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August 2014

PART A: Decision Of CIC

By Narayan Varma Chartered Accountant
Reading Time 6 mins
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Section 8 (1) (i) of the RTI Act:
Facts:
Vide
RTI application dated 14-05-2013, the appellant sought copies of
documents including a copy of the cabinet decision in respect of certain
recommendation relating to pension of ex-servicemen and civilians.

CPIO/under secretary (pension policy) declined to provide the copies of documents sought as the same were graded as ‘secret’.

Before
the Commission, CPIO submitted that the Cabinet Secretary has made
certain recommendations dated 17-08-2012 relating to pension of ex –
servicemen and civilians, which was graded as ‘secret’. Orders accepting
these recommendations were issued on 17-01-13. However, as the document
was graded ‘Secret’ and the process of downgrading is pending, the
information sought was denied. Appellant submitted that there is no
secrecy involved and he should have been provided the information
sought.

Decision:
“Section 8 (1) (i) of the RTI Act
states that notwithstanding anything contained in this Act, there shall
be no obligation to give any citizen, Cabinet papers including records
of deliberations of the Council of Ministers, Secretaries and other
officers, provided that the discussions of Council of Ministers, the
reasons thereof and the material on the basis of which the discussions
were taken, shall be made public after the decisions have been taken and
the matter is complete.”

“In the instant case, the
recommendations of the Committee have been accepted and formal orders
issued on17-01- 13. As such, the matter is complete as per the
provisions of section 8 (1) (i) and denial of information not tenable.”

The
Commission directed the CPIO to provide the information sought to the
appellant within two weeks from date of receipt of the order.

[P.K.
Bhargavan Pillai vs. Ministry of Defence, (Dept. of Ex Servicemen
Welfare (Pension Policy), New Delhi, File No. CIC/SS/A/2013/002508/RM,
Decided on: 24.04.2014, Citation: RTIR II (2014) 242(CIC)].

Substantially Financed
Vide
Clause 5 of the Finance (No. 2) Bill, 2014 certain amendment in section
10 of the Income- tax Act has been made which shall be effective from
the first day of April 2015. Relevant item therein is Clause (23 C) of
section 10.

Said Clause 5 (a) reads as under:
(a) In Clause (23C), –
(i) after sub-Clause (iiiac), the following Explanation shall be inserted, namely –

“Explanation,
– For the purposes of sub Clauses (iiiab) and (iiiac), any university
or other educational institution, hospital or other institution referred
therein, shall be considered as being substantially financed* by the
Government for any previous year, if the Government grant to such
university or other educational institution, hospital or other
institution exceeds such percentage of the total receipts including any
voluntary contributions, as may be prescribed, of such university or
other educational institution, hospital or other institution, as the
case maybe, during the relevant previous year”.

Section 2(h) of the RTI Act, defines the term “public authority”. Relevant provisions read as under:
(h) “public authority” means any authority or body or institution of self – government established or constituted-
(a)……..
(b)……..
(c)……..
(d) By notification issued or order made by the appropriate Government, and includes any –
(i) body owned, controlled or substantially financed*;
(ii) non – Government organisation substantially financed*,
directly or indirectly by funds provided by the appropriate Government;

Recently,
CIC in the case of Madan Mohan Priva vs. Jan Kalyan Shiksha
Samiti/Samkalp has opined on sub Clause (d) of section 2 (h). I
reproduce some relevant paragraphs from the order:

“As per the
above definition before an NGO can be held to be Public Authority u/s.
2(h) (d) (ii), it has to satisfy the condition that it is “Substantially Financed.”

The Hon’ble Delhi High Court in Indian Olympic Association vs. Veeresh Malik and Ors (2010) IL R 4 Delhi 1] with regard to substantial financing has observed that the term “substantially financed” has not been defined.

*Highlighted by the author
According to the Legal Glossary – 1992 (published by the Govt. of India) the term means: finance:

1. the pecuniary resources of a government or a company.

2.
to provide with necessary funds. Oxford’s Shorter English Dictionary
defines the term “substantial” as follows: S ubstantial…. An adjective…

3. Of ample or considerable amount or size; sizeable, fairly large.

4. Having solid worth or value, of real significance; solid, weighty; important, worthwhile…

The
term “substantial” denotes something of consequence, and contrary to
something that is insignificant or trivial. It implies a matter of some
degree of seriousness. The question is whether the term itself suggests,
in the context of “substantial financing” a predominant or overwhelming
financing. In other words, does “substantial” read with “financing”
mean that the major funding should from the relevant source, i.e., state
or governmental source”.

The Hon’ble Supreme Court in
Thalappalam Ser. Coop Bank Ltd & Ors. vs. State of Kerala [2013 (12)
SCALE 527] as to what is “substantial financing” has observed that:

“36.
The words “substantially financed” have been used in sections
2(h)(d)(i) and (ii), while defining the expression public authority as
well as section 2(a) of the Act, while defining the expression
“appropriate Government”. 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”. In Palser vs. Grimling (1948) 1 All ER 1, 1 (HL), while
interpreting the provisions of Section 10(1) of the Rent and Mortgage
Interest Restriction Act, 1923, the House of Lords held that
“substantial” is not the same as “not substantial” i.e. just enough to
avoid the de minimis principle. 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 is so substantial to the body which
practically runs by such funding and but for such funding, it would
struggle to exist.
The state may also float many schemes generally
for the betterment and welfare of the co operative sector like deposit
guarantee scheme, scheme of assistance from NABARD etc., but those
facilities or assistance cannot be termed as “substantially financed” by
the State Government to bring the body within the fold of “public
authority” under section 2(h)(d)(i) of the Act. But, there are
instances, where private educational institutions getting 95% grant – in
– aid from the appropriate government, may answer the definition of
public authority under section 2(h)(d)(i).”

[Madan Mohan Priva
vs. Jan Kalyan Shiksha Samiti/Samkalp, File No.: CIC/AD/A/2013/000269 –
SA, Decided on: 30-05-2014, citation RTIR II (2014) 262 (CIC), Order
delivered by M. Sridhar Acharyulu, Central Information Commissioner].

[Ch. Rama Krishna Rao vs. Naval Ship Yard, Port Blair, (third Party: shri r. ajit Kumar) decided by the full bench on 05-05-2014. file no. CiC/Ls/a/2012/002430/rm.]

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