CHS in Mumbai “Inside” or “outside” of RTI

By I C Naik

TOI March 2, 2017 detonated an RTI bomb on around 75,000 housing societies perhaps miss-reading the 13th February Order of the Aurangabad Bench of the Bombay High Court. The Bench dismissed writ petitions filed under Article 226/227 of the Constitution of India by Jalgaon Jilla Cooperative banks’ association claiming their status as “outside” of RTI Act 2005. The order has been welcome as “a  Shot in the Arm for Transparency” by eminent personalities connected to cooperatives.

On 6th March another  media report (DNA) confused the housing societies by quoting highly placed individuals including Ratnakar Gaikwad, (SCIC), Shailesh Gandhi, (former CIC) Bhaskar Prabhu, (Mahiti Adhikar Manch). Reportedly interpretations of the Information Commission and some RTI experts is that “the Court did not state anything on cooperatives being public authorities.”

But Vijay Kumbhar, an RTI activist is unrelenting, and reportedly said “The order categorically does not state CHS are public authority but as per the 97th amendment to the Constitution, cooperatives are now in the same list as Gram Panchayats and hence public authorities. The interpretation may not be agreeable now but two years down the line, it will have to be agreed upon. The amendment is clear on that and the interpretation of the order leads to that,” said Vijay Kumbhar, an RTI activist who first circulated the order. The activist appears to have overlooked what the Constitution (97th Amendment ) Act 2011 expects of the State vide Article 243ZI. “Subject to the provisions of this Part, the Legislature of a State may, by law, make provisions with respect to the incorporation, regulation and winding up of co-operative societies based on the principles of voluntary formation, democratic member-control, member-economic participation and autonomous functioning.  And this is to enhance the efficacy of a new Article 43B added under the directive principles which are wishes of Parliament as a guidance to States and not a constitutional imperative. Art 43 B: The State shall endeavour to promote voluntary formation, autonomous functioning, democratic control and professional management of co-operative societies

Reverting to the 13/2 order, its starts accepting “The petition is filed by the association of Jalgaon Zilla Urban Cooperative Banks, Credit Societies and other financial institutions registered under the Maharashtra Cooperative Societies Act 1960.”  Specifically the Bench was concerned about Banks and Credit Societies and Financial Institutions,(in the business of Money) under tight Control of RBI  though registered as legal entities under the MCS Act 1960. Special recognition of RBI’s statutory authority  over these Banks and Financial Institutions can be found not only in the MCS Act 1960  but even in the Constitution (97th Amendment ) Act 2011 also. For example: a proviso to Article 243ZL namely “Provided also that in case of a co-operative society carrying on the business of banking, the provisions of the Banking Regulation Act, 1949 shall also apply”

TOI appeared quite excited about putting the housing societies in under transparency law,  that it posted  a detailed menu card of  13 types of information about the business of housing societies which will have to be handed over to any member of public, just for asking. It is quite intriguing that as to how the Hon. High Court took so much trouble to go in to such details though housing societies were not party to the petition. It appears to be a misplaced belief that the District UCB  Association took the brief of all other Cooperative Societies registered under the MCS Act 1960 in the whole of Maharashtra, though no housing society could be the member of UCB Association. High Court order is not law like the Supreme Court of India per Article 141 of the Constitution of India namely  The law declared by the Supreme Court shall be binding on all courts within the territory of India.” is binding even on those who were not parties before the court’[ S C  Shenoy And Co. AIR 621, 1985 SCR (3) 659]

The Bench delivering 13/2 order relied largely  on the Apex Court order dated 16-12-2015, reported as (2016) 3 SCC 525 – [RBI v. Jayantilal N. Mistry] and for quashing 9  individual’s RTI applications. The Bench observed that in this case “the Apex Court  has discussed the effect of the provisions of the Banking Regulation Act,1949, Reserved Bank of India Act,1934, The Credit Information Companies (Regulation) Act,2005, the State Bank of India Act,1955; and, the Official Secrets Act,1923 on the provisions made under Act (RTI 2005). The Bench reproduced Paragraphs 58-68 from this 16/12 /205 order lokking out for a case to dismiss UBC Associations case and may be to ascertain if all the Maha-cooperatives were “inside” of RTI

In this case the petitioner RBI challenged the Chief Information Commissioner’s (CIC) orders directing RBI to share details gathered under inspection of these banks/financial institutions being its function under law, about the loans given by them. The position of a fiduciary relationship between RBI and the Banks inspected by it was advanced as the main defense by RBI in refusing to share info of the cooperative banks etc. The RBI stand of fiduciary relationship being  the basis of exemption to information sharing under Section 8(1) of RTI Act 2005 was completely rejected by the Apex Court (Para 58).  The Apex Court recorded certain very significant observation made by CIC which led him to order the RBI to share the information sought under RTI. Observations justifying CIC order to RBI are extracted below from the aforesaid Paragraph of the 16/12 Apex Court Order.

1 RBI is a statutory body set up by the RBI Act as India’s Central Bank. It is a statutory regulatory authority to oversee the functioning of the banks and the country’s banking sector.  (Para 59)

2.RBI has a statutory duty to uphold the interest of the public at large, the depositors, the country’s economy and the banking sector. Thus, RBI ought to act with transparency and not hide information that might embarrass individual banks.(Para 60)

3.where information is required by mandate of law to be provided to an authority, it cannot be said that such information is being provided in a fiduciary relationship. (Para 62)

4.Furthermore, the RTI Act under Section 2(f) clearly provides that the inspection reports, documents etc. fall under the purview of “Information” which is obtained by the public authority (RBI) from a private body (Para 66)

5.The Legislature’s intent was to make available to the general public such information which had been obtained by the public authorities from the private body. Reproducing definition of information as per Section 2(f) the Apex Court laid down a law that  “information relating to any private body which can be accessed by a public authority under any other law for the time being in force; (Para 67) cannot be refused when sought under RTI Act 2005..

It appears, the law laid down by the Supreme Court of India  did not find it necessary that the “Private body” required to furnish information as defined under Section 2(f) as aforesaid, is “inside” or “outside” RTI 2005 in terms of its definition as per Section 2(h) worth looking at so extracted here:

(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 organisation substantially financed, directly or indirectly by funds provided by the appropriate Government;

In application of this law the 13/2 order avoided declaring housing societies as public Authorities as set out above and limited the enquiry as to whether the information sough was covered by the RTI and in that the Apex Court order was about RBI providing information to citizen. RBI being a public authority it was not under discussion at all to uphold CIC directives.

As far as critical information of cooperative societies are concerned the Parliament through a constitutional provision in Article 243ZP inserted vide the Constitution (97th Amendment) direct the societies :

Article 243ZP. Every co-operative society shall file returns, within six months of the close of every financial year, to the authority designated by the State Government including the following matters, namely:—

(a) annual report of its activities;

(b) its audited statement of accounts;

(c) plan for surplus disposal as approved by the general body of the co-operative society;

(d) list of amendments to the bye-laws of the co-operative society, if any;

(e) declaration regarding date of holding of its general body meeting and conduct of elections when due; and

(f) any other information required by the Registrar in pursuance of any of the provisions of the State Act.

These information of every Cooperative Society is with the Public Authority and is a complete list of information every society shall have furnished. This does not require a clarification if housing societies are inside/outside of RTI 2005.Any citizen can access it under RTI. The Menu Card put up by TOI on 2 3 2017 is under Serious doubts.  Moreover Section 32 of the MCS Act 1960 also provides the list of information every member of the Society can ask for to provide by the management. But this is not available to public for cooperative societies are not public authorities.

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