By TIOL News Service

NEW DELHI, DEC 28, 2015: THE issue is: Whether RBI can deny access to information like reports of the inspections, statements of the bank, information related to their business, NPAs etc under the Right to Information Act on the grounds of economic interest of the country. NO is the answer.

Facts of the case

The RBI ('the appellant') filed transfer petition for seeking transfer of various writ petitions pending in High courts of Delhi & Mumbai. All these petitions dealt with almost the same issues, hence were clubbed together. The private individuals ('the Respondents'), originally asked for certain information which includes inspection report of co-operative and some private banks, Copy of FMs report read in parliament, advisory note issued to a private bank, list of banks and institutions served with show cause notices, details of actions taken by the appellants, list of top loan defaulters of banks, copies of complaints filed against banks etc from the appellants and other private banks under the RTI Act, 2005. The Appellants denied or refused to provide the information on the grounds of economic interest, confidentiality and fiduciary relationship with other banks. In majority cases the Central Information Commission (CIC) asked the appellant to furnish the required information to the respondents. The Appellants challenged the same before various High Courts via writ petitions.

The counsel for the appellants contended that information sort by the respondents was exempted u/s 8(1) of the RTI Act, 2005 and the appellants had discretion as not to disclose the same in public interest or being prejudicial to the economic interest of the country. It was also argued that awareness about the irregularities committed by banks could endanger the economic security of the country. It was further argued that information sort being sensitive and refused, to avoided adverse market reaction leading to systematic crisis for financial stability. Various provisions of the Banking Regulation Act, 1949 and the Reserve Bank of India Act were referred to justify the discretionary powers of the appellants. It was further contended that RTI Act, 2005 is a general legislation and cannot override the specific provisions of confidentiality provided in other specific acts. Another major contention being raised was that appellants have fiduciary relationship with other banks which stopped it from disclosing the information sort by the respondents.

The counsel for the respondents contended that Article 19 of the Constitution is the base of RTI Act and it allows the public to seek information from public institutions which is of routine nature and was in no way adversely affecting the public security. The counsel for the respondents quoted various judgments and pointed out that the RTI Act, 2005, as noted in its very preamble, did not create any new right but only provides machinery to effectuate the fundamental right to information. It was further argued that RTI act being a later law clearly overrides the provisions of other acts by virtue of its section 22, when came to transparency and access of information.

Decision

The Apex court confirmed the orders passed by CIC asking the appellants to disclose the information sought by public under the RTI Act, 2005.

Reasoning

1. 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.

2. 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. The exemption contained in Section 8(1) 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.

3. Banks and Financial institutions have defrauded the public with funds and not acted in the interest of the public. The appellant being the watch dog should punish the defaulters and not to cover up their acts from public scrutiny. Economic interest of the country will be served better when the citizens of the country are well informed and well aware of the activities of the financial institutions. Economic interest of the country will in no way danger on disclosure of lower level economic information like contracts and departmental budgets. Further disclosure of non compliance of policy guidelines and regulations will put pressure on defaulters to mind their activities.

4. 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.

5. The appellant is a statutory body confirmed with the powers and responsibility to regulate the functions of banks and financial institutions. The appellant cannot be placed in a fiduciary relationship with the Financial institutions because, the reports of the inspections, statements of the bank, information related to their business were not coming under the pretext of confidence or trust. Appellant had no legal duty to maximize the benefit of any public sector or private sector bank, there was no relationship of ‘trust’ between them. Neither the appellant nor the other banks act in interest of each other. 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.

(See 2015-TIOL-301-SC-RTI)