Disclosure of demat applications submitted by the shareholders by NSDL under RTI

Background

The appellant filed an application under the Right to information (RTI) Act with the National Securities Depository Ltd. (NSDL) seeking copy of the demat request received from the shareholders of the Escorts Heart Institute and Research Centre and other related information. The Public Information Officer (PIO) denied the information stating that the provisions of the RTI Act would not apply to their organisation. He added that the desired information could not be disclosed as it was third party commercial and confidential information.

Proceeding

During the hearing before the Central Information Commission (CIC), the appellant argued that the company concerned was bound to provide such information to any citizen as per the provisions of the Companies Act and that there was no reason why NSDL should not provide such information. The respondent submitted that they did not have the information with them and they could not disclose such information as they were bound by contract with both the investors and the company concerned to keep the information in trust.

View of CIC

The Central Information Commission (CIC) observed that the shareholders details of any company including the demat applications submitted by individual investors are held by the NSDL in fiduciary capacity. They are contractually bound to keep the information in good faith and that they would be breaking the contractual agreement with the depositors if they start disclosing this information to anyone without their consent. The CIC also held that a public authority can disclose only the information which belongs to it and not the one that it holds on behalf of a private party. The commission further ruled that disclosure of such information can impact the commercial viability of the NSDL itself as depositors may not take the breach of contract happily and may move away their business to some other agency. The Commission rejected the appeal stating that the sought information is exempt from disclosure under section 8(1)(d) Notwithstanding anything contained in this Act, there shall be no obligation to give any citizen, information including commercial confidence, trade secrets or intellectual property, the disclosure of which would harm the competitive position of a third party, unless the competent authority is satisfied that larger public interest warrants the disclosure of such information; and section 8(1)(e) Notwithstanding anything contained in this Act, there shall be no obligation to give any citizen, information available to a person in his fiduciary relationship, unless the competent authority is satisfied that the larger public interest warrants the disclosure of such information; of the RTI Act.

Citation: Mr. Rakesh Kumar Gupta v. National Securities Depository Ltd in File No.CIC/SM/A/2011/002389