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The Supreme Court of India ruled that non-governmental organisations substantially financed, whether directly or indirectly, by the appropriate government fall within the ambit of ‘public authority’ under Section 2(h) of the Right to Information Act, 2005. A range of colleges and schools claimed that as NGOs they did not constitute public authorities and were therefore not subject to the Act’s record keeping and disclosure requirements. The Court, however, found that the inclusive sub-clauses of the Act indicted that the legislature intended NGOs as well as other bodies “owned, controlled or substantially funded by the Government” to be public authorities. Whether an organization was ‘substantially’ funded by the government would have to be considered on a case-by-case basis. In the present case, the Court determined one applicant was substantially funded by the Government as it received grants covering up to 44% of its expenditures and the State Government subsidized nearly 95 percent of the salaries of the teaching and non-teaching staff.
The first appellant, DAV College Trust and Management Society, runs various independent schools and colleges which have individual identities. Additional applicants included parties to three cases on appeal: Civil Appeal Nos. 98449845 of 2013; Civil Appeal Nos. 98469857 of 2013; and Civil Appeal No. 9860 of 2013. The appellants moved before the Supreme Court claiming that the colleges, as NGOs, do not constitute ‘public authorities’ as defined under the Right to Information Act, 2005 and therefore are not subject to it.
The Act was enacted by the Parliament of India to establish the right and access to information from the public authority for its citizens. These rights are based on the premise that “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.” [para. 2] The Act recognized that the right to access information must be “harmonized” with other conflicting interests such as the confidentiality of sensitive information or the efficient use of public funds, “while preserving the paramountcy of the democratic ideal.”
Under the Act, all public authorities are required to maintain public records accessible upon request. Public authority has been defined in Section 2(h) of the Act to mean (emphasis added) “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 the Parliament; (c) by any other law made by the State Legislature; (d) by notification issued or order made by the appropriate Government, and include (emphasis added) any: (i) body owned, controlled or substantially financed; (ii) non-government organization (NGO) substantially financed, directly or indirectly by funds provided by the appropriate Government.”
The Appellants argued that according to the opening portion of the provision, only authorities, bodies or institutions actually concerned with self-governance could be declared to be public authorities. [para. 11] Therefore, the aim of the Act was to cover only the government and its instrumentalities, and not NGOs such as the colleges and schools. Further, if any body or institution, not within the purview of clauses (a) to (c) (those constituted under the Constitution, or the Parliament or the State Government), were to be brought within the ambit of public authority, they would need to receive official notification of such status as outlined in clause (d). [paras. 4,5 and 12] Moreover, the schools and/or colleges were not substantially financed by the Government, as required by Section 2(h) of the Act. [para. 25]
Justice Deepak Gupta delivered the judgment for the Supreme Court.
The primary issue before the Supreme Court was, whether NGOs substantially financed by the government fall within the ambit of ‘public authority’ under Section 2(h) of the Act. Further, the Supreme Court had to determine whether the appellants in this case were substantially financed by the government. [paras. 1 and 25]
The Court first addressed whether the colleges and schools constituted public authorities as defined under the Act. The Applicants argued that based on the opening portion of the provision, there were only 4 types of public authorities,“those set up (a) under the Constitution, (b) by an Act of Parliament, (c) by any law made by State Legislature, or (d) by notification issued or order made by the appropriate Government,” and that they fell outside the scope of those categories. [para. 4] The respondents countered that the sub-clauses in the second section of the provision, which included bodies and NGOs substantially financed by the government, formed two additional categories under Section 2(h) of the Act.
The Court reviewed previous case law to undertake a textual analysis of the Act. It referenced P. Kasilingam v. P.S.G. College of Technology & Ors., (1995) Supp 2 SCC 348] which dealt with the interpretation of the words “means and includes” in a definitional clause. In the present case, the Court juxtaposed the use of the word ‘means’ in Section 2(h) of the Act, which indicated “exhaustive and complete” definitions of the first four categories of public authorities, with the use of the word ‘includes’ in the second part of the section, which indicated that the legislature intended the last two categories of public authorities to be interpreted more broadly. Accordingly, the Court found that sub-clauses (i) and (ii), which defined bodies and NGOs owned, controlled or substantially financed by the Government, to form separate categories of public authorities.
The Court also discussed its decision in Thalappalam Service Cooperative Bank Ltd. and Ors. v. State of Kerala and Ors. which assessed whether cooperative societies would fall within the ambit of the Act. In that case, the validity of an order was challenged on the grounds that the cooperative societies were neither bodies owned, controlled and/or substantially financed by the government nor could they be said to be NGOs substantially financed, directly or indirectly, by funds provided by the appropriate Government. [para. 7] The Supreme Court in the present case noted, it had itself in para 32 of the Thalappalam case observed that the bodies and NGOs defined in the aforementioned sub-clauses (i) and (ii) constituted separate categories of public authorities, in addition to the previous four identified in Section 2(h) of the Act. [para. 19]
The Court noted that the term NGO was not defined under the Act or any other statute, but described bodies which are “legally constituted but non-governmental in nature.” [para. 23] Schools and colleges would fall under that definition. Further, organizations which receive part or all of their funding from the government can maintain their status as an NGO if they are run independently and exclude government representation. However, organizations which are not controlled by the government but receive substantial direct or indirect funding from the government would fall within the ambit of the sub-clauses. [para. 24]
The Court also relied on the purposive interpretation of a statute. For purposive interpretation, the court had to place itself in the shoes of the legislature to construe a provision in a manner to ensure that the object of the Act was fulfilled. The Court felt that by bringing in NGOs within the purview of Section 2(h) was to include it in addition to the four categories mentioned in clauses (a) to (d). Accordingly, the Supreme Court held that an NGO substantially financed, directly or indirectly, by funds provided by the government would be a public authority under the Act. [para. 22]
Having established as above, the Supreme Court next considered the words “substantially financed.” It observed that “substantial” means a large portion, but not necessarily a major portion or more than 50 percent. It further observed that no hard and fast rule may be laid down in this regard and would depend on the facts of each case. The Supreme Court also observed that if a body cannot carry on its activities without getting finance from the Government, it then would be an important consideration for determining if the body is being substantially financed. With regard to the first appellant, the Supreme Court observed that it received grants equivalent to about 44 percent of expenditures of one of the Colleges. As far as colleges are concerned, the State Government funds nearly 95 percent of the salaries of the teaching and non-teaching staff. It was also noted that teaching constitutes an essential part of the colleges, and not other infrastructure like auditorium, hostels, etc. Accordingly, the Supreme Court observed these to be substantial payments. Hence, it was held that these Colleges/School are substantially financed and are a public authority within the meaning of Section 2(h) of the Act.
The Supreme Court rejected the argument regarding notification requirement as well. The Bench observed that “the notification contemplated in clause (d) is a notification relating to the establishment or constitution of the body and has nothing to do with the Act.” [para. 15]
Consequently, the Supreme Court dismissed the petition of the first appellant.
Regarding other appellants party to the Civil Appeals, the Supreme Court found that the High Court did not take into consideration the issue of substantial financing completely. Accordingly, these appeals were remitted to the High Court to determine if the institutions are substantially financed or not.
Decision Direction indicates whether the decision expands or contracts expression based on an analysis of the case.
The Supreme Court of India held in the Thalappalam case that the right to information was a facet of freedom of speech and expression under the Constitution of India. Accordingly, in the present case including NGOs and other bodies substantially funded by the Government as “public authorities” will expand the purview of the Right to Information Act 2005, and hence expand access to information.
Global Perspective demonstrates how the court’s decision was influenced by standards from one or many regions.
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