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Atul Patankar

IFCI comes within ambit of RTI Act: HC

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Atul Patankar

As reported at business-standard.com on August 17, 2010


The Delhi High Court today held that Industrial Finance Corporation of India Ltd (IFCI) is a public authority under the RTI Act making it mandatory to disclose information under the transparency law.


Justice S Muralidhar dismissed the plea of the financial institution that it did not come under the purview of the RTI Act.


Upholding the order of the Central Information Commission which had directed it to put in place a mechanism for disclosure of information under the Act, the court said the Corporation comes within the ambit of the transparency law as it is controlled and substantially financed by the Centre.


"There is both control and substantial financing of the IFCI by the central government and therefore answers the description of a public authority under Section 2(h)(d)(i) of the RTI Act," the court said.


The court said the basic character of the company would remain public irrespective of the holding of government share in it as IFCI is very different from any other company registered under the Companies Act.


"This Court held that even though the central government subsequently ceased to hold shares in IFCI Ltd., its essential character as a public financial institution would remain," the court said.


The CIC had on May 31, 2007, had declared IFCI as a public authority on a complaint filed by a person after the company refused to reveal information under the RTI Act.


The IFCI was established as a statutory Corporation in 1948 by the enactment of the Industrial Financial Corporation of India Act, 1948. It was the first developmental financial institution set up by an Act of Parliament to pioneer institutional credit to medium and large scale industries.

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    • Shrawan
      By Shrawan
      To determine, for the purpose of RTI Act, whether an organization is a public authority or not, we have to have recourse to Section 2(h) of the said Act, which reads:
      A public authority means any authority or body or institution of self
      government established or constituted

      by or under the Constitution
      by any other law made by Parliament
      by any other law made by State Legislatures;
      by notification issued or order made by the appropriate Government;and includes any –
      body owned, controlled or substantially financed;
      non governmental organization substantially financed;
      directly or indirectly by funds provided by the appropriate Government.
      The term Substantially financed is not defined in the RTI Act. When a term is not defined in an Act, the normal rule is to find the definition of the term in a relatable statute or legislation and apply the same. The definition is given in Section 14(1) of CAG Act-1971 for the term substantially financed.
      According to this Section, when the loan or grant by the government to a body/authority is not less than Rs 25 lakhs and the amount of such loan or grant is not less than 75% of the total expenditure of that body/authority, then such body/authority shall be deemed to be substantially financed by such grants/loans. Direct funding could be by way of cash grants, reimbursement of expenses etc., and indirect funding could be meeting the expenses directly or in kind.
      The case under reference is Appeal No.163/ICPB/2006, F.No.PBA/06/158, Dated November 28, 2006
      Appellant: Shri Veeresh Malik, New Delhi Public authority: Indian Olympics Association / Deptt. of Sports
      This article has been posted on our wiki here: Substantially Financed [Right to Information Wiki]
    • known
      By known
      Isn't it desirable for all publicly listed companies in NSE and BSE to comply with RTI?
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