Indian Supreme Court Rules in Case Impacting RTI

8 October 2013

The Indian Supreme Court ruled Oct. 3 in case that may have implications for which nongovernmental organizations are “substantially financed’ by public funds and are thus covered by the Right to Information Act,

Although analysts are just beginning to sort through the ruling, there are indications it might reduce coverage of the RTI Act and create more litigation. Judges K S Radhakrishnan and A K Sikri criticize past “liberal” court decisions in their 57-page opinion.

Ruling in a case involving a request for information from a cooperative bank, the court says the determination of which organizations are “substantially financed” can’t be based solely on a governmental determination and must be factually based. Certain indirect types of government support might not qualify as government support, the court says.

The apex court says that substantially financed means that “the degree of financing must be actual, existing, positive and real to a substantial extent, not moderate, ordinary, tolerable etc.”

Moreover, the court suggests that “substantial” means that without the funding the organization “would struggle to exist.”

The ruling says “merely providing subsidiaries, grants, exemptions, privileges etc., as such, cannot be said to be providing funding to a substantial extent, unless the record shows that the funding was so substantial to the body which practically runs by such funding and but for such funding, it would struggle to exist.”

Also, the burden of proving that an NGO is substantially financed has been placed on the RTI applicant, the court finds.

The court overturns an order of the Kerala High Court which had declared Cooperative Societies registered under the Kerala Co-operative Societies Act as public authority.

In June, the Central Information Commission ruled that political parties receive substantial funding from the government in various forms and are covered by the RTI Act. The political parties have united in support of now pending legislation to overturn the decision. The bill is now under committee consideration.

Portion of Ruling

Beginning a discussion of the meaning of “substantial” the court wrote:

SUBSTANTIALLY FINANCED

36. The words “substantially financed” have been used in

Sections 2(h)(d)(i) & (ii), while defining the expression public

authority as well as in Section 2(a) of the Act, while defining

the expression “appropriate Government”. A body can be

substantially financed, directly or indirectly by funds

provided by the appropriate Government. The expression

“substantially financed”, as such, has not been defined

under the Act. “Substantial” means “in a substantial

manner so as to be substantial”. In Palser v. Grimling

(1948) 1 All ER 1, 11 (HL), while interpreting the provisions

of Section 10(1) of the Rent and Mortgage Interest

Restrictions Act, 1923, the House of Lords held that

“substantial” is not the same as “not unsubstantial” i.e. just

enough to avoid the de minimis principle. The word

“substantial” literally means solid, massive etc. Legislature

has used the expression “substantially financed” in Sections

2(h)(d)(i) and (ii) indicating that the degree of financing must

be actual, existing, positive and real to a substantial extent,

not moderate, ordinary, tolerable etc.

37. We often use the expressions “questions of law” and

“substantial questions of law” and explain that any question

of law affecting the right of parties would not by itself be a

substantial question of law. In Black’s Law Dictionary

(6th Edn.), the word ‘substantial’ is defined as ‘of real worth

and importance; of considerable value; valuable. Belonging

to substance; actually existing; real: not seeming or

imaginary; not illusive; solid; true; veritable. Something

worthwhile as distinguished from something without value or

merely nominal. Synonymous with material.’ The word

‘substantially’ has been defined to mean ‘essentially; without

material qualification; in the main; in substance; materially.’

In the Shorter Oxford English Dictionary (5th Edn.), the word

‘substantial’ means ‘of ample or considerable amount of size;

sizeable, fairly large; having solid worth or value, of real

significance; sold; weighty; important, worthwhile; of an act,

measure etc. having force or effect, effective, thorough.’ The

word ‘substantially’ has been defined to mean ‘in substance;

as a substantial thing or being; essentially, intrinsically.’

Therefore the word ‘substantial’ is not synonymous with

‘dominant’ or ‘majority’. It is closer to ‘material’ or

‘important’ or ‘of considerable value.’ ‘Substantially’ is closer

to ‘essentially’. Both words can signify varying degrees

depending on the context.

38. Merely providing subsidiaries, grants, exemptions,

privileges etc., as such, cannot be said to be providing

funding to a substantial extent, unless the record shows that

the funding was so substantial to the body which practically

runs by such funding and but for such funding, it would

struggle to exist. The State may also float many schemes

generally for the betterment and welfare of the cooperative

sector like deposit guarantee scheme, scheme of assistance

from NABARD etc., but those facilities or assistance cannot

be termed as “substantially financed” by the State

Government to bring the body within the fold of “public

authority” under Section 2(h)(d)(i) of the Act. But, there are

instances, where private educational institutions getting

ninety five per cent grant-in-aid from the appropriate

government, may answer the definition of public authority

under Section 2(h)(d)(i).

 

NON-GOVERNMENT ORGANISATIONS:

39. The term “Non-Government Organizations” (NGO), as

such, is not defined under the Act. But, over a period of

time, the expression has got its own meaning and, it has to

be seen in that context, when used in the Act. Government

used to finance substantially, several non-government

organizations, which carry on various social and welfare

activities, since those organizations sometimes carry on

functions which are otherwise governmental. Now, the

question, whether an NGO has been substantially financed or

not by the appropriate Government, may be a question of

fact, to be examined by the authorities concerned under the

RTI Act. Such organization can be substantially financed

either directly or indirectly by funds provided by the

appropriate Government. Government may not have any

statutory control over the NGOs, as such, still it can be

established that a particular NGO has been substantially

financed directly or indirectly by the funds provided by the

appropriate Government, in such an event, that organization

will fall within the scope of Section 2(h)(d)(ii) of the RTI Act.

Consequently, even private organizations which are, though

not owned or controlled but substantially financed by the

appropriate Government will also fall within the definition of

“public authority” under Section 2(h)(d)(ii) of the Act.

 

BURDEN TO SHOW:

40. The burden to show that a body is owned, controlled or

substantially financed or that a non-government

organization is substantially financed directly or indirectly by

the funds provided by the appropriate Government is on the

applicant who seeks information or the appropriate

Government and can be examined by the State Public

Information Officer, State Chief Information Officer, State

Chief Information Commission, Central Public Information

Officer etc., when the question comes up for consideration.

A body or NGO is also free to establish that it is not owned,

controlled or substantially financed directly or indirectly by

the appropriate Government.

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