RESERVE BANK OF INDIA v. JAYANTILAL N. MISTRY

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77Copy pinpoint77. In one of the case, the respondent S.S. Vohra sought certain infomiation in relation to the Patna Branch of ICICI Bank and advisory issued to the Hong Kong Branch of ICICI Bank. The contention of the respondent was tliat the Finance Minister · had made a written statement on the floor of the House on B- 24.07 .2009 that some banks like SBI, ICICI, Bank of Baroda, Dena Bank etc., were violating FEMA Guidelines for opening of accounts and categorically mentioned that the Patna Branch of ICICI Bank Ltd. had opened some fictitious accounts which were opened .by fraudsters and hence an advisory note was C issued to the concerned branch on December .2007 for·its irregularities. The Finance Minister even mentioned that in the year 2008 the ICICI Barik Ltd. was also warned for alleged irregular dealings in securities in Hong_ Kong. Hence·, the respondent sought such advisory note as issued by the RBI to D ICICI Bank. The Central Information Commissioner in the impugned order considered the RBI Master Circular dated 01.07.2009 to all the commercial banks giving various directions and finally held as under:- "It has been contended by the Counsel on behalf of the E ICICI Bank Limited that an advisory note is prepared after reliance on documents such as Inspection Reports, Scrutiny reports etc. and hence, will contain the contents of those documents too which are otherwise exempt from disclosure. We have already expressed our view in express terms that whether or not an Advisory Note shall be disclosed under the RTI .Act will have to be determined on case by case basis. In some other case, for example, there may·be a situation.where some contents of the Advisory Note may have to be severed to such an extent that details of Inspection Reports etc: can be separated from the Note and then be provided to the RTI Applicant. Section 10 of the RTI Act leaves it open to decide each case on its merits after having satisfied ourselves whether an Advisory Note needs to be provided as it is or whether H

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[M. Y. EQBAL, J.]

some of its contents may be severed since they may be A exempted per se under the RTI Act. However, we find no reason, whatsoever, to apply Section 10 of the RTI Act in order to severe the contents of the Advisory Note issued by the RBI to the ICICI Bank Limited as the matter has already been placed on the floor of the Lok Sabha by the B Hon'ble Finance Minister. This is a matter of concern since it involves the violation of policy Guidelines initiated by the RBI and affects the public at large. Transparency cannot be brought overnight in any system and one can hope to witness c. accountability in a syster;n only when its end users are well-educated, well-informed and well-aware. If the customers of commercial banks will remain oblivious to the violations of RBI Guidelines and standards which such banks regularly commit, then eventually the whole D financial system of the country would be at a monumental loss. This can only be prevented by suo motu disclosure of such information as the penalty orders are already in public domain." E

78Copy pinpoint78. Similarly, in another case the respondent Jayantilal N. Mistry sought information from the CPIO, RBI in respect of a Cooperative Bank viz. Saraspur Nagrik Sahkari Bank Limited related to inspection report, which was denied by the CPIO on the ground that the information contained therein were received by RBI in a fiduciary capacity and are exempt under Section 8(1 )(e) of RTI Act. The CIC directed the petitioner to furnish that information since the RBI expressed their willingness to disclose a summary of substantive part of the inspection report to the respondent. While disposing of the appeal the CIC observed:- · "Before parting with this appeal, we would iike to record our.observations that in a rapidly urif9lding economics scenario, there are public institutions, both iil the banking H

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A and non-banking sector, whose activities have not served public interest. On the contrary, some such institutions may have attempted to defraud the public of their moneys kept with such institutions in trust. RBI being the Central Bank is one of the instrumentalities available to the public which as a regulator can inspect such institutions and initiate remedial measures where necessary. It is important that the general public, particularly, the share holders and the depositors of such institutions are kept aware of RBl's appraisal of the functioning of such institutions and taken into confidence about the remedial actions initiated in specific cases. This will serve the public interest. The RBI Would therefore be well advised to be proactive in disclosing information to the public in general and the information seekers under the RTI Act, o in particular. The provisions of Section 10(1) of the RTI Act can therefore be judiciously used when necessary to adhere to this objective."

79Copy pinpoint79. In another case, where the respondent P.P. Kapoor sought information inter alia about the details of default in loans taken from public sectqr banks by industrialists, out of the list of defaulters, top 100 defaulters, names of the businessmen, firm name, principal amount, interest amount, date of default and date of availing the loan etc. The said information was denied by the CPIO mainly on the basis that it was held in fiduciary capacity and was exempt from disclosure of such information. Allowing the appeal, the CIC directed for the disclosure of such information. The CIC' in the impugned order has rightly obse.rved as under:- "I wish government and its instrumentalities would remember that all information held by them is owned by citizens, who are sovereign. Further, it is often seen that banks and financial institutions continue to provide loans to industrialists despite their default in repayment of an

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[M. Y. EQBAL, J.]

earlier loan." This Court in UP Financial Corporation . A . vs. Gem Cap/ndia Pvt. Ltd., AIR1993 SC 1435 has noted that: · "Promoting industrialization at the cost of public funds does not serve the public interest, it merely amounts to transferring public money to private account'. Such B practices have led citizens to believe that defaulters can get away and play fraud on public funds. There is no doubt that information regarding top industrialists who have defaulted in repayment of loans must be brought to citizens' knowledge; there is certainly a C larger public interest that could be served on .... disclosure of the same. In fact, information about industrialists who are loan defaulters of the country may put pressure on such persons to pay their dues. This would·have the impact of alerting Citizens about those who are defaulting in payments and could also have . some impact in shaming them. RBI had by· its Circular DBOD No. BC/CIS/47/

20. 16.002/94 dated April 23, 1994 directed all banks to send a report on their defaulters, which it would share with all banks and financial institutions, with the following objectives: · · 1) To alert banks and financial institutions (Fis) and to put them on guard against borrowers who have defaulted in their dues to.lending institutions; 2) To make public the names of the borrowers who have defaulted and against whom suits· have been filed by banks/ Fis." . G

80Copy pinpoint80. At this juncture, we may refer the decision of this Court in Mardia Chemicals Limited vs. Union of India, (2004) 4 sec 311, wherein this court while considering the validity of SARFAESI Act and recovery of non-performing assets by banks and financial institutions ih India, held :- H

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A "............ .it may be observed that though the transaction may have a character of a private contract yet the question of great importance behind such transactions as a whole having far reaching effect on the economy of the country cannot be ignored, purely restricting it to individual B transactions more particularly when financing is through banks and financial institutions utilizing the money of the · people in general namely, the depositors in the banks and public money at the disposal of the financial institutions. Therefore, wherever public interest to such c a large extent is involved and it may become necessary to achieve an object which serves the public purposes, individual rights may have to give way. Public interest has always been considered to be above the private interest. Interest of an individual may, to some extent, be o affected but it cann0t have the potential of taking over the public interest having an impact in the socio- economic drive of the country ........... "

81Copy pinpoint81. In rest of the cases the CIC has considered elaborately the information sought for and passed orders which E in our opinion do not suffer from any error of law, irrationality or arbitrariness.

82Copy pinpoint82. We have, therefore, given our anxious consideration to the matter and came to the conclusion that the Central F Information Commissioner has passed the impugned orders giving valid reasons and the said orders, therefore, need no interference by this Court. ·

83Copy pinpoint83. There is no merit in all these cases and hence they are dismissed. G

Kalpana K. Tripathy Matters dismissed.