The Indian Supreme Court ruled Oct. 3 in case that may have implications for which nongovernmental organizations are “substantially financed’ by public funds and are thus covered by the Right to Information Act,
Although analysts are just beginning to sort through the ruling, there are indications it might reduce coverage of the RTI Act and create more litigation. Judges K S Radhakrishnan and A K Sikri criticize past “liberal” court decisions in their 57-page opinion.
Ruling in a case involving a request for information from a cooperative bank, the court says the determination of which organizations are “substantially financed” can’t be based solely on a governmental determination and must be factually based. Certain indirect types of government support might not qualify as government support, the court says.
The apex court says that substantially financed means that “the degree of financing must be actual, existing, positive and real to a substantial extent, not moderate, ordinary, tolerable etc.”
Moreover, the court suggests that “substantial” means that without the funding the organization “would struggle to exist.”
The ruling says “merely providing subsidiaries, grants, exemptions, privileges etc., as such, cannot be said to be providing funding to a substantial extent, unless the record shows that the funding was so substantial to the body which practically runs by such funding and but for such funding, it would struggle to exist.”
Also, the burden of proving that an NGO is substantially financed has been placed on the RTI applicant, the court finds.
The court overturns an order of the Kerala High Court which had declared Cooperative Societies registered under the Kerala Co-operative Societies Act as public authority.
In June, the Central Information Commission ruled that political parties receive substantial funding from the government in various forms and are covered by the RTI Act. The political parties have united in support of now pending legislation to overturn the decision. The bill is now under committee consideration.
Portion of Ruling
Beginning a discussion of the meaning of “substantial” the court wrote:
SUBSTANTIALLY FINANCED
36. The words “substantially financed” have been used in
Sections 2(h)(d)(i) & (ii), while defining the expression public
authority as well as in Section 2(a) of the Act, while defining
the expression “appropriate Government”. A body can be
substantially financed, directly or indirectly by funds
provided by the appropriate Government. The expression
“substantially financed”, as such, has not been defined
under the Act. “Substantial” means “in a substantial
manner so as to be substantial”. In Palser v. Grimling
(1948) 1 All ER 1, 11 (HL), while interpreting the provisions
of Section 10(1) of the Rent and Mortgage Interest
Restrictions Act, 1923, the House of Lords held that
“substantial” is not the same as “not unsubstantial” i.e. just
enough to avoid the de minimis principle. The word
“substantial” literally means solid, massive etc. Legislature
has used the expression “substantially financed” in Sections
2(h)(d)(i) and (ii) indicating that the degree of financing must
be actual, existing, positive and real to a substantial extent,
not moderate, ordinary, tolerable etc.
37. We often use the expressions “questions of law” and
“substantial questions of law” and explain that any question
of law affecting the right of parties would not by itself be a
substantial question of law. In Black’s Law Dictionary
(6th Edn.), the word ‘substantial’ is defined as ‘of real worth
and importance; of considerable value; valuable. Belonging
to substance; actually existing; real: not seeming or
imaginary; not illusive; solid; true; veritable. Something
worthwhile as distinguished from something without value or
merely nominal. Synonymous with material.’ The word
‘substantially’ has been defined to mean ‘essentially; without
material qualification; in the main; in substance; materially.’
In the Shorter Oxford English Dictionary (5th Edn.), the word
‘substantial’ means ‘of ample or considerable amount of size;
sizeable, fairly large; having solid worth or value, of real
significance; sold; weighty; important, worthwhile; of an act,
measure etc. having force or effect, effective, thorough.’ The
word ‘substantially’ has been defined to mean ‘in substance;
as a substantial thing or being; essentially, intrinsically.’
Therefore the word ‘substantial’ is not synonymous with
‘dominant’ or ‘majority’. It is closer to ‘material’ or
‘important’ or ‘of considerable value.’ ‘Substantially’ is closer
to ‘essentially’. Both words can signify varying degrees
depending on the context.
38. Merely providing subsidiaries, grants, exemptions,
privileges etc., as such, cannot be said to be providing
funding to a substantial extent, unless the record shows that
the funding was so substantial to the body which practically
runs by such funding and but for such funding, it would
struggle to exist. The State may also float many schemes
generally for the betterment and welfare of the cooperative
sector like deposit guarantee scheme, scheme of assistance
from NABARD etc., but those facilities or assistance cannot
be termed as “substantially financed” by the State
Government to bring the body within the fold of “public
authority” under Section 2(h)(d)(i) of the Act. But, there are
instances, where private educational institutions getting
ninety five per cent grant-in-aid from the appropriate
government, may answer the definition of public authority
under Section 2(h)(d)(i).
NON-GOVERNMENT ORGANISATIONS:
39. The term “Non-Government Organizations” (NGO), as
such, is not defined under the Act. But, over a period of
time, the expression has got its own meaning and, it has to
be seen in that context, when used in the Act. Government
used to finance substantially, several non-government
organizations, which carry on various social and welfare
activities, since those organizations sometimes carry on
functions which are otherwise governmental. Now, the
question, whether an NGO has been substantially financed or
not by the appropriate Government, may be a question of
fact, to be examined by the authorities concerned under the
RTI Act. Such organization can be substantially financed
either directly or indirectly by funds provided by the
appropriate Government. Government may not have any
statutory control over the NGOs, as such, still it can be
established that a particular NGO has been substantially
financed directly or indirectly by the funds provided by the
appropriate Government, in such an event, that organization
will fall within the scope of Section 2(h)(d)(ii) of the RTI Act.
Consequently, even private organizations which are, though
not owned or controlled but substantially financed by the
appropriate Government will also fall within the definition of
“public authority” under Section 2(h)(d)(ii) of the Act.
BURDEN TO SHOW:
40. The burden to show that a body is owned, controlled or
substantially financed or that a non-government
organization is substantially financed directly or indirectly by
the funds provided by the appropriate Government is on the
applicant who seeks information or the appropriate
Government and can be examined by the State Public
Information Officer, State Chief Information Officer, State
Chief Information Commission, Central Public Information
Officer etc., when the question comes up for consideration.
A body or NGO is also free to establish that it is not owned,
controlled or substantially financed directly or indirectly by
the appropriate Government.
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