National IPR Policy Series : Who is a 'public authority' under the RTI Act?

In earlier blog posts, India’s National IPR Policy has been discussed at length. In February 2015, three RTI applications were made by the Centre for Internet and Society to the Department of Industrial Policy and Promotion (hereinafter, the “DIPP”). The response of the DIPP to these requests could be described as vague, at best. A detailed blog post by Nehaa Chaudhari discusses the questions, the responses and the other nuances of this endeavour at length.

Having failed repeatedly in our attempts to retrieve information pertaining to the IPR Think Tank that was, essentially, in charge of formulating the National IPR Policy, we put forth an RTI request to the IPR Think Tank earlier this month. The response is awaited, at the moment. In the meantime, we have undertaken the task of finding out whether the IPR Think Tank can indeed be classified as a “public authority” under the Right to Information Act, (hereinafter, the “RTI Act”, or simply the “Act”) because if it can, then it must have a Public Information Officer as per Section 5 of the Act.

The RTI Act defines “public authorities” in Section 2(h) –

A “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.

A. Who is a "Public Authority"?

In 2011, the Punjab-Haryana High Court[1] while deciding on 24 civil writ petitions against the Central/State Information Commissioners had held that if any person, or body, satisfies the following conditions then it would "squarely fall within the ambit and scope of definition of 'public authorities'" and would be "legally required to impart the indicated information as envisaged under the RTI Act" -

(i) the institution cannot come into existence and function unless registered and regulated by the provisions of a legislation; or

(ii) the State Government has some degree of control over it through the medium of Acts/Rules; or

(iii) it is substantially financed by means of funds provided directly, or indirectly, by the appropriate Government; or

(iv) the mandate and command of the provisions of the RTI Act along with its Preamble, aims, objects and regime extends to their public dealing; or

(v) the larger public interest and totality of the other facts and circumstances emanating from the records suggest that such information may be disclosed.

The Court was further inclined to believe that arguments to the contrary would "nullify the aims and objects of the RTI Act, perpetuating and inculcating the injustice to the larger public interest in general."

The Central Information Commission (hereinafter, the "CIC") has also held[2] that pension trusts are "public authorities" under the RTI Act.

The CIC also held[3] that the LIC Housing Finance Limited (hereinafter, the "LICHFL") and LIC Mutual Fund Asset Management Co. Ltd. would qualify as "public authorities" under the RTI Act. It was held that LIC is a body established, constituted, owned and controlled by Central Government. Further, LIC is a public authority having been constituted by an Act of Parliament. And, since the Chairman and Managing Director for both LIC and LICHFL is the same, and since LIC has 40.497% of the shares of LICHFL, LICHFL would be regarded as a "public authority" for the purposes of the RTI Act.

In a verdict that has remained prominent for over half-a-decade now, the CIC had alluded to the judgment of the Madras High Court in Tamil Nadu Newsprint & Papers Ltd v. State Information Commission. In this case, the court had observed that since the mere requirement of the RTI Act for an institution to be deemed a "public authority" is that the Government must substantially finance it, and exercise control over its affairs, it is not necessary that the Government must be the majority shareholder in that institution. The Court had further gone ahead to make an observation that whether or not the government exercises such control is immaterial. Having relied heavily upon this judgment by the Madras High Court, the CIC had further stated that the practice of funding and general control over the affairs and functions of the LIC Mutual Fund by the Central Government is nothing but a manner of indirect funding, and hence LIC Mutual Fund would qualify as a "public authority" under the RTI Act.

In the same case, it was held that the GIC Housing Finance Limited is also a "public authority" for the purposes of the RTI Act since "the shareholding of six Public Authorities in GIC Housing Finance is 47.68% and coupled with the control they exercise over the GIC Housing Finance, it is sufficient to bring them within the ambit of the definition of 'Public Authority' as defined in Section 2(h) of the Right to Information Act, 2005."

Further, the Indian Olympic Association (hereinafter, the "IOA") was held[4] to be a "public authority" under the RTI Act on account of substantial funding by the Government not only for the discharge of functions of the IOA, but also for the construction of its building. In fact, the level of funding by the Government, here, is such that without it, the IOA is unlikely to be able to discharge its functions under the Olympic Charter itself.

In another judgment[5], where it was contended that the body, in question, was a non-governmental organisation, and was not funded by the Government, the CIC held that the impugned body would be a "public authority" as it had been substantially financed by the funds provided by the Government.

In a judgment[6] by the Madras High Court, even an aided private school was held to fall under the ambit of the RTI Act as its entire teaching staff received 100% of their salary from the aid received from the government. The same line of reasoning was resonated in a judgment by the Allahabad High Court in the following year.[7] Yet another private recognised school was held[8] by the CIC to be a "public authority" under the RTI Act because it was substantially funded by the appropriate Government, and was under its control.

The Delhi High Court held[9] the Krishak Bharti Co-operative Ltd. (hereinafter, the "KRIBHCO") - a society registered under the Multi-State Co- operative Societies Act, 2002 (hereinafter, the "MSCS Act" - to be a "public authority" for the purpose of the RTI Act because certain devices laid down in the MSCS Act itself makes KRIBHCO amenable to the control of the Government. On the same grounds, the National Cooperative Consumer Federation of India Ltd. (and the National Agricultural Cooperative Federation of India Ltd. (hereinafter, the "NAFED") - two other societies registered under the MSCS Act - are "public authorities".

Furthermore, the NAFED is also "a nodal agency of the Government of India for the purchase of agricultural and non- agricultural commodities under Market Intervention Scheme and the losses incurred in the implementation of the schemes by NAFED are shared by the Government of India and the State Government concerned in the ratio of 50:50."

Continuing its trend of according a liberal approach to "public authorities" under the RTI Act, the Madras High Court stated in the New Tirupur Area Development case[10] that while Section 2(h)(d)(i) qualifies a "body owned" or a "body controlled", nowhere does it state that the body must be wholly owned, or wholly controlled, by the State. And, as the court observed, even the term "substantially financed" has not been defined though it has been qualified by the terms " directly or indirectly". Section 2(h)(d)(ii) further ropes in non-governmental organisations (NGOs) that are substantially financed. This reflects the intent and purpose of the legislators. In any case, the object of the Act to is to provide the citizens with a right to information from public authorities, and hence, as the Division Bench of the court had previously opined in the Tamil Nadu Road Development Corporation Ltd.'s case[11], the impugned section must receive a liberal interpretation.

Further ahead in this judgment[12], the court made an observation saying that if the State Government, instead of undertaking a work that is essentially its own duty, substantially funds an agency to do it, then such work can hardly be deemed as a private activity. It evolves "very much (into) a public activity over which public interest can generate."

In the same case[13], it was also observed that under the Act, the quantum of the finance required for a body to qualify as "substantially financed" is not spelt out. On this point, the High Court also relied on a precedent [14] (the Tamil Nadu Road Development case decided by Justice A.K. Ganguly) where the court had refused to accept the argument of the petitioner, which stated that the financial support by the government was meagre at best.

B. Which bodies are exempted from the Ambit of "Public Authorities"?

The Kerala High Court, in a 2011 judgment[15], exempted the offices and officers of public religious institutions and endowments to which the Madras Hindu Religious and Charitable Endowments Act, 1951 applies from the definition of "public authorities" under the RTI Act.

In a subsequent case[16], the CIC said that despite the fact that 46% of the equity capital of the National Commodity and Derivatives Exchange Ltd. was held by the PSUs (which are, of course, public authorities), the National Commodity and Derivatives Exchange Ltd. cannot, in itself, be regarded as a "public authority" as there is no direct or indirect funding by an appropriate Government.

Three Karnataka High Court judgments in 2009 [(a) dealing with the Basava Samithi[17] - an organisation that promotes the Basava Philosophy of Life and is registered under the Karnataka Societies Registration Act, 1961; (b) dealing with a co-operative housing society[18] in Malleswaram, Bangalore; (c) dealing with a Bank [19]] held three different bodies as not the creation of any law made by the Legislature, or not as bodies owned or controlled or substantially financed by the Government, and hence, exempt from the ambit of a "public authority" under the RTI Act. These judgments were, however, criticised in the Punjab and Haryana High Court[20] wherein it said that in the three 2009-judgments, the Karnataka High Court had overlooked the basic aims and objectives of larger public interest enshrined in the Preamble of the RTI Act.

C. Conclusion

The easiest way to establish that the IPR Think Tank would qualify as a "public authority" under the RTI Act would be to show that it is a body owned, controlled or substantially funded directly or indirectly by the Government, or that it is created either by any other law made by the Parliament or State Legislature, or under the Constitution itself.

Moreover, it appears from The Hindu Urban Cooperative Bank Limited v. The State Information Commission[21] that when discharging public functions, even though a private entity does not become a State per se, considering the public interest involved, it must be deemed to be a "public authority" in a bid to avoid diluting the aims and objectives of the RTI Act. Now, since the drafting of the National IPR Policy can, in all likelihood, be described as the exercise of a public function, the IPR Think Tank should then qualify as a "public authority" under the Act.

In addition, the underlying principle used in Indubala Agarwal v. National Commodity and Derivatives Exchange Ltd. [22] was that while the public bodies engaging in commercial or business activities - often, even profitable - that are created by any government in exercise of its sovereign functions would qualify as "public authorities" as per Section 2(h) of the Act, the set of commercial bodies further created by these public bodies as part of their business ventures would not qualify as "public authorities" as per Section 2(h). The simple reason behind this discrimination of sorts is that the latter set of bodies lacks any direct, or indirect, involvement of an appropriate government. However, it is unlikely that this rationale could be used to keep the IPR Think Tank outside the domain of "public authorities" under the Act since it would hardly qualify as a commercial body. Furthermore, it was not created by the DIPP merely in a bid to expand its business interests, but to formulate a National IPR Policy that is quite a far cry from being classified as a commercial activity.

On a different but related note, in the well-known case of Ajay Hasia v. Khalid Mujib Sehravardi [23], the test laid down for a "public body" was whether a said person, or body, is an instrumentality or agency of the State, and not as to how it was brought into existence, i.e., the idea is to find out why it was created, and not how. No doubt, the context of the judgment was Article 226 of the Constitution of India, and not the RTI Act. Nonetheless, considering that there is no apparent reason to distinguish between public bodies under Article 226 and under the RTI Act, what if this test were to be applied to the issue at hand? Since the IPR Think Tank has been created for the purpose of drawing up the National IPR Policy which obviously affects the public, it may not be entirely wrong to state, then, that it would fall within the ambit of "public authorities" the RTI Act .