The Hon’ble Supreme Court in the matter of Central for Public Interest Litigation Vs. Housing & Urban Development Corp. Ltd. & Ors. in WP(s)(C) No. 573/2003 in which the petitioner requested to make public the names of defaulters in excess of Rs. 500 crores from different institutions in the light of RBI Vs. Jayantilal N. Mistry judgment, the Hon’ble Supreme Court vide order dated 18.11.2016 held that “The Government has therefore acting in right earnest set up a Committee to look into the nature and extent of the problem and the proposed reforms. The Committee, we are told has already held several meetings and is about to finalize its report with recommendations. It will, therefore, not be proper at this stage to prevent the Committee from taking the proceedings to their logical conclusion especially when the recommendations to be made by the Committee are subject to scrutiny of this Court as also of the, petitioners. As regards the Government’s resolve to reform the statutory and other mechanism for recovery of the NPAs through the ORT and SARFAESI Act we direct that a’ comprehensive note indicating the Government’s action plan in that direction may be filed, if so advised in a sealed cover for the perusal of this Court.”

Having considered the submissions of both the parties, the Commission observes that since a similar issue is pending adjudication before the Hon’ble Supreme Court in the matter of Central for Public Interest Litigation Vs. Housing & Urban Development Corporation Ltd. & Ors., it would be judicious to await the final outcome from the Hon’ble Supreme Court. However, on receipt of the final outcome from the Hon’ble Supreme Court in the matter, the appellant shall be at liberty to file a second appeal afresh, if he so desires. The instant appeals are disposed of.

FULL TEXT OF THE CIC ORDER IS AS FOLLOWS

CIC Case Details

ORDER

Case No. CIC/VS/A/2013/001488

Facts:

1. The appellant, Shri Subhash Chandra Agrawal, submitted an RTI application dated 08.07.2013 before the Central Public Information Officer (CPIO). Reserve Bank of India (RBI). New Delhi seeking (1) list of bank-defaulters of public sector banks with outstanding above rupees one crore each. mentioning names of directors/ partners etc. of such defaulting companies/ firms as on 31.03.2013; (2) list of non-performing assets and/ or other loans at public-sector banks above rupees one crore written off as bad debts ever since 01,01.2008; (3) list of non-performing assets and/ or other loans at public sector banks above rupees one crore which were extended further after their being not paid on stipulated time ever since 01.01.2008; (4) complete information on steps taken to direct all public sector banks to put all such cases as queried under points (2) to (4) on website; (5) complete information on steps taken by RBI and/ or other concerned for effectively checking non­ performing assets and bad debts in public sector banks; and (6) file notings on movement of the RTI application.

1.2. The CPIO in his reply dated 18.07.2013 informed the appellant that RBI receive data relating to the top 30 Non- Performing Assets (NPAs) accounts from banks for supervisory purposes only and the same is held in fiduciary capacity and is exempt from disclosure uls 8(1)(a), (d) and (e) of the RTI Act in response to points 1 and A of the RTI application; and informed the appellant that the list of NPA and other loans at public sector banks was not available with RBI. On points 2 and 5 of the RTI application the CPIO informed the appellant about the remedial measures taken by the RBI to monitor credit quality- strategy for monitoring NPAs. Dissatisfied with the decision of the CPIO, the appellant approached the first appellate authority (FAA), who vide order dated 27.08.2013 while upholding the  decision of the CPIO, held that the CIC had vide order dated 15.11.2011, inter- alia directed the RBI to provide details of the top 100 defaulters in loans taken by industrialists from public sector banks. However, the Delhi High Court had stayed the operation of the order dated 15.11.2011 of CIC and in W.P. No. 1976 of 2012, the Delhi High Court vide its interim order dated 10.04.2012 directed the CIC to adjourn hearings in all such cases that involved the disclosure of the inspection reports prepared by the RBI, and correspondence exchanged between the RBI and banks etc.

1.3 Aggrieved with the decision of the respondent approached the Commission in second appeal.

Case No. CICNS/A/2013/001805

Facts:

2. The appellant, Shri Subhash Chandra Agrawal, submitted an RTI application dated 04.07.2013 before the Central Public Information Officer (CPIO), RBI, New Delhi seeking (1) complete information together with file- notings/ correspondence/ documents on action taken on each aspect of his representation titled ‘Non- performing assets of public- sector banks (DEABD/E/2013/002277) dated 04.07.2013, either by Department of Financial Services or by public authorities where submissions might have been forwarded; (2) list of bank-defaulters, at public-sector banks with outstanding above rupees one crore each mentioning names of directors/ partners etc. of each defaulting company/ firm as on 31.03.2013; (3) list of non-performing assets and/ or other loans at public sector banks above rupees one crore written off as bad debts ever since 01.01.2008; (4) list of NPA and/ or other loans at public sector  banks above rupees one crore which were extended further after their being not paid on stipulated time ever since 01.01.2008; (5) complete information on steps taken to direct all public sector banks to put all such cases as queried under query numbers (2) and (4) on website; (6) complete information on steps taken by Department of Financial Services and/ or other concerned like RBI for effectively checking NPA and bad debts in public Sector banks: and (7) file notings on movement of the RTI  through seven points.

2.1 The CPIO, RBI (DBS) vide letter dated 12.08.2013 informed the appellant regarding the remedial measures taken by RBI to monitor credit quality strategy for monitoring NPAs with reference to point 6 and informed the  appellant that the list of NPA loans of pubic sector banks was not available with RBI. The CPIO, RBI. Department of Banking Operation and Development (DBOD) vide letter dated 28.08.2013 informed the appellant that information sought at point 1 is exempted from disclosure u/s 8(1 )(e) and (h) of the RTI Act and replied to the appellant that as far as specific names/ persons/ organizations as sought at point 2 was concerned, Section 45(E) of the RBI Act 1934 prohibits the RBI from disclosing ‘credit information’ except in the manner provided therein. Since the applicant’s request was not covered under any of those exceptions, the information could not be provided to the appellant. The FAA vide order dated 25.09.2013 while partly allowing the appeal directed the CPIO, DBOD to issue a supplementary reply to the appellant queries at point 4 and 5 within ten days. The CPIO does not seem to comply with the directions of the FAA.

2.2 Aggrieved with the decision of the respondent authority the appellant approached the Commission in second appeal.

3. This matter was earlier heard by the Single Bench on 30th July, 2014 and the Commission vide its interim order dated 23rd September, 2014 considered that it would be appropriate to refer these two cases to a larger Bench, considering the legal issues to be adjudicated such as whether the information held by the RBI in relation to the NPA accounts in scheduled commercial bank is in fiduciary capacity; whether the exemption u/s 8(1)(e) of the RTI Act could be applicable in such cases. Hence, a Division Bench of the Commission was constituted consisting of Smt. Manjula Prasher, Information Commissioner and Shri Sudhir Bhargava, Information Commissioner.

4. In view of above, both the matters having similar queries were heard by the Division Bench of the Commission on 24th June, 2016 and the Commission vide interim order dated 26th June, 2016 directed the respondent authority to file written submissions in the matter which should include the details of the case pending before toe Hon’ble Supreme Court, the issues involved therein and their response J thereto with a copy to the appellant. Thereafter, the matter was heard by the Division Bench on 16th February, 2017.

5. Shri Pranav Sachdeva, Advocate representing the appellant stated that the information was incorrectly denied u/s 8(1)(a) and (e) of  the RTI Act, 2005 relating to the queries of NPA and list of defaulters by the respondents on the  grounds that it would prejudicially affect the economic interest of the country and the information was held by them in fiduciary relationship. RBI, the respondents had placed all possible arguments and other statutes that bar the disclosure of NPA accounts but the Hon’ble Supreme Court rejected the RBI’s arguments as these were against public interest disclosure. He stated that Hon’ble Supreme Court of India vide order dated 16th December, 2015 in the matter of Reserve Bank of India Vs. Jayantilal N. Mistry & Drs. [Transferred Cases (Civil) Nos. 91 to 101 of 2015] held that ”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 RTf Act and disclose the information sought by the respondents.” He argued that the instant judgment of Hon’ble Supreme Court of India was the settled law of the land. He stated that the RBI has taken the argument related to a case in the matter of Central for Pubic Interest Litigation Vs. Housing & Urban Development Corporation Ltd, & Ors pending before the Full Bench of Hon’ble Supreme Court of India in WP(C) No. 573 of 2003 and added that this case did not relate to the RTI Act. The appellant further stated that as per Section 22 of the RTI Act, 2005, the RTI Act has an overriding effect “the provisions of this Act shall have effect notwithstanding, anything inconsistent therewith contained in the Official Secrets Act, 1923 (19 of 1923), and any other law for the time being in force or in any instrument having effect by virtue of any law other than this Act.”

6. The respondents stated that the appellant had sought the list of bank defaulters at public sector banks with outstanding above rupees one crore each mentioning names of directors/ partners etc. of such defaulting companies as on 31.03.2013. The CPIO claimed exemption from disclosure u/s 8(1)(a), (d) and (e) of the RTI Act, 2005 and also under the provisions of Section 45-E of the RBI Act, 1934 which prohibits disclosure of credit information. Chapter IIIA of the RBI Act, 1934 prescribes the procedure for collection and furnishing of credit information and Section 45A(c) defines the term ‘Credit Information’. Section 45B of RBI Act provides that the RBI may collect, in such manner as it may think fit, credit information from banking companies and furnish such information to any banking company in accordance with the provisions of Section 45D of that Act. Under Section 45C of the Act, the RBI is empowered to call for returns containing credit  information from any banking company. Section 45E of the RBI Act prohibits the RBI and the banks from disclosing ‘Credit Information’ relating to customers of banks except in the manner provided therein. They stated though Section 22 of the RTI Act has an overriding effect, the provisions of Special enactments requiring confidentiality cannot be said to be impliedly repealed by the RTI Act. This is because RTI Act is a general legislation with respect to the disclosure of information and by Applying the established rules of interpretation one has to say that the provisions in that enactment cannot be said to have the effect of repealing all other specialized legislation relating to confidentiality of some special categories of information

Thus, Section 45E of the RBI Act relating to the confidentiality of credit information does not stand impliedly repealed by the provisions of Section 22 of the RTI Act. They further added that in judgment dated 16.12.2015 passed by the Hon’ble Supreme Court- in the matter if RBI Vs. Jayantilal Mistry, (supra) Transferred case (Civil) No. 91 of 2015 with others, the Supreme Court had only decided the applicability of exemption provided u/s 8(1 )(e) of the RTI Act to the information sought and the issue with respect to the applicability of Section 45E of the RBI Act to the information sought has not been dealt with by the Hon’ble Supreme Court. Therefore the submission of the appellant that the ratio of the said judgment would apply in the present case is wrong and is not tenable. They stated that in W.P(C) No. 573 of 2003 (Central for Public Interest Litigation Vs. Housing & Urban Development Corp. Ltd & Others) pending before the Full Bench of Supreme Court, RBI has been made party by the order dated 16.02.2016 of the Supreme Court. In its order dated 16.02.2016, the Supreme Court has directed the RBI to file an affidavit setting out the details of the debts and restructuring already done and extent of bad debts written off during the past five years. It was further directed that whatever information regarding bad debts is available with the RBI in regard to the debtors who are in default of payment of accounts more than Rs. 500 crores shall be filed along with the affidavit in a sealed cover. In compliance of the order dated 16.02.2016 passed in the above mentioned case, the RBI had filed an affidavit enclosing therewith the relevant information in a sealed cover. It had been submitted in the .affidavit that failure to repay the dues by the borrower does not always reflect as a ‘willful intent’ as to non- payment. There can be various reasons for default. Although some of these reasons are within the control of the promoter, some of them may not be within his control. Some defaults occur even with the best intent, some are malafide in nature. Disclosing the details of accounts where defaults have been found irrespective of the reasons, therefore, may have an adverse impact for the business and in a way may accentuate the failure of the business rather than nurse it back to’ health. While sharing such information among banks helps to address bad behavior from borrowers, putting it in public domain does not necessarily serve the same purpose. In the hearing before the Supreme Court in W.P(C) No. 573 of 2003 scheduled on 12.04.2016, it was submitted by the Bank’s counsel that there is a certain amount of confidentiality about the information in terms of the provisions of the RBI Act. In view of the aforesaid reasons, RBI would not be in position to disclose the information as sought by the appellant on point 1 of the RTI application No. 222/2013-14 dated 04.07.2013 and on point 2 of RTI application No. 573/2013-14 dated 08.07.2013 i.e. ‘list of banks-defaulters at public sector banks with outstanding dues above rupees one crore each mentioning names of directors/ partners etc. of such defaulting companies/firms etc. as on 31.03.2013. The Commission inquired from the respondents regarding the defaulters of Rs. 1 crore and above, as in the Central for Public Interest Litigation Vs. Housing & Urban Development Corporation & Ors. Writ Petition(s) (C) No. 573/2003 the matter related to defaulters  of Rs. 500 crore and above. The respondents argued that in the matter of RBI Vs. Jayantilal Mistry and others, the Apex Court held:

’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 RTI 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 … 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 . … 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.”

The respondents further contended that in the HUDCO matter, the Hon’ble Supreme Court vide its order dated 18.11.2016 mentioned that “Mr. Ranjit Kumar, learned Solicitor General has along with an additional affidavit filed on behalf of respondent No. 7, filed a copy of an office memorandum dated 05.05.2016 constituting a Committee to look into the issues raised by the petitioner in this writ petition. He submits that the Committee has already held as many as six meetings and is likely to finalize its report with recommendations by the end of this month. He further submits that this Court can adjourn these proceedings till such time the report of the  Committee is received in which event this Court will be in a better position to appreciate the. nature of the problem that led to accumulation of NPAs and the possible solutions and reforms to prevent such accumulation. He further submits that apart from the Committee, the Government of India is also separately looking into the possible reforms in the statutory mechanism provided for recovery of loans advanced by the banking institutions. He submits that although no final shape has been given to the line of action which the Government proposes to take, he should be in a position to file an outline of the steps that are proposed in that regard. Ms. Kamini Jaiswal, counsel appearing on behalf of the petitioner submits that the Committee set up by the Government would not inspire confidence as the same is presently manned by persons who are themselves. heading different banking institutions that are also accused of having accumulated a large. amount of NPAs. She submits that the Court could in the meantime make the names of the defaulters in excess of Rs. 500 crores from different institutions public in the light of the decision of this Court in RBI Vs. Jayantilal N. Mistry (2016)”. The Apex Court held that “the issues raised by the writ petitioner are as noticed in the earlier order passed by this Court of considerable public importance. The Government has therefore acting in right earnest set up a Committee to look into the nature and extent of the problem and the proposed reforms. This Committee we are told has already held several meetings and is about to finalize its report with recommendations. It will, therefore, not be proper at this stage to prevent the Committee from taking the proceedings to their logical conclusion especially when the recommendations to be made by the Committee are subject to scrutiny of this Court as also the petitioners … As regards the Government’s resolve to storm the statutory and other mechanism for recovery of the NPAs through the PRT and$ARFAESI Act, we direct that a comprehensive note indicating the Government’s action plan in that direction may be filed if so advised in a sealed cover for the perusal by this Court.” The respondents stated that no such directions were given by the Hon’ble Supreme Court for making the names of defaulters public and reiterated that till the outcome of this case in the matter, the information sought by the appellant may not be divulged

Conclusion/ Decision

7. The Hon’ble Supreme Court in the matter of Central for Public Interest Litigation Vs. Housing & Urban Development Corp. Ltd. & Ors. in WP(s)(C) No. 573/2003 in which the petitioner requested to make public the names of defaulters in excess of Rs. 500 crores from different institutions in the light of RBI Vs. Jayantilal N. Mistry judgment, the Hon’ble Supreme Court vide order dated 18.11.2016 held that “The Government has therefore acting in right earnest set up a Committee to look into the nature and extent of the problem and the proposed reforms. The Committee, we are told has already held several meetings and is about to finalize its report with recommendations. It will, therefore, not be proper at this stage to prevent the Committee from taking the proceedings to their logical conclusion especially when the recommendations to be made by the Committee are subject to scrutiny of this Court as also of the, petitioners. As regards the Government’s resolve to reform the statutory and other mechanism for recovery of tl7e NPAs through the ORT and SARFAESI Act we direct that a’ comprehensive note indicating the Government’s action plan in that direction may be filed, if so advised in a sealed cover for the perusal of this Court.”

8. Having considered the submissions of both the parties, the Commission observes that since a similar issue is pending adjudication before the Hon’ble Supreme Court in the matter of Central for Public Interest Litigation Vs. Housing & Urban Development Corporation Ltd. & Ors., it would be judicious to await the final outcome from the Hon’ble Supreme Court. However, on receipt of the final outcome  from the Hon’ble Supreme Court in the matter, the appellant shall be at liberty to file a second appeal afresh, if he so desires. The instant appeals are disposed of.

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