The
Hans India: New Delhi: Tuesday, 22 December 2015.
The Section
8(1)(j) of RTI Act leaves no room for any doubt that the 'Right to Privacy'
fades out in front of the 'Right to Information' and 'larger public
interest'. RBI’s argument that if
people, who are sovereign, are made aware of the irregularities being committed
by the banks, then the country’s economic security would be endangered, is not
only absurd but is equally misconceived and baseless.
It has been
recognised and understood without any doubt now that one of the tools to attain
this goal is to make information available to people. Because an informed
citizen has the capacity to reasoned action and also to evaluate the actions of
the legislature and executives, which is very important in a participative
democracy and this will serve the nation’s interest better which as stated
above also includes its economic interests
To deny
information, public authorities very frequently raise defence of information
given in ‘fiduciary’ relation and say it cannot be given. It is their firm
strategy against disclosure of anything about the exercise of their power.
When the
regulatory does not perform its duties for various reasons like inefficiency,
reluctance, laziness or corruption, fraudulent financial institutions get fresh
lease of encouragement from the regulator to their comfort. Fiduciary character means trust like attitude
to care for welfare of beneficiaries.
Even Reserve
Bank of India continued to refuse to part with information about financial
institutions for years despite ten orders from Shailesh Gandhi, the then
Information Commissioner, and one from Satyanand Mishra, a retired CIC.
The Supreme
Court upheld these orders and directed the RBI to disclose information about
financial institutions upholding that the information furnished by financial
institutions to the RBI was not in fiduciary capacity.
It is
unfortunate that several public authorities including the RBI invoked
exceptions wrongly apprehending possible detriment to the nation's economic
interests [Section 8(1)(a)], commercial confidence of banks [Section 8(1)(d)]
and fiduciary relationship with the banks to reject information access when the
RTI applicants sought the following categories of information under the RTI
Act.
Apex
financial regulatory Reserve Bank of India received an admonition from the
Supreme Court for its anti-transparency attitude. The apex court has surmised that many financial
institutions have resorted to such acts which are neither clean nor
transparent. The RBI in association with them has been trying to cover up their
acts from public scrutiny. It is the responsibility of the RBI to take rigid
action against those banks which have been practising disreputable business
practices, it said.
RBI &
transparency
The Supreme
Court explained: “In the instant case, the RBI does not place itself in a
fiduciary relationship with the financial institutions …. In this case neither
the RBI nor the banks act in the interest of each other. By attaching an
additional “fiduciary” label to the statutory duty, the Regulatory authorities
have intentionally or unintentionally created an in terrorem [in fear]
effect....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 RTI Act
and disclose the information sought by the respondents herein."
The exemption
contained in Section 8(1)(e) applies to exceptional cases and only with regard
to certain pieces of information, for which disclosure is unwarranted or undesirable.
If information is available with a regulatory agency not in fiduciary
relationship, there is no reason to withhold the disclosure of the same.
However,
where information is required by mandate of law to be provided to an authority,
it cannot be said that such information is being provided in a fiduciary
relationship. In the instant case, the financial institutions have an
obligation to provide all the information to the RBI and such an information
shared under an obligation/ duty cannot be considered as amounting to being
shared in fiduciary relationship.
Even if RBI
and the Financial Institutions shared a “Fiduciary Relationship,” Section 2(f)
of the RTI Act would still make the information shared between them to be
accessible by the public. The facts reveal that banks are trying to cover up
their underhand actions, they are even more liable to be subjected to public
scrutiny....
RBI
defending institutions or acting as
watchdog
The Supreme
Court has surmised that many financial institutions have resorted to such acts
which are neither clean nor transparent. The RBI in association with them has
been trying to cover up their acts from public scrutiny. It is the
responsibility of the RBI to take rigid action against those banks which have
been practicing disreputable business practices. “From the past we have also
come across financial institutions which have tried to defraud the public.”
“These acts
are neither in the best interests of the country nor in the interests of
citizens. To our surprise, the RBI as a watch dog should have been more
dedicated towards disclosing information to the general public under the Right
to Information Act," the court said.
Using
“public interests” against the public
The apex
court dismissed the RBI's plea that the economic interests of the country would
be hurt by disclosure. It held: “In the impugned order, the CIC has given
several reasons to state why the disclosure of the information sought by the
respondents would hugely serve public interests, and non-disclosure would be
significantly detrimental to public interests and not in the economic interests
of India. RBI’s argument that if people, who are sovereign, are made aware of
the irregularities being committed by the banks, then the country’s economic security
would be endangered, is not only absurd but is equally misconceived and
baseless.”
“It includes
in its ambit a wide range of economic transactions or economic activities
necessary and beneficial to attain the goals of a nation, which definitely
includes as an objective economic empowerment of its citizens. It has been
recognised and understood without any doubt now that one of the tools to attain
this goal is to make information available to people. Because an informed
citizen has the capacity to reasoned action and also to evaluate the actions of
the legislature and executives, which is very important in a participative
democracy and this will serve the nation’s interest better which as stated
above also includes its economic interests. Recognising the significance of
this tool it has not only been made one of the fundamental rights under Article
19 of the Constitution but also a Central Act has been brought into effect on
12th October 2005 as the Right to Information Act, 2005. Economic interest of a
nation in most common parlance is the goals which a nation wants to attain to
fulfill its national objectives. It is the part of our national interest,
meaning thereby national interest can’t be seen with the spectacles(glasses)
devoid of economic interest.
CIC’s
reasoning
The apex
court appreciated the CIC's reasoning saying they do not suffer from any error
of law, irrationality or arbitrariness. Earlier Madras High Court in K J
DoraiSwamy v AGM of SBI [(2006) 4MLJ 1877] where the issue was disclosure of
names of loan defaulters, held “the provision [Section 8(1)(j)] leaves no room
for any doubt that the 'Right to Privacy' fades out in front of the 'Right to
Information' and 'larger public interest'. If borrowers could find newer and
newer methods to avoid repayment of the loans, the banks are also entitled to
invent novel methods to recover their dues." [by publishing their names,
photos and details in newspapers]
In the era of
privatisation, the state should have strict regulatory institutions with honest
individuals to protect the common citizen from exploitation of profit oriented
private enterprises. Privatisation does not mean abdication of state
responsibility.
By:Madabhushi
Sridhar
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