2010 (4) TMI 606 - HC - Companies Law

Whether National Stock Exchange of India Limited, the petitioner are not a public authority as defined by section 2(h) of the Right to Information Act, 2005 ? Held that - The petitioner is a public authority as it is an authority or institution of self-government constituted or established by notification or order issued by the appropriate Government. It is also held that the petitioner is controlled by the appropriate Government. The writ petition accordingly, has no merit and is dismissed.

Issues Involved:
1. Whether the National Stock Exchange of India Limited (NSE) is a 'public authority' under Section 2(h) of the Right to Information Act, 2005.
2. Interpretation of the terms 'authority', 'institution of self-government', and 'body' under Section 2(h) of the Act.
3. The impact of substantial government financing and control on the classification of an entity as a 'public authority'.
4. The relevance of the establishment or constitution of an entity by a notification or order issued by the appropriate Government.

Detailed Analysis:

1. Whether NSE is a 'public authority' under Section 2(h) of the Right to Information Act, 2005:
The petitioner, NSE, argued that it is not a 'public authority' as defined by Section 2(h) of the Right to Information Act, 2005. Section 2(h) defines 'public authority' to include any authority, body, or institution of self-government established or constituted by or under the Constitution, by any law made by Parliament or State Legislature, or by a notification or order issued by the appropriate Government. It also includes bodies owned, controlled, or substantially financed by the Government, as well as non-Government organizations substantially financed by the Government.

2. Interpretation of the terms 'authority', 'institution of self-government', and 'body' under Section 2(h) of the Act:
The court examined the definitions and interpretations of 'authority', 'institution of self-government', and 'body'. The term 'authority' was interpreted broadly to include any public administrative agency or corporation with quasi-Governmental powers. The term 'institution of self-government' was interpreted to cover independent, autonomous organizations performing governmental or public functions. The term 'body' was interpreted as a collective of individuals associated for a common purpose, which could include entities performing public functions and substantially financed by the Government.

3. The impact of substantial government financing and control on the classification of an entity as a 'public authority':
The court emphasized that the term 'substantially financed' should not be confined to majority financing in percentage terms but should be assessed based on the overall impact of Government financing on the entity. The court referred to the judgment in Indian Olympic Association v. Veeresh Malik, which stated that substantial financing could include indirect benefits and support from the Government. The court also noted that Government control, whether deep and pervasive or regulatory, plays a significant role in determining if an entity is a 'public authority'.

4. The relevance of the establishment or constitution of an entity by a notification or order issued by the appropriate Government:
The court examined whether NSE was established or constituted by a notification or order issued by the appropriate Government. NSE was incorporated as a company under the Companies Act, 1956, and later recognized as a stock exchange under the Securities Contracts (Regulation) Act, 1956 (Securities Act). The court held that the recognition and registration of NSE under the Securities Act by the Central Government (or SEBI as its delegate) constituted an 'authority' or 'institution of self-government'. The court rejected the argument that the order by SEBI did not meet the requirements of Section 2(h) of the Act.

Conclusion:
The court concluded that NSE is a 'public authority' under Section 2(h) of the Right to Information Act, 2005, as it is an 'authority or institution of self-government' established by a notification or order issued by the appropriate Government. Additionally, NSE is controlled by the Central Government, meeting the criteria of the second part of Section 2(h). The writ petition was dismissed, affirming that NSE is subject to the provisions of the Right to Information Act, 2005.

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