RESERVE BANK OF INDIA Vs. JAYANTILAL N. MISTRY
Supreme Court of India (Division Bench (DB)- Two Judge)
Transfer Case (Civil), 91 of 2015, Judgment Date: Dec 16, 2015
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL ORIGINAL JURISDICTION
TRANSFERRED CASE (CIVIL) NO. 91 OF 2015
(Arising out of Transfer Petition (Civil) No. 707 of 2012)
Reserve Bank of India ……..Petitioner(s)
versus
Jayantilal N. Mistry …..Respondent(s)
With
TRANSFERRED CASE (CIVIL) NO. 92 OF 2015
(Arising out of Transfer Petition (Civil) No. 708 of 2012)
I.C.I.C.I Bank Limited …….. Petitioner(s)
versus
S.S. Vohra and others ………Respondent(s)
TRANSFERRED CASE (CIVIL) NO. 93 OF 2015
(Arising out of Transfer Petition (Civil) No. 711 of 2012)
National Bank for Agriculture
and Rural Development ………Petitioner(s)
versus
Kishan Lal Mittal ………Respondent(s)
TRANSFERRED CASE (CIVIL) NO. 94 OF 2015
(Arising out of Transfer Petition (Civil) No. 712 of 2012)
Reserve Bank of India ……….Petitioner(s)
versus
P.P. Kapoor ……….Respondent(s)
TRANSFERRED CASE (CIVIL) NO. 95 OF 2015
(Arising out of Transfer Petition (Civil) No. 713 of 2012)
Reserve Bank of India ……….Petitioner(s)
versus
Subhas Chandra Agrawal ……….Respondent(s)
TRANSFERRED CASE (CIVIL) NO. 96 OF 2015
(Arising out of Transfer Petition (Civil) No. 715 of 2012)
Reserve Bank of India ……….Petitioner(s)
versus
Raja M. Shanmugam ……….Respondent(s)
TRANSFERRED CASE (CIVIL) NO. 97 OF 2015
(Arising out of Transfer Petition (Civil) No. 716 of 2012)
National Bank for Agriculture
and Rural Development ……….Petitioner(s)
versus
Sanjay Sitaram Kurhade ……….Respondent(s)
TRANSFERRED CASE (CIVIL) NO. 98 OF 2015
(Arising out of Transfer Petition (Civil) No. 717 of 2012)
Reserve Bank of India ……….Petitioner(s)
versus
K.P. Muralidharan Nair ………..Respondent(s)
TRANSFERRED CASE (CIVIL) NO. 99 OF 2015
(Arising out of Transfer Petition (Civil) No. 718 of 2012)
Reserve Bank of India ……….Petitioner(s)
versus
Ashwini Dixit ………..Respondent(s)
TRANSFERRED CASE (CIVIL) NO. 100 OF 2015
(Arising out of Transfer Petition (Civil) No. 709 of 2012)
Reserve Bank of India ………Petitioner(s)
versus
A.Venugopal and another ………Respondent(s)
TRANSFERRED CASE (CIVIL) NO. 101 OF 2015
(Arising out of Transfer Petition (Civil) No. 714 of 2012)
Reserve Bank of India ………Petitioner(s)
versus
Dr. Mohan K. Patil and others ………Respondent(s)
JUDGMENT
M.Y. EQBAL, J.
The main issue that arises for our consideration in these transferred
cases is as to whether all the information sought for under the Right to
Information Act, 2005 can be denied by the Reserve Bank of India and other
Banks to the public at large on the ground of economic interest, commercial
confidence, fiduciary relationship with other Bank on the one hand and the
public interest on the other. If the answer to above question is in
negative, then upto what extent the information can be provided under the
2005 Act.
2. It has been contended by the RBI that it carries out inspections of
banks and financial institutions on regular basis and the inspection
reports prepared by it contain a wide range of information that is
collected in a fiduciary capacity. The facts in brief of the Transfer Case
No.91 of 2015 are that during May-June, 2010 the statutory inspection of
Makarpura Industrial Estate Cooperative Bank Ltd. was conducted by RBI
under the Banking Regulation Act, 1949. Thereafter, in October 2010, the
Respondent sought following information from the CPIO of RBI under the Act
of 2005, reply to which is tabulated hereunder:
|Sr. No.|Information sought |Reply |
|1. |Procedure Rules and |RBI is conducting inspections |
| |Regulations of Inspection |under Section 35 of the B.R. |
| |being carried out on |Act 1949 (AACS) at prescribed |
| |Co-operative Banks |intervals. |
|2. |Last RBI investigation and |The Information sought is |
| |audit report carried out by|maintained by the bank in a |
| |Shri Santosh Kumar during |fiduciary capacity and was |
| |23rd April, 2010 to 6th |obtained by Reserve Bank |
| |May, 2010 sent to Registrar|during the course of |
| |of the Cooperative of the |inspection of the bank and |
| |Gujarat State, Gandhinagar |hence cannot be given to the |
| |on Makarpura Industrial |outsiders. Moreover, |
| |Estate Co-op Bank Ltd Reg. |disclosure of such information|
| |No.2808 |may harm the interest of the |
| | |bank & banking system. Such |
| | |information is also exempt |
| | |from disclosure under Section |
| | |8(1) (a) & (e) of the RTI Act,|
| | |2005. |
|3. |Last 20 years inspection |Same as at (2) above |
| |(carried out with name of | |
| |inspector) report on above| |
| |bank and action taken | |
| |report. | |
|4. |(i) Reports on all |Same as at (2) above |
| |co-operative banks gone on |This information is not |
| |liquidation |available with the Department |
| |(ii) action taken against | |
| |all Directors and Managers | |
| |for recovery of public | |
| |funds and powers utilized | |
| |by RBI and analysis and | |
| |procedure adopted. | |
|5. |Name of remaining | No specific information has |
| |co-operative banks under |been sought |
| |your observations against | |
| |irregularities and action | |
| |taken reports | |
|6. |Period required to take |No specific information has |
| |action and implementations |been sought |
3. On 30.3.2011, the First Appellate Authority disposed of the appeal of
the respondent agreeing with the reply given by CPIO in query No.2, 3 &
first part of 4, relying on the decision of the Full Bench of CIC passed in
the case of Ravin Ranchochodlal Patel and another vs. Reserve Bank of
India. Thereafter, in the second appeal preferred by the aggrieved
respondent, the Central Information Commission by the impugned order dated
01.11.2011, directed RBI to provide information as per records to the
Respondent in relation to queries Nos.2 to 6 before 30.11.2011. Aggrieved
by the decision of the Central Information Commission (CIC), petitioner RBI
moved the Delhi High Court by way of a Writ Petition inter alia praying for
quashing of the aforesaid order of the CIC. The High Court, while issuing
notice, stayed the operation of the aforesaid order.
4. Similarly, in Transfer Case No. 92 of 2015, the Respondent sought
following information from the CPIO of RBI under the Act of 2005, reply to
which is tabulated hereunder:
|Sr. |Information sought |Reply |
|No. | | |
|1. |The Hon’ble FM made a |In the absence of the specific|
| |written statement on the |details, we are not able to |
| |Floor of the House which |provide any information. |
| |inter alia must have been | |
| |made after verifying the | |
| |records from RBI and the | |
| |Bank must have the copy of | |
| |the facts as reported by | |
| |FM. Please supply copy of | |
| |the note sent to FM | |
|2. |The Hon’ble FM made a |We do not have this |
| |statement that some of the |information. |
| |banks like SBI, ICICI Bank | |
| |Ltd, Bank of Baroda, Dena | |
| |Bank, HSBC Bank etc. were | |
| |issued letter of | |
| |displeasure for violating | |
| |FEMA guidelines for opening| |
| |of accounts where as some | |
| |other banks were even fined| |
| |Rupees one crore for such | |
| |violations. Please give me| |
| |the names of the banks with| |
| |details of violations | |
| |committed by them. | |
|3. |‘Advisory Note’ issued to |An Advisory Letter had been |
| |ICICI Bank for account |issued to the bank in |
| |opened by some fraudsters |December, 2007 for the bank’s |
| |at its Patna Branch |Patna branch having failed to |
| |Information sought about |(a) comply with the RBI |
| |“exact nature of |guidelines on customer |
| |irregularities committed by|identification, |
| |the bank under “FEMA”. Also|opening/operating customer |
| |give list of other |accounts, (b) the bank not |
| |illegalities committed by |having followed the normal |
| |IBL and other details of |banker’s prudence while |
| |offences committed by IBL |opening an account in |
| |through various branches in|question. |
| |India and abroad along with|As regards the list of |
| |action taken by the |supervisory action taken by |
| |Regulator including the |us, it may be stated that the |
| |names and designations of |query is too general and not |
| |his officials branch name, |specific. Further, we may |
| |type of offence committed |state that Supervisory actions|
| |etc. The exact nature of |taken were based on the |
| |offences committed by Patna|scrutiny conducted under |
| |Branch of the bank and |Section 35 of the Banking |
| |other branches of the bank |Regulation (BR) Act. The |
| |and names of his officials |information in the scrutiny |
| |involved, type of offence |report is held in fiduciary |
| |committed by them and |capacity and the disclosure of|
| |punishment awarded by |which can affect the economic |
| |concerned authority, names |interest of the country and |
| |and designation of the |also affect the commercial |
| |designated authority, who |confidence of the bank. And |
| |investigated the above case|such information is also |
| |and his findings and |exempt from disclosure under |
| |punishment awarded.” |Section 8(1)(a)(d) & (e) of |
| | |the RTI Act (extracts |
| | |enclosed). We, therefore, are |
| | |unable to accede to your |
| | |request. |
|4. |Exact nature of |In this regard, self explicit |
| |irregularities committed by|print out taken from the |
| |ICICI Bank in Hong Kong |website of Securities and |
| | |Futures Commission, Hong Kong |
| | |is enclosed. |
|5. |ICICI Bank’s Moscow Branch |We do not have the |
| |involved in money |information. |
| |laundering act. | |
|6. |Imposition of fine on ICICI|We do not have any information|
| |Bank under Section 13 of |to furnish in this regard. |
| |the PMLA for loss of | |
| |documents in floods . | |
|7. |Copy of the Warning or |As regards your request for |
| |‘Advisory Note’ issued |copies/details of advisory |
| |twice issued to the bank in|letters to ICICI Bank, we may |
| |the last two years and |state that such information is|
| |reasons recorded therein. |exempt from disclosure under |
| |Name and designation of the|Section 8(1)(a)(d) and (e) of |
| |authority who conducted |the RTI Act. The scrutiny of |
| |this check and his decision|records of the ICICI Bank is |
| |to issue an advisory note |conducted by our Department of|
| |only instead of penalties |Banking Supervision (DBS). The|
| |to be imposed under the |Chief General Manager-in |
| |Act. |charge of the DBS, Centre |
| | |Office Reserve Bank of India |
| | |is Shri S. Karuppasamy. |
5. In this matter, it has been alleged by the petitioner RBI that the
respondent is aggrieved on account of his application form for three-in-one
account with the Bank and ICICI Securities Limited (ISEC) lost in the
floods in July, 2005 and because of non-submission of required documents,
the Trading account with ISEC was suspended, for which respondent
approached the District Consumer Forum, which rejected the respondent’s
allegations of tempering of records and dismissed the complaint of the
respondent. His appeal was also dismissed by the State Commission.
Respondent then moved an application under the Act of 2005 pertaining to
the suspension of operation of his said trading account. As the consumer
complaint as well as the abovementioned application did not yield any
result for the respondent, he made an application under the Act before the
CPIO, SEBI, appeal to which went up to the CIC, the Division Bench of which
disposed of his appeal upholding the decision of the CPIO and the Appellate
Authority of SEBI. Thereafter, in August 2009, respondent once again made
the present application under the Act seeking aforesaid information. Being
aggrieved by the order of the appellate authority, respondent moved second
appeal before the CIC, who by the impugned order directed the CPIO of RBI
to furnish information pertaining to Advisory Notes as requested by the
respondent within 15 working days. Hence, RBI approached Bombay High Court
by way of writ petition.
6. In Transfer Case No. 93 of 2015, the Respondent sought following
information from the CPIO of National Bank for Agriculture and Rural
Development under the Act of 2005, reply to which is tabulated hereunder:-
|Sl. |Information Sought |Reply |
|No. | | |
|1. |Copies of inspection reports |Furnishing of information is |
| |of Apex Co-operative Banks of|exempt under Section 8(1)(a) of|
| |various States/Mumbai DCCB |the RTI Act. |
| |from 2005 till date | |
|2. |Copies of all correspondences|Different Departments in NABARD|
| |with Maharashtra State |deal with various issues |
| |Govt./RBI/any other agency of|related to MSCB. The query is |
| |State/Central Co-operative |general in nature. Applicant |
| |Bank from January, 2010 till |may please be specific in |
| |date. |query/information sought. |
|3. |Provide confirmed/draft |Furnishing of information is |
| |minutes of meetings of |exempt under Sec. 8(1)(d) of |
| |Governing Board/Board of |the RTI Act. |
| |Directors/Committee of | |
| |Directors of NABARD from | |
| |April, 2007 till date | |
|4. |Provide information on |Compliance available on the |
| |compliance of Section 4 of |website of NABARD i.e. |
| |RTI Act, 2005 by NABARD |www.nabard.org |
|5. |Information may be provided |- |
| |on a CD | |
7. The First Appellate Authority concurred with the CPIO and held that
inspection report cannot be supplied in terms of Section 8(1)(a) of the RTI
Act. The Respondent filed Second Appeal before the Central Information
Commission, which was allowed. The RBI filed writ petition before the High
Court challenging the order of the CIC dated 14.11.2011 on identical issue
and the High Court stayed the operation of the order of the CIC.
8. In Transfer Case No. 94 of 2015, the Respondent sought following
information from the CPIO of RBI under the Act of 2005, reply to which is
tabulated hereunder:
|Sl. |Information Sought |Reply |
|No. | | |
|1. | As mentioned at 2(a) what |Pursuant to the then Finance |
| |is RBI doing about |Minister’s Budget Speech made |
| |uploading the entire list |in Parliament on 28th February,|
| |of Bank defaulters on the |1994, in order to alert the |
| |bank’s website? When will |banks and FIs and put them on |
| |it be done? Why is it not |guard against the defaulters to|
| |done? |other lending institutions. RBI|
| | |has put in place scheme to |
| | |collect details about borrowers|
| | |of banks and FIs with |
| | |outstanding aggregating Rs. 1 |
| | |crore and above which are |
| | |classified as ‘Doubtful’ or |
| | |‘Loss or where suits are filed,|
| | |as on 31st March and 30th |
| | |September each year. In |
| | |February 1999, Reserve Bank of |
| | |India had also introduced a |
| | |scheme for collection and |
| | |dissemination of information on|
| | |cases of willful default of |
| | |borrowers with outstanding |
| | |balance of Rs. 25 lakh and |
| | |above. At present, RBI |
| | |disseminates list of above said|
| | |non suit filed ‘doubtful’ and |
| | |‘loss’ borrowed accounts of |
| | |Rs.1 crore and above on |
| | |half-yearly basis (i.e. as on |
| | |March 31 and September 30) to |
| | |banks and FIs. for their |
| | |confidential use. The list of |
| | |non-suit filed accounts of |
| | |willful defaulters of Rs. 25 |
| | |lakh and above is also |
| | |disseminated on quarterly basis|
| | |to banks and FIs for their |
| | |confidential use. Section 45 E |
| | |of the Reserve Bank of India |
| | |Act 1934 prohibits the Reserve |
| | |Bank from disclosing ‘credit |
| | |information’ except in the |
| | |manner provided therein. |
| | |However, Banks and FIs were |
| | |advised on October 1, 2002 to |
| | |furnish information in respect |
| | |of suit-filed accounts between |
| | |Rs. 1 lakh and Rs. 1 crore from|
| | |the period ended March, 2002 in|
| | |a phased manner to CIBIL only. |
| | |CIBIL is placing the list of |
| | |defaulters (suit filed |
| | |accounts) of Rs. 1 crore and |
| | |above and list of willful |
| | |defaulters (suit filed |
| | |accounts) of Rs. 25 lakh and |
| | |above as on March 31, 2003 and |
| | |onwards on its website |
| | |(www.cibil.com) |
9. The Central Information Commission heard the parties through video
conferencing. The CIC directed the CPIO of the petitioner to provide
information as per the records to the Respondent in relation to query Nos.
2(b) and 2(c) before 10.12.2011. The Commission has also directed the
Governor RBI to display this information on its website before 31.12.2011,
in fulfillment of its obligations under Section 4(1)(b) (xvii) of the Right
to Information Act, 2005 and to update it each year.
10. In Transfer Case No.95 of 2015, following information was sought and
reply to it is tabulated hereunder:
|Sl. |Information Sought |Reply |
|No. | | |
|1. |Complete and detailed information |As the violations of |
| |including related |which the banks were |
| |documents/correspondence/file |issued Show Cause |
| |noting etc of RBI on imposing |Notices and subsequently|
| |fines on some banks for violating |imposed penalties and |
| |rules like also referred in |based on the findings of|
| |enclosed news clipping |the Annual Financial |
| | |Inspection (AFI) of the |
| | |banks, and the |
| | |information is received |
| | |by us in a fiduciary |
| | |capacity, the disclosure|
| | |of such information |
| | |would prejudicially |
| | |affect the economic |
| | |interests of the State |
| | |and harm the bank’s |
| | |competitive position. |
| | |The |
| | |SCNs/findings/reports/ |
| | |associated |
| | |correspondences/orders |
| | |are therefore exempt |
| | |from disclosure in terms|
| | |of the provisions of |
| | |Section 8(1)(a) (d) and |
| | |(e) of the RTI Act, |
| | |2005. |
|2. |Complete list of banks which were | |
| |issued show cause notices before | |
| |fine was imposed as also referred | |
| |in enclosed news clipping | |
| |mentioning also default for which | |
| |show cause notice was issued to | |
| |each of such banks | |
|2. |Complete list of banks which were |-do- |
| |issued show cause notices before | |
| |fine was imposed as also referred | |
| |in enclosed news clippings | |
| |mentioning also default for which | |
| |show cause notice was issued to | |
| |each of such banks. | |
|3. |List of banks out of those in |Do |
| |query (2) above where fine was not| |
| |imposed giving details like if | |
| |their reply was satisfactory etc. | |
|4. |List of banks which were |The names of the 19 |
| |ultimately found guilty and fines |banks and details of |
| |mentioning also amount of fine on |penalty imposed on them |
| |each of the bank and criterion to |are furnished in Annex |
| |decide fine on each of the bank |1. Regarding the |
| | |criterion for deciding |
| | |the fine, the penalties |
| | |have been imposed on |
| | |these banks for |
| | |contravention of various|
| | |directions and |
| | |instructions such as |
| | |failure to carry out |
| | |proper due diligence on |
| | |user appropriateness and|
| | |suitability of products,|
| | |selling derivative |
| | |products to users not |
| | |having proper risk |
| | |Management policies, not|
| | |verifying the underlying|
| | |/adequacy of underlying |
| | |and eligible limits |
| | |under past performance |
| | |route, issued by RBI in |
| | |respect of derivative |
| | |transactions. |
|5. |Is fine imposed /action taken on |No other bank was |
| |some other banks also other than |penalized other than |
| |as mentioned in enclosed news |those mentioned in the |
| |clipping |Annex, in the context of|
| | |press release |
| | |No.2010-2011/1555 of |
| | |April 26, 2011 |
|6. |If yes please provide details |Not Applicable, in view |
| | |of the information |
| | |provided in query No.5 |
|7. |Any other information | The query is not |
| | |specific. |
|8. |File notings on movement of this |Copy of the note is |
| |RTI petition and on every aspect |enclosed. |
| |of this RTI Petition | |
11. In the Second Appeal, the CIC heard the respondent via telephone and
the petitioner through video conferencing. As directed by CIC, the
petitioner filed written submission. The CIC directed the CPIO of the
Petitioner to provide complete information in relation to queries 1 2 and 3
of the original application of the Respondent before 15.12.2011.
12. In Transfer Case No. 96 of 2015, the Respondent sought following
information from the CPIO of RBI under the Act of 2005, reply to which is
tabulated hereunder:-
|Sl. |Information Sought |Reply |
|No. | | |
|1. |Before the Orissa High Court |The Information sought by you |
| |RBI has filed an affidavit |is exempted under Section |
| |stating that the total mark |8(1)(a) & (e) of RTI Act, which|
| |to market losses on account |state as under; |
| |of currency derivatives is |8(1) notwithstanding anything |
| |to the tune of more than Rs. |contained in this Act, there |
| |32,000 crores Please give |shall be no obligation to give |
| |bank wise breakup of the MTM|any citizen |
| |Losses |information disclosure of which|
| | |would prejudicially affect the |
| | |sovereignty and integrity of |
| | |India the security strategic |
| | |scientific or economic |
| | |interests of the state, |
| | |relation with foreign State or |
| | |lead to incitement of an |
| | |offence. |
| | |(e) Information available to a |
| | |person in his fiduciary |
| | |relationship unless the |
| | |competent authority is |
| | |satisfied that larger public |
| | |interest warrants the |
| | |disclosure of such information.|
|2. |What is the latest figure |Please refer to our response to|
| |available with RBI of the |1 above. |
| |amount of losses suffered by | |
| |Indian Business houses? | |
| |Please furnish the latest | |
| |figures bank wise and | |
| |customer wise. | |
|3. |Whether the issue of |We have no information in this |
| |derivative losses to Indian |matter. |
| |exporters was discussed in | |
| |any of the meetings of | |
| |Governor/Deputy Governor or | |
| |senior official of the | |
| |Reserve Bank of India? If so | |
| |please furnish the minutes of| |
| |the meeting where the said | |
| |issue was discussed | |
|4. |Any other Action Taken |We have no information in this |
| |Reports by RBI in this |matter. |
| |regard. | |
13. The CIC allowed the second appeal and directed the CPIO FED of the
Petitioner to provide complete information in queries 1, 2, 9 and 10 of the
original application of the Respondent before 05.01.2012. The CPIO, FED
complied with the order of the CIC in so far queries 2, 9 and 10 are
concerned. The RBI filed writ petition for quashing the order of CIC so far
as it directs to provide complete information as per record on query No.1.
14. In Transfer Case No. 97 of 2015, the Respondent sought following
information from the CPIO of National Bank for Agriculture and Rural
Development under the Act of 2005, reply to which is tabulated hereunder:-
|Sl. |Information Sought |Reply |
|No. | | |
|1. |The report made by NABARD regarding 86 |Please refer to your|
| |N.P.A. Accounts for Rs. 3806.95 crore |application dated 19|
| |of Maharashtra State Co-operative Bank |April, 2011 seeking |
| |Ltd. (if any information of my |information under |
| |application is not available in your |the RTI Act, 2005 |
| |Office/Department/ Division/Branch, |which was received |
| |transfer this application to the |by us on 06th May, |
| |concerned Office/Department/ |2011. In this |
| |Division/Branch and convey me |connection, we |
| |accordingly as per the provision of |advise that the |
| |Section 6 (3) of Right to Information |questions put forth |
| |Act, 2005. |by you relate to the|
| | |observations made in|
| | |the Inspection |
| | |Report of NABARD |
| | |pertaining to MSCB |
| | |which are |
| | |confidential in |
| | |nature. Since |
| | |furnishing the |
| | |information would |
| | |impede the process |
| | |of investigation or |
| | |apprehension or |
| | |prosecution of |
| | |offenders, |
| | |disclosure of the |
| | |same is exempted |
| | |under Section |
| | |8(1)(h) of the Act. |
15. In Transfer Case No. 98 of 2015, the Respondent sought following
information from the CPIO of RBI under the Act of 2005, reply to which is
tabulated hereunder:-
|Sl. |Information Sought |Reply |
|No. | | |
|1. |What contraventions and violations |The bank was |
| |were made by SCB in respect of RBI |penalized along with |
| |instructions on derivatives for which |18 other banks for |
| |RBI has imposed penalty of INR 10 |contravention of |
| |lakhs on SCB in exercise of its powers|various instructions |
| |vested under Section 47(1)(b) of |issued by the Reserve|
| |Banking Regulation Act, 1949 and as |Bank of India in |
| |stated in the RBI press release dated |respect of |
| |April 26, 2011 issued by Department of|derivatives, such as,|
| |Communications RBI |failure to carry out |
| | |due diligence in |
| | |regard to suitability|
| | |of products, selling |
| | |derivative products |
| | |to users not having |
| | |risk management |
| | |policies and not |
| | |verifying the |
| | |underlying/adequacy |
| | |of underlying and |
| | |eligible limits under|
| | |past performance |
| | |route. The |
| | |information is also |
| | |available on our |
| | |website under press |
| | |releases. |
|2. |Please provide us the copies/details |Complaints are |
| |of all the complaints filed with RBI |received by Reserve |
| |against SCB, accusing SCB of |Bank of India and as |
| |mis-selling derivative products, |they constitute the |
| |failure to carry out due diligence in |third party |
| |regard to suitability of products, not|information, the |
| |verifying the underlying/adequacy of |information requested|
| |underlying and eligible limits under |by you cannot be |
| |past performance and various other |disclosed in terms of|
| |non-compliance of RBI instruction on |Section 8(1)(d) of |
| |derivatives. |the RTI Act, 2005. |
| |Also, please provide the above | |
| |information in the following format | |
| |. Date of the complaint | |
| |Name of the complaint | |
| |Subject matter of the complaint | |
| |Brief description of the facts and | |
| |accusations made by the complaint. | |
| |Any other information available with | |
| |RBI with respect to | |
| |violation/contraventions by SCB of RBI| |
| |instructions on derivatives. | |
|3. |Please provide us the copies of all |The action has been |
| |the written replies/correspondences |taken against the |
| |made by SCB with RBI and the |bank based on the |
| |recordings of all the oral submissions|findings of the |
| |made by SCB to defend and explain the |Annual Financial |
| |violations/contraventions made by SCB |Inspection (AFI) of |
| | |the bank which is |
| | |conducted under the |
| | |provisions of Sec.35 |
| | |of the BR Act, 1949. |
| | |The findings of the |
| | |inspection are |
| | |confidential in |
| | |nature intended |
| | |specifically for the |
| | |supervised entities |
| | |and for corrective |
| | |action by them. The |
| | |information is |
| | |received by us in |
| | |fiduciary capacity |
| | |disclosure of which |
| | |may prejudicially |
| | |affect the economic |
| | |interest of the |
| | |state. |
| | |As such the |
| | |information cannot be|
| | |disclosed in terms of|
| | |Section 8(1) (a) and |
| | |(e) of the RTI Act, |
| | |2005 |
|4. |Please provide us the details/copies |-do- |
| |of the findings recordings, enquiry | |
| |reports, directive orders file notings| |
| |and/or any information on the | |
| |investigations conducted by RBI | |
| |against SCB in respect of | |
| |non-compliance by SCB thereby | |
| |establishing violations by SCBV in | |
| |respect of non compliances of RBI | |
| |instructions on derivatives. | |
| |Please also provide the above | |
| |information in the following format. | |
| |. Brief violations/contraventions made| |
| |by SCB | |
| |. In brief SCB | |
| |replies/defense/explanation against | |
| |each violations/contraventions made by| |
| |it under the show cause notice. | |
| |. RBI investigations/notes/on the | |
| |SCB | |
| |Replies/defense/explanations for each | |
| |of the violation/contravention made by| |
| |SCB. | |
| |. RBI remarks/findings with regard | |
| |to the violations/contraventions made | |
| |by SCB. | |
16. In Transfer Case No. 99 of 2015, the Respondent sought following
information from the CPIO of RBI under the Act of 2005, reply to which is
tabulated hereunder:-
|Sl. |Information Sought |Reply |
|No. | | |
|1. |That, what action has the department |Enquiry was carried |
| |taken against scams/financial |out against |
| |irregularities of United Mercantile |scams/financial |
| |Cooperative Bank Ltd as mentioned in |irregularities of |
| |the enclosed published news. Provide |United Mercantile |
| |day to day progress report of the |Cooperative Bank Ltd.|
| |action taken. |as mentioned in the |
| | |enclosed published |
| | |news. |
| | |Note/explanation has |
| | |been called for from |
| | |the bank vide our |
| | |letter dated 8th |
| | |July, 2011 regarding |
| | |errors mentioned in |
| | |enquiry report. |
| | |The other information|
| | |asked here is based |
| | |on the conclusions of|
| | |Inspection Report. |
| | |We would like to |
| | |state that |
| | |conclusions found |
| | |during inspections |
| | |are confidential and |
| | |the reports are |
| | |finalized on the |
| | |basis of information |
| | |received from banks. |
| | |We received the |
| | |information from |
| | |banks in a confident |
| | |capacity. Moreover, |
| | |disclosure of such |
| | |information may cause|
| | |damage to the banking|
| | |system and financial |
| | |interests of the |
| | |state. Disclosure |
| | |of such type of |
| | |information is |
| | |exempted under |
| | |Section 8(1)(a) and |
| | |(e) of RTI Act, 2005.|
|2. |That permission for opening how many |United Mercantile |
| |extension counters was obtained by |Cooperative Bank Ltd.|
| |United Mercantile Cooperative Bank |was permitted to open|
| |Ltd from RBI. Provide details of |5, extension |
| |expenditure incurred for constructing|counters. |
| |the extension counters. Had the bank |The information |
| |followed tender system for these |regarding expenditure|
| |constructions, if yes, provide |incurred on |
| |details of concerned tenders. |construction of these|
| | |extension counters |
| | |and tenders are not |
| | |available with |
| | |Reserve Bank of |
| | |India. |
17. In Transfer Case No. 100 of 2015, the Respondent sought following
information from the CPIO of RBI under the Act of 2005, reply to which is
tabulated hereunder:-
|Sl. |Information Sought |Reply |
|No. | | |
|1. |Under which Grade The George Town |The classification of|
| |Co-operative Bank Ltd., Chennai, has |banks into various |
| |been categorised as on 31.12.2006? |grades are done on |
| | |the basis of |
| | |inspection findings |
| | |which is based on |
| | |information/ |
| | |documents obtained in|
| | |a fiduciary capacity |
| | |and cannot be |
| | |disclosed to |
| | |outsiders. It is |
| | |also exempted under |
| | |Section 8(1)(e) of |
| | |right to Information |
| | |Act, 2005. |
18. The Appellate Authority observed that the CPIO, UBD has replied that
the classification of banks into various grades is done on the basis of
findings recorded in inspection which are based on information/documents
obtained in a fiduciary capacity and cannot be disclosed to outsiders. The
CPIO, UBD has stated that the same is exempted under Section 8(1)(e) of RTI
Act. Apart from the fact that information sought by the appellant is
sensitive and cannot be disclosed, it could also harm the competitive
position of the co-operative bank. Therefore, exemption from disclosure of
the Information is available under Section 8(1)(d) of the RTI Act.
19. In Transfer Case No. 101 of 2015, with regard to Deendayal Nagri
Shakari Bank Ltd, District Beed, the Respondent sought following
information from the CPIO of RBI under the Act of 2005, reply to which is
tabulated hereunder:-
|Sl. |Information Sought |Reply |
|No. | | |
|1. |Copies of complaints received by RBI |Disclosure of |
| |against illegal working of the said |information regarding|
| |bank, including violations of the |complaints received |
| |Standing Orders of RBI as well as the|from third parties |
| |provisions under Section 295 of the |would harm the |
| |Companies Act, 1956. |competitive position |
| | |of a third party. |
| | |Further such |
| | |information is |
| | |maintained in a |
| | |fiduciary capacity |
| | |and is exempted from |
| | |disclosure under |
| | |Sections 8(1)(d) and |
| | |(e) of the RTI Act. |
|2. |Action initiated by RBI against the |(a) A penalty of Rs. |
| |said bank, including all |1 lakh was imposed on|
| |correspondence between RBI and the |Deendayal Nagri |
| |said bank officials. |Sahakari Bank Ltd. |
| | |for violation of |
| | |directives on loans |
| | |to directors/their |
| | |relatives/concerns in|
| | |which they are |
| | |interested. The bank |
| | |paid the penalty on |
| | |08.10.2010. |
| | |(b) As regards |
| | |correspondence |
| | |between RBI and the, |
| | |co-operative bank, it|
| | |is advised that such |
| | |information is |
| | |maintained by RBI in |
| | |fiduciary capacity |
| | |and hence cannot be |
| | |given to outsiders. |
| | |Moreover disclosure |
| | |of such information |
| | |may harm the interest|
| | |of the bank and |
| | |banking system. Such |
| | |information is exempt|
| | |from disclosure under|
| | |Section 8(1)(a) and |
| | |(e) of the RTI Act. |
|3. |Finding of the enquiry made by RBI, |Such information is |
| |actions proposed and taken against |maintained by the |
| |the bank and its officials-official |bank in a fiduciary |
| |notings, decisions, and final orders |capacity and is |
| |passed and issued. |obtained by RBI |
| | |during the course of |
| | |inspection of the |
| | |bank and hence cannot|
| | |be given to |
| | |outsiders. The |
| | |disclosure of such |
| | |information would |
| | |harm the competitive |
| | |position of a third |
| | |party. Such |
| | |information is, |
| | |therefore, exempted |
| | |from disclosure |
| | |under Section 8(1)(d)|
| | |and (e) of the RTI |
| | |Act. |
| | |As regards action |
| | |taken against the |
| | |bank, are reply at S.|
| | |No.2 (a) above. |
|4. |Confidential letters received by RBI |See reply at S. NO.2 |
| |from the Executive Director of |(a) above. |
| |Vaishnavi Hatcheries Pvt. Ltd. | |
| |complaining about the illegal working| |
| |and pressure policies of the bank and| |
| |its chairman for misusing the | |
| |authority of digital signature for | |
| |sanction of the backdated | |
| |resignations of the chairman of the | |
| |bank and few other directors of the | |
| |companies details of action taken by | |
| |RBI on that. | |
20. The First Appellate Authority observed that the CPIO had furnished
the information available on queries 2 and 4. Further information sought in
queries 1 and 3 was exempted under Section 8(1)(a)(d) and (e) of the RTI
Act.
21. Various transfer petitions were, therefore, filed seeking transfer of
the writ petitions pending before different High Courts. On 30.5.2015,
while allowing the transfer petitions filed by Reserve Bank of India
seeking transfer of various writ petitions filed by it in the High Courts
of Delhi and Bombay, this Court passed the following orders:
“Notice is served upon the substantial number of respondents. Learned
counsel for the respondents have no objection if Writ Petition Nos. 8400 of
2011, 8605 of 2011, 8693 of 2011, 8583 of 2011, 32 of 2012, 685 of 2012,
263 of 2012 and 1976 of 2012 pending in the High Court of Delhi at New
Delhi and Writ Petition (L) Nos. 2556 of 2011, 2798 of 2011 and 4897 of
2011 pending in the High Court of Bombay are transferred to this Court and
be heard together. In the meanwhile, the steps may be taken to serve upon
the unserved respondents.
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL ORIGINAL JURISDICTION
TRANSFERRED CASE (CIVIL) NO. 91 OF 2015
(Arising out of Transfer Petition (Civil) No. 707 of 2012)
Reserve Bank of India ……..Petitioner(s)
versus
Jayantilal N. Mistry …..Respondent(s)
With
TRANSFERRED CASE (CIVIL) NO. 92 OF 2015
(Arising out of Transfer Petition (Civil) No. 708 of 2012)
I.C.I.C.I Bank Limited …….. Petitioner(s)
versus
S.S. Vohra and others ………Respondent(s)
TRANSFERRED CASE (CIVIL) NO. 93 OF 2015
(Arising out of Transfer Petition (Civil) No. 711 of 2012)
National Bank for Agriculture
and Rural Development ………Petitioner(s)
versus
Kishan Lal Mittal ………Respondent(s)
TRANSFERRED CASE (CIVIL) NO. 94 OF 2015
(Arising out of Transfer Petition (Civil) No. 712 of 2012)
Reserve Bank of India ……….Petitioner(s)
versus
P.P. Kapoor ……….Respondent(s)
TRANSFERRED CASE (CIVIL) NO. 95 OF 2015
(Arising out of Transfer Petition (Civil) No. 713 of 2012)
Reserve Bank of India ……….Petitioner(s)
versus
Subhas Chandra Agrawal ……….Respondent(s)
TRANSFERRED CASE (CIVIL) NO. 96 OF 2015
(Arising out of Transfer Petition (Civil) No. 715 of 2012)
Reserve Bank of India ……….Petitioner(s)
versus
Raja M. Shanmugam ……….Respondent(s)
TRANSFERRED CASE (CIVIL) NO. 97 OF 2015
(Arising out of Transfer Petition (Civil) No. 716 of 2012)
National Bank for Agriculture
and Rural Development ……….Petitioner(s)
versus
Sanjay Sitaram Kurhade ……….Respondent(s)
TRANSFERRED CASE (CIVIL) NO. 98 OF 2015
(Arising out of Transfer Petition (Civil) No. 717 of 2012)
Reserve Bank of India ……….Petitioner(s)
versus
K.P. Muralidharan Nair ………..Respondent(s)
TRANSFERRED CASE (CIVIL) NO. 99 OF 2015
(Arising out of Transfer Petition (Civil) No. 718 of 2012)
Reserve Bank of India ……….Petitioner(s)
versus
Ashwini Dixit ………..Respondent(s)
TRANSFERRED CASE (CIVIL) NO. 100 OF 2015
(Arising out of Transfer Petition (Civil) No. 709 of 2012)
Reserve Bank of India ………Petitioner(s)
versus
A.Venugopal and another ………Respondent(s)
TRANSFERRED CASE (CIVIL) NO. 101 OF 2015
(Arising out of Transfer Petition (Civil) No. 714 of 2012)
Reserve Bank of India ………Petitioner(s)
versus
Dr. Mohan K. Patil and others ………Respondent(s)
JUDGMENT
M.Y. EQBAL, J.
The main issue that arises for our consideration in these transferred
cases is as to whether all the information sought for under the Right to
Information Act, 2005 can be denied by the Reserve Bank of India and other
Banks to the public at large on the ground of economic interest, commercial
confidence, fiduciary relationship with other Bank on the one hand and the
public interest on the other. If the answer to above question is in
negative, then upto what extent the information can be provided under the
2005 Act.
2. It has been contended by the RBI that it carries out inspections of
banks and financial institutions on regular basis and the inspection
reports prepared by it contain a wide range of information that is
collected in a fiduciary capacity. The facts in brief of the Transfer Case
No.91 of 2015 are that during May-June, 2010 the statutory inspection of
Makarpura Industrial Estate Cooperative Bank Ltd. was conducted by RBI
under the Banking Regulation Act, 1949. Thereafter, in October 2010, the
Respondent sought following information from the CPIO of RBI under the Act
of 2005, reply to which is tabulated hereunder:
|Sr. No.|Information sought |Reply |
|1. |Procedure Rules and |RBI is conducting inspections |
| |Regulations of Inspection |under Section 35 of the B.R. |
| |being carried out on |Act 1949 (AACS) at prescribed |
| |Co-operative Banks |intervals. |
|2. |Last RBI investigation and |The Information sought is |
| |audit report carried out by|maintained by the bank in a |
| |Shri Santosh Kumar during |fiduciary capacity and was |
| |23rd April, 2010 to 6th |obtained by Reserve Bank |
| |May, 2010 sent to Registrar|during the course of |
| |of the Cooperative of the |inspection of the bank and |
| |Gujarat State, Gandhinagar |hence cannot be given to the |
| |on Makarpura Industrial |outsiders. Moreover, |
| |Estate Co-op Bank Ltd Reg. |disclosure of such information|
| |No.2808 |may harm the interest of the |
| | |bank & banking system. Such |
| | |information is also exempt |
| | |from disclosure under Section |
| | |8(1) (a) & (e) of the RTI Act,|
| | |2005. |
|3. |Last 20 years inspection |Same as at (2) above |
| |(carried out with name of | |
| |inspector) report on above| |
| |bank and action taken | |
| |report. | |
|4. |(i) Reports on all |Same as at (2) above |
| |co-operative banks gone on |This information is not |
| |liquidation |available with the Department |
| |(ii) action taken against | |
| |all Directors and Managers | |
| |for recovery of public | |
| |funds and powers utilized | |
| |by RBI and analysis and | |
| |procedure adopted. | |
|5. |Name of remaining | No specific information has |
| |co-operative banks under |been sought |
| |your observations against | |
| |irregularities and action | |
| |taken reports | |
|6. |Period required to take |No specific information has |
| |action and implementations |been sought |
3. On 30.3.2011, the First Appellate Authority disposed of the appeal of
the respondent agreeing with the reply given by CPIO in query No.2, 3 &
first part of 4, relying on the decision of the Full Bench of CIC passed in
the case of Ravin Ranchochodlal Patel and another vs. Reserve Bank of
India. Thereafter, in the second appeal preferred by the aggrieved
respondent, the Central Information Commission by the impugned order dated
01.11.2011, directed RBI to provide information as per records to the
Respondent in relation to queries Nos.2 to 6 before 30.11.2011. Aggrieved
by the decision of the Central Information Commission (CIC), petitioner RBI
moved the Delhi High Court by way of a Writ Petition inter alia praying for
quashing of the aforesaid order of the CIC. The High Court, while issuing
notice, stayed the operation of the aforesaid order.
4. Similarly, in Transfer Case No. 92 of 2015, the Respondent sought
following information from the CPIO of RBI under the Act of 2005, reply to
which is tabulated hereunder:
|Sr. |Information sought |Reply |
|No. | | |
|1. |The Hon’ble FM made a |In the absence of the specific|
| |written statement on the |details, we are not able to |
| |Floor of the House which |provide any information. |
| |inter alia must have been | |
| |made after verifying the | |
| |records from RBI and the | |
| |Bank must have the copy of | |
| |the facts as reported by | |
| |FM. Please supply copy of | |
| |the note sent to FM | |
|2. |The Hon’ble FM made a |We do not have this |
| |statement that some of the |information. |
| |banks like SBI, ICICI Bank | |
| |Ltd, Bank of Baroda, Dena | |
| |Bank, HSBC Bank etc. were | |
| |issued letter of | |
| |displeasure for violating | |
| |FEMA guidelines for opening| |
| |of accounts where as some | |
| |other banks were even fined| |
| |Rupees one crore for such | |
| |violations. Please give me| |
| |the names of the banks with| |
| |details of violations | |
| |committed by them. | |
|3. |‘Advisory Note’ issued to |An Advisory Letter had been |
| |ICICI Bank for account |issued to the bank in |
| |opened by some fraudsters |December, 2007 for the bank’s |
| |at its Patna Branch |Patna branch having failed to |
| |Information sought about |(a) comply with the RBI |
| |“exact nature of |guidelines on customer |
| |irregularities committed by|identification, |
| |the bank under “FEMA”. Also|opening/operating customer |
| |give list of other |accounts, (b) the bank not |
| |illegalities committed by |having followed the normal |
| |IBL and other details of |banker’s prudence while |
| |offences committed by IBL |opening an account in |
| |through various branches in|question. |
| |India and abroad along with|As regards the list of |
| |action taken by the |supervisory action taken by |
| |Regulator including the |us, it may be stated that the |
| |names and designations of |query is too general and not |
| |his officials branch name, |specific. Further, we may |
| |type of offence committed |state that Supervisory actions|
| |etc. The exact nature of |taken were based on the |
| |offences committed by Patna|scrutiny conducted under |
| |Branch of the bank and |Section 35 of the Banking |
| |other branches of the bank |Regulation (BR) Act. The |
| |and names of his officials |information in the scrutiny |
| |involved, type of offence |report is held in fiduciary |
| |committed by them and |capacity and the disclosure of|
| |punishment awarded by |which can affect the economic |
| |concerned authority, names |interest of the country and |
| |and designation of the |also affect the commercial |
| |designated authority, who |confidence of the bank. And |
| |investigated the above case|such information is also |
| |and his findings and |exempt from disclosure under |
| |punishment awarded.” |Section 8(1)(a)(d) & (e) of |
| | |the RTI Act (extracts |
| | |enclosed). We, therefore, are |
| | |unable to accede to your |
| | |request. |
|4. |Exact nature of |In this regard, self explicit |
| |irregularities committed by|print out taken from the |
| |ICICI Bank in Hong Kong |website of Securities and |
| | |Futures Commission, Hong Kong |
| | |is enclosed. |
|5. |ICICI Bank’s Moscow Branch |We do not have the |
| |involved in money |information. |
| |laundering act. | |
|6. |Imposition of fine on ICICI|We do not have any information|
| |Bank under Section 13 of |to furnish in this regard. |
| |the PMLA for loss of | |
| |documents in floods . | |
|7. |Copy of the Warning or |As regards your request for |
| |‘Advisory Note’ issued |copies/details of advisory |
| |twice issued to the bank in|letters to ICICI Bank, we may |
| |the last two years and |state that such information is|
| |reasons recorded therein. |exempt from disclosure under |
| |Name and designation of the|Section 8(1)(a)(d) and (e) of |
| |authority who conducted |the RTI Act. The scrutiny of |
| |this check and his decision|records of the ICICI Bank is |
| |to issue an advisory note |conducted by our Department of|
| |only instead of penalties |Banking Supervision (DBS). The|
| |to be imposed under the |Chief General Manager-in |
| |Act. |charge of the DBS, Centre |
| | |Office Reserve Bank of India |
| | |is Shri S. Karuppasamy. |
5. In this matter, it has been alleged by the petitioner RBI that the
respondent is aggrieved on account of his application form for three-in-one
account with the Bank and ICICI Securities Limited (ISEC) lost in the
floods in July, 2005 and because of non-submission of required documents,
the Trading account with ISEC was suspended, for which respondent
approached the District Consumer Forum, which rejected the respondent’s
allegations of tempering of records and dismissed the complaint of the
respondent. His appeal was also dismissed by the State Commission.
Respondent then moved an application under the Act of 2005 pertaining to
the suspension of operation of his said trading account. As the consumer
complaint as well as the abovementioned application did not yield any
result for the respondent, he made an application under the Act before the
CPIO, SEBI, appeal to which went up to the CIC, the Division Bench of which
disposed of his appeal upholding the decision of the CPIO and the Appellate
Authority of SEBI. Thereafter, in August 2009, respondent once again made
the present application under the Act seeking aforesaid information. Being
aggrieved by the order of the appellate authority, respondent moved second
appeal before the CIC, who by the impugned order directed the CPIO of RBI
to furnish information pertaining to Advisory Notes as requested by the
respondent within 15 working days. Hence, RBI approached Bombay High Court
by way of writ petition.
6. In Transfer Case No. 93 of 2015, the Respondent sought following
information from the CPIO of National Bank for Agriculture and Rural
Development under the Act of 2005, reply to which is tabulated hereunder:-
|Sl. |Information Sought |Reply |
|No. | | |
|1. |Copies of inspection reports |Furnishing of information is |
| |of Apex Co-operative Banks of|exempt under Section 8(1)(a) of|
| |various States/Mumbai DCCB |the RTI Act. |
| |from 2005 till date | |
|2. |Copies of all correspondences|Different Departments in NABARD|
| |with Maharashtra State |deal with various issues |
| |Govt./RBI/any other agency of|related to MSCB. The query is |
| |State/Central Co-operative |general in nature. Applicant |
| |Bank from January, 2010 till |may please be specific in |
| |date. |query/information sought. |
|3. |Provide confirmed/draft |Furnishing of information is |
| |minutes of meetings of |exempt under Sec. 8(1)(d) of |
| |Governing Board/Board of |the RTI Act. |
| |Directors/Committee of | |
| |Directors of NABARD from | |
| |April, 2007 till date | |
|4. |Provide information on |Compliance available on the |
| |compliance of Section 4 of |website of NABARD i.e. |
| |RTI Act, 2005 by NABARD |www.nabard.org |
|5. |Information may be provided |- |
| |on a CD | |
7. The First Appellate Authority concurred with the CPIO and held that
inspection report cannot be supplied in terms of Section 8(1)(a) of the RTI
Act. The Respondent filed Second Appeal before the Central Information
Commission, which was allowed. The RBI filed writ petition before the High
Court challenging the order of the CIC dated 14.11.2011 on identical issue
and the High Court stayed the operation of the order of the CIC.
8. In Transfer Case No. 94 of 2015, the Respondent sought following
information from the CPIO of RBI under the Act of 2005, reply to which is
tabulated hereunder:
|Sl. |Information Sought |Reply |
|No. | | |
|1. | As mentioned at 2(a) what |Pursuant to the then Finance |
| |is RBI doing about |Minister’s Budget Speech made |
| |uploading the entire list |in Parliament on 28th February,|
| |of Bank defaulters on the |1994, in order to alert the |
| |bank’s website? When will |banks and FIs and put them on |
| |it be done? Why is it not |guard against the defaulters to|
| |done? |other lending institutions. RBI|
| | |has put in place scheme to |
| | |collect details about borrowers|
| | |of banks and FIs with |
| | |outstanding aggregating Rs. 1 |
| | |crore and above which are |
| | |classified as ‘Doubtful’ or |
| | |‘Loss or where suits are filed,|
| | |as on 31st March and 30th |
| | |September each year. In |
| | |February 1999, Reserve Bank of |
| | |India had also introduced a |
| | |scheme for collection and |
| | |dissemination of information on|
| | |cases of willful default of |
| | |borrowers with outstanding |
| | |balance of Rs. 25 lakh and |
| | |above. At present, RBI |
| | |disseminates list of above said|
| | |non suit filed ‘doubtful’ and |
| | |‘loss’ borrowed accounts of |
| | |Rs.1 crore and above on |
| | |half-yearly basis (i.e. as on |
| | |March 31 and September 30) to |
| | |banks and FIs. for their |
| | |confidential use. The list of |
| | |non-suit filed accounts of |
| | |willful defaulters of Rs. 25 |
| | |lakh and above is also |
| | |disseminated on quarterly basis|
| | |to banks and FIs for their |
| | |confidential use. Section 45 E |
| | |of the Reserve Bank of India |
| | |Act 1934 prohibits the Reserve |
| | |Bank from disclosing ‘credit |
| | |information’ except in the |
| | |manner provided therein. |
| | |However, Banks and FIs were |
| | |advised on October 1, 2002 to |
| | |furnish information in respect |
| | |of suit-filed accounts between |
| | |Rs. 1 lakh and Rs. 1 crore from|
| | |the period ended March, 2002 in|
| | |a phased manner to CIBIL only. |
| | |CIBIL is placing the list of |
| | |defaulters (suit filed |
| | |accounts) of Rs. 1 crore and |
| | |above and list of willful |
| | |defaulters (suit filed |
| | |accounts) of Rs. 25 lakh and |
| | |above as on March 31, 2003 and |
| | |onwards on its website |
| | |(www.cibil.com) |
9. The Central Information Commission heard the parties through video
conferencing. The CIC directed the CPIO of the petitioner to provide
information as per the records to the Respondent in relation to query Nos.
2(b) and 2(c) before 10.12.2011. The Commission has also directed the
Governor RBI to display this information on its website before 31.12.2011,
in fulfillment of its obligations under Section 4(1)(b) (xvii) of the Right
to Information Act, 2005 and to update it each year.
10. In Transfer Case No.95 of 2015, following information was sought and
reply to it is tabulated hereunder:
|Sl. |Information Sought |Reply |
|No. | | |
|1. |Complete and detailed information |As the violations of |
| |including related |which the banks were |
| |documents/correspondence/file |issued Show Cause |
| |noting etc of RBI on imposing |Notices and subsequently|
| |fines on some banks for violating |imposed penalties and |
| |rules like also referred in |based on the findings of|
| |enclosed news clipping |the Annual Financial |
| | |Inspection (AFI) of the |
| | |banks, and the |
| | |information is received |
| | |by us in a fiduciary |
| | |capacity, the disclosure|
| | |of such information |
| | |would prejudicially |
| | |affect the economic |
| | |interests of the State |
| | |and harm the bank’s |
| | |competitive position. |
| | |The |
| | |SCNs/findings/reports/ |
| | |associated |
| | |correspondences/orders |
| | |are therefore exempt |
| | |from disclosure in terms|
| | |of the provisions of |
| | |Section 8(1)(a) (d) and |
| | |(e) of the RTI Act, |
| | |2005. |
|2. |Complete list of banks which were | |
| |issued show cause notices before | |
| |fine was imposed as also referred | |
| |in enclosed news clipping | |
| |mentioning also default for which | |
| |show cause notice was issued to | |
| |each of such banks | |
|2. |Complete list of banks which were |-do- |
| |issued show cause notices before | |
| |fine was imposed as also referred | |
| |in enclosed news clippings | |
| |mentioning also default for which | |
| |show cause notice was issued to | |
| |each of such banks. | |
|3. |List of banks out of those in |Do |
| |query (2) above where fine was not| |
| |imposed giving details like if | |
| |their reply was satisfactory etc. | |
|4. |List of banks which were |The names of the 19 |
| |ultimately found guilty and fines |banks and details of |
| |mentioning also amount of fine on |penalty imposed on them |
| |each of the bank and criterion to |are furnished in Annex |
| |decide fine on each of the bank |1. Regarding the |
| | |criterion for deciding |
| | |the fine, the penalties |
| | |have been imposed on |
| | |these banks for |
| | |contravention of various|
| | |directions and |
| | |instructions such as |
| | |failure to carry out |
| | |proper due diligence on |
| | |user appropriateness and|
| | |suitability of products,|
| | |selling derivative |
| | |products to users not |
| | |having proper risk |
| | |Management policies, not|
| | |verifying the underlying|
| | |/adequacy of underlying |
| | |and eligible limits |
| | |under past performance |
| | |route, issued by RBI in |
| | |respect of derivative |
| | |transactions. |
|5. |Is fine imposed /action taken on |No other bank was |
| |some other banks also other than |penalized other than |
| |as mentioned in enclosed news |those mentioned in the |
| |clipping |Annex, in the context of|
| | |press release |
| | |No.2010-2011/1555 of |
| | |April 26, 2011 |
|6. |If yes please provide details |Not Applicable, in view |
| | |of the information |
| | |provided in query No.5 |
|7. |Any other information | The query is not |
| | |specific. |
|8. |File notings on movement of this |Copy of the note is |
| |RTI petition and on every aspect |enclosed. |
| |of this RTI Petition | |
11. In the Second Appeal, the CIC heard the respondent via telephone and
the petitioner through video conferencing. As directed by CIC, the
petitioner filed written submission. The CIC directed the CPIO of the
Petitioner to provide complete information in relation to queries 1 2 and 3
of the original application of the Respondent before 15.12.2011.
12. In Transfer Case No. 96 of 2015, the Respondent sought following
information from the CPIO of RBI under the Act of 2005, reply to which is
tabulated hereunder:-
|Sl. |Information Sought |Reply |
|No. | | |
|1. |Before the Orissa High Court |The Information sought by you |
| |RBI has filed an affidavit |is exempted under Section |
| |stating that the total mark |8(1)(a) & (e) of RTI Act, which|
| |to market losses on account |state as under; |
| |of currency derivatives is |8(1) notwithstanding anything |
| |to the tune of more than Rs. |contained in this Act, there |
| |32,000 crores Please give |shall be no obligation to give |
| |bank wise breakup of the MTM|any citizen |
| |Losses |information disclosure of which|
| | |would prejudicially affect the |
| | |sovereignty and integrity of |
| | |India the security strategic |
| | |scientific or economic |
| | |interests of the state, |
| | |relation with foreign State or |
| | |lead to incitement of an |
| | |offence. |
| | |(e) Information available to a |
| | |person in his fiduciary |
| | |relationship unless the |
| | |competent authority is |
| | |satisfied that larger public |
| | |interest warrants the |
| | |disclosure of such information.|
|2. |What is the latest figure |Please refer to our response to|
| |available with RBI of the |1 above. |
| |amount of losses suffered by | |
| |Indian Business houses? | |
| |Please furnish the latest | |
| |figures bank wise and | |
| |customer wise. | |
|3. |Whether the issue of |We have no information in this |
| |derivative losses to Indian |matter. |
| |exporters was discussed in | |
| |any of the meetings of | |
| |Governor/Deputy Governor or | |
| |senior official of the | |
| |Reserve Bank of India? If so | |
| |please furnish the minutes of| |
| |the meeting where the said | |
| |issue was discussed | |
|4. |Any other Action Taken |We have no information in this |
| |Reports by RBI in this |matter. |
| |regard. | |
13. The CIC allowed the second appeal and directed the CPIO FED of the
Petitioner to provide complete information in queries 1, 2, 9 and 10 of the
original application of the Respondent before 05.01.2012. The CPIO, FED
complied with the order of the CIC in so far queries 2, 9 and 10 are
concerned. The RBI filed writ petition for quashing the order of CIC so far
as it directs to provide complete information as per record on query No.1.
14. In Transfer Case No. 97 of 2015, the Respondent sought following
information from the CPIO of National Bank for Agriculture and Rural
Development under the Act of 2005, reply to which is tabulated hereunder:-
|Sl. |Information Sought |Reply |
|No. | | |
|1. |The report made by NABARD regarding 86 |Please refer to your|
| |N.P.A. Accounts for Rs. 3806.95 crore |application dated 19|
| |of Maharashtra State Co-operative Bank |April, 2011 seeking |
| |Ltd. (if any information of my |information under |
| |application is not available in your |the RTI Act, 2005 |
| |Office/Department/ Division/Branch, |which was received |
| |transfer this application to the |by us on 06th May, |
| |concerned Office/Department/ |2011. In this |
| |Division/Branch and convey me |connection, we |
| |accordingly as per the provision of |advise that the |
| |Section 6 (3) of Right to Information |questions put forth |
| |Act, 2005. |by you relate to the|
| | |observations made in|
| | |the Inspection |
| | |Report of NABARD |
| | |pertaining to MSCB |
| | |which are |
| | |confidential in |
| | |nature. Since |
| | |furnishing the |
| | |information would |
| | |impede the process |
| | |of investigation or |
| | |apprehension or |
| | |prosecution of |
| | |offenders, |
| | |disclosure of the |
| | |same is exempted |
| | |under Section |
| | |8(1)(h) of the Act. |
15. In Transfer Case No. 98 of 2015, the Respondent sought following
information from the CPIO of RBI under the Act of 2005, reply to which is
tabulated hereunder:-
|Sl. |Information Sought |Reply |
|No. | | |
|1. |What contraventions and violations |The bank was |
| |were made by SCB in respect of RBI |penalized along with |
| |instructions on derivatives for which |18 other banks for |
| |RBI has imposed penalty of INR 10 |contravention of |
| |lakhs on SCB in exercise of its powers|various instructions |
| |vested under Section 47(1)(b) of |issued by the Reserve|
| |Banking Regulation Act, 1949 and as |Bank of India in |
| |stated in the RBI press release dated |respect of |
| |April 26, 2011 issued by Department of|derivatives, such as,|
| |Communications RBI |failure to carry out |
| | |due diligence in |
| | |regard to suitability|
| | |of products, selling |
| | |derivative products |
| | |to users not having |
| | |risk management |
| | |policies and not |
| | |verifying the |
| | |underlying/adequacy |
| | |of underlying and |
| | |eligible limits under|
| | |past performance |
| | |route. The |
| | |information is also |
| | |available on our |
| | |website under press |
| | |releases. |
|2. |Please provide us the copies/details |Complaints are |
| |of all the complaints filed with RBI |received by Reserve |
| |against SCB, accusing SCB of |Bank of India and as |
| |mis-selling derivative products, |they constitute the |
| |failure to carry out due diligence in |third party |
| |regard to suitability of products, not|information, the |
| |verifying the underlying/adequacy of |information requested|
| |underlying and eligible limits under |by you cannot be |
| |past performance and various other |disclosed in terms of|
| |non-compliance of RBI instruction on |Section 8(1)(d) of |
| |derivatives. |the RTI Act, 2005. |
| |Also, please provide the above | |
| |information in the following format | |
| |. Date of the complaint | |
| |Name of the complaint | |
| |Subject matter of the complaint | |
| |Brief description of the facts and | |
| |accusations made by the complaint. | |
| |Any other information available with | |
| |RBI with respect to | |
| |violation/contraventions by SCB of RBI| |
| |instructions on derivatives. | |
|3. |Please provide us the copies of all |The action has been |
| |the written replies/correspondences |taken against the |
| |made by SCB with RBI and the |bank based on the |
| |recordings of all the oral submissions|findings of the |
| |made by SCB to defend and explain the |Annual Financial |
| |violations/contraventions made by SCB |Inspection (AFI) of |
| | |the bank which is |
| | |conducted under the |
| | |provisions of Sec.35 |
| | |of the BR Act, 1949. |
| | |The findings of the |
| | |inspection are |
| | |confidential in |
| | |nature intended |
| | |specifically for the |
| | |supervised entities |
| | |and for corrective |
| | |action by them. The |
| | |information is |
| | |received by us in |
| | |fiduciary capacity |
| | |disclosure of which |
| | |may prejudicially |
| | |affect the economic |
| | |interest of the |
| | |state. |
| | |As such the |
| | |information cannot be|
| | |disclosed in terms of|
| | |Section 8(1) (a) and |
| | |(e) of the RTI Act, |
| | |2005 |
|4. |Please provide us the details/copies |-do- |
| |of the findings recordings, enquiry | |
| |reports, directive orders file notings| |
| |and/or any information on the | |
| |investigations conducted by RBI | |
| |against SCB in respect of | |
| |non-compliance by SCB thereby | |
| |establishing violations by SCBV in | |
| |respect of non compliances of RBI | |
| |instructions on derivatives. | |
| |Please also provide the above | |
| |information in the following format. | |
| |. Brief violations/contraventions made| |
| |by SCB | |
| |. In brief SCB | |
| |replies/defense/explanation against | |
| |each violations/contraventions made by| |
| |it under the show cause notice. | |
| |. RBI investigations/notes/on the | |
| |SCB | |
| |Replies/defense/explanations for each | |
| |of the violation/contravention made by| |
| |SCB. | |
| |. RBI remarks/findings with regard | |
| |to the violations/contraventions made | |
| |by SCB. | |
16. In Transfer Case No. 99 of 2015, the Respondent sought following
information from the CPIO of RBI under the Act of 2005, reply to which is
tabulated hereunder:-
|Sl. |Information Sought |Reply |
|No. | | |
|1. |That, what action has the department |Enquiry was carried |
| |taken against scams/financial |out against |
| |irregularities of United Mercantile |scams/financial |
| |Cooperative Bank Ltd as mentioned in |irregularities of |
| |the enclosed published news. Provide |United Mercantile |
| |day to day progress report of the |Cooperative Bank Ltd.|
| |action taken. |as mentioned in the |
| | |enclosed published |
| | |news. |
| | |Note/explanation has |
| | |been called for from |
| | |the bank vide our |
| | |letter dated 8th |
| | |July, 2011 regarding |
| | |errors mentioned in |
| | |enquiry report. |
| | |The other information|
| | |asked here is based |
| | |on the conclusions of|
| | |Inspection Report. |
| | |We would like to |
| | |state that |
| | |conclusions found |
| | |during inspections |
| | |are confidential and |
| | |the reports are |
| | |finalized on the |
| | |basis of information |
| | |received from banks. |
| | |We received the |
| | |information from |
| | |banks in a confident |
| | |capacity. Moreover, |
| | |disclosure of such |
| | |information may cause|
| | |damage to the banking|
| | |system and financial |
| | |interests of the |
| | |state. Disclosure |
| | |of such type of |
| | |information is |
| | |exempted under |
| | |Section 8(1)(a) and |
| | |(e) of RTI Act, 2005.|
|2. |That permission for opening how many |United Mercantile |
| |extension counters was obtained by |Cooperative Bank Ltd.|
| |United Mercantile Cooperative Bank |was permitted to open|
| |Ltd from RBI. Provide details of |5, extension |
| |expenditure incurred for constructing|counters. |
| |the extension counters. Had the bank |The information |
| |followed tender system for these |regarding expenditure|
| |constructions, if yes, provide |incurred on |
| |details of concerned tenders. |construction of these|
| | |extension counters |
| | |and tenders are not |
| | |available with |
| | |Reserve Bank of |
| | |India. |
17. In Transfer Case No. 100 of 2015, the Respondent sought following
information from the CPIO of RBI under the Act of 2005, reply to which is
tabulated hereunder:-
|Sl. |Information Sought |Reply |
|No. | | |
|1. |Under which Grade The George Town |The classification of|
| |Co-operative Bank Ltd., Chennai, has |banks into various |
| |been categorised as on 31.12.2006? |grades are done on |
| | |the basis of |
| | |inspection findings |
| | |which is based on |
| | |information/ |
| | |documents obtained in|
| | |a fiduciary capacity |
| | |and cannot be |
| | |disclosed to |
| | |outsiders. It is |
| | |also exempted under |
| | |Section 8(1)(e) of |
| | |right to Information |
| | |Act, 2005. |
18. The Appellate Authority observed that the CPIO, UBD has replied that
the classification of banks into various grades is done on the basis of
findings recorded in inspection which are based on information/documents
obtained in a fiduciary capacity and cannot be disclosed to outsiders. The
CPIO, UBD has stated that the same is exempted under Section 8(1)(e) of RTI
Act. Apart from the fact that information sought by the appellant is
sensitive and cannot be disclosed, it could also harm the competitive
position of the co-operative bank. Therefore, exemption from disclosure of
the Information is available under Section 8(1)(d) of the RTI Act.
19. In Transfer Case No. 101 of 2015, with regard to Deendayal Nagri
Shakari Bank Ltd, District Beed, the Respondent sought following
information from the CPIO of RBI under the Act of 2005, reply to which is
tabulated hereunder:-
|Sl. |Information Sought |Reply |
|No. | | |
|1. |Copies of complaints received by RBI |Disclosure of |
| |against illegal working of the said |information regarding|
| |bank, including violations of the |complaints received |
| |Standing Orders of RBI as well as the|from third parties |
| |provisions under Section 295 of the |would harm the |
| |Companies Act, 1956. |competitive position |
| | |of a third party. |
| | |Further such |
| | |information is |
| | |maintained in a |
| | |fiduciary capacity |
| | |and is exempted from |
| | |disclosure under |
| | |Sections 8(1)(d) and |
| | |(e) of the RTI Act. |
|2. |Action initiated by RBI against the |(a) A penalty of Rs. |
| |said bank, including all |1 lakh was imposed on|
| |correspondence between RBI and the |Deendayal Nagri |
| |said bank officials. |Sahakari Bank Ltd. |
| | |for violation of |
| | |directives on loans |
| | |to directors/their |
| | |relatives/concerns in|
| | |which they are |
| | |interested. The bank |
| | |paid the penalty on |
| | |08.10.2010. |
| | |(b) As regards |
| | |correspondence |
| | |between RBI and the, |
| | |co-operative bank, it|
| | |is advised that such |
| | |information is |
| | |maintained by RBI in |
| | |fiduciary capacity |
| | |and hence cannot be |
| | |given to outsiders. |
| | |Moreover disclosure |
| | |of such information |
| | |may harm the interest|
| | |of the bank and |
| | |banking system. Such |
| | |information is exempt|
| | |from disclosure under|
| | |Section 8(1)(a) and |
| | |(e) of the RTI Act. |
|3. |Finding of the enquiry made by RBI, |Such information is |
| |actions proposed and taken against |maintained by the |
| |the bank and its officials-official |bank in a fiduciary |
| |notings, decisions, and final orders |capacity and is |
| |passed and issued. |obtained by RBI |
| | |during the course of |
| | |inspection of the |
| | |bank and hence cannot|
| | |be given to |
| | |outsiders. The |
| | |disclosure of such |
| | |information would |
| | |harm the competitive |
| | |position of a third |
| | |party. Such |
| | |information is, |
| | |therefore, exempted |
| | |from disclosure |
| | |under Section 8(1)(d)|
| | |and (e) of the RTI |
| | |Act. |
| | |As regards action |
| | |taken against the |
| | |bank, are reply at S.|
| | |No.2 (a) above. |
|4. |Confidential letters received by RBI |See reply at S. NO.2 |
| |from the Executive Director of |(a) above. |
| |Vaishnavi Hatcheries Pvt. Ltd. | |
| |complaining about the illegal working| |
| |and pressure policies of the bank and| |
| |its chairman for misusing the | |
| |authority of digital signature for | |
| |sanction of the backdated | |
| |resignations of the chairman of the | |
| |bank and few other directors of the | |
| |companies details of action taken by | |
| |RBI on that. | |
20. The First Appellate Authority observed that the CPIO had furnished
the information available on queries 2 and 4. Further information sought in
queries 1 and 3 was exempted under Section 8(1)(a)(d) and (e) of the RTI
Act.
21. Various transfer petitions were, therefore, filed seeking transfer of
the writ petitions pending before different High Courts. On 30.5.2015,
while allowing the transfer petitions filed by Reserve Bank of India
seeking transfer of various writ petitions filed by it in the High Courts
of Delhi and Bombay, this Court passed the following orders:
“Notice is served upon the substantial number of respondents. Learned
counsel for the respondents have no objection if Writ Petition Nos. 8400 of
2011, 8605 of 2011, 8693 of 2011, 8583 of 2011, 32 of 2012, 685 of 2012,
263 of 2012 and 1976 of 2012 pending in the High Court of Delhi at New
Delhi and Writ Petition (L) Nos. 2556 of 2011, 2798 of 2011 and 4897 of
2011 pending in the High Court of Bombay are transferred to this Court and
be heard together. In the meanwhile, the steps may be taken to serve upon
the unserved respondents.
Accordingly, the transfer petitions are allowed and the above mentioned
writ petitions are withdrawn to this Court. The High Court of Delhi and the
High Court of Bombay are directed to remit the entire record of the said
writ petitions to this Court within four weeks.”
22. Mr. T.R. Andhyarujina, learned senior counsel appearing for the
petitioner-Reserve Bank of India, assailed the impugned orders passed by
the Central Information Commissioner as illegal and without jurisdiction.
Learned Counsel referred various provisions of The Reserve Bank of India
Act, 1934; The Banking Regulation Act, 1949 and The Credit Information
Companies (Regulation) Act, 2005 and made the following submissions:-
The Reserve Bank of India being the statutory authority has been
constituted under the Reserve Bank of India Act, 1934 for the purpose of
regulating and controlling the money supply in the country. It also acts
as statutory banker with the Government of India and State Governments and
manages their public debts. In addition, it regulates and supervises
Commercial Banks and Cooperative Banks in the country. The RBI exercises
control over the volume of credit, the rate of interest chargeable on loan
and advances and deposits in order to ensure the economic stability. The
RBI is also vested with the powers to determine “Banking Policy” in the
interest of banking system, monetary stability and sound economic growth.
The RBI in exercise of powers of powers conferred under Section 35 of the
Banking Regulation Act, 1949 conducts inspection of the banks in the
country.
The RBI in its capacity as the regulator and supervisor of the banking
system of the country access to various information collected and kept by
the banks. The inspecting team and the officers carry out inspections of
different banks and much of the information accessed by the inspecting
officers of RBI would be confidential. Referring Section 28 of the Banking
Regulation Act, it was submitted that the RBI in the public interest may
publish the information obtained by it, in a consolidated form but not
otherwise.
The role of RBI is to safeguard the economic and financial stability of the
country and it has large contingent of expert advisors relating to matters
deciding the economy of the entire country and nobody can doubt the bona
fide of the bank. In this connection, learned counsel referred the
decision of this Court in the case of Peerless General Finance and
Investment Co. Limited and Another Vs. Reserve Bank of India, 1992 Vol. 2
SCC 343.
Referring the decision in the case of B. Suryanarayana Vs. N. 1453 The
Kolluru Parvathi Co-Op. Bank Ltd., 1986 AIR (AP) 244, learned counsel
submitted that the Court will be highly chary to enter into and interfere
with the decision of Reserve Bank of India. Learned Counsel also referred
to the decision in the case of Peerless General Finance and Investment Co.
Limited and Another Vs. Reserve Bank of India, 1992 Vol. 2 SCC 343 and
contended that Courts are not to interfere with the economic policy which
is a function of the experts.
That the RBI is vested with the responsibility of regulation and
supervision of the banking system. As part of its supervisory role, RBI
supervises and monitors the banks under its jurisdiction through on-site
inspection conducted on annual basis under the statutory powers derived by
it under section 35 of the Banking Regulation Act 1949, off-site returns on
key financial parameters and engaging banks in dialogue through periodical
meetings. RBI may take supervisory actions where warranted for violations
of its guidelines/directives. The supervisory actions would depend on the
seriousness of the offence, systemic implications and may range from
imposition of penalty, to issue of strictures or letters of warning. While
RBI recognizes and promotes enhanced transparency in banks disclosures to
the public, as transparency strengthens market discipline, a bank may not
be able to disclose all data that may be relevant to assess its risk
profile, due to the inherent need to preserve confidentially in relation to
its customers. In this light, while mandatory disclosures include certain
prudential parameters such as capital adequacy, level of Non Performing
Assets etc., the supervisors themselves may not disclose all or some
information obtained on-site or off-site. In some countries, wherever
there are supervisory concerns, “prompt corrective action” programmes are
normally put in place, which may or may not be publicly disclosed.
Circumspection in disclosures by the supervisors arises from the potential
market reaction that such disclosure might trigger, which may not be
desirable. Thus, in any policy of transparency, there is a need to build
processes which ensure that the benefits of supervisory disclosure are
appropriately weighed against the risk to stakeholders, such as depositors.
As per the RBI policy, the reports of the annual financial inspection,
scrutiny of all banks/ financial institutions are confidential document
cannot be disclosed. As a matter of fact, the annual financial inspection/
scrutiny report reflect the supervisor’s critical assessment of banks and
financial institutions and their functions. Disclosure of these scrutiny
and information would create misunderstanding/ misinterpretation in the
minds of the public. That apart, this may prove significantly counter
productive. Learned counsel submitted that the disclosure of information
sought for by the applicant would not serve the public interest as it will
give adverse impact in public confidence on the bank. This has serious
implication for financial stability which rests on public confidence. This
will also adversely affect the economic interest of the State and would not
serve the larger public interest.
23. The specific stand of petitioner Reserve Bank of India is that the
information sought for is exempted under Section 8(1)(a), (d) and (e) of
the Right to Information Act, 2005. As the regulator and supervisor of the
banking system, the RBI has discretion in the disclosure of such
information in public interest.
24. Mr. Andhyarujina, learned senior counsel, referred various decisions
to the High Court and submitted that the disclosure of information would
prejudicially affect the economic interest of the State. Further, if the
information sought for is sensitive from the point of adverse market
reaction leading to systematic crisis for financial stability.
25. Learned senior counsel put heavy reliance on the Full Bench decision
of the Central Information Commissioner and submitted that while passing
the impugned order, the Central Information Commissioner completely
overlooked the Full Bench decision and ignored the same. According to the
learned counsel, the Bench, which passed the impugned order, is bound to
follow the Full Bench decision. The Commission also erred in holding that
the Full Bench decision is per incuriam as the Full Bench has not
considered the statutory provisions of Section 8 (2) of the Right to
Information Act, 2005.
26. Learned senior counsel also submitted that the Commission erred in
holding that even if the information sought for is exempted under Section
8(1) (a), (d) or (e) of the Right to Information Act, Section 8(2) of the
RTI Act would mandate the disclosure of the information.
27. Learned senior counsel further submitted that the basic question of
law is whether the Right to Information Act, 2005 overrides various
provisions of special statutes which confer confidentiality in the
information obtained by the RBI.; If the Respondents are right in their
contention, these statutory provisions of confidentiality in the Banking
Regulation Act, 1949, the Reserve Bank of India Act, 1934 and the Credit
Information Companies (Regulation) Act, 2005 would be repealed or overruled
by the Right to Information Act, 2005.
28. Under the Banking Regulation Act, 1949, the Reserve Bank of India has
a right to obtain information from the banks under Section 27. These
information can only be in its discretion published in such consolidated
form as RBI deems fit. Likewise under Section 34A production of documents
of confidential nature cannot be compelled. Under sub-section (5) of
Section 35, the Reserve Bank of India may carry out inspection of any bank
but its report can only be disclosed if the Central Government orders the
publishing of the report of the Reserve Bank of India when it appears
necessary.
29. Under Section 45E of the Reserve Bank of India Act, 1934, disclosure
of any information relating to credit information submitted by banking
company is confidential and under Section 45E(3) notwithstanding anything
contained in any law no court, tribunal or authority can compel the Reserve
Bank of India to give information relating to credit information etc.
30. Under Section 17(4) of the Credit Information Companies (Regulation)
Act, 2005, credit information received by the credit information company
cannot be disclosed to any person. Under Section 20, the credit
information company has to adopt privacy principles and under Section 22
there cannot be unauthorized access to credit information.
31. It was further contended that the Credit Information Companies Act,
2005 was brought into force after the Right to Information act, 2005 w.e.f.
14.12.2006. It is significant to note that Section 28 of Banking
Regulation Act, 1949 was amended by the Credit Information Companies
(Regulation) Act, 2005. This is a clear indication that the Right to
Information Act, 2005 cannot override credit information sought by any
person in contradiction to the statutory provisions for confidentiality.
32. This is in addition to other statutory provisions of privacy in
Section 44 of State Bank of India Act, 1955, Section 52, State Bank of
India (Subsidiary Banks) Act, 1959, Section 13 of the Banking Companies
(Acquisition & Transfer of Undertakings) Act, 1970.
33. The Right to Information Act, 2005 is a general provision which
cannot override specific provisions relating to confidentiality in earlier
legislation in accordance with the principle that where there are general
words in a later statute it cannot be held that the earlier statutes are
repealed altered or discarded.
34. Learned counsel submitted that Section 22 of the Right to Information
Act, 2005 cannot have the effect of nullifying and repealing earlier
statutes in relation to confidentiality. This has been well settled by
this Court in
a) Raghunath vs. state of Karnataka 1992(1) SCC 335 at p.348 pages 112
and 114
b) ICICI Bank vs. SIDCO Leather etc., 2006(10) SCC 452 at p. 466, paras
36 & 37
c) Central Bank vs. Kerala, 2009 (4) SCC 94 at p. 132-133 para 104
d) AG Varadharajalu vs. Tamil Nadu, 1998 (4) SCC 231 at p. 236 para 16.
Hence, the Right to Information Act, 2005 cannot override the provisions
for confidentiality conferred on the RBI by the earlier statutes referred
to above.
35. The Preamble of the RTI Act, 2005 itself recognizes the fact that
since the revealing of certain information is likely to conflict with other
public interests like “the preservation of confidentiality of sensitive
information”, there is a need to harmonise these conflicting interests. It
is submitted that certain exemptions were carved out in the RTI Act to
harmonise these conflicting interests. This Court in Central Board of
Secondary Education and Anr. vs. Aditya Bandopadhyay and Ors, (2011)8 SCC
497, has observed as under:-
“When trying to ensure that the right to information does not conflict with
several other public interests (which includes efficient operations of the
Governments, preservation of confidentiality of sensitive information,
optimum use of limited fiscal resources, etc.), it is difficult to
visualise and enumerate all types of information which require to be
exempted from disclosure in public interest. The legislature has however
made an attempt to do so. The enumeration of exemptions is more exhaustive
than the enumeration of exemptions attempted in the earlier Act, that is,
Section 8 of the Freedom to Information Act, 2002. The courts and
Information Commissions enforcing the provisions of the RTI Act have to
adopt a purposive construction, involving a reasonable and balanced
approach which harmonises the two objects of the Act, while interpreting
Section 8 and the other provisions of the Act.”
36. Apart from the legal position that the Right to Information Act, 2005
does not override statutory provisions of confidentiality in other Act, it
is submitted that in any case Section 8(1)(a) of the Right to Information
Act, 2005 states that there is no obligation to give any information
which pre-judiciously affects the economic interests of the States.
Disclosure of such vital information relating to banking would pre-
judiciously affect the economic interests of the State. This was clearly
stated by the Full Bench of the Central Information Commission by its Order
in the case of Ravin Ranchchodlal Patel (supra). Despite this emphatic
ruling individual Commissioners of the Information have disregarded it by
holding that the decision of the Full Bench was per incurium and directed
disclosure of information.
37. Other exceptions in Section 8, viz 8(1)(a)(d), 8(1)(e) would also
apply to disclosure by the RBI and banks. In sum, learned senior counsel
submitted that the RBI cannot be directed to disclose information relating
to banking under the Right to Information Act, 2005.
38. Mr. Prashant Bhushan, learned counsel appearing for the respondents
in Transfer Case Nos.94 & 95 of 2015, began his arguments by referring the
Preamble of the Constitution and submitted that through the Constitution
it is the people who have created legislatures, executives and the
judiciary to exercise such duties and functions as laid down in the
constitution itself.
39. The right to information regarding the functioning of public
institutions is a fundamental right as enshrined in Article 19 of the
Constitution of India. This Hon’ble Court has declared in a plethora of
cases that the most important value for the functioning of a healthy and
well informed democracy is transparency. Mr. Bhushan referred Constitution
Bench judgment of this Court in the case of State of U.P. vs. Raj Narain,
AIR 1975 SC 865, and submitted that it is a Government’s responsibility
like ours, where all the agents of the public must be responsible for their
conduct, there can be but few secrets. The people of this country have a
right to know every public act, everything that is done in a public way, by
their functionaries. The right to know, which is derived from the concept
of freedom of speech, though not absolute, is a factor which should make
one wary, when secrecy is claimed for transactions which can, at any rate,
have no repercussion on public security. To cover with veil of secrecy, the
common routine business is not in the interest of public.
40. In the case of S.P. Gupta v. President of India and Ors., AIR 1982 SC
149, a seven Judge Bench of this Court made the following observations
regarding the right to information:-
“There is also in every democracy a certain amount of public suspicion and
distrust of Government, varying of course from time to time according to
its performance, which prompts people to insist upon maximum exposure of
its functioning. It is axiomatic that every action of the Government must
be actuated by public interest but even so we find cases, though not many,
where Governmental action is taken not for public good but for personal
gain or other extraneous considerations. Sometimes Governmental action is
influenced by political and other motivations and pressures and at times,
there are also instances of misuse or abuse of authority on the part of the
executive. Now, if secrecy were to be observed in the functioning of
Government and the processes of Government were to be kept hidden from
public scrutiny, it would tend to promote and encourage oppression,
corruption and misuse or abuse of authority, for it would all be shrouded
in the veil of secrecy without any public accountability. But if there is
an open Government with means of information available to the public, there
would be greater exposure of the functioning of Government and it would
help to assure the people a better and more efficient administration. There
can be little doubt that exposure to public gaze and scrutiny is one of the
surest means of achieving a clean and healthy administration. It has been
truly said that an open Government is clean Government and a powerful
safeguard against political and administrative aberration and
inefficiency.”
41. In the case of the Union of India vs. Association for Democratic
Reforms, AIR 2002 SC 2112, while declaring that it is part of the
fundamental right of citizens under Article 19(1)(a) to know the assets and
liabilities of candidates contesting election to the Parliament or the
State Legislatures, a three Judge Bench of this Court held unequivocally
that:- “The right to get information in a democracy is recognized all
throughout and is a natural right flowing from the concept of democracy
(Para 56).” Thereafter, legislation was passed amending the Representation
of People Act, 1951 that candidates need not provide such information. This
Court in the case of PUCL vs. Union of India, (2003) 4 SCC 399, struck down
that legislation by stating: “It should be properly understood that the
fundamental rights enshrined in the Constitution such as, right to equality
and freedoms have no fixed contents. From time to time, this Court has
filled in the skeleton with soul and blood and made it vibrant. Since the
last more than 50 years, this Court has interpreted Articles 14, 19 and 21
and given meaning and colour so that the nation can have a truly republic
democratic society.”
42. The RTI Act, 2005, as noted in its very preamble, does not create any
new right but only provides machinery to effectuate the fundamental right
to information. The institution of the CIC and the SICs are part of that
machinery. The preamble also inter-alia states “… democracy requires an
informed citizenry and transparency of information which are vital to its
functioning and also to contain corruption and to hold Governments and
their instrumentalities accountable to the governed.”
43. The submission of the RBI that exceptions be carved out of the RTI
Act regime in order to accommodate provisions of RBI Act and Banking
Regulation Act is clearly misconceived. RTI Act, 2005 contains a clear
provision (Section 22) by virtue of which it overrides all other Acts
including Official Secrets Act. Thus, notwithstanding anything to the
contrary contained in any other law like RBI Act or Banking Regulation Act,
the RTI Act, 2005 shall prevail insofar as transparency and access to
information is concerned. Moreover, the RTI Act 2005, being a later law,
specifically brought in to usher transparency and to transform the way
official business is conducted, would have to override all earlier
practices and laws in order to achieve its objective. The only exceptions
to access to information are contained in RTI Act itself in
Section 8.
44. In T.C.No.94 of 2015, the RTI applicant Mr. P.P. Kapoor had asked
about the details of the loans taken by the industrialists that have not
been repaid, and he had asked about the names of the top defaulters who
have not repaid their loans to public sector banks. The RBI resisted the
disclosure of the information claiming exemption under Section 8(1) (a) and
8(1)(e) of the RTI Act on the ground that disclosure would affect the
economic interest of the country, and that the information has been
received by the RBI from the banks in fiduciary capacity. The CIC found
these arguments made by RBI to be totally misconceived in facts and in law,
and held that the disclosure would be in public interest.
45. In T.C.No.95 of 2015, the RTI applicant therein Mr. Subhash Chandra
Agrawal had asked about the details of the show cause notices and fines
imposed by the RBI on various banks. The RBI resisted the disclosure of
the information claiming exemption under Section 8(1)(a),(d) and 8(1) (e)
of the RTI Act on the ground that disclosure would affect the economic
interest of the country, the competitive position of the banks and that the
information has been received by RBI in fiduciary capacity. The CIC,
herein also, found these arguments made by RBI to be totally misconceived
in facts and in law and held that the disclosure would be in public
interest.
46. In reply to the submission of the petitioner about fiduciary
relationship, learned counsel submitted that the scope of Section 8(1)(e)
of the RTI Act has been decided by this Court in Central Board of Secondary
Education vs. Aditya Bandopadhyay, (2011) 8 SCC 497, wherein, while
rejecting the argument that CBSE acts in a fiduciary capacity to the
students, it was held that:
“…In a philosophical and very wide sense, examining bodies can be said to
act in a fiduciary capacity, with reference to students who participate in
an examination, as a Government does while governing its citizens or as the
present generation does with reference to the future generation while
preserving the environment. But the word ‘information available to a
person in his fiduciary relationship’ are used in Section 8(1) (e) of the
RTI Act in its normal and well recognized sense, that is to refer to
persons who act in a fiduciary capacity, with reference to specific
beneficiary or beneficiaries who are to be expected to be protected or
benefited by the action of the fiduciary.”
47. We have extensively heard all the counsels appearing for the
petitioner Banks and respondents and examined the law and the facts.
48. While introducing the Right to Information Bill, 2004 a serious
debate and discussion took place. The then Prime Minister while addressing
the House informed that the RTI Bill is to provide for setting out
practical regime of right to information for people, to secure access to
information under the control of public authorities in order to promote
transparency and accountability in the working of every public authority.
The new legislation would radically alter the ethos and culture of secrecy
through ready sharing of information by the State and its agencies with the
people. An era of transparency and accountability in governance is on the
anvil. Information, and more appropriately access to information would
empower and enable people not only to make informed choices but also
participate effectively in decision making processes. Tracing the origin
of the idea of the then Prime Minister who had stated, “Modern societies
are information societies. Citizens tend to get interested in all fields
of life and demand information that is as comprehensive, accurate and fair
as possible.” In the Bill, reference has also been made to the decision of
the Supreme Court to the effect that Right to Information has been held as
inherent in Article 19 of our Constitution, thereby, elevating it to a
fundamental right of the citizen. The Bill, which sought to create an
effective mechanism for easy exercise of this Right, was held to have been
properly titled as “Right to Information Act”. The Bill further states
that a citizen has to merely make a request to the concerned Public
Information Officer specifying the particulars of the information sought by
him. He is not required to give any reason for seeking information, or any
other personal details except those necessary for contacting him. Further,
the Bill states:-
“The categories of information exempted from disclosure are a bare minimum
and are contained in clause 8 of the Bill. Even these exemptions are not
absolute and access can be allowed to them in public interest if disclosure
of the information outweighs the harm to the public authorities. Such
disclosure has been permitted even if it is in conflict with the provisions
of the Official Secrets Act, 1923. Moreover, barring two categories that
relate to information disclosure – which may affect sovereignty and
integrity of India etc., or information relating to Cabinet papers etc.-all
other categories of exempted information would be disclosed after twenty
years.
There is another aspect about which information is to be made public. We
had a lengthy discussion and it is correctly provided in the amendment
under clause 8 of the Bill. The following information shall be exempted
from disclosure which would prejudicially affect the sovereignty and
integrity of India; which has been expressly forbidden; which may result in
a breach of privileges of Parliament or the Legislature; and also
information pertaining to defence matters. They are listed in clause 8 (a)
to (g). There are exceptions to this clause. Where it is considered
necessary that the information will be divulged in the interest of the
State, that will be done. There must be transparency in public life.
There must be transparency in administration and people must have a right
to know what has actually transpired in the secretariat of the State as
well as the Union Ministry. A citizen will have a right because it will be
safe to prevent corruption. Many things are done behind the curtain. Many
shoddy deals take place in the secretariats of the Central and State
Governments and the information will always be kept hidden. Such practice
should not be allowed in a democratic country like ours. Ours is a
republic. The citizenry should have a right to know what transpired in the
secretariat. Even Cabinet papers, after a decision has been taken, must be
divulged as per the provisions of this amendment. It cannot be hidden from
the knowledge of others.”
49. Addressing the House, it was pointed out by the then Prime Minister
that in our country, Government expenditure both at the Central and at the
level of the States and local bodies, account for nearly 33% of our Gross
National Product. At the same time, the socio-economic imperatives require
our Government to intervene extensively in economic and social affairs.
Therefore, the efficiency and effectiveness of the government processes are
critical variables, which will determine how our Government functions and
to what extent it is able to discharge the responsibilities entrusted. It
was pointed out that there are widespread complaints in our country about
wastefulness of expenditure, about corruption, and matter which have
relations with the functioning of the Government. Therefore, it was very
important to explore new effective mechanism to ensure that the Government
will purposefully and effectively discharge the responsibilities entrusted
to it.
50. Finally the Right to Information Act was passed by the Parliament
called “The Right to Information Act, 2005”. The Preamble states:-
“An Act to provide for setting out the practical regime of right to
information for citizens to secure access to information under the control
of public authorities, in order to promote transparency and accountability
in the working of every public authority, the constitution of a Central
Information Commission and State Information Commissions and for matters
connected therewith or incidental thereto.
WHEREAS the Constitution of India has established democratic
Republic;
AND WHEREAS democracy requires an informed citizenry and transparency
of information which are vital to its functioning and also to contain
corruption and to hold Governments and their instrumentalities accountable
to the governed;
AND WHEREAS revelation of information in actual practice is likely to
conflict with other public interests including efficient operations of the
Governments, optimum use of limited fiscal resources and the preservation
of confidentiality of sensitive information;
AND WHEREAS it is necessary to harmonise these conflicting interest
while preserving the paramountcy of the democratic ideal;
NOW, THEREFORE, it is expedient to provide for furnishing certain
information to citizens who desire to have it.”
51. Section 2 of the Act defines various authorities and the words.
Section 2(j) defines right to information as under :-
“2(j) “right to information” means the right to information accessible
under this Act which is held by or under the control of any public
authority and includes the right to-
inspection of work, documents, records;
taking notes, extracts, or certified copies of documents or records;
taking certified samples of material;
obtaining information in the form of diskettes, floppies, tapes, video
cassettes or in any other electronic mode or through printouts where such
information is stored in a computer or in any other device;”
52. Section 3 provides that all citizens shall have the right to
information subject to the provisions of this Act. Section 4 makes it
obligatory on all public authorities to maintain records in the manner
provided therein. According to Section 6, a person who desires to obtain
any information under the Act shall make a request in writing or through
electronic means in English or Hindi in the official language of the area
in which the application is being made to the competent authority
specifying the particulars of information sought by him or her. Sub-
section (ii) of Section 6 provides that the applicant making request for
information shall not be required to give any reason for requesting the
information or any other personal details except those that may be
necessary for contacting him. Section 7 lays down the procedure for
disposal of the request so made by the person under Section 6 of the Act.
Section 8, however, provides certain exemption from disclosure of
information. For better appreciation Section 8 is quoted hereinbelow:-
“8. Exemption from disclosure of information.—
(1) Notwithstanding anything contained in this Act, there shall be no
obligation to give any citizen,—
(a) information, disclosure of which would prejudicially affect the
sovereignty and integrity of India, the security, strategic, scientific or
economic interests of the State, relation with foreign State or lead to
incitement of an offence;
(b) information which has been expressly forbidden to be published by any
court of law or tribunal or the disclosure of which may constitute contempt
of court;
(c) information, the disclosure of which would cause a breach of privilege
of Parliament or the State Legislature;
(d) information including commercial confidence, trade secrets or
intellectual property, the disclosure of which would harm the competitive
position of a third party, unless the competent authority is satisfied that
larger public interest warrants the disclosure of such information;
(e) information available to a person in his fiduciary relationship, unless
the competent authority is satisfied that the larger public interest
warrants the disclosure of such information;
(f) information received in confidence from foreign government;
(g) information, the disclosure of which would endanger the life or
physical safety of any person or identify the source of information or
assistance given in confidence for law enforcement or security purposes;
(h) information which would impede the process of investigation or
apprehension or prosecution of offenders;
(i) cabinet papers including records of deliberations of the Council of
Ministers, Secretaries and other officers: Provided that the decisions of
Council of Ministers, the reasons thereof, and the material on the basis of
which the decisions were taken shall be made public after the decision has
been taken, and the matter is complete, or over: Provided further that
those matters which come under the exemptions specified in this section
shall not be disclosed;
(j) information which relates to personal information the disclosure of
which has not relationship to any public activity or interest, or which
would cause unwarranted invasion of the privacy of the individual unless
the Central Public Information Officer or the State Public Information
Officer or the appellate authority, as the case may be, is satisfied that
the larger public interest justifies the disclosure of such information:
Provided that the information, which cannot be denied to the Parliament or
a State Legislature shall not be denied to any person.
(2) Notwithstanding anything in the Official Secrets Act, 1923 (19 of 1923)
nor any of the exemptions permissible in accordance with sub-section (1), a
public authority may allow access to information, if public interest in
disclosure outweighs the harm to the protected interests.
(3) Subject to the provisions of clauses (a), (c) and (i) of sub-section
(1), any information relating to any occurrence, event or matter which has
taken place, occurred or happened twenty years before the date on which any
request is made under section 6 shall be provided to any person making a
request under that section: Provided that where any question arises as to
the date from which the said period of twenty years has to be computed, the
decision of the Central Government shall be final, subject to the usual
appeals provided for in this Act.”
53. The information sought for by the respondents from the petitioner-
Bank have been denied mainly on the ground that such information is
exempted from disclosure under Section 8(1)(a)(d) and (e) of the RTI Act.
54. Learned counsel appearing for the petitioner-Bank mainly relied upon
Section 8(1)(e) of the RTI Act taking the stand that the Reserve Bank of
India having fiduciary relationship with the other banks and that there is
no reason to disclose such information as no larger public interest
warrants such disclosure. The primary question therefore, is, whether the
Reserve Bank of India has rightly refused to disclose information on the
ground of its fiduciary relationship with the banks.
55. The Advanced Law Lexicon, 3rd Edition, 2005, defines fiduciary
relationship as "a relationship in which one person is under a duty to act
for the benefit of the other on the matters within the scope of the
fiduciary relationship. Fiduciary relationship usually arise in one of the
four situations (1) when one person places trust in the faithful integrity
of another, who as a result gains superiority or influence over the first,
(2) when one person assumes control and responsibility over another, (3)
when one person has a duty to act or give advice to another on matters
falling within the scope of the relationship, or (4) when there is specific
relationship that has traditionally be recognized as involving fiduciary
duties, as with a lawyer and a client, or a stockbroker and a customer.”
56. The scope of the fiduciary relationship consists of the following
rules:
“(i) No Conflict rule- A fiduciary must not place himself in a position
where his own interests conflicts with that of his customer or the
beneficiary. There must be “real sensible possibility of conflict.
(ii) No profit rule- a fiduciary must not profit from his position at the
expense of his customer, the beneficiary;
(iii) Undivided loyalty rule- a fiduciary owes undivided loyalty to the
beneficiary, not to place himself in a position where his duty towards one
person conflicts with a duty that he owes to another customer. A
consequence of this duty is that a fiduciary must make available to a
customer all the information that is relevant to the customer’s affairs
(iv) Duty of confidentiality- a fiduciary must only use information
obtained in confidence and must not use it for his own advantage, or for
the benefit of another person.”
57. The term fiduciary relationship has been well discussed by this Court
in the case of Central Board of Secondary Education and Anr. vs. Aditya
Bandopadhyay and Ors. (supra). In the said decision, their Lordships
referred various authorities to ascertain the meaning of the term fiduciary
relationship and observed thus:-
“20.1) Black’s Law Dictionary (7th Edition, Page 640) defines ‘fiduciary
relationship’ thus:
“A relationship in which one person is under a duty to act for the benefit
of the other on matters within the scope of the relationship. Fiduciary
relationships – such as trustee-beneficiary, guardian-ward, agent-
principal, and attorney-client – require the highest duty of care.
Fiduciary relationships usually arise in one of four situations : (1) when
one person places trust in the faithful integrity of another, who as a
result gains superiority or influence over the first, (2) when one person
assumes control and responsibility over another, (3) when one person has a
duty to act for or give advice to another on matters falling within the
scope of the relationship, or (4) when there is a specific relationship
that has traditionally been recognized as involving fiduciary duties, as
with a lawyer and a client or a stockbroker and a customer.”
20.2) The American Restatements (Trusts and Agency) define ‘fiduciary’ as
one whose intention is to act for the benefit of another as to matters
relevant to the relation between them. The Corpus Juris Secundum (Vol. 36A
page 381) attempts to define fiduciary thus :
“A general definition of the word which is sufficiently comprehensive to
embrace all cases cannot well be given. The term is derived from the civil,
or Roman, law. It connotes the idea of trust or confidence, contemplates
good faith, rather than legal obligation, as the basis of the transaction,
refers to the integrity, the fidelity, of the party trusted, rather than
his credit or ability, and has been held to apply to all persons who occupy
a position of peculiar confidence toward others, and to include those
informal relations which exist whenever one party trusts and relies on
another, as well as technical fiduciary relations.
The word ‘fiduciary,’ as a noun, means one who holds a thing in trust for
another, a trustee, a person holding the character of a trustee, or a
character analogous to that of a trustee, with respect to the trust and
confidence involved in it and the scrupulous good faith and candor which it
requires; a person having the duty, created by his undertaking, to act
primarily for another’s benefit in matters connected with such undertaking.
Also more specifically, in a statute, a guardian, trustee, executor,
administrator, receiver, conservator, or any person acting in any fiduciary
capacity for any person, trust, or estate. Some examples of what, in
particular connections, the term has been held to include and not to
include are set out in the note.”
20.3) Words and Phrases, Permanent Edition (Vol. 16A, Page 41) defines
‘fiducial relation’ thus :
“There is a technical distinction between a ‘fiducial relation’ which is
more correctly applicable to legal relationships between parties, such as
guardian and ward, administrator and heirs, and other similar
relationships, and ‘confidential relation’ which includes the legal
relationships, and also every other relationship wherein confidence is
rightly reposed and is exercised.
Generally, the term ‘fiduciary’ applies to any person who occupies a
position of peculiar confidence towards another. It refers to integrity and
fidelity. It contemplates fair dealing and good faith, rather than legal
obligation, as the basis of the transaction. The term includes those
informal relations which exist whenever one party trusts and relies upon
another, as well as technical fiduciary relations.”
20.4) In Bristol and West Building Society vs. Mothew [1998 Ch. 1] the term
fiduciary was defined thus :
“A fiduciary is someone who has undertaken to act for and on behalf of
another in a particular matter in circumstances which give rise to a
relationship of trust and confidence. The distinguishing obligation of a
fiduciary is the obligation of loyalty….. A fiduciary must act in good
faith; he must not make a profit out of his trust; he must not place
himself in a position where his duty and his interest may conflict; he may
not act for his own benefit or the benefit of a third person without the
informed consent of his principal.”
20.5) In Wolf vs. Superior Court [2003 (107) California Appeals, 4th 25]
the California Court of Appeals defined fiduciary relationship as under :
“any relationship existing between the parties to the transaction where one
of the parties is duty bound to act with utmost good faith for the benefit
of the other party. Such a relationship ordinarily arises where confidence
is reposed by one person in the integrity of another, and in such a
relation the party in whom the confidence is reposed, if he voluntarily
accepts or assumes to accept the confidence, can take no advantage from his
acts relating to the interests of the other party without the latter’s
knowledge and consent.”
21. The term ‘fiduciary’ refers to a person having a duty to act for the
benefit of another, showing good faith and condour, where such other person
reposes trust and special confidence in the person owing or discharging the
duty. The term ‘fiduciary relationship’ is used to describe a situation or
transaction where one person (beneficiary) places complete confidence in
another person (fiduciary) in regard to his affairs, business or
transaction/s. The term also refers to a person who holds a thing in trust
for another (beneficiary). The fiduciary is expected to act in confidence
and for the benefit and advantage of the beneficiary, and use good faith
and fairness in dealing with the beneficiary or the things belonging to the
beneficiary. If the beneficiary has entrusted anything to the fiduciary, to
hold the thing in trust or to execute certain acts in regard to or with
reference to the entrusted thing, the fiduciary has to act in confidence
and expected not to disclose the thing or information to any third party.
There are also certain relationships where both the parties have to act in
a fiduciary capacity treating the other as the beneficiary. Examples of
these are : a partner vis-à-vis another partner and an employer vis-à-vis
employee. An employee who comes into possession of business or trade
secrets or confidential information relating to the employer in the course
of his employment, is expected to act as a fiduciary and cannot disclose it
to others. Similarly, if on the request of the employer or official
superior or the head of a department, an employee furnishes his personal
details and information, to be retained in confidence, the employer, the
official superior or departmental head is expected to hold such personal
information in confidence as a fiduciary, to be made use of or disclosed
only if the employee’s conduct or acts are found to be prejudicial to the
employer.”
58. In the instant case, the RBI does not place itself in a fiduciary
relationship with the Financial institutions (though, in word it puts
itself to be in that position) because, the reports of the inspections,
statements of the bank, information related to the business obtained by the
RBI are not under the pretext of confidence or trust. In this case neither
the RBI nor the Banks act in the interest of each other. By attaching an
additional “fiduciary” label to the statutory duty, the Regulatory
authorities have intentionally or unintentionally created an in terrorem
effect.
59. 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. Under Section 35A of the
Banking Regulation Act, RBI has been given powers to issue any direction to
the banks in public interest, in the interest of banking policy and to
secure proper management of a banking company. It has several other far-
reaching statutory powers.
60. RBI is supposed to uphold public interest and not the interest of
individual banks. RBI is clearly not in any fiduciary relationship with
any bank. RBI has no legal duty to maximize the benefit of any public
sector or private sector bank, and thus there is no relationship of ‘trust’
between them. 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. It is duty bound to comply with the
provisions of the RTI Act and disclose the information sought by the
respondents herein.
61. The baseless and unsubstantiated argument of the RBI that the
disclosure would hurt the economic interest of the country is totally
misconceived. In the impugned order, the CIC has given several reasons to
state why the disclosure of the information sought by the respondents would
hugely serve public interest, and non-disclosure would be significantly
detrimental to public interest and not in the economic interest of India.
RBI’s argument that if people, who are sovereign, are made aware of the
irregularities being committed by the banks then the country’s economic
security would be endangered, is not only absurd but is equally
misconceived and baseless.
62. The exemption contained in Section 8(1)(e) applies to exceptional
cases and only with regard to certain pieces of information, for which
disclosure is unwarranted or undesirable. If information is available with
a regulatory agency not in fiduciary relationship, there is no reason to
withhold the disclosure of the same. However, 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. As in the
instant case, the Financial institutions have an obligation to provide all
the information to the RBI and such an information shared under an
obligation/ duty cannot be considered to come under the purview of being
shared in fiduciary relationship. One of the main characteristic of a
Fiduciary relationship is “Trust and Confidence”. Something that RBI and
the Banks lack between them.
63. In the present case, we have to weigh between the public interest and
fiduciary relationship (which is being shared between the RBI and the
Banks). Since, RTI Act is enacted to empower the common people, the test to
determine limits of Section 8 of RTI Act is whether giving information to
the general public would be detrimental to the economic interests of the
country? To what extent the public should be allowed to get information?
64. In the context of above questions, it had long since come to our
attention that the Public Information Officers (PIO) under the guise of one
of the exceptions given under Section 8 of RTI Act, have evaded the general
public from getting their hands on the rightful information that they are
entitled to.
65. And in this case the RBI and the Banks have sidestepped the General
public’s demand to give the requisite information on the pretext of
“Fiduciary relationship” and “Economic Interest”. This attitude of the RBI
will only attract more suspicion and disbelief in them. RBI as a regulatory
authority should work to make the Banks accountable to their actions.
66. 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.
Section 2(f), reads thus:
“information” means any material in any form, including records, documents,
memos, e-mails, opinions, advices, press releases, circulars, orders,
logbooks, contracts, reports, papers, samples, models, data material held
in any electronic form and information relating to any private body which
can be accessed by a public authority under any other law for the time
being in force;
67. From reading of the above section it can be inferred that 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. Had it been the case where only information related to public
authorities was to be provided, the Legislature would not have included the
word “private body”. As in this case, the RBI is liable to provide
information regarding inspection report and other documents to the general
public.
68. Even if we were to consider that RBI and the Financial Institutions
shared a “Fiduciary Relationship”, Section 2(f) would still make the
information shared between them to be accessible by the public. The facts
reveal that Banks are trying to cover up their underhand actions, they are
even more liable to be subjected to public scrutiny.
69. We have surmised that many Financial Institutions have resorted to
such acts which are neither clean nor transparent. The RBI in association
with them has been trying to cover up their acts from public scrutiny. It
is the responsibility of the RBI to take rigid action against those Banks
which have been practicing disreputable business practices.
70. From the past we have also come across financial institutions which
have tried to defraud the public. These acts are neither in the best
interests of the Country nor in the interests of citizens. To our surprise,
the RBI as a Watch Dog should have been more dedicated towards disclosing
information to the general public under the Right to Information Act.
71. We also understand that the RBI cannot be put in a fix, by making it
accountable to every action taken by it. However, in the instant case the
RBI is accountable and as such it has to provide information to the
information seekers under Section 10(1) of the RTI Act, which reads as
under:
“Section 10(1) Severability —Where a request for access to information is
rejected on the ground that it is in relation to information which is
exempt from disclosure, then, notwithstanding anything contained in this
Act, access may be provided to that part of the record which does not
contain any information which is exempt from disclosure under this Act and
which can reasonably be severed from any part that contains exempt
information.”
72. It was also contended by learned senior counsel for the RBI that
disclosure of information sought for will also go against the economic
interest of the nation. The submission is wholly misconceived.
73. Economic interest of a nation in most common parlance are the goals
which a nation wants to attain to fulfil its national objectives. It is
the part of our national interest, meaning thereby national interest can’t
be seen with the spectacles(glasses) devoid of economic interest.
74. It includes in its ambit a wide range of economic transactions or
economic activities necessary and beneficial to attain the goals of a
nation, which definitely includes as an objective economic empowerment of
its citizens. It has been recognized and understood without any doubt now
that one of the tool to attain this goal is to make information available
to people. Because an informed citizen has the capacity to reasoned action
and also to evaluate the actions of the legislature and executives, which
is very important in a participative democracy and this will serve the
nation’s interest better which as stated above also includes its economic
interests. Recognizing the significance of this tool it has not only been
made one of the fundamental rights under Article 19 of the Constitution but
also a Central Act has been brought into effect on 12th October 2005 as the
Right to Information Act, 2005.
75. The ideal of ‘Government by the people’ makes it necessary that
people have access to information on matters of public concern. The free
flow of information about affairs of Government paves way for debate in
public policy and fosters accountability in Government. It creates a
condition for ‘open governance’ which is a foundation of democracy.
76. But neither the Fundamental Rights nor the Right to Information have
been provided in absolute terms. The fundamental rights guaranteed under
Article 19 Clause 1(a) are restricted under Article 19 clause 2 on the
grounds of national and societal interest. Similarly Section 8, clause 1 of
Right to Information Act, 2005, contains the exemption provisions where
right to information can be denied to public in the name of national
security and sovereignty, national economic interests, relations with
foreign states etc. Thus, not all the information that the Government
generates will or shall be given out to the public. It is true that gone
are the days of closed doors policy making and they are not acceptable also
but it is equally true that there are some information which if published
or released publicly, they might actually cause more harm than good to our
national interest… if not domestically it can make the national interests
vulnerable internationally and it is more so possible with the dividing
line between national and international boundaries getting blurred in this
age of rapid advancement of science and technology and global economy. It
has to be understood that rights can be enjoyed without any inhibition only
when they are nurtured within protective boundaries. Any excessive use of
these rights which may lead to tampering these boundaries will not further
the national interest. And when it comes to national economic interest,
disclosure of information about currency or exchange rates, interest rates,
taxes, the regulation or supervision of banking, insurance and other
financial institutions, proposals for expenditure or borrowing and foreign
investment could in some cases harm the national economy, particularly if
released prematurely. However, lower level economic and financial
information, like contracts and departmental budgets should not be withheld
under this exemption. This makes it necessary to think when or at what
stage an information is to be provided i.e., the appropriate time of
providing the information which will depend on nature of information sought
for and the consequences it will lead to after coming in public domain.
77. In one of the case, the respondent S.S. Vohra sought certain
information in relation to the Patna Branch of ICICI Bank and advisory
issued to the Hong Kong Branch of ICICI Bank. The contention of the
respondent was that the Finance Minister had made a written statement on
the floor of the House on 24.07.2009 that some banks like SBI, ICICI, Bank
of Baroda, Dena Bank etc., were violating FEMA Guidelines for opening of
accounts and categorically mentioned that the Patna Branch of ICICI Bank
Ltd. had opened some fictitious accounts which were opened by fraudsters
and hence an advisory note was issued to the concerned branch on December
2007 for its irregularities. The Finance Minister even mentioned that in
the year 2008 the ICICI Bank Ltd. was also warned for alleged irregular
dealings in securities in Hong Kong. Hence, the respondent sought such
advisory note as issued by the RBI to ICICI Bank. The Central Information
Commissioner in the impugned order considered the RBI Master Circular dated
01.07.2009 to all the commercial banks giving various directions and
finally held as under :-
“It has been contended by the Counsel on behalf of the ICICI Bank
Limited that an advisory note is prepared after reliance on documents such
as Inspection Reports, Scrutiny reports etc. and hence, will contain the
contents of those documents too which are otherwise exempt from disclosure.
We have already expressed our view in express terms that whether or not an
Advisory Note shall be disclosed under the RTI Act will have to be
determined on case by case basis. In some other case, for example, there
may be a situation where some contents of the Advisory Note may have to be
severed to such an extent that details of Inspection Reports etc. can be
separated from the Note and then be provided to the RTI Applicant. Section
10 of the RTI Act leaves it open to decide each case on its merits after
having satisfied ourselves whether an Advisory Note needs to be provided as
it is or whether some of its contents may be severed since they may be
exempted per se under the RTI Act. However, we find no reason, whatsoever,
to apply Section 10 of the RTI Act in order to severe the contents of the
Advisory Note issued by the RBI to the ICICI Bank Limited as the matter has
already been placed on the floor of the Lok Sabha by the Hon’ble Finance
Minister.
This is a matter of concern since it involves the violation of policy
Guidelines initiated by the RBI and affects the public at large.
Transparency cannot be brought overnight in any system and one can hope to
witness accountability in a system only when its end users are well-
educated, well-informed and well-aware. If the customers of commercial
banks will remain oblivious to the violations of RBI Guidelines and
standards which such banks regularly commit, then eventually the whole
financial system of the country would be at a monumental loss. This can
only be prevented by suo motu disclosure of such information as the penalty
orders are already in public domain.”
78. Similarly, in another case the respondent Jayantilal N. Mistry sought
information from the CPIO, RBI in respect of a Cooperative Bank viz.
Saraspur Nagrik Sahkari Bank Limited related to inspection report, which
was denied by the CPIO on the ground that the information contained therein
were received by RBI in a fiduciary capacity and are exempt under Section
8(1)(e) of RTI Act. The CIC directed the petitioner to furnish that
information since the RBI expressed their willingness to disclose a summary
of substantive part of the inspection report to the respondent. While
disposing of the appeal the CIC observed:-
“Before parting with this appeal, we would like to record our observations
that in a rapidly unfolding economics scenario, there are public
institutions, both in the banking and non-banking sector, whose activities
have not served public interest. On the contrary, some such institutions
may have attempted to defraud the public of their moneys kept with such
institutions in trust. RBI being the Central Bank is one of the
instrumentalities available to the public which as a regulator can inspect
such institutions and initiate remedial measures where necessary. It is
important that the general public, particularly, the share holders and the
depositors of such institutions are kept aware of RBI’s appraisal of the
functioning of such institutions and taken into confidence about the
remedial actions initiated in specific cases. This will serve the public
interest. The RBI would therefore be well advised to be proactive in
disclosing information to the public in general and the information seekers
under the RTI Act, in particular. The provisions of Section 10(1) of the
RTI Act can therefore be judiciously used when necessary to adhere to this
objective.”
79. In another case, where the respondent P.P. Kapoor sought information
inter alia about the details of default in loans taken from public sector
banks by industrialists, out of the list of defaulters, top 100 defaulters,
names of the businessmen, firm name, principal amount, interest amount,
date of default and date of availing the loan etc. The said information
was denied by the CPIO mainly on the basis that it was held in fiduciary
capacity and was exempt from disclosure of such information. Allowing the
appeal, the CIC directed for the disclosure of such information. The CIC
in the impugned order has rightly observed as under:-
“I wish government and its instrumentalities would remember that all
information held by them is owned by citizens, who are sovereign. Further,
it is often seen that banks and financial institutions continue to provide
loans to industrialists despite their default in repayment of an earlier
loan.” This Court in UP Financial Corporation vs. Gem Cap India Pvt. Ltd.,
AIR 1993 SC 1435 has noted that :
“Promoting industrialization at the cost of public funds does not serve the
public interest, it merely amounts to transferring public money to private
account’. Such practices have led citizens to believe that defaulters can
get away and play fraud on public funds. There is no doubt that
information regarding top industrialists who have defaulted in repayment
of loans must be brought to citizens’ knowledge; there is certainly a
larger public interest that could be served on ….disclosure of the same.
In fact, information about industrialists who are loan defaulters of the
country may put pressure on such persons to pay their dues. This would have
the impact of alerting Citizens about those who are defaulting in payments
and could also have some impact in shaming them.
RBI had by its Circular DBOD No. BC/CIS/47/20.16.002/94 dated April 23,
1994 directed all banks to send a report on their defaulters, which it
would share with all banks and financial institutions, with the following
objectives:
To alert banks and financial institutions (FIs) and to put them on guard
against borrowers who have defaulted in their dues to lending institutions;
To make public the names of the borrowers who have defaulted and against
whom suits have been filed by banks/ FIs.”
80. At this juncture, we may refer the decision of this Court in Mardia
Chemicals Limited vs. Union of India, (2004) 4 SCC 311, wherein this court
while considering the validity of SARFAESI Act and recovery of non-
performing assets by banks and financial institutions in India, held :-
“………….it may be observed that though the transaction may have a character
of a private contract yet the question of great importance behind such
transactions as a whole having far reaching effect on the economy of the
country cannot be ignored, purely restricting it to individual transactions
more particularly when financing is through banks and financial
institutions utilizing the money of the people in general namely, the
depositors in the banks and public money at the disposal of the financial
institutions. Therefore, wherever public interest to such a large extent is
involved and it may become necessary to achieve an object which serves the
public purposes, individual rights may have to give way. Public interest
has always been considered to be above the private interest. Interest of an
individual may, to some extent, be affected but it cannot have the
potential of taking over the public interest having an impact in the socio-
economic drive of the country………..”
81. In rest of the cases the CIC has considered elaborately the
information sought for and passed orders which in our opinion do not suffer
from any error of law, irrationality or arbitrariness.
82. We have, therefore, given our anxious consideration to the matter and
came to the conclusion that the Central Information Commissioner has passed
the impugned orders giving valid reasons and the said orders, therefore,
need no interference by this Court.
83. There is no merit in all these cases and hence they are dismissed.
…………………………….J.
(M.Y. Eqbal)
…………………………….J.
(C. Nagappan )
New Delhi
December 16, 2015