Important Decision of the Supreme Court Part-III

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Important Decision of the Supreme Court on RTI Act Part-III

What does Substantially Financed under RTI Act Conveys?

In the matter of D.A.V. College Trust and Management Society & Ors. Versus Director of Public Instructions & Ors. the Supreme Court has given the following judgment in Civil Appeal No. 9828 Of 2013, Civil Appeal Nos. 9844­9845 Of 2013, Civil Appeal Nos. 9846­9857 Of 2013.

Whether non­governmental organizations substantially financed by the appropriate government fall within the ambit of ‘public authority’ under Section 2(h) of the Right to Information Act, 2005 is the issue for consideration in this case. It held as under:

26. In our view, ‘substantial’ means a large portion. It does not necessarily have to mean a major portion or more than 50%. No hard and fast rule can be laid down in this regard. Substantial financing can be both direct and indirect. To give an example, if a land in a city is given free of cost or on heavy discount to hospitals, educational institutions or such other body, this in itself could also be substantial financing. The very establishment of such an institution, if it is dependent on the largesse of the State in getting the land at a cheap price, would mean that it is substantially financed. Merely because financial contribution of the State comes down during the actual funding, will not by itself mean that the indirect finance given is not to be taken into consideration. The value of the land will have to be evaluated not only on the date of allotment but even on the date when the question arises as to whether the said body or NGO is substantially financed.

27. Whether an NGO or body is substantially financed by the government is a question of fact which has to be determined on the facts of each case. There may be cases where the finance is more than 50% but still may not be called substantially financed. Supposing a small NGO which has a total capital of Rs.10,000/ gets a grant of Rs.5,000/ from the Government, though this grant may be 50%, it cannot be termed to be substantial contribution. On the other hand, if a body or an NGO gets hundreds of crores of rupees as grant but that amount is less than 50%, the same can still be termed to be substantially financed.

28. Another aspect for determining substantial finance is whether the body, authority or NGO can carry on its activities effectively without getting finance from the Government. If its functioning is dependent on the finances of the Government then there can be no manner of doubt that it has to be termed as substantially financed.

29. While interpreting the provisions of the Act and while deciding what is substantial finance one has to keep in mind the provisions of the Act. This Act was enacted with the purpose of bringing transparency in public dealings and probity in public life. If NGOs or other bodies get substantial finance from the Government, we find no reason why any citizen cannot ask for information to find out whether his/her money which has been given to an NGO or any other body is being used for the requisite purpose or not.

30. It is in the light of the aforesaid proposition of law that we now propose to examine the cases individually. Civil Appeal No. 9828 of 2013

31. This has been filed by D.A.V. College Trust and Management Society, New Delhi; D.A.V. College, Chandigarh; M.C.M. D.A.V. College, Chandigarh and D.A.V. Senior Secondary School, Chandigarh.

32. Appellant no.1 is the Society which runs various colleges/schools but each has an identity of its own and, in our view, each of the college/school is a public authority within the meaning of the Act. It has been urged that these colleges/schools are not being substantially financed by the Government in as much as that they do not receive more than 50% of the finance from the Government. Even the documents filed by the appellants themselves show that M.C.M. D.A.V. College, Chandigarh, in the years 2004­05, 2005­06 and 2006­07, has received grants in excess of 1.5 crores each year which constituted about 44% of the expenditure of the College. As far as D.A.V. College, Chandigarh is concerned the grant for these three years ranged from more than 3.6 crores to 4.5 crores and in percentage terms it is more than 40% of the total financial outlay for each year. Similar is the situation with D.A.V. Senior Secondary School, Chandigarh, where the contribution of the State is more than 44%.

33. Another important aspect, as far as the colleges are concerned, is that 95% of the salary of the teaching and non­teaching staff of the College is borne by the State Government. A major portion of the remaining expenses shown by the College is with regard to the hostels, etc. It is teaching which is the essential part of the College and not the hostels or other infrastructure like auditorium, etc. The State has placed on record material to show that now these grants have increased substantially and in the years 2013­14, 2014­15 and 2015­16, the D.A.V. College, Chandigarh received amounts more than Rs.15 crores yearly, M.C.M. D.A.V. College, Chandigarh received amounts more than Rs.10 crores yearly and the D.A.V. Senior Secondary School, Chandigarh received grant of more than Rs.4 crores yearly. It can be safely said that they are substantially financed by the Government. 34. During the course of hearing, some information was placed on record by the learned counsel for the respondents showing how much is the fund being granted to these institutions from the year 2013­14 to 2015­16. As far as these institutions are concerned the payments received are as follows:

Institution                 2013­14 (Rs.)             2014­15 (Rs.)             2015­16 (Rs.)

D.A.V.College,          14,97,31,954/            15,15,91,074/            17,57,90,476/

Sector 10, Chandigarh

M.C.M. D.A.V.           10,06,91,020/            10,47,79,495/            11,33,94,771/

College, Sector­36, Chandigarh

D.A.V. Sr. Sec.          3,97,39,280/              4,17,85,658/              5,06,88,770/

School, Sector­8, Chandigarh

35. These are substantial payments and amount to almost half the expenditure of the Colleges/School and more than 95% of the expenditure as far as the teaching and other staff is concerned. Therefore, in our opinion, these Colleges/School are substantially financed and are public authority within the meaning of Section 2(h) of the Act. CIVIL APPEAL NOS. 9844­9845 OF 2013 CIVIL APPEAL NOS. 9846­9857 OF 2013 CIVIL APPEAL NO. 9860 OF 2013

36. As far as these cases are concerned, we find from the judgments of the High Court that the aspect with regard to substantial financing has not been fully taken into consideration, as explained by us above. Therefore, though we hold that these bodies are NGOs, the issue whether these are substantially financed or not needs to be decided by the High Court. The High Court shall give both the parties opportunity to file documents and decide the issue in light of the law laid down by us.

37. With these observations, all the appeals are disposed of in the aforesaid terms. Civil Appeal No. 9828 of 2013 is dismissed. Civil Appeal Nos. 9844­9845 of 2013, 9846­9857 of 2013 and 9860 of 2013 are remitted to the High Court for determination whether the institutions are substantially financed or not. The High Court shall treat the writ petitions to be filed in the year 2013 and give them priority accordingly.”