In the recent DAV college trust case[1], when some colleges, associations running schools/ colleges claimed that NGOs are not covered under the definition of public authority[2] of the RTI Act, Hon’ble Supreme Court (SC) decided to analyse the definition of public authority to assess whether their claim is justified.
SC’s analysis of ‘Public Authority’:
- In the definition of public authority, the words of ‘means’ and ‘includes’ have not been used together. ‘Means’ has been used in the first part of the definition, ‘includes’ has been used in the second part of the definition. The words ‘and includes any’, in the second part makes it an inclusive clause and expands the definition, which indicates the intention of the Legislature to cover bodies other than/in addition to those mentioned in clauses (a) to (d) of the first part, which have been established or constituted in the four manner prescribed therein.
- The second part relates to bodies which are (i) owned, controlled or substantially financed by the Government (these bodies may not have been constituted by or under the Constitution, by an Act of Parliament or State Legislature or by a notification) and (ii) NGOs substantially financed by the appropriate Government. Such an NGO cannot be owned or controlled by the Government and only the question of financing is relevant.
Basis the above analysis, SC held that an NGO substantially financed directly or indirectly by funds provided by appropriate government would be a public authority.
Substantial financing:
Having resolved the issue of whether an NGO is a public authority, SC proceeded to interpret the meaning of substantial financing. It opined that substantial means a large portion and does not necessarily have to mean a major portion or more than 50%. Explaining further, SC gave an example of an NGO having a total capital of Rs. 10,000/- and getting a grant of Rs.5000/- from the Government. Though the grant of Rs.5000/- would be a 50% grant, in the opinion of SC, it would not be substantial. On the other hand, if a body or an NGO gets hundreds of crores of rupees as grant but it is less than 50% of its capital, it can still be termed as substantial financing.
SC further held that the question of whether an NGO is substantially financed is a question of fact, to be determined on the facts of each case and that substantial financing can be both direct and indirect, for example, if land is given free of cost or at a huge discount to a hospital, educational institutions or such other body, it would mean substantial financing if, the very establishment of such an institution is dependent on getting the land at cheap price.
Lastly, if the functioning of an NGO is dependent on the finances of the Government, it will be held to be substantially financed.
DAV School/College Chandigarh is a Public Authority:
SC held that MCM DAV College Chandigarh, DAV College Chandigarh, DAV Senior Secondary School Chandigarh are all substantially financed, since, in the period of 2004-2005, 2005-2006, 2006-2007, they received grants from the State Government which constituted about 44%, 40% and 44% of their expenditure respectively, which in recent years increased substantially and because 95% of the salary of the teaching and non-teaching staff of the college is borne by the State Government.
Conclusion:
It is for the first time SC has specifically dealt with the issue of whether an NGO will be a public authority under the RTI Act. In the case of Thalappalam Service Cooperative Bank Ltd and others[3] it had examined whether a co-operative society registered under the Kerala Co-operative Societies Act, 1969 will be a public authority or not. However, its stand vis-i-vis the meaning of the term substantial financing has not changed, as, in Thalappalam it had observed that “….”substantial” is not synonymous with “dominant” or “majority”. It is closer to “material” or “important” or “of considerable value”. “Substantially” is closer to “essentially”. Both words can signify varying degrees depending on the context….…there are instances, where private educational institutions getting ninety five per cent grant-in-aid from the appropriate government, may answer the definition of public authority…”and in the DAV College Trust case, it has held that substantially financed would mean a large portion and not necessarily a major portion or more than 50% and would depend on the facts of the case, but, if the very functioning of these bodies is dependent on Government finances then they will undoubtedly be termed as substantially financed. Thus, the position of SC vis-i-vis the meaning of substantial financing has remained the same.
[1] DAV College Trust and Management Society and Ors Vs. Director of Public Instructions and Ors, Civil Appeal No.9828 of 2013 along with Civil Appeal Nos.9844-9845 of 2013, Civil Appeal Nos.9846-9857 of 2013, Civil Appeal No.9860 of 2013 dated 17.9.2019
[2] 2 (h) “public authority” means any authority or body or institution of selfgovernment 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) nonGovernment organisation substantially financed,
directly or indirectly by funds provided by the appropriate Government;”
6 Comments
Comments are closed.