CENTRAL INFORMATION COMMISSION
Complaint No.CIC/SS/C/2010/000594 , 000595 & CIC/SS/C/2011/000006 Dated
07.03.2011
Right to Information Act, 2005 - Section 18
PARTIES TO THE CASE:
Complainant : Mr. Hatim Ali
Shri Gaurav Tripathi
Respondent : Mother Dairy Fruit & Vegetable Private Limited
Date of Decision : 15.04.2011
FACTS
OF THE CASE:
1. This complaint by Mr. Hatim Ali and Shri Gaurav Tripathi (hereinafter “the
Complainants”) is against the reply/letter tendered to them on behalf of the
Mother Dairy Fruit & Vegetable Private Limited (MDFVPL) (hereinafter “the
Respondent”) dated 29.09.2010 wherein the information as sought by the
Complainants vide their RTI Applications dated 30.07.2010 & 23.09.2010 was
categorically denied. The ground taken by the Respondent for denying the
information was that MDFVPL is not a public authority and therefore the
provisions of the RTI Act, 2005 do not apply to it.
2. The Complainants filed complaints dated 15.10.2010, 27.10.2010 and 03.01.2011
respectively before us under Section 18/19 of the RTI Act. The CIC issued
notices dated 02.12.2010 to the MDFVPL to appear before it on 20.12.2010 but
the matter was re-listed on 31.01.2011. In between, the Respondent had sent a
latter MDFVL: RTI: 46/10 dated 06.01.2011 to the Complainant wherein it re-
conveyed that it is not a public authority under the RTI Act. However, the
Respondent, with a view to effectuate smooth access to information and greater
transparency, took the initiative to provide that information to the Complainants
as were sought by them through their original RTI Applications.
3. The Respondent filed an affidavit before us on 31.01.2011 attaching the letter
dated 06.01.2011and thereafter; the matter was listed on 07.03.2011 for final
hearing.
4. The Respondent has already presented his written submissions before the
Commission and has relied on catena of decisions to substantiate his pleadings.
The hearing of the present case was attended by all the parties to the present case.
CORE ISSUE TO BE DECIDED
5. The core issue which arises out of the present appeal before me is as follows:
Whether the Respondent qualifies as a “public authority” within the expression as
defined under clause (i) of Section 2(h) of the RTI Act?
DECISION NOTICE:
6. We have carefully considered all the material and records present before us and
have the benefit of File No. CIC/AT/A/2008/01018 wherin the same point was
raised but the appellants in that case and respondents in the present case did not
agitate the matter beyond hearing on 29.12.2008. Viewed in totality, we have no
hesitation in answering the question as framed in the preceding paragraph in the
affirmative.
7. But before conclusively resting our decision upon the pillar of legal reasoning, I
consider it necessary to have a brief look into the history of the Respondent
Company as that is apposite for the purpose of the present case.
8. National Dairy Development Board (NDDB) is a body corporate constituted by
the Parliament under the National Dairy Development Board Act, 1987 and is a
Public Authority within the meaning of the RTI Act. MDFVPL was found in
April 2000 and is a fully owned subsidiary of the NDDB. All of the fully paid up
equity shares of MDFVPL, as on 31.03.2010, are held by the NDDB and its
nominees. It is worth appreciating that the Director of Department of Animal
Husbandry and Dairying, Ministry of Agriculture, Government of India had
communicated to the then Chairperson of NDDB vide its letter No.18-4/99-
Admn.IV dated 13.12.1999 :
“Subject:- Approval of the Central Govt. for creation of a separate wholly
owned Private Limited Company to take over the functioning of the
Mother Dairy Fruit & Vegetable project Delhi.
Sir,
I am directed to refer to your letter No.DEL:EO:MD dated the 17th
February 1999 on the subject cited above and to convey the approval of
the Central Government on the same terms and conditions of the
Resolution passed by the NDDB, Board of Directors in its 51st meeting
held on 11.02.1999.”
9. The above communication which has been sent on behalf of the Government of
India clearly places the MDFVPL within the scope of clause (d) of Section 2(h) of
the RTI Act since it is nothing but “notification issued or order made by the
Appropriate Government.” The expression “Appropriate Government” has beendefined in Section 2(a) as follows:
“(a) “appropriate Government” means in relation to a public authority
which is established, constituted, owned, controlled or substantially
financed by funds provided directly or indirectly–
(i) by the Central Government or the Union territory
administration, the Central Government;
(ii) by the State Government, the State Government;”
The notification cum order issued by the Central Government (supra) makes it the
“Appropriate Government” for the purpose of MDFVPL vis-à-vis Section 2(a)(i)
of the RTI Act. The very existence of the Respondent in this case is based not on
the Resolution passed by the NDDB board of Directors but solely on the
subsequent approval which has been tendered by the Government of India to give
effect to that Resolution. That should be sufficient to settle the case but we feel it
necessary to settle the core issue on all four squares so as to avoid further
confusion.
10. The latter part of Section 2(h)(d), which defines “Public Authority” is inclusive in
definition and is couched in the following language:
” […] 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;”
A conjoint reading of Section 2(h) and Section 2(a) respectively will surely yield
the result that the words “directly or indirectly by funds provided” are appended
only to the words “substantially financed” and not to the words “owned” or
“controlled”; and thus, the Legislature deliberately intended to include those
bodies which are substantially financed “indirectly” by the Central Government
into the ambit of “public authority”. And on that note, few of the many channels
deployed by the Government of India for “indirect” funding can be contemplated
as equity shareholding in a Company, loan disbursal with sovereign guarantee or
at concessional rates or participation of the Government through special purpose
vehicles (SPVs) created or in existence.
11. The thrust of the argument forwarded by the Respondent is that MDFVPL,
without any external support from the Government, has received funding in the
through equity shares, loans etc through the NDDB and that the Central
Government did not delegate it upon the NDDB expressly to establish MDFVPL
as such. It is contended by the Respondent that the control and financing which is
enjoyed by the NDDB in MDFVPL does not amount to any control or financing
on the part of Central Government. We find no merit in such contention because
of the reasons stated in the preceding paragraphs. The Central Government’s
approval to the Resolution passed by the NDDB Board of Directors is itself
evident of the fact that the creation of MDFVPL was not an act committed only
by the management of NDDB but in truest sense, it was a preliminary action
which was finally effectuated by the Central Government’s approval. It leaves us
with no room for doubt on the fact that NDDB was used as a Special Purpose
Vehicle by the Central Government to create a wholly owned Pvt. Ltd. company
in the form of MDFVPL so as to take over the functioning of the Mother Dairy
project in Delhi. Had it not been for the role of Central Government in giving the
green flag to the formation of MDFVPL, perhaps it would be difficult to assail
how else the Respondent would have got vending shops all over the NCR region
at such concessional rates. The preferential treatment per se speaks of the Central
Government’s role in the formation of MDFVPL.
12. The role of the Central Government is further two-fold – financing wise as well as
control wise. We shall deal with both these aspects now one each at a time. We
have already settled that the Respondent did receive indirect funding from the
Central Government, which deliberately deployed the NDDB as a channel to fund
and run the MDFVPL. The question remains that of “substantial financing” for
the purpose of clause (i) of Section 2(h). All the 100% equity paid up shares of
MDFVPL are owned by NDDB. There is a secured loan of Rs.7,53,018 and an
unsecured loan of Rs.11,12,983 both taken from the NDDB out of a total loan of
Rs.1,02,69,978 taken by MDFVPL, which amounts to approximately 18%. The
word “substantial” cannot be made to fit into a straight-jacketed formula but its
construction surely varies with the factual matrix of each case. For instance, 1%
of a Billion would clearly outweigh 90% of a 1000, simply because the
percentage above at most can be solid indicia for an avid mathematician but may
fail to indicate the essence of a transaction to a reasonable prudent man.
13. The Hon’ble Delhi High Court in IFCI vs. Ravinder Balwani [WP(C) 4596/2007]
has even held a Government owned/controlled equity in a corporation to the
extent of merely 23.53% as being sufficient for the purpose of clause (i) of
Section 2(h) of the RTI Act. Thus, without being misled by the quantum in a strict
manner, we are bound to look into the essence of the transaction involved in the
present case which leaves us with no doubt that the financing provided by the
Central Government in MDFVPL through NDDB is sufficient enough to hold the
Respondent as a “Public Authority” under clause (i) of Section 2(h) of the RTI
Act.
14. We now turn our focus to the other aspect indicating the extent of role of the
Central Government in the MDFVPL, i.e. control wise. The control exercised by
the NDDB, which is a statutory body, in the matters and functioning of MDFVPL
is exemplary if not less. It is important to understand that the word “control” in
clause (i) of Section 2(h) is not appended by any qualification such as “deep,
pervasive or majority” so on and so forth. Hence, all that needs to be shown is
some degree of control for the purpose of Section 2(h). That “control” which is
neither too high like dominant control nor is that feeble so that it shocks the
conscience of a reasonable man.
15. A perusal of the Articles of Association of the MDFVPL leaves us with no doubt
regarding the control exercised by the Central Government through NDDB in the
matters of MDFVPL. Article 9 gives the power to appoint the Chairman of
MDFVPL to NDDB. Article 10 (2) states that the Directors shall be appointed by
the NDDB and enlists the first five Directors of the Respondent Company
beforehand only. All the 5 Directors have close ties with the NDDB and are not
Independent Directors. All in all, the control enjoyed by NDDB through its self
appointed Board of Directors over MDFVPL is not merely supervisory but in fact
complete and dominant in nature.
16. Thus, to summarize it all, we find no reason why the Respondent does not fall
within the net of clause (i) of Section 2(h) of the RTI Act. Though the provision is
satisfied even if either control or substantial financing is proven, in the present
case, it’s both of these requirements which are satisfied along with the
requirement as laid down in clause (d) of Section 2(h).
17. We have no doubt that the Respondent Company in the present appeal is a “public
authority” under clause (i) of Section 2(h) of the RTI Act. The Mother Diary will
appoint a CPIO and the Appellate Authority as per the mandate of the RTI Act.
Mother Diary will also comply with the requirements of Section 4 within 8 weeks
of the receipt of the order.
18. The Respondents will provide information to the Complainants on the points not
covered in earlier replies.
(Sushma Singh)
Central Information Commissioner
Authenticated True Copies
(S. Padmanabha)
Deputy Registrar
No. CIC/SS/C/2010/000594 , 000595 & CIC/SS/C/2011/000006
Copy to:
1. Sh. Hatim Ali
S/o Late Sh. T. H. Khan
R/o C-70, 71, Inder Enclave
Phase-II, Kirari Suleman Nagar
Delhi-110086
2. Sh. Gaurav Tripathi
Village-Jigina
Post-Hussainpur
Zila Mirzapur
U.P.-243301
3. The Public Information Officer
Mother Dairy Fruit & Vegetable Pvt. Ltd.
NDDB House
Safdarjung Enclave
New Delhi-110029
