WPC No.4748/2007 Page 1 REPORTABLE * IN THE HIGH COURT OF DELHI AT NEW DELHI + WRIT PETITION (CIVIL) NO. 4748 OF 2007 Reserved on : 26th November, 2009. % Date of Decision 15th April, 2010. NATIONAL STOCK EXCHANGE OF INDIA LIMITED .... Petitioner Through Mr. Ashok Desai, Sr. Advocate with Mr. Sanjay Bhatt, Advocate. VERSUS CENTRAL INFORMATION COMMISSION & OTHERS…..Respondents. Through Mr. B.V. Niren, CGSC & Ms. Akriti Gandotra, Advocate for UOI. Mr. K. Lall, respondent No. 2 in person. Mr. Rajan Narain and Mr. Rajat Bhardwaj, Advocates for CERS in CM No. 3359/2008. CORAM: HON'BLE MR. JUSTICE SANJIV KHANNA 1. Whether Reporters of local papers may be allowed to see the judgment? 2. To be referred to the Reporter or not ? YES 3. Whether the judgment should be reported in the Digest ? YES SANJIV KHANNA, J.: 1. The petitioner, National Stock Exchange of India Limited, claims that they are not a ‗public authority‘ as defined by Section 2(h) of the Right to Information Act, 2005 (hereinafter referred to as the Act, for short). The aforesaid definition clause is significant as a citizen is entitled to enforce his right to ask for information only from WPC No.4748/2007 Page 2 a ‗public authority‘ as defined in Section 2(h) and not from bodies, which are not public authorities. 2. Section 2(h) of the Act reads as under:- ―2(h) "public authority" means any authority or body or institution of self- government established or constituted— (a) by or under the Constitution; (b) by any other law made by Parliament; (c) by any other law made by State Legislature; (d) by notification issued or order made by the appropriate Government, and includes any— (i) body owned, controlled or substantially financed; (ii) non-Government organisation substantially financed, directly or indirectly by funds provided by the appropriate Government;‖ 3. Section 2(h) of the Act consists of two parts. The first part states that public authority means any authority or body or institution of self-government established or constituted by or under the Constitution, by any enactment made by the Parliament or the State Legislature or by a notification issued or order made by the appropriate Government. The second part starts from the word ‗includes‘ and states the term ‗public authority‘ includes bodies which are owned, controlled or substantially financed directly or indirectly by funds provided by the appropriate Government and non- Government organizations substantially financed directly or indirectly by the funds provided by the appropriate Government. Interpreting WPC No.4748/2007 Page 3 the second part of the definition and whether conditions (a) to (d) apply, S. Ravindra Bhat, J. in his judgment dated 7th January, 2010 in W.P. (C) No. 876/2007 titled Indian Olympic Association versus Veeresh Malik and Others and other cases has observed as under:- ―45. Now, if the Parliamentary intention was to expand the scope of the definition ―public authority‖ and not restrict it to the four categories mentioned in the first part, but to comprehend other bodies or institutions, the next question is whether that intention is coloured by the use of the specific terms, to be read along with the controlling clause ―authority…of self government‖ and ―established or constituted by or under‖ a notification. A facial interpretation would indicate that even the bodies brought in by the extended definition: (i) “….Body owned, controlled or substantially financed; (ii) Non- Government organization substantially financed, directly or indirectly by funds provided by the appropriate Government.” are to be constituted under, or established by a notification, issued by the appropriate government. If indeed such were the intention, sub-clause (i) is a surplusage, since the body would have to be one of self government, substantially financed, and constituted by a notification, issued by the appropriate government. Secondly – perhaps more importantly, it would be highly anomalous to expect a ―non-government organization‖ to be constituted or established by or under a notification issued by the government. These two internal indications actually have the effect of extending the scope of the definition ―public authority‖; it is thus not necessary that the institutions falling under the inclusive part have WPC No.4748/2007 Page 4 to be constituted, or established under a notification issued in that regard. Another significant aspect here is that even in the inclusive part, Parliament has nuanced the term; sub-clause (i) talks of a ―body, owned, controlled or substantially financed‖ by the appropriate government (the subject object relationship ending with sub-clause (ii)). In the case of control, or ownership, the intention here was that the irrespective of the constitution (i.e it might not be under or by a notification), if there was substantial financing, by the appropriate government, and ownership or control, the body is deemed to be a public authority. This definition would comprehend societies, co-operative societies, trusts, and other institutions where there is control, ownership, (of the appropriate government) or substantial financing. The second class, i.e non- government organization, by its description, is such as cannot be ―constituted‖ or ―established‖ by or under a statute, or notification. 46. The term ―non-government organization‖ has not been used in the Act. It is a commonly accepted expression. Apparently, the expression was used the first time, in the definition of "international NGO" (INGO) in Resolution 288 (X) of ECOSOC on February 27, 1950 as "any international organization that is not founded by an international treaty". According to Wikipedia http://en.wikipedia.org/wiki/Nongovernmental_or ganization..accessed on 28-12-2009 @19:52 hrs) “…Non-Government organization (NGO) is a term that has become widely accepted as referring to a legally constituted, non-Government organization created by natural or legal persons with no participation or representation of any government. In the cases in which NGOs are funded totally or partially by WPC No.4748/2007 Page 5 governments, the NGO maintains its non- Government status and excludes government representatives from membership in the organization. Unlike the term intergovernmental organization, "non-Government organization" is a term in general use but is not a legal definition. In many jurisdictions these types of organization are defined as "civil society organizations" or referred to by other names…” Therefore, inherent in the context of a ―non- government‖ organization is that it is independent of government control in its affairs, and is not connected with it. Naturally, its existence being as a non-state actor, the question of its establishment or constitution through a government or official notification would not arise. The only issue in its case would be whether it fulfills the ―substantial financing‖ criteria, spelt out in Section 2(h). Non-government organizations could be of any kind; registered societies, co-operative societies, trusts, companies limited by guarantee or other juristic or legal entities, but not established or controlled in their management, or administration by state or public agencies.‖ 4. The term ―substantially financed‖ has also been interpreted in the same judgment and it has been held that majority test is not appropriate to decide whether or not a non-Government organization is substantially financed directly or indirectly by the appropriate Government. It has been explained that financing in percentage terms in relation to the total budget of a body is not important. While deciding the question whether an organization has been infused or has taken benefit of substantial financing, directly or indirectly from the Government in paragraphs 58 to 60 of the said judgment, learned WPC No.4748/2007 Page 6 single Judge had examined the scope and ambit of the second part and its relationship with the first part and observed in paragraph 60 as under:- ―60. This court therefore, concludes that what amounts to ―substantial‖ financing cannot be straight-jacketed into rigid formulae, of universal application. Of necessity, each case would have to be examined on its own facts. That the percentage of funding is not ―majority‖ financing, or that the body is an impermanent one, are not material. Equally, that the institution or organization is not controlled, and is autonomous is irrelevant; indeed, the concept of non-government organization means that it is independent of any manner of government control in its establishment, or management. That the organization does not perform – or pre- dominantly perform – “public” duties too, may not be material, as long as the object for funding is achieving a felt need of a section of the public, or to secure larger societal goals. To the extent of such funding, indeed, the organization may be a tool, or vehicle for the executive government‘s policy fulfillment plan. This view, about coverage of the enactment, without any limitation, so long as there is public financing, ……….‖ (emphasis supplied) 5. I have referred the second part of Section 2(h) of the Act and the aforesaid judgment, as these are relevant to the present case and give an indication of the legislative intent while defining the term ‗public authority‘. It is obvious that the term ‗public authority‘ has been given a broad and wide meaning not only to include bodies which are owned, controlled or substantially financed directly or indirectly by the Government but even non-Government organizations, which are substantially financed directly or indirectly WPC No.4748/2007 Page 7 by the Government. The idea, purpose and objective behind the beneficial legislation is to make information available to citizens in respect of organizations, which take benefit and advantage by utilizing substantial public funds. This ensures that the citizens can ask for and get information and know on how public funds are being used and there is accountability, transparency and openness. Even private organizations, which are enjoying benefit of substantial funding directly or indirectly from the Governments, fall within the definition of ‗public authorities‘ under the Act. 6. The first part of Section 2(h) of the Act states that public authorities means authorities, institutions of self-government or bodies which have been established or constituted in the manner specified in (a) to (d). Each of the said words has been interpreted below. Effect of conditions (a) to (d) mentioned in the first part has been examined. 7. Webster‘s Comprehensive Dictionary (International Edition) defines the term ‗authority‘ as ―the person or persons in whom government or command is vested; often in the plural‖. Meaning to the word ―authority‖ in Webster‘s Third New International Dictionary is ―a public administrative agency or corporation having quasi- governmental powers and authorized to administer a revenue- producing public enterprise‖. Meaning of ‗authority‘ given in The Law Lexicon P. Ramanatha Aiyar, Second Edition-1997 is ―a person or persons, or a body, exercising power of command; generally in plural: as the civil and military authorities‖. In Rajasthan State Electricity Board v. Mohan Lal,(1967) 3 SCR 377, 385 the Supreme Court referred to the dictionary mean of the term ‗authority‘ and observed; WPC No.4748/2007 Page 8 ―5. The meaning of the word ―authority‖ given in Webster’s Third New International Dictionary, which can be applicable, is a public administrative agency or corporation having quasi-governmental powers and authorised to administer a revenue-producing public enterprise. This dictionary meaning of the word ―authority‖ is clearly wide enough to include all bodies created by a statute on which powers are conferred to carry out governmental or quasi governmental functions. The expression ―other authorities‖ is wide enough to include within it every authority created by a statute and functioning within the territory of India, or under the control of the Government of India; and we do not see any reason to narrow down this meaning in the context in which the words ―other authorities‖ are used in Article 12 of the Constitution. 6. In Smt Ujjam Bai v. State of Uttar Pradesh, Ayyangar, J., interpreting the words ―other authorities‖ in Article 12, held: ―Again, Article 12 winds up the list of authorities falling within the definition by referring to ―other authorities‖ within the territory of India which cannot obviously be read as ejusdem generis with either the Government and the Legislatures or local authorities. The words are of wide amplitude and capable of comprehending every authority created under a statute and functioning within the territory of India or under the control of the Government of India. There is no characterisation of the nature of the ‗authority‘ in this residuary clause and consequently it must include every type of authority set up under a statute for the purpose of administering laws enacted by the Parliament or by the State including those vested with the duty to make decisions in order to implement those laws.‖ In K.S. Ramamurthi Reddiar v. Chief Commissioner, Pondicherry, this Court, dealing with Article 12, held: ―Further, all local or other authorities within the territory of India include all authorities within the territory of India whether under the control of the Government of India or the Governments of various States and even autonomous authorities which may not be under the control of the Government at all.‖ These decisions of the Court support our view that the expression ―other authorities‖ in Article 12 will include all constitutional or statutory authorities on whom powers are conferred by law. It is not at all material that some of the powers conferred may be for the purpose of carrying on commercial activities. Under the Constitution, the State is itself envisaged as having the right to carry on trade or business as mentioned in Article 19(1)(g). In Part IV, the State has been given the same meaning as in Article 12 and one of the Directive Principles laid down in Article 46 is that the State shall promote with special care the educational and economic interests of the weaker sections of the people. The State, as defined in Article 12, is thus comprehended to include bodies WPC No.4748/2007 Page 9 created for the purpose of promoting the educational and economic interests of the people. The State, as constituted by our Constitution, is further specifically empowered under Article 298 to carry on any trade or business.‖ 8. The term ‗authority‘ has been a subject matter of judicial decisions of the Supreme Court while examining Articles 12 and 226 of the Constitution of India and has been given wider meaning. The Supreme Court in Praga Tools Corporation versus Shri C.A. Imanual and Others, (1969) 3 SCR 773 had observed: ―6. In our view the High Court was correct in holding that the writ petition filed under Article 226 claiming against the company mandamus or an order in the nature of mandamus was misconceived and not maintainable. The writ obviously was claimed against the company and not against the conciliation officer in respect of any public or statutory duty imposed on him by the Act as it was not be, but the company who sought to implement the impugned agreement. No doubt, Article 226 provides that every High Court shall have power to issue to any person or authority orders and writs including writs in the nature of habeas corpus, mandamus etc. or any of them for the enforcement of any of the rights conferred by Part III of the Constitution and for any other purpose. But it is well understood that a mandamus lies to secure the performance of a public or statutory duty in the performance of which the one who applies for it has a sufficient legal interest. Thus, an application for mandamus will not lie for an order of reinstatement to an office which is essentially of a private character nor can such an application be maintained to secure performance of obligations owed by a company towards its workmen or to resolve any private dispute. (See Sohan Lal v. Union of India), In Regina v. Industrial court mandamus was refused against WPC No.4748/2007 Page 10 the Industrial court though set up under the Industrial courts Act, 1919 on the ground that the reference for arbitration made to it by a minister was not one under the Act but a private reference. ―This Court has never exercised a general power‖ said Bruce, J. in R. v. Lawisham Union ―to enforce the performance of their statutory duties by public bodies on the application of anybody who chooses to apply for a mandamus. It has always required that the applicant for a mandamus should have a legal and a specific right to enforce the performance of those duties‖. Therefore, the condition precedent for the issue of mandamus is that there is in one claiming it a legal right to the performance of a legal duty by one against whom it is sought. An order of mandamus is, in form, a command directed to a person, corporation or an inferior tribunal requiring him or them to do a particular thing therein specified which appertains to his or their office and is in the nature of a public duty. It is, however, not necessary that the person or the authority on whom the statutory duty is imposed need be a public official or an official body. A mandamus can issue, for instance, to an official of a society to compel him to carry out the terms of the statute under or by which the society is constituted or governed and also to companies or corporations to carry out duties placed on them by the statutes authorising their undertakings. A mandamus would also lie against a company constituted by a statute for the purposes of fulfilling public responsibilities. [Cf. Halsbury’s Laws of England, (3rd ed.), Vol. II, p. 52 and onwards]. 7. The company being a non-statutory body and one incorporated under the Companies Act there was neither a statutory nor a public duty imposed on it by a statute in respect of which enforcement could be sought by means of a mandamus, nor was there in its workmen any corresponding legal right for enforcement of any such statutory or public duty. The High Court, therefore, was right in holding that no writ WPC No.4748/2007 Page 11 petition for a mandamus or an order in the nature of mandamus could lie against the company.‖ 9. In Ramana Dayaram Shetty versus The International Airport Authority of India & Others, (1979) 3 SCR 1014, the Supreme Court noticed that the power of the executive Government to affect the lives of the people is growing and there has been a tremendous expansion of welfare and social service functions by the State. It was also noticed that this has resulted in greater frequency with which ordinary citizens come into association or encounter with the State policy holders. In Ajay Hasia and Others versus Khalid Mujib Sehravardi and Others, (1981) 1 SCC 722 it was observed that there would be considerable erosion of the efficiency of the fundamental rights in case the term ‗authority‘ is interpreted narrowly by allowing the State to adopt stratagem of carrying out their functions through instrumentality of agency of a corporation and excluding the same. It was accordingly observed in paragraph 11 of the judgment as under:- “11. We may point out that it is immaterial for this purpose whether the corporation is created by a statute or under a statute. The test is whether it is an instrumentality or agency of the Government and not as to how it is created. The inquiry has to be not as to how the juristic person is born but why it has been brought into existence. The corporation may be a statutory corporation created by a statute or it may be a government Company or a Company formed under the Companies Act, 1956 or it may be a society registered under the Societies. Registration Act, 1860 or any other similar statute. Whatever be its genetical origin, it would be an ―authority‖ within the meaning of Article 12 if it is an instrumentality or agency of the Government and that would have to be decided on a proper assessment of the facts in the light of the relevant factors. The concept of WPC No.4748/2007 Page 12 instrumentality or agency of the Government is not limited to a corporation created by a statute but is equally applicable to a Company or society and in a given case it would have to be decided, on a consideration of the relevant factors, whether the Company or society is an instrumentality or agency of the Government so as to come within the meaning of the expression ―authority‖ in Article 12.‖ 10. Section 2(h) of the Act does refer to the manner of establishment or constitution in conditions (a) to (d) but condition (d) expands the term to include establishment or constitution by a notification or order by an appropriate government. Legislative enactment is not necessary and ‗authority‘ under condition (d) of the section 2(h) can be established or constituted by an executive action. ‗Authority‘ may be statutory or non statutory. Effect and relevance of conditions (a) to (d) has been examined later on. 11. In Ajay Hasia’s case (supra), the Supreme Court quoted with approval the test laid down in International Airport Authority’s case to decide whether an organization/body is an authority against whom a writ could be issued under Article 226 of the Constitution of India and it was observed:- “9. The tests for determining as to when a corporation can be said to be an instrumentality or agency of Government may now be culled out from the judgment in the International Airport Authority case. These tests are not conclusive or clinching, but they are merely indicative indicia which have to be used with care and caution, because while stressing the necessity of a wide meaning to be placed on the expression ―other authorities‖, it must be realised that it should not be stretched so far as to bring in every autonomous body which has some nexus with the Government within the sweep of the expression. A wide enlargement of the meaning must be tempered by a wise WPC No.4748/2007 Page 13 limitation. We may summarise the relevant tests gathered from the decision in the International Airport Authority case as follows: ―(1) One thing is clear that if the entire share capital of the corporation is held by Government, it would go a long way towards indicating that the corporation is an instrumentality or agency of Government. (SCC p. 507, para 14) (2) Where the financial assistance of the State is so much as to meet almost entire expenditure of the corporation, it would afford some indication of the corporation being impregnated with Governmental character. (SCC p. 508, para 15) (3) It may also be a relevant factor ... whether the corporation enjoys monopoly status which is State conferred or State protected. (SCC p. 508, para 15) (4) Existence of deep and pervasive State control may afford an indication that the corporation is a State agency or instrumentality. (SCC p. 508, para 15) (5) If the functions of the corporation are of public importance and closely related to Governmental functions, it would be a relevant factor in classifying the corporation as an instrumentality or agency of Government. (SCC p. 509, para 16) (6) ‗Specifically, if a department of Government is transferred to a corporation, it would be a strong factor supportive of this inference‘ of the corporation being an instrumentality or agency of Government.‖ (SCC p. 510, para 18) If on a consideration of these relevant factors it is found that the corporation is an instrumentality or agency of Government, it would, as pointed out in the International Airport Authority case, be an ―authority‖ and, therefore, ‗State‘ within the meaning of the expression in Article 12.‖ 12. Conflict between Sukhdev Singh versus Bhagatram Sardar Singh Raghuvanshi, (1975) 1 SCC 421 and Sabhajit Tewary v WPC No.4748/2007 Page 14 UOI (1975) 1 SCC 485 was examined by seven Judges of the Supreme Court in the case of Pradeep Kumar Biswas versus Indian Institute of Chemical Biology, (2002) 5 SCC 111. The majority judgment approved of the tests specified in the case of Ajay Hasia and has observed as under: ―31. The tests to determine whether a body falls within the definition of ―State‖ in Article 12 laid down in Ramana with the Constitution Bench imprimatur in Ajay Hasia form the keystone of the subsequent jurisprudential superstructure judicially crafted on the subject which is apparent from a chronological consideration of the authorities cited. 40. The picture that ultimately