Whether Cooperative Societies Come Under The Purview Of Sec. 2(H) Of RTI Act, 2005?

Mahi Agarwal

20 Feb 2023 5:14 AM GMT

  • Whether Cooperative Societies Come Under The Purview Of Sec. 2(H) Of RTI Act, 2005?

    It has long been a matter of debate whether a cooperative society would be subject to the requirements to provide information under the RTI Act and fall under the definition of "public authority" as per Section 2(h) of the said Act. Before delving into the nuances of the subject, lets understand what a cooperative society is. “A co-operative association is a union of...

    It has long been a matter of debate whether a cooperative society would be subject to the requirements to provide information under the RTI Act and fall under the definition of "public authority" as per Section 2(h) of the said Act.

    Before delving into the nuances of the subject, lets understand what a cooperative society is. “A co-operative association is a union of individuals commonly laborers, farmers, or small capitalists, formed for the prosecution in common of some productive enterprise, the profits being shared in accordance with the capital or labor contributed by each.”[1]

    Section 2(h) of RTI Act, 2005 provides for the definition of “public authority” to be governed which includes certain requisites to be followed i.e.

    1. “any authority or body or institution of self-government established or constituted by or under the Constitution;
    2. by any other law made by Parliament;
    3. by any other law made by State Legislature; by notification issued or order made by the appropriate Government,

    and includes any--

    (i) body owned, controlled or substantially financed;

    (ii) non-Government organizations substantially financed, directly or indirectly by funds provided by the appropriate Government”.[2]

    In interpretation clauses, the phrase "and includes" is frequently used to broaden the meaning of the words or phrases that appear in the statute's body[3] and they must be understood to encompass all that the interpretation clause demonstrates they must include in addition to what they actually mean given their nature and context.[4] In statutory interpretation, the term "includes" is often regarded to broaden the meaning of the words or phrases in the statute's body. In “Delhi Development Authority v. Bhola Nath Sharma”, the Supreme Court clarified the definitions of the words "means" and "includes." [5], “when such expressions are used, they may afford an exhaustive explanation of the meaning which for the purpose of the Act, must invariably be attached to those words and expressions.”

    The government has also clarified time and again that “according to Section 2(h) of the Act all institutions formed by laws made by state legislature is a “public authority” and therefore all co-operative institutions coming under the administrative control of The Registrar of co-operative societies are also public authorities”.[6]

    The Supreme Court has clarified in a case that “According to Article 12 of the Indian Constitution, cooperative societies that are not owned, controlled, or significantly financed by the State or Central Government, or that were not created, established, or constituted by a law enacted by the State Legislature or Parliament, qualify as "States." However, the existence of several institutions that have complied with legal requirements without being established by or subject to any legislation does not give the entity statutory identity. Numerous institutions are run and kept up to date in line with hazy legal standards.”[7] In another case, the Court observed that the State Government can exercise complete control over the Bank regardless of it operating as a cooperative society, it comes under the purview of the State as specified in Article 12 of the Constitution. In some cases, the courts took a different position as although statutory authorities like the Registrar, Joint Registrar, the Government, etc. are in charge of these co-op societies, but it cannot be said that the State has any direct or indirect control over the widespread and deeply ingrained affairs of the society. Although a co-operative society that is a body corporate may be required by law to be subject to general or supervisory oversight, this does not mean that the body's operations are under the type of State control that would make it a State instrument.[8]

    An instrument or agency of the Government is a corporation created by statute or incorporated under the law. It is crucial to think about whether a government-appointed board of directors is in charge of the administration because a corporation may not have any shares or shareholders. It is unclear what the directors' position is even when they are nominated by the government because they may not be subject to supervision. Before concluding that the State controls the Society thoroughly and extensively, it is important to take into account a number of additional relevant factors, such as: (1) How was the Society founded? (2) Is there any evidence of monopolistic behavior? (3) Are the Society's obligations covered by governmental or legislative mandates? and (4) Is it an authorized public body?[9]

    Moreover, the courts have illustrated that a poorly inclusive or comprehensive test cannot be created that would provide a sufficient response to this inquiry. The proper split of corporations into those that are instruments or agents of the government and those that are not cannot be determined by a clear-cut formula.[10]

    The same rule has been approved in “Ajai Hasia v. Khalid Mujib”[11], the Supreme Court provided that “while it is essential to give the term "other authorities" a broad interpretation, it should not be stretched so far as to include every autonomous body that has legal standing”. Instead, the Supreme Court stated that these tests for determining whether a corporation can be said to be an instrumentality or agency of the government must be used with care and caution.

    Whilst, in this judgement, the Supreme court tried to summarize the tests gathered from the decision in the International Airport Authority's[12] case and the requirements are as follows:

    1. “If the entire share capital of the Corporation is held by Government it would go a long way towards indicating that the Corporation is an instrumentality or agency of Government”;
    2. “The financial assistance of the State is so much as to meet almost entire expenditure of the Corporation, it would afford some indication of the Corporation being impregnated with Governmental character”;
    3. “A relevant factor whether the Corporation enjoys monopoly status which is the State conferred or State protected”;
    4. Existence of "deep and pervasive State control;
    5. If the functions of the Corporation are of public importance and closely related to Government functions it would be a relevant factor in classifying the Corporation as an instrumentality or agency of Government;
    6. If a department of Government is transferred to a corporation, it would be a strong factor supportive of this 'inference' of the Corporation being an instrumentality or agency of Government.”[13]

    The Supreme Court in State of “Mysore v. Allum Karibasappa & Ors[14]. while interpreting Section 54 of the Mysore Cooperative Societies Act, 1959 concluded that “the word "control" was intended to regulate, hold in check, and restrict from acting since it connotes check, constraint, or influence.” In accordance with Section 2(h)(d)(i) of the RTI Act, an organization would not qualify as a "public authority" simply by virtue of the "supervision" or "regulation" it receives as such from a statute or another source. According to the Supreme Court, “the word ‘controlled’ in Section 2(h)(d)(i) of the Act must be concieved in relation to a body that is owned by or substantially financed by the appropriate government, i.e., the control of the body is to the extent that it amounts to substantial control over the management and affairs of the body.”[15]

    In Black's Law Dictionary (6th Edn.), the word 'substantial' is defined as “of real worth and importance; of considerable value; valuable. Belonging to substance; existing; real: not seeming or imaginary; not illusive; solid; true; veritable.”[16] One cannot claim the ground of substantial funding by merely taking benefit of the government-funded subsidiaries, grants, exemptions, privileges, etc. that are accessible to the general public regardless of the statutory status. The funding must be so critical to the business that it aids in everyday operations and would be difficult to maintain without it. In the case of “Thalappalam Service Corp. Bank Ltd. vs. State of Kerala” the court established that the “burden of proof lies on the applicant who requests information to demonstrate that a body is owned, controlled, or substantially financed, or that a non-government organization is significantly supported directly or indirectly by the money granted by the appropriate Government.”[17]

    The Right to Information Act, 2005 is an Act which provides for access to information under the control of public authorities. However, it comes with certain restrictions, Moreover, in several judgments including “Kharak Singh Vs. State of U.P. and others”[18], the Supreme Court has also affirmed the legitimacy of the right to privacy as a basic right under Article 21 of the Indian Constitution.

    Both of these rights, however, are certainly subject to regulation, restriction, and curtailment where doing so is in the greater good of society.

    Over and above that, if the subject of the inquiry of an RTI application with regard to public authorities falls under clause (j) of sub section (1) of section 8 of the RTI Act, such authorities can refuse to divulge information on the premise of the requirement of inquiry relating to personal information whose disclosure is unrelated to any activity or interest of the public.[19]

    But the question, what is the way forward? To answer that, the SC provided an alternative, stating that “the Registrar of Cooperative Societies operating under the Cooperative Societies Act is a public authority within the meaning of Section 2(h) of the Act and has been granted a number of statutory powers under the respective Act under which he is functioning”. However, one may not be able to obtain information from cooperative societies which are not owned, controlled, or substantially financed by the appropriate Government. He also has a duty to uphold the requirements of the RTI Act and provide information to a citizen in accordance with the RTI Act. He is endowed with a number of statutory authorities under the particular Act under which he is employed. Therefore, even if a society does not meet the definition of "public authority" on its own, the statutory authorities under the Cooperative Societies Act, which are considered public authorities under Clause (c) of Section 2(h), are required to provide information after obtaining it from the relevant cooperative society.[20]

    Views are personal.

    [1] “Mooney v. Farmers' Mercantile & Elevator Co. of Madison, 138 Minn. 199, 164 N.W. 804, 805”

    [2] “The Right to Information Acct, 2005, § 2, No. 22, Acts of Parliament, 2005 (India).”

    [3] “Krishak Bharti Cooperative Ltd. vs Ramesh Chander Bawa, W. P. (C) 6129/2007”

    [4] “CIT v. Taj Mahal Hotel, (1971) 3 SCC 550”

    [5] “Delhi Development Authority v. Bhola Nath Sharma, (2011) 2 SCC 54”

    [6] “Thalappalam Service Corp. Bank Ltd. vs. State of Kerala,(2013) 16 SCC 82.”

    [7] “Executive Committee of Vaish Degree College, Shamli and Others v. Lakshmi Narain and Ors, (1976) 2 SCC 58”

    [8] “S.S. Rana v. Registrar, Co-operative Societies and Anr., (2006) 11 SCC 634.”

    [9] Supra at 6

    [10]Ramana v. I.A. Authority of India, AIR 1979 SC 1628.”

    [11] “Ajai Hasia v. Khalid Mujib, (1981) 1 SCC 722”

    [12] Supra at 11.

    [13] Ibid

    [14] “State of Mysore v. Allum Karibasappa & Ors, (1974) 2 SCC 498 : AIR. 1974 SC. 1863”

    [15] Supra at 6

    [16] “4th Edition, Henry Campbell Black, Black Law Dictionary, pg. No. 1597, St. Paul, Minn. West publishing co. 1968.”

    [17] Supra at 6.

    [18] “Kharak Singh Vs. State of U.P. and others, AIR 1963 SC 1295.”

    [19] Supra at 2.

    [20] Supra at 6.

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