Should the Unit Run CSD Canteens be treated as a Public Authority within the scope of the RTI Act? - CIC: No cogent reason has been made out by the appellant to establish the three-fold test of Creation, Finance and Control of an organization
10 Jul, 2017Interim Order (25.05.2016)
Shri D.S. Shukla assisted by Shri Bharat Bhushan Khullar made submissions and prayed that the Unit Run CSD Canteen at Garhi Cantt., Dehradun (Uttarakhand) may be declared as a public authority under the RTI Act, 2005 and the requested information may be ordered to be provided to him. To support their contention, the appellants placed reliance on a set of documents including a judgment of the Kerala High Court. (Indian Naval Canteen & Ors. v. UOI) W.A.No.1759/13 dated 19.10.2015.
2. The officers from the Ministry of Defence/Army Headquarters/CS Directorate made detailed submissions that Unit Run Canteens at various places in the country are private ventures and are not covered by the definition of public authority under the RTI Act, 2005 and cited the Supreme Court decision in the case of R.R. Pillai (Decd) through L.Rs vs Commanding Officer Hq S.A.C.(U)& Ors. [CIVIL APPEAL NO. 3495 OF 2005] to substantiate their arguments.
3. After hearing the parties, orders are reserved.
4. The appellant, Shri Shukla is directed to file a copy of the documents he had cited during the hearing, before the Commission and upon serving a copy on the respondents, the proof of service may be duly filed with the Registrar of this Commission. The respondents are directed to file their written submissions two weeks thereafter clearly substantiating their claim as to why they are not a public authority within the precincts of the Section 2(h) “public authority” means any authority or body or institution of self-government 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) non-Government organization substantially financed, directly or indirectly by funds provided by the appropriate Government; “public authority” means any authority or body or institution of self-government 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) non-Government organization substantially financed, directly or indirectly by funds provided by the appropriate Government; “public authority” means any authority or body or institution of self-government 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) non-Government organization substantially financed, directly or indirectly by funds provided by the appropriate Government; of the RTI Act 2005 dealing with the aspects of origin/creation, finance and control of the URCs. The details about the structure of the Unit Run Canteens and guidelines issued by the Ministry of Defence/Army Headquarters if relevant may also be furnished.
FINAL HEARING: 06.12.2016
5. Pursuant to the aforementioned directions of the Commission, the submissions dated 31.05.2016 have been received from the appellants wherein number of documents (fourteen in number) have been placed on record.
The various documents submitted by the appellant are as follows:
a) Order dated 19.10.2015 passed by the Hon’ble High Court of Kerala, at Ernakulam in the case of Indian Naval Canteen Service Employees Union & Ors. Versus Union of India & Ors. holding as follows:
“.10.....The status of the INCCB as State under Article 12 of the constitution of India, would not, in our opinion, automatically amount to bestowing of status of Government employees on the employees of the INCS………………………the appellants are not Central Government employees under Article 309 of the Constitution of India and the recommendations of sixth Central Pay Commission are not automatically applicable to them.....”
b) Observations and Recommendations of the Public Accounts Committee, with respect to URCs, relevant extracts whereof are as follows:
“.......In view of the yeoman’s service rendered by the employees of the URC towards the welfare and overall betterment of the jawans, including in far flung and remotest areas, the Committee recommend that their case may be considered sympathetically and on humanitarian grounds. There is no cogent reason why the benefits of the 6th CPC should be denied to the employees of the URCs when they were given the benefits of the 5th CPC …………………. The Government, therefore, need to frame suitable terms and condition of service and provide reasonable pay scales and promotional avenues for the employees of the URCs servicing the jawans in remote, often hostile and restricted areas.
c) Extracts from a Report of the Comptroller and Auditor General of India on Canteen Stores Dept.,
d) Extracts from the 87th Report of the Committee on Subordinate Legislation, Rajya Sabha,
e) Details of reimbursement of transportation charges paid by CSD Depot Delhi to various URCs for the FY 2011-12,
f) List of Unit Run Canteens under CSD, Reply of Hon’ble Minister of Defence
g) Reply of Hon’ble Minister of Defence on status of Army HQ URC at Plot No. 30, Rajaji Marg, New Delhi, relevant extracts whereof reveal the following:
“.....The Defence Security Corps and CSD Canteen, being constituents of Ministry of Defence, efforts are being made for their relocation...”
h) Reply by Dy. CAO in response to RTI dated 16.10.2015 on status of Army HQ URC at Plot No. 30, Rajaji Marg, New Delhi
i) Letter dated 15.01.2015 from Food Safety and Standards Authority of India regarding attachment of URCs with CSD,
j) Order dated 04.07.2013 in File No. CIC/LS/A/2013/000543;
k) Order dated 09.04.2014 in File No. CIC/LS/A/2013/001911;
l) Newspaper report dated 04.06.2013 on order of CIC in case nos. CIC/SM/C/2011/001386 and CIC/SM/C/2011/000838;
m) Eligibility criteria for opening a new URC;
n) Downloaded pages from CSD Website regarding departments of CSD and organisational structure
There were no other averments or contentions made by the appellant over and above submission of the aforesaid documents.
6. The Respondents have also filed their submissions dated 17.06.2016 in response to the appellant’s submissions dated 31.05.2016 wherein it has been averred by the Respondent that the Unit Run Canteens (hereinafter referred to as “URC”s) were established with the purpose of providing consumable stores to the Defence personnel at a price cheaper than the market as a welfare measure. These URCs were established strictly in terms of provisions laid down in AO/19/2003/QMG and the sanction operate them is accorded to a unit/formation by Canteen Services (CS) Directorate, QMG’s Branch, IHQ of MoD(Army) on the basis of recommendation of higher formation/CSD Head Office. The criteria to be fulfilled before obtaining sanction to open an URC are:
i) Unit has on its posted strength the number of personnel not below hundred (including attached personnel)
ii) Dependency of ex-servicemen (including their families) is not below five thousand.
6A. These URCs established by a unit/formation are run by the funds of the formation/unit which are Regimental funds created through contributions from the defence personnel as per statutory rules provided in service regulations. The Respondent has categorically stated that URCs are in no way funded by the Government/ public funds or from the Consolidated Fund of India. The URCs do not receive any direct “pecuniary benefits” from the Government of India nor are the CSDs under any obligation to grant any financial assistance to URCs or create any URCs. The URCs pay rent and allied charge at prescribed rates for utilisation of premises and other services. Loans granted by CSDs to URCs are repaid in full alongwith interest @ 4% for first loan and @ 6% for the second loan for a maximum period of 5 years.
6B. The Respondent vide their submissions further contended that URCs are managed through a Standard Operating Procedure formulated by the URC management Committee. It has been further submitted by the Respondents that service conditions of the employees of such canteens are neither framed nor controlled by the Government but it is done by the respective managing bodies of the Canteens. For day-to-day operations, depending upon the strength of clientele of URCs, Manager/Assistant Manager is employed, assisted by Billing Clerks. These staff are employed as per Qualitative Requirement (QR) formulated by the URC management. The procurement of stores/goods for the URCs can be done only from a CSD depot by making advance payment from their non public (Regimental) funds and the profits of URCs are distributed/utilised as Regimental funds by the units/formations for the welfare activities of troops and their families after meeting the operational/running expenses of URC.
The Respondents have placed reliance on the Apex Court decision in the case of R R Pillai vs. Commanding Officer HQ SAC (U) & Ors. and some decisions of the CIC which have from time to time held that “URCs are private ventures”.
7. Apart from the contentions as narrated above, the Respondents have dealt with each of the document placed forth by the appellant in the form of submissions dated 31.05.2016.
FINAL DECISION
8. The Commission has heard the matter at length and given sufficient opportunities to both parties to substantiate their respective cases. Both parties have submitted their respective contentions duly supported by all relevant documents to substantiate their case. As discussed above, the submissions made by both parties have been placed on record and the Commission has given a thorough and careful perusal to the same. The primary question to be adjudicated by the Commission in this case is:
“Whether the Unit Run Canteens should be treated as a Public Authority and fall within the scope and ambit of the RTI Act or not”?
9. To adjudicate this issue, it is imperative to peruse the definition of public authority under the RTI Act and analyse as stipulated under Section 2 (h) of the RTI Act, 2005 which reads as under:
2(h) “public authority” means any authority or body or institution of self-government 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) non-Government organization substantially financed, directly or indirectly by funds provided by the appropriate Government; “public authority” means any authority or body or institution of self-government 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) non-Government organization substantially financed, directly or indirectly by funds provided by the appropriate Government; “public authority” means any authority or body or institution of self-government 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) non-Government organization substantially financed, directly or indirectly by funds provided by the appropriate Government; . “Public authority” means any authority or body or institution of self government 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) non-Government Organization substantially financed, directly or indirectly by funds provided by the appropriate Government;
Thus the three vital aspects to determine whether any organisation/ institution/body is a Public Authority, as per the aforementioned definition are: I) CREATION, II) FINANCE & III) CONTROL
I) CREATION
10. Submissions above indicate that the URCs were established in terms of provisions laid down in AO/19/2003/QMG. The Canteen Services (CS) Directorate, QMG’s Branch, IHQ of MoD (Army) grants the sanction to a unit/formation to operate the URC on the basis of recommendation of higher formation/CSD Head Office. Such a sanction to operate the URC is granted to a Unit/formation upon fulfilling the basic criteria viz.: i) Unit should have on its posted strength minimum hundred number of personnel (including attached personnel) ii) Dependency of ex-servicemen (including their families) is not below five thousand. The creation of Unit Run Canteen arises out of need of the defence personnel posted in a particular Unit/formation and not by any act of the aforesaid authorities as stipulated in the definition [viz. Constitution, Parliament, State Legislature etc.] but by an order from the Quarter Master General Branch of the Army. It is thus evident that the Unit Run Canteen is neither a creation of the Constitution or Parliament or the State Legislature. The AO/19/2003/QMG which contains the provisions for creation of the URC, is an Army Order and not a notification nor carries any statutory validity by any stretch of imagination. Since creation of URC is not an effect of Governmental action, therefore, the first test as envisaged by the Section 6 2(h) “public authority” means any authority or body or institution of self-government 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) non-Government organization substantially financed, directly or indirectly by funds provided by the appropriate Government; “public authority” means any authority or body or institution of self-government 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) non-Government organization substantially financed, directly or indirectly by funds provided by the appropriate Government; “public authority” means any authority or body or institution of self-government 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) non-Government organization substantially financed, directly or indirectly by funds provided by the appropriate Government; of the RTI Act is clearly not applicable in the case of the Unit Run Canteen.
II) FINANCE
11. In so far as financing the URCs is concerned, it has been submitted by the Respondents that they depend on Regimental non public funds for their financial operation. These Unit Run Canteens created in order to cater to the requirement of the defence personnel and their families by providing consumable stores are run by the funds of the formation/unit which are Regimental, non public funds created through contributions from the defence personnel, as per the rules provided in service regulations. The Respondent has categorically stated that URCs are in no way funded by the Government/public funds or from the Consolidated Fund of India. The URCs do not receive any direct “pecuniary benefits” from the Government of India nor are the CSDs under any obligation to grant any financial assistance to URCs or create any URCs. In fact the URCs pay rent and allied charge at prescribed rates even for utilisation of the premises and other services. Loans granted by CSDs to URCs are also repaid in full alongwith interest @ 4% for first loan and @ 6% for the second loan for a maximum period of 5 years.
Thus, in so far as the financial operation of the URCs is concerned, there appears neither direct nor indirect funding from any Government authority. Hence, the provisions of the Section 2(h) “public authority” means any authority or body or institution of self-government 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) non-Government organization substantially financed, directly or indirectly by funds provided by the appropriate Government; “public authority” means any authority or body or institution of self-government 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) non-Government organization substantially financed, directly or indirectly by funds provided by the appropriate Government; “public authority” means any authority or body or institution of self-government 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) non-Government organization substantially financed, directly or indirectly by funds provided by the appropriate Government; of the RTI Act does not apply in this case.
III) CONTROL
12. The Respondent vide their submissions have submitted that URCs are managed through a Standard Operating Procedure formulated by the URC management Committee. For day-to-day operations, depending upon the strength of clientele of URCs, Managers/Assistant Managers are employed, assisted by Billing Clerks. These staff members are employed as per Qualitative Requirement (QR) formulated by the URC management. The procurement of stores/goods for the URCs can be done only from a CSD depot by making advance payment from their non public (Regimental) funds and the profits of URCs are distributed/utilised as Regimental funds by the units/formations for the welfare activities of troops and their families after meeting the operational/running expenses of URC.
From the above discussion, it appears that URCs function and are administered and governed purely by an internal set up by the defence authorities, with no Governmental control over it.
13. It is noted that the appellants have placed on record a list of documents but they have at no point countered any of the submission of the Respondent with contrary facts. Among the documents submitted by the Appellant, reliance has been placed on only decision dated 19.10.2015 passed by the Hon’ble High Court of Kerala, apart from two orders dated 7 04.07.2013 in File No. CIC/LS/A/2013/000543 and dated 09.04.2014 in File No. CIC/LS/A/2013/001911.
The decision relied upon by the appellant is titled Indian Naval Canteen Service Employees Union & Ors. Versus Union of India & Ors. dated 19.10.2015 decided by the High Court of Kerala at Ernakulam. In this case inter alia the petitioner sought a declaration to be entitled to receive salary and other pecuniary benefits in terms of the 6th Pay Commission. While deciding the case, the Hon’ble Court directed the Union Govt to take up the question of grant of benefits under 6th Central Pay Commission to the petitioners in view of the fact that they were recipients of the benefits under the earlier Pay Commission. Perusal of the judgment reveals that the High Court has in fact observed:
“10. .........The status of the INCCB [Indian Naval Canteen Control Board] as State under Article 12 of the Constitution of India, would not, in our opinion, automatically amount to bestowing of status of Govt employees on the employees of the INCS...........................................................the appellants are not Central Government employees under Article 309 of the Constitution of India and the recommendations of sixth Central Pay Commission are not automatically applicable to them....”
Thus the status of employees of the Canteen employees have not been held at par as a Govt employee, but left to the consideration of the Union Govt. to advance the benefits of the 6th Pay Commission to these employees. Therefore this decision fails to advance the point that the URCs can be declared as public authorities and made amenable to the RTI Act.
It is pertinent to note from submissions dated 13.12.2016 filed by the Appellant that the decision dated 19.10.2015 of the High Court of Kerala at Ernakulam discussed in the para above has been challenged before the Hon’ble Supreme Court by the Indian Navy in the form of SLP(C) No. 12929/2016, which is pending final adjudication.
14. While on this point, it is pertinent to note a clearer observation from the same High Court of Kerala in the decision dated 12.03.2010, while deciding the case of Indian Naval Canteen Service Employees Union & Ors. vs Union Of India holding that:
“ 20. ........................ the Unit Run Canteens or INCS as the case may be, the fact remains that these are operated out of non-public fund. ................................. 29. INCCB is neither a State or other authority coming under Article 12 of the Constitution of India and it does not carry on any public function in order to be amenable to the jurisdiction of this Court....”
15. Furthermore, it will be useful to refer to the judgment of the Supreme Court in Union of India v. Chottey Lal [1999(1) SCC 554]:
“6. In view of the characters of the Regimental Fund as discussed above, we have no hesitation to come to the conclusion that the said Fund cannot be held to be a public fund by any stretch of imagination....”
Moreover, a three Judge Bench of the Supreme Court in R.R. Pillai v. Southern Air Commandant, Indian Air Force [2009(13)SCC 311] held as follows:
“.....that URCs are purely private ventures and their employees are at no stretch of imagination employees of the Government or CSD. It is also observed that there was no statutory obligation on the part of the Central Government to provide canteen services to its employees. The profit generated from URCs are not credited to the consolidated fund but are distributed to the non-public funds which are used by the units for the welfare of the troops.”
16. The Respondent has placed reliance on another decision of the Hon’ble High Court of Delhi in the case of Army Welfare Housing Organisation vs. Adjutant General’s Branch & Ors. [LPA No. 867/2013] dated 19/11/2014:
“……14….Though the persons occupying the position in the Board of Management of the appellant are serving Army officials who in performance of their duties as such officers are required to act as per the dictates of the Army Headquarters or the Ministry of Defence but the same cannot lead to the presumption that they, in their capacity/position as members of the Board of Management of the appellant will also act as per the dictates of the Army Headquarters or the Ministry of Defence. Thus it cannot be said that for this reason the Board of Management of the appellant is under the control of Army Headquarters or the Ministry of Defence….”
17. The Commission thus notes from the above detailed submissions and the precedents laid down by the various Courts that the three-fold test of Creation, Finance and Control of an organization as outlined in the definition clause of Section 2 (h) of the RTI Act, have each been addressed in the foregoing paragraphs. It has been established beyond any doubt that the Respondent is not a creature of statute. The URCs are run by Regimental Funds which has been held by the Courts to be non public fund. The Government does not exercise any direct or indirect control over the Respondent, as is evident from the discussion above. The Apex Court in the case of R R Pillai (supra) as well as the Hon’ble High Court of Kerala and Delhi have already dealt with and decided the status of the URCs on a number of occasions. The array of documents submitted by the appellant also fail out establish how and on what count the Respondents can be brought within the ambit of the RTI Act. Thus this Commission while deciding whether the URCs should be declared as “public authority”, after perusal of the submissions of the parties is of the considered opinion that no cogent reason has been made out by the appellant to establish the fact that the Respondent URC [Unit Run Canteens] should be declared as a Public Authority, under the RTI Act.
In the light of the well established legal position discussed in the catena of judgments above, the Commission holds that the Respondent URCs cannot be declared as Public authority under the RTI Act, for want of supporting reasons.
Accordingly, the appeals are dismissed.
(Sudhir Bhargava)
Information Commissioner
(Yashovardhan Azad)
Information Commissioner
Citation: Shri Daya Shankar Shukla and others v. Ministry of Defence in F. No.CIC/LS/A/2012/000665 CIC/LS/A/2013/001914 CIC/RM/A/2013/001287 Date of Order : 25.05.2016, 15.03.2017 (Division Bench)