Full Judgment Text
THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment delivered on: 02.03.2015
+ W.P.(C) 6751/2013
SUBHASH CHANDRA AGRAWAL ..... Petitioner
versus
INDIAN FARMERS FERTILISER COOPERATIVE
LTD. & ANR. ..... Respondents
AND
+ W.P.(C) 824/2014
DR. M HAROON SIDDIQUI ..... Petitioner
versus
INDIAN FARMERS FERTALISER COOPERATIVE
LTD. & ORS. ..... Respondents
Advocates who appeared in this case:
For the Petitioners : Mr Ramesh K. Mishra for Mr Prashant
Bhushan in W.P.(C) 6751/2013.
Mr Prashant Chandra Sen with Ms Ankita
Saikia and Mr Rohit Kumar in W.P.(C) 824/2014
For the Respondent : Mr Arvind Nigam, Sr. Advocate with Mr Rajiv
Bansal, and Mr Aman Nandrajog for IFFCO.
Mr Vikram Jetly, CGSC for UOI in
W.P.(C) 6751/2013.
Mr Sanjeev Narula (CGSC) and Mr Ajay Kalra
for UOI (R-2 & R-3) in W.P.(C) 824/2014.
CORAM:-
HON’BLE MR JUSTICE VIBHU BAKHRU
JUDGMENT
VIBHU BAKHRU, J
1. The petitioners have filed the present petitions impugning a common
order dated 05.08.2013 (hereafter ‘impugned order’) passed by the Central
W.P.(C) Nos. 6751/2013 & 824/2014 Page 1 of 18
Information Commission (CIC) holding that the respondent - Indian
Farmers Fertiliser Cooperative Limited (hereafter ‘IFFCO’) is not a ‘Public
Authority’ within the meaning of Section 2(h) of the Right to Information
Act, 2005 (hereafter the ‘Act’).
2. The relevant facts pertaining to W.P.(C) No.6751//2013 are that the
petitioner - Subhash Chandra Agrawal, filed an application dated
20.01.2011 under the Act with IFFCO seeking various information. By a
letter dated 03.02.2011, IFFCO rejected the said application stating that
IFFCO has no government equity and IFFCO is not a ‘public authority’
under Section 2(h) of the Act. On 31.03.2013, the first appeal filed by
Subhash Chandra Agarwal against the letter dated 03.02.2011 was also
rejected. Thereafter, Subhash Chandra Agarwal filed a second appeal
(No.CIC/SS/A/2011/001245) before the CIC against the order dated
31.03.2013.
3. Subhash Chandra Agrawal also filed an application dated 20.01.2011
under the Act with the Department of Agriculture and Co-operation seeking
various information. By a letter dated 24.02.2011, the Department of
Agriculture and Co-operation transferred the said application to IFFCO. On
04.03.2011, the first appeal filed by Subhash Chandra Agarwal against the
letter dated 24.02.2011 was also transferred by the Department of
Agriculture and Co-operation to the Appellate Authority of IFFCO.
Thereafter, Subhash Chandra Agrawal filed a second appeal
(No.CIC/SS/A/2011/001246) before the CIC against the order dated
04.03.2011.
W.P.(C) Nos. 6751/2013 & 824/2014 Page 2 of 18
4. The relevant facts pertaining to W.P.(C) No.824/2014 are that the
petitioner - Dr. M. Haroon Siddiqui, filed applications dated 18.05.2010
and 22.05.2010 under the Act with IFFCO seeking various information. On
02.06.2010, IFFCO rejected the said applications contending that it was not
a ‘public authority’ within the meaning of Section 2(h) of the Act. On
08.07.2010, the appeal filed by Dr. M. Haroon Siddiqui challenging the
refusal of information was rejected by the First Appellate Authority of
IFFCO. Thereafter, Dr. M. Haroon Siddiqui filed a second appeal
(No.CIC/SS/A/2011/001565) before the CIC against the order of First
Appellate Authority dated 08.07.2010.
5. The CIC, by the impugned order dated 05.08.2013, rejected all three
aforementioned second appeals filed by the petitioners and held that IFFCO
is not a public authority under the Act. The CIC observed that IFFCO is not
substantially financed and controlled by the appropriate government.
6. Thus, the issue to be addressed is whether IFFCO is substantially
financed and/or controlled by the appropriate government so as to fall
within the sweep of Section 2(h) of the Act.
Submissions
7. The petitioners contended that IFFCO is a public authority within the
meaning of Section 2(h) of the Act as according to them, IFFCO is
controlled and substantially financed by the Central Government. It was
contended that the Government has exhaustive powers under the Multi-
State Cooperative Societies Act, 2002 (hereafter the ‘MSCS Act’) for
taking over management and control of Multi-State Cooperative Societies
W.P.(C) Nos. 6751/2013 & 824/2014 Page 3 of 18
and as IFFCO is a Multi-State Cooperative Society, the Government
exercises substantial control by virtue of the MSCS Act. The petitioners
relied on the decision of this Court in Krishak Bharti Cooperative Ltd. v.
Ramesh Chander Bawa : (2010) 118 DRJ 176 in support of their
contention. In particular, the learned counsel referred to paragraph 59 of the
said judgment which read as under:-
“59. Just as the right to vote of the ‘little’ citizen is of profound
significance in a democracy, so is the right to information. It is
another small but potent key in the hands of India's ‘little’ people
that can ‘unlock’ and lay bare the internal workings of public
authorities whose decisions affect their daily lives in myriad
unknown ways. What was said of the working of a government in
a democracy in S.P. Gupta v. Union of India , 1981 Supp SCC 87
should hold good for the working of a multi-state Co-operative
society too. The Court there said (SCC, p. 453):
“In a government of responsibility like ours, where all the
agents of the public must be responsible for their conduct,
there can be but few secrets. The people of this country
have a right to know every public act, everything that is
done in a public way, by their public functionaries.”
In the context of the working of multi-state co-operative
societies, which by their very nature facilitate participatory
decision-making through a network of elected bodies at different
levels, the opening up of their working to public scrutiny through
the RTI Act can only be in their best interests. Instead of shying
away from, the RTI Act, large multi-state co-operative societies
like KRIBHCO, NCCF and NAFED should view it as an
opportunity.”
8. It was further contended that IFFCO also fell within the
administrative control of the Ministry of Chemicals and Fertilizers,
Department of Fertilizers. In support of this contention, the petitioners
relied on the Government of India (Allocation of Business) Rules, 1961.
W.P.(C) Nos. 6751/2013 & 824/2014 Page 4 of 18
The Second Schedule to the said Rules provides for distribution of subjects
amongst departments and it is expressly indicated that “Administrative
responsibility for fertilizers production units in the cooperative sector,
namely, Indian Farmers Cooperative Limited (IFFCO), Krishak Bharti
Cooperative Limited (KRIBHCO)” fall with the Department of Fertilizers.
9. It was next contended that several constituent members of IFFCO are
units which are controlled and funded by State Government and are public
authorities. It was further stated that the Board of Directors of IFFCO also
constitute nominees of the Central Government and, therefore, the Central
Government exercises direct control over IFFCO, through its nominees.
10. The petitioners also submitted that IFFCO is substantially funded by
the Central Government. It was argued that the infrastructure of IFFCO was
directly funded and aided by the Central Government, which had
subscribed to majority of its initial share capital. In addition, it was asserted
that large amount of subsidies are paid by Central Government to IFFCO;
the Central Government had released following subsidies to IFFCO:-
“(a) For indigeneous P&K Fertilizers – Rs. 5935.22 Crores in
2010-11; Rs. 5968.28 Crores in 2011-12; Rs. 4489.78
Crores in 2012-13.
(b) For imported P&K Fertilizers – Rs. 2962.37 Crores in
2010-11; Rs. 2104.61 Crores in 2011-12 and Rs. 1998.94
Crores in 2012-13.
(c) For indigeneous Urea – Rs. 2924.15 Crores in 2010-11;
Rs. 3385.49 Crores in 2011-12 and Rs. 3873.56 Crores
in 2012-13.
(d) For import of Urea – Rs. 5935.22 Crores in 2010-11; Rs.
5968.28 Crores in 2011-12 and Rs. 4489.78 Crores in
2012-13.”
W.P.(C) Nos. 6751/2013 & 824/2014 Page 5 of 18
11. The petitioners further stated that in addition to the general subsidies,
a sum of 1680 crores had been released to IFFCO as 5 units of IFFCO
`
were sponsored under the Corporation Sponsored Scheme for Agricultural
Marketing and inputs. The petitioners relied upon the report of the National
Cooperative Development Corporation (hereafter ‘NCDC’) for the year
2012-13 in support of this contention.
12. The learned counsel for the petitioners urged that an authority would
not cease to be a public authority by mere repatriation of the equity as long
as potential for being so controlled or substantially financed in future
existed. He referred to Section 61 of the MSCS Act to show that the central
government had the potential to control such societies in future. He argued
that the Central Government provided land, building and other
infrastructure facilities at concessional rates to IFFCO, without which
IFFCO would struggle to exist. He argued that "control" or "substantial
finance" need not necessarily be in presenti . Reliance was placed on the
decision of a coordinate bench of this Court in Krishak Bharti (supra) in
support of this contention . He further submitted that the subsidies provided
by the central government were substantial and material in nature and in
absence of such subsidies the core function of manufacturing and
distribution of fertilizers by IFFCO would not be feasible. Further, IFFCO
is directly financed by its members which are state owned cooperative
societies.
13. The learned counsel for respondents controverted the submissions
made on behalf of the petitioners. It was stated that the share capital
subscribed by the Central Government was returned by IFFCO in 2004 and
W.P.(C) Nos. 6751/2013 & 824/2014 Page 6 of 18
as such the Central Government did not hold any shares of IFFCO. It was
further submitted that all functional Directors of IFFCO were appointed by
the Board of Directors of IFFCO and other Directors were appointed by its
shareholders. The Central Government neither appoints any Directors on
the Board of IFFCO nor exercises any management control. The
respondents also disputed that a sum of ` 1680 crores was granted to IFFCO
by NCDC. It was asserted that a sum of ` 1680 crores, as indicated in the
report of NCDC, was a cumulative amount of interest bearing working
capital loan/term loan which was provided to IFFCO over a period of 50
years. And, IFFCO had repaid this loan in full along with interest.
14. Although it was not disputed that the IFFCO received large amount
of subsidies from Central Government, it was submitted that the said
subsidies were, essentially, subsidies granted to farmers as a part of the
efforts of the Government to control prices of fertilizers. It was submitted
that such subsidies could not be considered as providing substantial
financing to IFFCO. The respondents relied upon the decision of the
Supreme Court in Thalappalam Ser. Coop. Bank Ltd. and Ors. v. State of
Kerala and Ors. : (2013) 16 SCC 82 in support of their contention that
general subsidies would not constitute substantially financing a body for the
purposes of Section 2(h) of the Act.
Reasoning and conclusion
15. Section 2(h) of the Act, which defines public authority, reads as
under:-
“(h) “public authority” means any authority or body or
institution of self-government established or constituted,—
W.P.(C) Nos. 6751/2013 & 824/2014 Page 7 of 18
(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) non-Government Organisation substantially
financed, directly or indirectly by funds provided by
the appropriate Government;”
16. The Supreme Court in Thalappalam (supra) had expressly held:-
“30. The legislature, in its wisdom, while defining the
expression “public authority” under Section 2(h), intended to
embrace only those categories, which are specifically included,
unless the context of the Act otherwise requires. Section 2(h)
has used the expressions “means” and “includes”. When a word
is defined to “mean” something, the definition is prima facie
restrictive and where the word is defined to “include” some
other thing, the definition is prima facie extensive. But when
both the expressions “means” and “includes” are used, the
categories mentioned there would exhaust themselves. ….”
17. The Supreme Court held that the above definition is exhaustive and
the categories of authorities referred to in Section 2(h) of the Act exhaust
all entities/bodies that could be considered as public authorities. It was held
that the former part of Section 2(h) of the Act was concerned with the
following categories:-
“(1) an authority or body or institution of self-government
established by or under the Constitution,
(2) an authority or body or institution of self-government
established or constituted by any other law made by Parliament,
(3) an authority or body or institution of self-government
established or constituted by any other law made by the State
Legislature, and
W.P.(C) Nos. 6751/2013 & 824/2014 Page 8 of 18
(4) an authority or body or institution of self-government
established or constituted by notification issued or order made
by the appropriate Government.”
And, the later part of Section 2(h) of the Act embraced within its fold:
“(5) a body owned, controlled or substantially financed,
directly or indirectly by funds provided by the appropriate
Government,
(6) non-governmental organisations substantially financed
directly or indirectly by funds provided by the appropriate
Government.”
18. Undisputedly, IFFCO does not fall within the former part of Section
2(h) of the Act. Thus, the only question to be examined is whether IFFCO
falls within the later part of Section 2(h) of the Act; that is, whether IFFCO
is a body owned, controlled or substantially financed by an appropriate
government and/or it is a non-governmental organisation substantially
financed by funds provided by an appropriate government?
19. The first issue to be addressed is whether IFFCO is controlled by an
appropriate Government. IFFCO was registered as a Cooperative Society
under the MSCS Act on 03.11.1967 and its registration was sponsored by
NCDC. Subsequently, the Central Government, Ministry of Petroleum and
Chemicals issued a letter of intent to IFFCO for setting up a fertilizer plant
at Kandla. Apparently, the Co-operative League of U.S.A had informed the
Government of India that American Cooperatives had shown interest in
collaborating with Cooperatives in India for establishing a Fertiliser Plant
in India. Thereafter, the Government of India requested US Aid for sending
a team of expert for preparing a project report on the location, size, type of
production, process and investment required for establishing a fertilizer
W.P.(C) Nos. 6751/2013 & 824/2014 Page 9 of 18
plant in the cooperative sector. Pursuant to this request, a team had visited
India in June/July 1967 and, subsequently, a report was presented by
International Cooperative Development Association recommending
establishment of a fertilizer plant in the cooperative sector. The fertilizer
plant was to be funded by equity from cooperative members; equity from
the Government of India; loan from the Government of India and financing
agency; and foreign currency loan from US Aid. It is not disputed that at
the material time IFFCO was controlled by the Central Government. The
members of the Board of Directors as well as the Chairman had been
nominated by the Central Government and IFFCO’s venture was
substantially funded by the Central Government.
20. Concededly, the equity subscribed by the Central Government was
retired in 2004. As a consequence of the same, central government ceased
to have any equity in IFFCO. Insofar as the Board of Directors in IFFCO is
concerned, the Bye-laws of IFFCO provide that the Board of Directors of
IFFCO would comprise of not more than twenty-one directors, excluding
functional and Co-opted Directors. Out of the above, ten directors would be
elected from the direct delegates of Cooperative Marketing Federations
which fulfill the specified criteria and eight directors would be elected by
the general body of IFFCO. Bye-law 34(iii) provides for appointment of
directors by the Central Government reads as under:-
“(iii) Not more than three persons to be nominated by the
Central Government based on equity share capital held by the
Central Government i.e. one person if the equity share capital is
less than 26%, two persons if the equity share capital is 26% or
more but less than 51%; and three persons if the equity share
capital is 51% or more of the total issued share capital;”
W.P.(C) Nos. 6751/2013 & 824/2014 Page 10 of 18
21. In addition to the above, the Bye-laws also provide for co-opting
experts and professionals on the Board of Directors.
22. Since the Central Government has ceased to hold any shares in
IFFCO, it may not be entitled to appoint any Director on the Board of
IFFCO. It is apparent from Bye-law 34, which relates to constitution of the
Board of Directors of IFFCO, that the Central Government exercises little
control insofar as the constitution of the Board of Directors is concerned.
23. The Supreme Court in Thalappalam (supra) observed that the
expression “controlled” under Section 2(h)(d)(i) of the Act must be of a
substantial nature. The court held as under:-
“44. We are of the opinion that when we test the meaning of
expression “controlled” which figures in between the words
“body owned” and “substantially financed”, the control by the
appropriate Government must be a control of a substantial
nature. The mere “supervision” or “regulation” as such by a
statute or otherwise of a body would not make that body a
“public authority” within the meaning of Section 2 (h)(d)(i) of
the RTI Act. In other words just like a body owned or body
substantially financed by the appropriate Government, the
control of the body by the appropriate Government would also
be substantial and not merely supervisory or regulatory. The
powers exercised by the Registrar of Cooperative Societies and
others under the Cooperative Societies Act are only regulatory
or supervisory in nature, which will not amount to dominating
or interfering with the management or affairs of the society so
as to be controlled. The management and control are statutorily
conferred on the Management Committee or the Board of
Directors of the Society by the respective Cooperative Societies
Act and not on the authorities under the Cooperative Societies
Act.
W.P.(C) Nos. 6751/2013 & 824/2014 Page 11 of 18
45. We are, therefore, of the view that the word “controlled”
used in Section 2 (h)(d)(i) of the Act has to be understood in the
context in which it has been used vis-à-vis a body owned or
substantially financed by the appropriate Government, that is,
the control of the body is of such a degree which amounts to
substantial control over the management and affairs of the
body.”
24. As explained by the Supreme Court, the control exercised by an
appropriate Government must be qualitatively different from regulatory
powers as may be conferred under statutes under which the entities/bodies
are incorporated. Undisputedly, incorporated entities are required to comply
with the statute under which they are incorporated. The supervisory and
regulatory control exercised by authorities under such enactments is
primarily to ensure compliance with the concerned statutes. For example,
companies incorporated under the Companies Act, 1956 are required to
comply with the provisions of the statute and under Section 408 of the said
Act, the Central Government has the power to appoint directors in the
interest of the company, its shareholders or public interest. However, such
power is exercised if it is found that the affairs of a company are being
conducted in a manner oppressive to any member(s) of the company or
prejudicial to the interest of the company or public interest. Clearly, such
powers are only to ensure that the affairs of the company are conducted in a
manner, which is compliant with the provisions of law. As held by the
Supreme Court in Thalappalam (supra) , existence of such powers of
regulation and supervision would not mean that a body is controlled by an
appropriate government. In the context of Section 2(h)(d)(i) of the Act,
control would mean a pervasive control which includes the power to
conduct the affairs of a body and the ability to influence and determine its
W.P.(C) Nos. 6751/2013 & 824/2014 Page 12 of 18
course. Such control is qualitatively different from mere supervisory and
regulatory control. In this view, IFFCO cannot be considered as an
authority controlled by an appropriate government.
25. Although, it was contended that some of the constituent members of
IFFCO are public authorities and are controlled by state governments, there
is no material on record to determine, whether State governments indirectly
control IFFCO or that the constituent members of IFFCO are
instrumentalities of State Government.
26. The CIC considered the question whether IFFCO was controlled by
the central government and concluded as under:-
“We are, however, not inclined to accept this argument. Suffice
to say that the powers conferred on the Central Registrar or the
Central Government are merely regulatory powers. They do not
establish control of the Central Govt. or the Central Registrar
on the functioning of IFFCO. Moreover, the Central
Registrar/Central Govt. cannot exercise powers in an arbitrary
manner at their sweet will. These powers can be exercised only
on the fulfillment of certain preconditions, as spelled out in
these sections. Viewed in this light, we do not find any merit in
this argument and reject the same.
47. As regards the powers exercisable by the Central Govt.
u/s 122 and 123 of MSCS Act, suffice to say that these powers
are available to the Central Govt. only when it has 51% paid up
share capital in the Society. As noted herein before, the Central
Govt. has remitted its stakes in IFFCO in 2004 and thus, these
provisions have become irrelevant.
48. Let us now consider the issue of the alleged control of the
Central Government on IFFCO by virtue of the composition of
its Board of Directors. Suffice to say that Central Govt. can
nominate three Directors subject to its stakes in the equity share
capital. The Central Govt. had majority stakes in the equity
W.P.(C) Nos. 6751/2013 & 824/2014 Page 13 of 18
share capital before 2004 but it remitted its stakes in that year.
Consequently, these [sic] is no Central Govt. appointee in the
Board of Directors. Coming to the question of nomination of
representatives of Apex Cooperative Marketing Federations in
the Board of Directors of IFFCO, suffice to say that it would be
erroneous to presume that the nominees of Federations would
always be serving officers of the Central Govt. Even private
individuals can be nominated by the Federations. This
argument, therefore, does not help the appellant’s case.”
27. I find no infirmity with the aforesaid view.
28. The next question to be addressed is whether IFFCO is substantially
financed by an appropriate Government. Although, it was asserted that a
sum of ` 1680 crores had been provided as a grant by NCDC to IFFCO, the
same has been disputed and it has been affirmed on behalf of IFFCO that
the said amount only represented loans which had been repaid with full
interest. There is no reason to doubt this statement made on behalf of
IFFCO. Although, IFFCO was established by the funds provided by the
Central Government, it was asserted that the said funds had been returned
and the equity has been re-purchased. It was also asserted that IFFCO had
paid substantial dividends to the Central Government on the equity
subscribed by the Central Government.
29. There is also no material to indicate that the equity was repaid at less
than the fair value which would indicate that certain residual value due to
the Central Government remain imbedded in the undertaking of IFFCO.
30. The petitioners had contended that IFFCO would not cease to be a
public authority even if the equity was repatriated. The petitioners relied on
W.P.(C) Nos. 6751/2013 & 824/2014 Page 14 of 18
the decision of a Coordinate Bench of this Court in Krishak Bharti (supra) ,
in support of their contention.
31. The above observations cannot be read to mean that in all cases
where an entity has ceased to be financed or controlled by an appropriate
Government, the body would continue to be a public authority. I am unable
to subscribe to the view that a body would continue to be a public authority
even though it is not controlled or substantially financed by an appropriate
government. In my view, the language of Section 2(h) of the Act does not
support this interpretation. However, even if it is assumed that in certain
cases where an entity is owned or substantially controlled by an appropriate
government, temporary cessation of such control may not result in the body
ceasing to be a public authority under Section 2(h) of the Act, IFFCO
would not be a public authority. This is so because there is no reason to
believe that the Central Government has withdrawn its financial support
and equity for a temporary period and there is a potential for Central
Government to introduce substantial finances in IFFCO in future; there is
also no indication that the Central Government has the potential to take-
over control of IFFCO or is likely to do so in future.
32. The only remaining issue to be addressed is whether disbursement of
fertilizer subsidies would render the recipient a public authority within the
meaning of Section 2(h)(d) of the Act. It cannot be disputed that in certain
cases where large subsidies are provided for support of a body, the same
may render the body as a public authority within the meaning of Section
2(h)(d)(i) of the Act. This would certainly be the case where initiatives of
appropriate government(s) are implemented by bodies/entities, which are
W.P.(C) Nos. 6751/2013 & 824/2014 Page 15 of 18
funded by the government by way of subsidies or grants. In such cases, the
body financed would be an instrumentality of the government for
undertaking such initiatives. However, in cases where subsidies are
provided under a general scheme to reduce the costs of products, the same
would be qualitatively different from the subsidies or grants provided for
financing a particular body, which is acting as an extension of the state for
implementing its programme. The fertilizer subsidies are not such
subsidies. In substance and in effect, fertilizer subsidy is provided to the
consumers of fertilizers i.e. the farmers by ensuring that the price of
fertilizers is below its cost of production/import. Subsidy is provided to
fertilizer producers as well as fertilizer importers based on the quantum of
fertilizer sold. The quantum of fertilizer subsidy is directly related to the
quantum of fertilizer sold; every bag of fertilizer indicates the amount of
subsidy adjusted in the price of that bag.
33. In my view, fertilizer subsidies would not amount to substantially
financing a body as contemplated under Section 2(h)(d)(i) of the Act, for
the reason that subsidy is not for support of any particular organization but
is available to all manufacturers or importers who manufacture the
specified fertilizers. Thus, the object of such subsidy is not to support any
organization, but to subsidize the sale price of fertilizers for the benefit of
the consumers; the fertilizer manufacturers and importers are only the
means of transmitting such subsidy.
34. The CIC had examined the above aspects and held as under:-
“54. In view of the above, we are of the opinion that subsidy is
being given to IFFCO and other fertilizer manufacturers for
meeting the difference between the cost of production and the
W.P.(C) Nos. 6751/2013 & 824/2014 Page 16 of 18
sale price fixed by the Central Govt. The subsidy cannot be
equated with outright grants. We are, therefore, inclined to
reject the contention of appellants herein that grant of subsidy
amounts to direct financing of IFFCO.
55. It has also been vehemently argued before us that the ratio
of Delhi High Court judgement in Krishak Bharathi
Cooperative Limited (KRIBHCO) vs. Ramesh Chandra Bawa
applies in the present case. We are inclined to think otherwise.
On a careful perusal of the aforesaid judgement, we find that
KRIBHCO was held to be public authority primarily for the
reason that the share capital of the Central Govt. in KRIBHCO
was 48.38% of the total paid up share capital of KRIBHCO at
the relevant time. However, this is not the case in the matter in
hand. The Central Govt. does not have any stakes, let alone
controlling stakes in IFFCO. Hence, the ratio of KRIBHCO
does not apply in the present case.
56. In this context, appellant Shri S.C.Agrawal has extracted a
para from the aforesaid judgement to buttress the argument that
as IFFCO was substantially financed by the Central Govt. before
2004, it does not cease to be so as there is potential of it being
substantially financed in future. We are not inclined to accept
this argument as there are too many ‘ifs’ in it. To put it
differently, this argument is conjectural in nature in as much as
IFFCO may or may not be substantially financed by the Central
Govt. in future. On the other hand, we are inclined to accept the
argument of IFFCO that once an entity has ceased to be a public
authority it cannot be deemed to be a public authority unless
there is a substantive change in the factual matrix. It may be
pertinent to mention that a number of PSUs were divested by
the Central Govt. not too long ago but they cannot be deemed to
be public authority unless there is evidence of control or
substantial financing by the appropriate Govt. In the factual
matrix of the case, it is evident that the Central Govt. has no
share capital in IFFCO as of now. Nor has it nominated any
Director in the IFFCO’s Board of Directors.
57. From the above discussion, it clearly emerges that IFFCO
is a Multi State Cooperative Society registered under MSCS
W.P.(C) Nos. 6751/2013 & 824/2014 Page 17 of 18
Act. The Central Govt. had high financial stakes in the paid up
share capital till 2004 but remitted its capital in that year and
does not have any stakes at present. It is, no doubt, true that
IFFCO is getting huge amount of subsidy from the Central
Govt. but, in our opinion, it is not unique to IFFCO; subsidy is
also being given to private sector players. The provisioning of
subsidy is to keep the sale price of fertilizers low in the open
market so as to keep it within the reach of farmers. Subsidy is
not a grant. It is only a mechanism to pay the difference
between the cost of production and the sale price of fertilizers.
We, therefore, hold that subsidy cannot be construed as
substantial financing of IFFCO. We also come to the
conclusion that statutory provisions mentioned herein above,
conferring certain powers on the central Registrar/Central Govt.
are regulatory in nature and do not establish control of the
Central Govt. over IFFCO. In view of the above discussion, we
have no hesitation in coming to the conclusion that IFFCO is
not a public authority u/s 2(h) of the RTI Act. The appeals are,
therefore, dismissed.”
35. I concur with the aforesaid view and find that no interference with
the impugned order is warranted. The petitions are, accordingly, dismissed.
No order as to costs.
VIBHU BAKHRU, J
MARCH 02, 2015
RK
W.P.(C) Nos. 6751/2013 & 824/2014 Page 18 of 18