Central Information Commission
Nipun Singhvi vs State Bank Of India on 5 September, 2023
Author: Saroj Punhani
Bench: Saroj Punhani
के ीय सूचना आयोग
Central Information Commission
बाबागंगनाथमाग , मुिनरका
Baba Gangnath Marg, Munirka
नई द ली, New Delhi - 110067
File No : CIC/MOFIN/A/2022/608511/SBIND
Nipun Singhvi ......अपीलकता /Appellant
VERSUS
बनाम
CPIO,
State Bank of India, Compliance
Department RTI Cell 3rd Floor
Corporate Centre, State Bank Bhavan
Madam Kamaroad, Nariman
Point, Mumbai-400021 .... ितवादीगण /Respondent
Date of Hearing : 17/07/2023
Date of Decision : 30/08/2023
INFORMATION COMMISSIONER : Saroj Punhani
Relevant facts emerging from appeal:
RTI application filed on : 20/10/2021
CPIO replied on : 22/10/2021
First appeal filed on : 16/11/2021
First Appellate Authority order : 03/12/2021
2nd Appeal/Complaint dated : 04/02/2022
Information sought:
The Appellant filed an RTI application dated 20.10.2021 seeking the following information:1
"Please provide the copy of order passed against SBI imposing penalty of Rs.1 Crore as per press release numbered 2021-2022/1060 dated 18.10.2021."
The CPIO furnished a reply to the Appellant on 22.10.2021 stating as under:
"The information sought under RTI Act, 2005 comes under the restricted list of information disclosure under RTI Act Section 8 (1) (a) of the act."
Being dissatisfied, the Appellant filed a First Appeal dated 16.11.2021. FAA's order, dated 03.12.2021, upheld the reply of the CPIO and stated inter alia as under:
"Thus, any supply of information, which is more than what has already been provided by RBI by way of the RBI Press Release, holds no relationship to any public activity or interest and also would cause unwarranted invasion of the privacy of the Bank -- The same would hence be exempted under Section 8(1) (i).C. The undersigned, therefore, concurs with the decision of the SBI CPIO & DGM (Regulatory Coordination) and while upholding the decision of CPIO, would like to add that the PO is exempted from disclosure under Sections 8 (1)(d), Sections 8 (1)(e) and Sections 8 (1)(j) in addition to Section 8 (1)(a) of the RTI Act 2005."
Feeling aggrieved and dissatisfied, the Appellant approached the Commission with the instant Second Appeal.
Relevant Facts emerging during Hearing:
The following were present:-
Appellant: Represented by Mayur Jaktawat, Advocate through video-conference. Respondent: S Dinesh, DGM & CPIO present through video-conference.
The Rep. of the Appellant reiterated the contents of written submissions filed on 15.07.2023 stating as under:
"If such information is not disclosed to general public, it will lead to three major problems;
➢ The transactions will get affected and the banks may take undue advantage of the same.
➢ The general public may end up making wrong choices due to lack of information. ➢ The general public is liable to know the economic crisis and credit worthiness of the banking sector as public money is involved at large. C. BREACH OF NATURAL JUSTICE PRINCIPLES 2 ➢ The CPIO has not even given the opportunity of being heard which is very basic principle of natural justice that one must get the chance of being heard. ➢ Further there are no speaking orders or reasoned order in support of the response of CPIO. If no reasons are given in the orders, then it is breach of natural justice principals since it is quasi judicial obligation to give reasons for order, because the party effected must know on what grounds the order passed against him.
D. REPLY IS AGAINST THE PROVISIONS OF RTI ACT, 2005 The reply which has been given by the CPIO against the queries raised by me is not in consonance with the provisions of RTI Act, 2005 that there is violation under section 7(8)(i) and sec. 20 of the RTI Act, 2005.
7. It is submitted in that in response to said First Appeal, the response given by FAA is that it upholded the response of the CPIO and that the relevant penalty order is exempted from disclosure under section 8(1)(d),Section 8 (1)(e) and section 8(1)(j) in addition to section 8(1)(a) of the RTI Act 2005.
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10. It is submitted that in the matter of Reserve Bank of India Vs Jyantilal N. Mistry (Transferred Case (Civil) No. 91 Of 2015 (Arising out of Transfer Petition (Civil) No. 707 of 2012) in the Hon'ble Supreme Court, the main issue that arose for consideration was "whether all the information sought for under RTI Act can be denied by RBI and other Banks on the grounds of economic interest, commercial confidence ,fiduciary relationship with other Bank on the one hand and the public interest on the other. If the answer of the above question is in negative, then up to what extent the information can be provided under the 2005 Act?"
11. It is submitted that the Hon'ble Supreme Court in the matter stated that while introducing Right to information Bill ,2004 a serious discussion and debate had taken place.The then Prime Minister while addressing the House informed that the RTI Bill is to provide for setting out practical regime of right to information for people, to secure access to information under the public authorities in order to promote transparency and accountability in the working of every public authority.
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13.It is submitted that as per the quoted Judgment it has been specifically mentioned by the Hon'ble Supreme Court that the exemptions provided under Section 8 are not absolute .Further the Banks must uphold public interest and not the interest of the individual bank. The Hon'ble court also pointed out that the RBI is not in fiduciary relation with other banks. And the RBI ought to act with 3 transparency and not hide information that might embarrass individual banks. Further the Hon'ble Court pointed that the Bank's argument that the disclosure would hurt economic interest of the country was totally misconceived and that that the RBI and the Banks had sidestepped the public's demand to give information on the pretext of "Fiduciary relationship and Economic interest. Arguments of the Bank that if people who are sovereign ,are made aware of irregularities committed by the banks then the country's economic security will be endangered is also baseless .Further Court pointed out that national interest can't be seen with the glasses devoid of economic interest.
14. Hence as per the above Judgment in the present matter also the response of the FAA about non-disclosure of PO in the pretext of Economic interest and Fiduciary relationship is baseless Further as per above Judgment the Banks must uphold public interest rather then interest of individual bank. Hence as has been stated in the above Judgment national interest i.e interest of public at large has to be taken care of and the public is supposed to be disclosed of the information which if is hided is going to bring harm to them."
The Respondent also reiterated the contents of their written submissions dated 13.07.2023 stating as under
"It is respectfully submitted that we deny all the statements, allegations, claims, and contentions made / leveled / raised in the Appeal submitted by the Appellant, unless specifically admitted hereunder. It is further submitted that the CPIO and the First Appellate Authority had declined the information sought by the Appellant under the provisions of Sections 8(1)(a), (d), (e) and (j) of the RTI Act. 3. The following was the Information sought by the Applicant by his RTI application dated: 20/10/2021: Please provide the copy of order passed by RBI imposing monetary penalty of Rs. 1 Crore by RBI as per RBI press release numbered 2021- 2022/1060 (Document/Information/PO").
4. Brief Background:
A. In October 2010, several applicants sought copies of RAR's of various banks including that of the bank under the Act. The RAR's sought by the concerned RTI applicants are prepared by RBI pursuant to inspection/scrutiny conducted by its officers, under Section 35 of the Banking Regulation Act 1949, annually. The said annual inspection reports, also called RARS, contain comprehensive review of the performance/operational frailties/ functioning of the banks by RBI in exercise of its supervisory and regulatory powers. The RAR's contain wide-ranging information, including business plans of the banks to customer details and legal compliance, it also contains requirement, if any, of regulatory intervention and risk assessment of various credit risks of the bank in question, by RBI. Such inspection reports are not 4 only irrelevant to the public at large, but also the information contained thereto price sensitive and confidential. As a result, the information requests under the Act were -- denied by RBI on the grounds of economic interest, commercial confidence, fiduciary relationship, and public interest (under applicable exemptions provisions of the Act).
Several applicants filed appeals before the Chief Information Commission inter alia challenging the denial of the disclosure of the RARS by RBI.
B Findings of the Apex Court: The issue was finally decided by the Hon'ble Apex court on 16.12.2015 in a Transfer Petition (91/2015) titled as Reserve Bank of India vs. Jayantilal N. Mistry case, (2016) 3 SCC 525 (Mistry Case/Judgment'). The findings of the learned Court were broadly made on two aspects of the Act and have been recorded as under-
Fiduciary relationship [Concerns Section 8(1)(e) of the Act] Economic interests [Concerns Section 8(1) (a) of the Act] C. Contempt Petitions before the Hon'ble Apex Court: Thereafter, one Mr. Girish Mittal, filed a Contempt Petition being Contempt Petition No. (C) No.928 of 2016 against RBI and before the Hon'ble Apex Court inter alia alleging that RBI have withheld certain information in spite of the directions of the Hon'ble Apex Court in the Mistry Judgment and therefore they have committed contempt of the judgement of the Hon'ble Apex Court. Further, another Contempt Petition i.c., Contempt Petition (C) No.59 of 2017 was filed against RBI inter alia alleging that RBI had uploaded a Disclosure Policy dated 30.11.2016 on its website by which the Public Information Officers were directed not to disclose virtually all kinds of information, which were in violation of the judgment in Jayantilal N. Mistry case. As a result, on 26.04.2019, the Hon'ble Apex Court passed the judgment in Girish Mittal v. Paravati V. Sundaram, 2019 SCC OnLine SC 607 ("Girish Mittal Case/Judgment") wherein it was inter alia held that RBI had committed contempt of the Court by exempting disclosure of information as directed in Jayantilal N. Mistry case, in its disclosure policy dated 18.06.2018. Importantly, the Hon'ble Apex Court also stated: "We are not persuaded to accept the submission of Mr. Gupta that the judgment dated 16.12.2015 requires reconsideration as we cannot consider the said submission while deciding the contempt petitions."
D. Subsequently, the RBI addressed a letter dated 26.06.2019 to SBI post facto, informing that in compliance of the Judgment in Girish Mittal case, it has issued inspection reports of SBI for the years 2012, 2013, 2014, 2015, which were clearly sought under prior application(s). The said letter did not indicate any details regarding the application made under the Act, the stage of the proceedings in respect of such RTI application, etc. In fact, by disclosing such inspection reports. RBI subverted circumvented the due process under the RTI Act, since the issuance 5 would imply that the various proceedings pending under the Act whereby SBI had challenged disclosure of such inspection reports, would be rendered infructuous.
E. On 02/09/2019, a Writ Petition, being WP. (Civil) No. 1159 of 2019 was filed in the Hon'ble Supreme Court, inter alia by a few private Banks praying for striking down of arbitrary actions of RBI disclosing in their Inspection Reports/RARS by RBI, and for declaration that the sensitive and confidential information received by RBI during its inspections and regulatory & related functions pertaining to Banks are exempted from disclosure under Section 8(1) of the Act".
Decision:
During the pendency of the decision in the matter, it has been noted from the documents filed on record that the instant appeal was ab initio not maintainable as the Appellant filed the instant Second Appeal based on a RTI Application filed with RBI vide RBIND/R/E/21/08671 while the CPIO's reply is with respect to RTI reference no. SBIND/R/E/21/01804 filed with SBI. Pertinently so, this fact was pointed out by the FAA as well at paras 3 & 4 of the preface to the order, yet the FAA proceeded with deciding on the reply of CPIO, SBI without taking the RTI Application reference no. SBIND/R/E/21/01804 filed with SBI on record which renders the FAA's order technically flawed.
Nonetheless, taking a liberal view in the matter considering the fact that the above observation was not pertinent at the time of the hearing and having heard the case at length on merits, the following decision is being issued:
In the facts of the instant case, it is pertinent to note that a decision of a coordinate bench of the Commission in the matter of various third-party banks vs. RBI vide File No. CIC/RBIND/A/2021/152460 + Ors. dated 05.05.2022 covers a detailed discussion inter alia on the same nature of information sought for from the RBI and the reliance placed by RBI on the Jayantilal Mistry case. Suffice to say that the issues raised in the instant case are encapsulated in that same discussion of the coordinate bench in the following manner:
"39. A comprehensive view has to be taken on the objection filed by the institutions. These objectives has to be deliberated and adjudicated in the light of Jayantilal Mistry's case and other judicial pronouncements relevant in such matter, some of which have been referred by the Commission in the above parts as well.
The Commission while examining various objections realize that the Writ Petitions filed before the Hon'ble Supreme Court of India is seeking directions of the Supreme Court for non-disclosure of certain aspects of these audit/inspection report and any such guidance in these Writ Petitions will have direct bearing and provide further 6 clarity to the CPIO/FAA in adjudicating various aspects of disclosure/non-disclosure of reports or the information/data which are part of these reports under the provisions of the RTI Act. The Commission takes note that all the cases/second appeals filed herein are based on interpretations of RBI Vs. Jayantilal Mistry case and other relevant judicial pronouncements requesting for full disclosure vis-à-vis with exemptions under Section 8(1) of the RTI Act for non-disclosure of full or parts of these reports.
40. In view of the above observations, the Commission is of the view that the reports generated in the hands of regulatory public authority in discharge of its statutory obligations are information under Section 2 (f) of the RTI Act, as the regulator and the regulated entities are not governed by fiduciary relationship. The orders of the Commission to their effect has been upheld by the Hon'ble Supreme Court in Jayantilal Mistry's case and the position is unchanged even today. Various objections filed by banks/financial institutions, to be examined, analyzed and adjudicated upon, are related to various data and information submitted to the Reserve Bank of India by these financial institutions explaining their operations, commercial decisions, clients data etc. under statutory obligations can be disclosed as such. There are apparently two set of such information which have been shared by the institutions with the regulator under statutory obligation. First is the information/data of clients relating to their business/commercial operations, financial transactions, business and commercial strategy which is shared by clients with financial institutions in full trust and confidence and is held by them in fiduciary capacity, protected from disclosure under the RTI Act in their hands. Second set is the information relating to business strategy, decisions, transactions, other operational data etc. of financial institutions have been bearing on their competitive position which also enjoys the exemption from disclosure in their hands, if it is a public authority or otherwise, under the RTI Act. Some of such data, on case to case basis be sensitive enough for protection of national interest. The Commission is of the view that the protection of disclosure of information under Section 8(1) of the RTI Act, 2005 in the hands of financial institutions does not evaporate once such data/information is shared, in good faith and trust, with the regulator under statutory obligation. Various observations of Hon'ble Supreme Court in Jayantilal Mistry's case also does not indicate so and decision of the regulator to consider redacting such data/information while disclosing the reports is aligned with this and other judicial pronouncements of Supreme Court and High Courts.
41. The Commission has already outlined the deficiency in the conduct of the CPIO/FAA while hearing such matters and hence is of the opinion that due care has to be taken by according opportunity of personal hearing and making reasoned order with reference to the objections in the hands of the CPIO and later in the hands 7 of FAA, if any appeal is preferred. Hence, the CPIO will be required to adjudicate such RTI applications in the light of the observations of the Commission afresh. The Commission also expects that the CPIO will take view on various objections filed by the Banks and Financial Institutions and submissions made by applicant to reach the decision in favour or against redaction of various parts of the report on case to case basis. He has to factor the observation of Hon'ble Supreme Court in Jayantilal Mistry case and other relevant judgments, some of which have been referred in this order as well. Hence, with these observations the orders passed by the CPIO and FAA in these matters are set aside and the cases are being remanded to the CPIO for adjudication afresh. (Emphasis Supplied)
42. It is amply clear that Writ Petition Nos. 1159/2019 and 768/2021 and others tagged are admitted in Hon'ble Supreme Court wherein guidance and direction has been sought on non-disclosure of certain type of information which are essentially the part of the Annual Inspection Report/RAR, etc. These petitions also seek protection of interim communication between regulator and the regulated entity in the process of finalization of these reports or otherwise. It is obvious that decision in these Writ Petitions will provide clarity and guidance to the Public Authority on redaction/non-disclosure of a set of information inspite of being part of these reports which are open to disclosure. At this stage, any decision by the Public Authority will amount to pre-judging the issues pending admitted Writ Petitions before the Hon'ble Supreme Court. Various banks, financial institutions, respondent public authority and the RTI applicant have already impleaded party and are presenting their arguments before the Apex Court.
43. Hence, any decision of redaction or disclosure of information, without waiting for decision in the Writ Petition Nos. 1159/2019 and 768/2021 and others tagged may cause irrevocable damage against right of privacy and protection of commercial interest. Hence, the respondent public authority if expedient may wait for the outcome in Writ Petition Nos. 1159/2019 and 768/2021 and others tagged or seek clarification from the Hon'ble Court and accordingly decide these RTI applications by following process as enumerated in the earlier paras by the Commission in the interest of principles of natural justice. While disclosing the information they should be cautious in taking a considerate view balancing right to privacy, protection of national and commercial interest on one hand vis-à-vis larger public interest. (Emphasis Supplied)
44. It is further observed that similar view has also been taken by the Division Bench of the Commission in file bearing nos. CIC/VS/A/2013/001488 and CIC/VS/A/2013/001805 dated 11.05.2017 wherein the Commission observed that 'Having considered the submissions of both the parties, the Commission observes that since a similar issue is pending adjudication before the Hon'ble Supreme Court in the matter of Central for Public Interest Litigation Vs. Housing & Urban 8 Development Corporation Ltd. &Ors., it would be judicious to await the final outcome from the Hon'ble Supreme Court. However, on receipt of the final outcome from the Hon'ble Supreme Court in the matter, the appellant shall be at liberty to file second appeal afresh, if he so desires. The instant appeals are disposed of'."
Now, irrespective of the above stated position, it is also noteworthy that the averred Press Release refers to the scrutiny of a particular customer account maintained with the Bank, and notice issued to the Respondent Bank in relation to a certain delay in reporting of a bank fraud and a reply received from the bank in that regard, all of which suggests the privacy stake of a third party customer of the bank and the fiduciary relationship held between the bank and that third party customer. Therefore, the stance of the Respondent bank stating that the information that entailed public interest has already been placed in the public domain appears to bear sufficient merit.
In view of the foregoing discussion, the Commission is not inclined to order for any relief in the matter.
The appeal is disposed of accordingly.
Saroj Punhani (सरोज पुनहािन) हािन) Information Commissioner (सूचना आयु ) Authenticated true copy (अिभ मािणत स#यािपत ित) (C.A. Joseph) Dy. Registrar 011-26179548/ [email protected] सी. ए. जोसेफ, उप-पंजीयक दनांक / 9