIDC is an instrumentality of the Planning Commission and hence the Central Government and functions as such. Alterations/modifications subsequently made to the Council have been merely cosmetic in nature and do not change the purpose with which the CIDC was created, its basic structure, functions etc. The core idea behind the creation and till date the operation of the Construction Industry Development Council [CIDC] is to contribute towards the improvement of the economy, efficiency, quality and speed of output of the Construction Industry. Thus by the initiative of the Planning Commission, the CIDC was set up. It has been claimed by CIDC that only 38.4% of its total corpus has been donated by the 8 Planning Commission. The donation of the Planning Commission has been compared to the current total corpus (as on 2013), however, in fact the contribution of the Planning Commission (Rs. 2.47 crores) made in 1998, when weighed against the then total corpus of Rs. 5,08,60,000/-, stood at 48% of the total corpus, at the time of the contribution, at the initial stages of the Council, in its second year of operation. Even in the initial corpus of Rs. 1,99,40,000/ collected in 1997, at the point of commencement of CIDC, a sum of Rs. 72,00,000/- was contributed by organisations like Power Finance Corporation Ltd., HUDCO, Army Headquarters, Airport Authority of India. These being instrumentalities/agencies/departments of the Govt of India, the monetary contributions from these organisations account as public money and aggregate to 36% of initial corpus of 1,99,40,000/-. Thus as detailed in para 19 above, out of the total corpus in 1998, 48% (by the Planning Commission) + 36% (Govt organisations) = 84% of the finance was contributed by the Government directly or indirectly. This corpus aided the CIDC in building up its own infrastructure and the edifice of the petitioner's substratum was built by such funding. The petitioner has claimed that they were in receipt of only 38.4% grant-in-aid without pointing out that the initial grant-in-aid paid to them was to the extent of 84%. Even till date the major area of functions/operations and revenue generation remain Government projects handled by the Council. Thus it cannot be argued by the Respondent that no substantial grant-in-aid is received and therefore it could not be regarded as 'public authority'.
Decision:
24. In the light of the foregoing discussion, the role of the Government is evidently deep and pervasive in the respondent organisation right from its inception to funding, control and operations. Thus, based on the documents submitted before us, and arguments of the parties, we are of the considered opinion that the CIDC is substantially financed by the Central Government and is a fit organisation to be defined as 'public authority' under clause (h) of section 2 of the RTI Act.
25. In view of the above, we hold the CIDC to be a 'public authority' under section 2 (h) of the Act. The CIDC is directed to appoint a Central Public 9 Information Officer (CPIO) and a First Appellate Authority under the relevant provisions of the Act within four weeks. The CPIO so appointed shall respond to the request of Shri Agrawal, referred to in para 4 above, within the next thirty days.
26. It is ordered that an authenticated copy of this order be sent to the parties free of cost.
27. Accordingly, the complaint is allowed.
(Sharat Sabharwal) (Yashovardhan Azad)
Information Commissioner Information Commissioner
(Vijai Sharma)
Chief Information Commissioner
Authenticated true copy
(Dr. M.K. Sharma)
Registrar
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