Information about defaulter companies, NPA accounts, Shri Vijay Mallaya etc were sought - CIC: Wait for the final outcome of the Writ Petitions pending with Supreme Court regarding non-disclosure of the part of the Annual Inspection Report/RAR, etc.

(Note: The instant appeal has been filed by the third party i.e. HDFC Bank Ltd. aggrieved by an order passed by the FAA, RBI). Proceedings in the matter are being pursued in pursuance of the following interim decision dated 13.01.2023.)

Information sought:

The RTI applicant Shri Rajiv Chandok filed an RTI application dated 06.10.2017 seeking the following information:

With regard to the recent amendments in the Banking Regulation Act 1949 where after Section 35AA and 35AB have been added after the Section 35A, I have the following queries under Section 35A(1)(a):-

1. Kindly inform the names of all the defaulter companies/Business Entities having NPA accounts with Rs. 5000 crores or above (PAN INDIA BASIS). Kindly inform the value of their NPAs (as of date) of each Party. Please provide this information in tabular form bank wise.

2. In pursuance to the aforesaid amendment, kindly provide the total number and names of companies/ Business Entities or Groups having NPA accounts that have defaulted in the loan payments to their lender banks and action would be PROPOSED by your Office's Internal Advisory Committee (IAC) against such defaulters at the National Company Law Tribunal under the Insolvency and Bankruptcy Code 2016.

3. Kindly inform the name of the defaulter companies which have been referred uptil now by your Office to the lender Banks to proceed under the provisions of the Insolvency and Bankruptcy Code 2016 (IBC) at the National Company Law Tribunal.

4. What is the total value of the NPA's (as of date) of the defaulter companies of Shri Vijay Mallaya i.e. the Kingfisher, LIB Group of Companies and their allied companies?

5. Have these companies been added in the aforesaid list of defaulters referred uptil now for IBC proceedings at the NCLT? If the answer to the aforesaid question is in the negative, then kindly inform the reasons why the said defaulter companies have not been directed to be proceeded against with?

6. In case companies of Shri Vijay Mallaya have not been referred by the IAC of RBI in the identified 12 defaulter list, kindly explain the reasons why the said Committee has not referred the name of Shri Vijay Mallaya's companies.

7. Kindly provide all the names of the members of the IAC of RBI.

8. It is learnt from reliable sources that apart from the 12 large accounts that IAC RBI has directed banks for proceeding under the IBC 2016, they have also referred a list of 26 other big defaulters to be proceeded against with at the NCLT benches at 10 locations. Kindly provide the name of the said defaulters as well.

In response, the CPIO vide its letter dated 18.03.2021 issued a notice u/s. 11(3) of the RTI Act to the Appellant i.e. HDFC Bank Ltd. stating as under:

“Please refer to our letter No.DOS.CO.RIA.No.SK(98/01 .12.OO112O2O-21 (Vot.10) dated October 23, 2020 wherein we had issued a notice under section 11(1) Where a Central Public Information Officer or a State Public Information Officer, as the case may be, intends to disclose any information or record, or part thereof on a request made under this Act, which relates to or has been supplied by a third party and has been treated as confidential by that third party, the Central Public Information Officer or State Public Information Officer, as the case may be, shall, within five days from the receipt of the request, give a written notice to such third party of the request and of the fact that the Central Public Information Officer or State Public Information Officer, as the case may be, intends to disclose the information or record, or part thereof, and invite the third party to make a submission in writing or orally, regarding whether the information should be disclosed, and such submission of the third party shall be kept in view while taking a decision about disclosure of information: read with section 11(2) of the Right to Information Act, 2005 with respect to captioned RTI request to enable you to make a written submission as to whether the information may be disclosed or not along with reasons for exemption from disclosure under any clause of RTI Act, 2005.

2. After considering your response (dated 12.03.2021) to the above notice, we intend to disclose the information on entities having NPA accounts with Rs. 5000 Crores or above (PAN INDIA BASIS) and the value of NPA of each entity and the bank wise information.

3 Hence a Notice under Section 1 1(3) of the RTI Act,2005 is hereby given apprising you of the decision taken in the matter.”

Being dissatisfied, the Appellant bank through filed a First Appeal dated 16.04.2021. The FAA vide order dated 21.06.2021 upheld the reply given by the CPIO and appeal dismissed accordingly.

Feeling aggrieved and dissatisfied, the Appellant bank approached the Commission with the instant Second Appeal.

Relevant Facts emerging during Hearing:

The following were present:-

Appellant: Adv Arpit Gupta representative of the Appellant bank present through Intra Video-Conference.

Respondent: Shri Vinod Kumar, DGM present through Video-Conference.

Original RTI applicant: Present through Intra Video-Conference.

He further referred to the reply provided by CPIO and order passed by the FAA and submitted that the CPIO, RBI and FAA had violated the principles of natural justice, as they had not given any personal hearing to the Appellant Bank before passing their decisions in the matter. No reasons were given for not offering personal hearing in the first appeal. The counsel for the appellant prayed before the Commission that the FAA orders in the above mentioned cases should be set aside for want of reasons. He further submitted that the information related to the bank should not be disclosed to the RTI applicant. The Counsel further referred the Full Bench judgment of this Commission passed in file no. CIC/RBIND/A/2021/152460 & Ors. vide order dated 05.05.2022 wherein an identical issue of the information sought, has remanded to the CPIO for fresh adjudication by keeping in mind principles of natural justice. He further submitted that Writ Petition no. 1159/2019 is also pending before Hon’ble Supreme Court of India for adjudication on similar issue.

The Respondent, during the hearing, submitted that the information sought by the RTI applicant in his RTI application should be disclosed as per Jayantilal Mistry case.

The RTI applicant submitted that “That it is pertinent to mention that the bank in the lead case i.e. SBI through Mr. S. Dinesh, though has supplied to the undersigned a copy of their Second Appeal, but the same is not in order as some Annexures are missing in the paper book supplied by them to the undersigned. The paper book has also not been numbered properly and will cause a lot of hardship to the parties to address this Hon’ble Commission at the hearings. That all the other Appellants, except for Axis bank Ltd through Mr. Sunit Malhotra though have also supplied the copies of their second Appeal to the undersigned, but the same are not in order as certain Annexures are also missing in those copies supplied by the rest of the Appellants.”

Decision:

In the facts of the instant case, it is pertinent to note that a decision of a coordinate bench of the Commission in the matter of various third-party banks vs. RBI vide File No. CIC/RBIND/A/2021/152460 + Ors. dated 05.05.2022 covers a detailed discussion inter alia on the same nature of information sought for from the RBI and the reliance placed by RBI on the Jayantilal Mistry case. Suffice to say that the issues raised in the instant case are encapsulated in that same discussion of the coordinate bench in the following manner:

“39. A comprehensive view has to be taken on the objection filed by the institutions. These objectives has to be deliberated and adjudicated in the light of Jayantilal Mistry’s case and other judicial pronouncements relevant in such matter, some of which have been referred by the Commission in the above parts as well. The Commission while examining various objections realize that the Writ Petitions filed before the Hon’ble Supreme Court of India is seeking directions of the Supreme Court for non-disclosure of certain aspects of these audit/inspection report and any such guidance in these Writ Petitions will have direct bearing and provide further clarity to the CPIO/FAA in adjudicating various aspects of disclosure/non-disclosure of reports or the information/data which are part of these reports under the provisions of the RTI Act. The Commission takes note that all the cases/second appeals filed herein are based on interpretations of RBI Vs. Jayantilal Mistry case and other relevant judicial pronouncements requesting for full disclosure vis-à-vis with exemptions under Section 8(1) of the RTI Act for nondisclosure of full or parts of these reports.

40. In view of the above observations, the Commission is of the view that the reports generated in the hands of regulatory public authority in discharge of its statutory obligations are information under Section 2 (f) of the RTI Act, as the regulator and the regulated entities are not governed by fiduciary relationship. The orders of the Commission to their effect has been upheld by the Hon’ble Supreme Court in Jayantilal Mistry’s case and the position is unchanged even today. Various objections filed by banks/financial institutions, to be examined, analyzed and adjudicated upon, are related to various data and information submitted to the Reserve Bank of India by these financial institutions explaining their operations, commercial decisions, clients data etc. under statutory obligations can be disclosed as such. There are apparently two set of such information which have been shared by the institutions with the regulator under statutory obligation. First is the information/data of clients relating to their business/commercial operations, financial transactions, business and commercial strategy which is shared by clients with financial institutions in full trust and confidence and is held by them in fiduciary capacity, protected from disclosure under the RTI Act in their hands. Second set is the information relating to business strategy, decisions, transactions, other operational data etc. of financial institutions have been bearing on their competitive position which also enjoys the exemption from disclosure in their hands, if it is a public authority or otherwise, under the RTI Act. Some of such data, on case to case basis be sensitive enough for protection of national interest. The Commission is of the view that the protection of disclosure of information under Section 8(1) of the RTI Act, 2005 in the hands of financial institutions does not evaporate once such data/information is shared, in good faith and trust, with the regulator under statutory obligation. Various observations of Hon’ble Supreme Court in Jayantilal Mistry’s case also does not indicate so and decision of the regulator to consider redacting such data/information while disclosing the reports is aligned with this and other judicial pronouncements of Supreme Court and High Courts.

41. The Commission has already outlined the deficiency in the conduct of the CPIO/FAA while hearing such matters and hence is of the opinion that due care has to be taken by according opportunity of personal hearing and making reasoned order with reference to the objections in the hands of the CPIO and later in the hands of FAA, if any appeal is preferred. Hence, the CPIO will be required to adjudicate such RTI applications in the light of the observations of the Commission afresh. The Commission also expects that the CPIO will take view on various objections filed by the Banks and Financial Institutions and submissions made by applicant to reach the decision in favour or against redaction of various parts of the report on case to case basis. He has to factor the observation of Hon’ble Supreme Court in Jayantilal Mistry case and other relevant judgments, some of which have been referred in this order as well. Hence, with these observations the orders passed by the CPIO and FAA in these matters are set aside and the cases are being remanded to the CPIO for adjudication afresh.

42. It is amply clear that Writ Petition Nos. 1159/2019 and 768/2021 and others tagged are admitted in Hon’ble Supreme Court wherein guidance and direction has been sought on non-disclosure of certain type of information which are essentially the part of the Annual Inspection Report/RAR, etc. These petitions also seek protection of interim communication between regulator and the regulated entity in the process of finalization of these reports or otherwise. It is obvious that decision in these Writ Petitions will provide clarity and guidance to the Public Authority on redaction/non-disclosure of a set of information inspite of being part of these reports which are open to disclosure. At this stage, any decision by the Public Authority will amount to pre-judging the issues pending admitted Writ Petitions before the Hon’ble Supreme Court. Various banks, financial institutions, respondent public authority and the RTI applicant have already impleaded party and are presenting their arguments before the Apex Court.

43. Hence, any decision of redaction or disclosure of information, without waiting for decision in the Writ Petition Nos. 1159/2019 and 768/2021 and others tagged may cause irrevocable damage against right of privacy and protection of commercial interest. Hence, the respondent public authority if expedient may wait for the outcome in Writ Petition Nos. 1159/2019 and 768/2021 and others tagged or seek clarification from the Hon’ble Court and accordingly decide these RTI applications by following process as enumerated in the earlier paras by the Commission in the interest of principles of natural justice. While disclosing the information they should be cautious in taking a considerate view balancing right to privacy, protection of national and commercial interest on one hand vis-à-vis larger public interest.

44. It is further observed that similar view has also been taken by the Division Bench of the Commission in file bearing nos. CIC/VS/A/2013/001488 and CIC/VS/A/2013/001805 dated 11.05.2017 wherein the Commission observed that ‘Having considered the submissions of both the parties, the Commission observes that since a similar issue is pending adjudication before the Hon'ble Supreme Court in the matter of Central for Public Interest Litigation Vs. Housing & Urban Development Corporation Ltd. & Ors., it would be judicious to await the final outcome from the Hon'ble Supreme Court. However, on receipt of the final outcome from the Hon'ble Supreme Court in the matter, the appellant shall be at liberty to file second appeal afresh, if he so desires. The instant appeals are disposed of’.”

The above decision is therefore applicable to the instant case and no separate line of adjudication is warranted in the matter. The stipulations contained in File No. CIC/RBIND/A/2021/152460 + Ors. dated 05.05.2022 stands endorsed to the Respondent CPIO with emphasis on para 41 & 43 supplied as above.

Saroj Punhani

Information Commissioner

Citation: Mr Shashank Raj (ICICI Bank Limited) v. Reserve Bank of India, CIC/RBIND/A/2021/141097; Date of Decision: 06/07/2023