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TMI Blog2009 (10) TMI 969X X X X Extracts X X X X X X X X Extracts X X X X ..... is not applicable to them. 2. Since the matter involved an important question of law of general public importance, it was decided that it should be heard and decided by a Full Bench. Hence, all these Complaints and Appeal Petitions were clubbed together and placed before the Full Bench so constituted. 3. The matter pertaining to Complaint Petition of Shri Cherian K. Simon (CIC/AT/C/2007/0216) and Appeal Petition of Shri Nisar Ahmed (CIC/AT/A/2007/ 0735) was partly heard by Full Bench on 25.4.2008. Similarly, matters relating to LIC Mutual Fund Asset Management Co. Limited were partly heard by the Full Bench on 17.10.2008. It was submitted that in a similar case, the High Court of Madras by its judgment dated 5th August, 2008 in Tamil Nadu Road Development Co. Ltd. Vs. Tamil Nadu Information Commission and Anr. (2008) 145 CompCas 248(Mad) has declared the Tamil Nadu Road Development Company Ltd as a Public Authority. Therefore, the same should apply to the respondent also. 4. These matters were again placed before the Full Bench along with other pending complaints and appeal petitions involving similar issues and heard on 17.4.2009. The following were present at the hearing: A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated by LIC of India which in turn was formed by an Act of Parliament. LIC of India is thus the parent organization of LICHFL hence it is logical that LICHFL also gets covered under the said Act. (ii) That both the companies, i.e. LICHFL and LIC of India, share the same Chairman & Managing Director; (iii) That some percentage of staff revenue of LICHFL is shouldered by LIC of India; (iv) LICHFL is advertised as a product of LIC of India in official publications -- one of such publication is the New Year Diary. 8. Appellant, Shri Ahmad also produced a profile of LICHFL and, on the basis of that, has submitted as under: (i) LICHFL is one of the largest Housing Finance companies in India, incorporated on 19.6.1989 under the Companies Act, 1956; (ii) LICHFL was promoted by LIC of India and went public in 1994; (iii) it launched its maiden GDR issue in 2004. The GDRs are listed on the Luxembourg Stock Exchange; (iv) Authorized Capital of the LICHFL is ₹ 100 crores and its paid-up capital is ₹ 85 crores. (v) It is recognized by National Housing Bank and listed in the NSE & BSE and its shares are traded only in D-mat format. (vi) LICHFL has also floated a 10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2(h)(a) to (d)(i) of the RTI Act but because the respondent LICHFL is a non-government body and has been substantially financed by funds provided by Appropriate Government, therefore, it is a Public Authority. LICHFL made the following submissions: (i) This Commission in 'Col. P.K. Garg vs. Care Homes Ltd' -Appeal No.523/ICPB/2007 - has categorically held that LICHFL is not a Public Authority since LIC does not hold more than 50 per cent share in it and since the matter has already been set at rest by the Commission, it cannot be re-agitated; (ii) The Ministry of Finance, Department of Economic Affairs, Insurance Division has already considered the matter and conveyed their decision vide No.M-18011/14/2007-INS-III dated 12.6.2007 that LICHFL being a company registered under the Companies Act, 1956, provisions of RTI Act are not applicable to it; (iii) The Cabinet Secretariat in its meeting held on 20th February, 2007 has categorically held that LICHFL is not a Government controlled company; (iv) The words "substantially financed" in the definition of Public Authority have not been defined in the Act and, therefore, external aid of concoction needs to be applied to know ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt. LIC of India in their letter affirmed that Life Insurance Corporation of India holds 39.04% of shares in LIC HFL. As per the Articles of the Association of LICHFL, LIC is entitled to appoint to the Board one third of the total number of Directors, so long as LIC holds at least 33% of the issued equity shares. As such, LIC does not have any controlling interest in the composition of the Board of the LICHFL, other than its own nominees. The LIC does not have any control over the functioning of the LICHFL except limited to the nominating officials to the Board of LICHFL and hence LIC directors on Board of LICHFL cannot transmit the information of LIC HFL to the applicant. The LIC submitted that under Section 2(j) of the Act, the information held by the public authority or held by the private entity which is under the control of public authority should be provided to the applicant by the public authority. Hence, LIC provides to the applicant information held by it but it is not in a position to divulge information about LICHFL which is neither a subsidiary of LIC nor under the control of LIC, as it is beyond the scope of the RTI Act. RESPONDENT: LIC Mutual Fund Asset Management Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... objective to carry on the business as Investment Manager to LIC Mutual Fund and, therefore, cannot be termed either as "Non-Government Organization" or a "Public Authority" or an "Appropriate Government". (iii) The Madras High Court held in Mrs. Annie Besant Vs. Government of Madras, (AIR 1918 Mad 1210) that "Government" denotes an established authority entitled and able to administer the public affairs of the country. (iv) The term "Appropriate Government" or "State Government" cannot be considered as identical at all times, because different Government, at different times, will constitute the Appropriate Government. This was held in G.C. Janardchanan Vs. Joseph, AIR 1958 Ker 169. (v) Section 80 of the Code of Civil Procedure is not applicable to LIC Mutual Fund Asset Management Company. As per Section 80, no suit shall be instituted against the Government or against the public officer in respect of any act purporting to be done by such public officer in his official capacity until expiration of two months next after notice in writing. Section 80 is applicable to Governments (Central and/or State), Corporations created by an act of Parliament, municipalities, departments of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt in Tamilnadu Road Development Company Ltd is not applicable in the present case 22. Respondents further submitted as under: (I) The share of LIC in LIC Mutual Fund Assets Management Co. Limited (LICMFAM) is not even 50% as is the case in Tamil Nadu Road Development Company Ltd which is a wholly owned subsidiary of TIDCO, whereas Life Insurance Corporation itself is not an Appropriate Government. (ii) In the case of LICMFAM, there are seven directors out of which two are nominated by the LC but the other five are independent directors from outside. No official from the Appropriate Government is on the Board of Directors of LICMFAM. As such, LICMFAM is not under the control of Appropriate Government whereas Tamil Nadu Road Development Company Ltd is under the control of the Appropriate Government inasmuch as the Secretary to the Government of Tamil Nadu is the Chairman and other IAS ex-officio members are on the board of Tamil Nadu Road Development Company Ltd. (iii) There is no duty cast upon the Government by the Constitution to run or manage the affairs of a Mutual Fund for the public whereas Tamil Nadu Road Development Company Ltd has been formed to carry out the funct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Trustees from time to time. (viii) The corpus of the Trust amounting to ₹ 10 lakhs shall be contributed by the LIC on such terms and conditions as may be set forth in the Trust Deed. (ix) A further sum not exceeding ₹ 25 crores shall be made available as initial contribution to the Trust by the Corporation carrying interest at 10% and redeemable at the discretion of the Trust. (x) The purpose of the LIC of India to float the Mutual Fund will be to mop up the additional savings from the public in rural and semi-urban areas and that LIC itself would be receiving considerable amount of insurance business from the Mutual Fund. (xi) LIC of India for the above purpose will provide to the Mutual Fund all suitable help and guidance which will include payment of initial corpus of the Trust and financial assistance to the Trust, renting out premises after housing the Mutual Fund, provision of initial office equipments and deputation of suitable employees etc. Necessary administrative decisions in this regard will be taken by Chairman. (xii) The Board, therefore, recommended that Chairman of LIC will be authorized to taking such administrative decisions as may be re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ory "Promoter and Promoter Group" in the Respondent company is 50.5369% as is clear from the data available on the website of the respondents. (v) The fact that 11 of the 12 Directors on Board of the respondent company have clear connection with one or the other Promoters (Annexure C6) - all of whom are clearly controlled by the Government - and the 12th Director too appears to have strong Government roots by virtue of his nomination on boards of other Government controlled organisations (though his detailed profile is not available), clearly suggests that the Government exercises control in appointing or nominating Directors on Board of the respondent company. (vi) The fact that all the directors resign exactly on the date of resignation or superannuation, as the case may be, from the Promoter Companies again makes the Government control explicit and clear. 25. The Respondent, GIC Housing Finance Limited in their Written Statement has submitted as follows : (i) That the RTI Act was enacted to bring transparency which is vital to the functioning and to hold "Government and their Instrumentality accountable to the governed". In other words the Right to Information contained u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e capable of controlling and owning an authority. In other words, any finance which is not capable of exercising a right of ownership or has a capacity to control the management and/or the decision making process cannot be regarded to come within the scope of the expression "Substantially financed". The facts as set out clearly shows that Respondent Company has not been "Substantially financed" by any Government directly or indirectly. (iv) It was further submitted that the expression "directly or indirectly" by funds provided by the appropriate Government also need to be given interpretation which is in harmony with the preceding part of the said sub section and the general theme of the Act. An indirect finance by the Government can only cover a situation where Government provides funds to a particular organisation for instance GIC and with a clear directions and guidelines to employ and/or invest those funds in another organisation (say GICHFC). In view of the facts of the present case, the holding of the equity by GIC or LIC or other public Insurance Company without there being a specific direction cannot be covered within the meaning and the scope of expression "financed Indi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to whether the respondent organizations can be termed as "Public Authorities" within the meaning of Section 2(h) of the RTI Act. Before taking the case of each of the respondent organizations, it would be pertinent to reproduce section 2(h) of the RTI Act which defines the term "Public Authority":- "Section 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; 29. From the above definition, there can be no ambiguity that to be treated as Public Authority, an entity will need to come within the definition of "Public Authority" under Section 2(h) of the Right to Information Act, 2005. None of the above respondents are covered by clause (a) to (c) of Section 2(h) of the Act. The Commission needs, however, to de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant has also submitted that if the shareholding of other Banks is added to the total shareholding of the PSU, the total shareholding will exceed 80%. It is an admitted fact that the total shareholding of the PSU is 45% and this is sufficient enough to bring it within the definition of the term "substantial finance". We may agree that the LICHFL is not owned by LIC of India as the total shareholding of the LIC does not exceed 50% but there can be no doubt that LIC and other insurance companies and banks taken together have financed LICHFL substantially. 34. In this connection, our attention has been drawn to an earlier decision of the Commission in Manoj Kumar Kamra Vs. IL&FS (CIC/AT/C/2007/000091). In this case, the Commission has made a distinction between funding by Appropriate Government and funding by the other PSUs and it was held that business funding of a Public Authority created by an Appropriate Government will not qualify to be an indirect funding. 35. In this context, it would be pertinent to refer to the decision of the High Court of Madras in Tamilnadu Road Development Company Ltd. Vs. Tamilnadu Information Commission & another. In their decision, the Hon'ble ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TI Act. 38. As regards LIC Mutual Fund Assets Management Co. Limited, the respondents have submitted that the ratio of judgment in the case of Tamil Nadu Road Development Company is not applicable to LIC Mutual Fund since LIC Mutual Fund is an independent organization and not substantially financed by appropriate government. The submissions of the respondents fail to convince. The LIC of India is a body established, constituted, owned and controlled by Central Government which is the Appropriate Government for the LIC of India and the funding by LIC of India and their general control over the functioning of the LIC Mutual Fund can be nothing but an indirect funding and control by the Appropriate Government. LIC of India is a public authority having been constituted by an Act of Parliament. LIC of India in turn in order to further carry out their public function have formed LIC Mutual Fund approved for formation "through subsidiary" which has to function under LIC's control. The respondent Mutual Fund is fully financed and administratively controlled by the LIC of India through a Board of Trustees. The trustees of the Board who manage the LIC Mutual Fund are appointed with the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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