IWRO IS PUBLIC AUTHORITY UNDER RTI ACT

IN THE HIGH COURT OF DELHI AT NEW DELHI
W.P.(C) No. 8219 of 2009
INDIAN RAILWAY WELFARE ORGANISATION ..... Petitioner
Through: Mr. A.K. Tewari, Advocate.
versus
D.M. GAUTAM & ANR.
..... Respondents
Through: Mr.A.N. Singh and
Mr. A.K. Mishra, Advocates for R-1.
CORAM: JUSTICE S. MURALIDHAR
1. Whether Reporters of local papers may be
allowed to see the order?
No
2. To be referred to the Reporter or not?
Yes
3. Whether the order should be reported in Digest? Yes
ORDER
03.05.2010
W.P.(C) No. 8219 of 2009 & CM No. 4976 of 2009 (for stay)
1. Is the Indian Railway Welfare Organisation („IRWO‟) a public authority
within the meaning of Section 2(1)(h) of the Right to Information Act, 2005
(„RTI Act‟)?
The Central Information Commission („CIC‟) has in the
impugned order answered the said question in the affirmative. The CIC‟s
order is under challenge in the present writ petition by the IRWO.
2. The IRWO states that it is a society registered under the Societies
Registration Act of 1860. Its principal object is to promote and provide
dwelling units all over India to serving and retired railway personnel and
their widows on a no profit no loss basis. The dwelling units provided by
the IRWO are on self-financing basis. It is stated that the IRWO‟s
memorandum specifies that the sources of funds of the IRWO would be
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predominantly and chiefly from nationalized and commercial banks. It is
submitted that IRWO receives no grant from the Railway Board or the
Central Government. It received a loan of Rs. 10 crores from the Ministry
of Railways which has since been repaid. A loan of Rs. 6 crores was taken
from the Railway public sector undertakings (PSUs) of which only Rs. 1.2
crores remains to be paid. IRWO submits that its affairs are administered
by a governing body of which the Member (Staff) Railway Board is the ex-
officio Chairman. It is submitted that the IRWO is neither an agent nor an
instrumentality of State within the meaning of Article 12 of the Constitution
of India. It maintains that there is neither a deep nor a pervasive control of
the IRWO by the Indian Railways or the Ministry of Railways. There is no
substantial funding of the IRWO either directly or indirectly by funds
provided by the appropriate government, i.e the central government.
3. In the impugned order, the CIC has highlighted the following factors for
concluding that IRWO is a „public authority‟ within the meaning of Section
2(1) (h) of the RTI Act:
(a) IRWO is indirectly owned, controlled and substantially financed by the
Railway Board and the Ministry of Railways.
(b) The initiation of the registration of the IRWO was by the Ministry of
Railways. The basic infrastructure including land was also provided by the
Railway Board and the Ministry of Railways.
(c) The initial loan of Rs.10 crores and the loans by the Railway PSUs
constituted indirect financing of the IRWO.
(d) Property provided to the IRWO for its head quarters in Delhi was at a
very nominal rate and that also constituted indirect financing by the central
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government.
(e) IRWO works for the welfare of Railway employees and if a regime of
transparency is ushered, the faith of Railway employees in it would be
strengthened.
4. Learned counsel for the Petitioner submits that the IRWO had written to
the Adviser, Land and Amenities, Railway Board on 10th May 2006
pointing out why it was not a public authority under Section 2(1)(h) of the
RTI Act. No reply in response thereto was received from the Railway
Board. On the other hand, at a meeting held to discuss the question of
granting of loan to the IRWO by the Ministry of Railways, the Railway
Board opined as under:
“IRWO is an independent organization. Ministry of
Railway does not give any grant or loan to an
independent organization. It cannot form part of our
budget.
It is correct that financial assistance was provided in
1989-90. But that was with the approval of the Ministry
of Finance. In this case also it has to be with the
approval of Ministry of Finance.
Further, as per the extant orders on `New Service/New
Instrument of Service‟, loans to be provided to
Public/Private
institutions
require
Parliament‟s
approval.”
5. It is submitted that it is not as if IRWO is granted a loan by the Ministry
of Railways as and when it raises a demand. The Ministry of Railways
exercises no control, whether administrative or financial, over the working
of the IRWO. There are only 4 officials in the Ministry of Railways in ex
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officio capacity out of the total 19 members in the governing body of the
IRWO while the others are non-government members. No member of the
governing body is nominated by the central government and no member can
be removed by the central government. It is, therefore, submitted that there
is no control of the IRWO by the central government. There is also no
substantial financial assistance received by the IRWO from the Ministry of
Railways.
6. Learned counsel for Respondent No. 1, on the other hand, highlights
several other factors which make the IRWO a public authority for the
purposes of the RTI Act. First, the Union Railway Minister in a budget
speech made in Parliament in 1989-90 announced the registration of the
IRWO and highlighted the fact that it had started its activities with a loan of
Rs. 3 crores provided by the Ministry of Finance. Further, a sum of Rs. 10
crores had been proposed as a loan to the IRWO by way of capital in the
Railway Budget of 1990-91. Secondly, in the registration process of the
Society, the Ministry of Railways was the sole sponsor. The relevant
extracts of the registration papers including a letter dated 20 th September
1989 written by the Member (Staff) of the Railway Board to the Registrar
of Societies stating that the “Ministry of Railways have decided to set up a
Society to be known as Indian Railways Welfare Organisation…” is relied
7. Thirdly, as regards the management and control which the Ministry of
Railways/Railway Board exercises over the IRWO, the following factors
are highlighted:
Chairman, Railway Board is the Patron of the IRWO
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Member (Staff) Railway Board is the ex-officio Chairman
IRWO and is a member of its Governing Body
Executive Director, Establishment, Railway Board is a
member of the Governing Body
Executive Director, Finance, Railway Board is a member of
the Governing Body
Executive Director/Adviser, Land Management is a member of
the Governing Body
Managing Director, IRWO is appointed by nomination by its
Patron (who is the Chairman, Railway Board) and the MD is a
member of the Governing Body
Director (Technical) IRWO is appointed by nomination by
Member (Staff), Railway Board (who is the Chairman, IRWO)
and is a member of the Governing Body
Director (Finance) IRWO is appointed by nomination by the
Member (Staff) Railway Board (who is the Chairman, IRWO)
and is a member of the Governing Body
Four co-opted Members in the Governing Body of IRWO are
nominated/approved by the Chairman, Railway Board who is
also the Patron, IRWO
IRWO Grievance Committee (a permanent body) is chaired by
the Adviser, Land and Amenities, Railway Board, who is a
member of the Governing Body of the IRWO. He is also the
Head of the Land and Amenities Directorate of the Railway
Board.
All issues of the IRWO including appointment of Directors,
terms and conditions of their service including their tenure,
house rent etc., demands and representations of IRWO
employees are processed by the Land and Amenities
Directorate of the Railway Board. IRWO was instructed to
submit all cases to that Directorate requiring approval of the
Railway Board.
8. As regards financial assistance, apart from the above factors, it is pointed
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out that in 1998 on the request of the IRWO some of the PSUs of the
Ministry of Railways i.e. IRCON, RITES and CONCOR were directed to
give Rs. 2 crores each as soft loan to the IRWO. Further a request for a
loan of Rs.100 crores was considered by the Ministry of Railways recently.
It is also pointed out that the Railway Board sanctions complimentary
passes to officers and staff of IRWO every year. There are 14 sets of passes
for the Managing Director/Directors, 15 sets of passes for General
Managers, 15 sets of posts for other officers and staff. Importantly, it is
pointed out that the IRWO has its Corporate Office (Headquarters) in Delhi
and a number of Zonal Offices which have been provided land/office
accommodation by the Ministry of Railways on either very nominal charges
or without any charges. A list of 9 such offices has been set out in the
counter affidavit in the present writ petition. As far as Delhi is concerned,
it is pointed out that office space has been provided for the headquarters of
the IRWO in the Delhi Railway Office Complex, Shivaji Bridge (Minto
Bridge) behind Shankar Market, New Delhi on licence basis for 21 years
for just Rs.12,400 for approximately 3,000 sq. ft. area. The market rent
could be at least Rs. 3 lakhs per month or Rs. 36 lakhs per year. There are
other factors highlighted in the counter affidavit to show that in fact it is the
Ministry of Railways and/or the Railway Board that controls the IRWO. It
is therefore submitted that the IRWO answers the description of a public
authority under Section 2(1)(h) of the RTI Act.
9. The above submissions have been considered. There is no denial by the
IRWO that it is a society which was formed by a letter written by the
Member (Staff), Railway Board to the Registrar of Societies. However, the
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said letter is sought to be explained away by saying that the Member (Staff)
was not perhaps aware of the legal status of IRWO. This Court is unable to
appreciate this submission. The question is not whether the person who sent
that letter was aware of the legal status but whether in fact it was the Indian
Railways which formed the society. On that score, there appears to be no
doubt.
10. Section 2(1)(h) of the RTI Act defines the expression „public authority‟
to mean any authority or body or institution of self-government established
or constituted by a law made by the Parliament or State Legislature or by a
Notification or order by the appropriate Government and includes under
Section 2(1)(h) (d) (i) and (ii):
(i) body owned, controlled or substantially financed;
(ii) non-Government organization substantially financed,
directly or indirectly by funds provided by
the appropriate Government;
11. As far as the present case is concerned, the question can be approached
from two angles.
The first is whether IRWO is controlled by the
appropriate Government. The second is whether as a non-governmental
organisation it is substantially financed directly or indirectly by funds
provided by the central government.
12. In a judgment dated 7th January 2010 of the learned Single Judge of this
Court in Indian Olympic Association v. Veeresh Malik [W.P.(C) No. 876
of 2007] it has been observed, in the context of Section 2(h) as under:
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“In the case of control, or ownership, the intention here was
that the irrespective of the constitution (i.e. it might not be
under or by a notification), if there was substantial financing,
by the appropriate government, and ownership or control, the
body is deemed to be a public authority. This definition would
comprehend societies, co-operative societies, trusts, and other
institutions where there is control, ownership, (of the
appropriate government) or substantial financing. The second
class, i.e. non-government organization, by its description, is
such as cannot be "constituted" or "established" by or under a
statute, or notification.”
13. As regards what could constitute substantial financing, the Court in
Indian Olympic Association v. Veeresh Malik observed as under:
“60.This Court therefore, concludes that what amounts to
"substantial" financing cannot be straight-jacketed into rigid
formulae, of universal application. Of necessity, each case would
have to be examined on its own facts. That the percentage of funding
is not "majority" financing, or that the body is an impermanent one,
are not material. Equally, that the institution or organization is not
controlled, and is autonomous is irrelevant; indeed, the concept of
non-government organization means that it is independent of any
manner of government control in its establishment, or management.
That the organization does not perform - or pre-dominantly perform -
"public" duties too, may not be material, as long as the object for
funding is achieving a felt need of a section of the public, or to secure
larger societal goals. To the extent of such funding, indeed, the
organization may be a tool, or vehicle for the executive government's
policy fulfillment plan.”
14. As regards the control of IRWO, this Court finds that the key posts in
the IRWO are held by officials of the Railway Board although in an ex
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officio capacity. It is not denied that the Chairman of the Railway Board is
the patron of the Indian Railways and the Member(Staff), Railway Board is
the Chairman of IRWO in ex officio capacity; that the Executive Directors
of Establishment, Finance and Land Management are all members of the
governing body; that the Managing Director of the IRWO is appointed by
nomination by the Chairman, Railway Board and the Director (Technical),
IRWO is by nomination by the Member (Staff) of Railway Board and is
also a member of the governing body. The Director (Finance), IRWO is
nominated by the Member (Staff) Railway Board. Four co-opted members
are nominated/approved by the Chairman Railway Board. The IRWO
Grievance Committee which is a permanent body is chaired by the Adviser,
Land & Amenities, Railway Board. The above factors point to the control
of the IRWO by the Ministry of Railways.
15. At this juncture it must be observed that the submission that the control
has to be „deep and pervasive‟ is based on the decisions rendered by the
courts in the context of Article 12 of the Constitution. In the first place, the
question whether IRWO is “state” is not relevant for answering the question
whether it is a public authority for the purposes of the RTI Act. The
definition of „public authority‟ under Section 2 (1) (h) RTI Act does not talk
of „deep and pervasive‟ control. It is enough if it is shown that the authority
is „controlled‟ by the central government. The composition of the
Governing Body of IRWO and the manner of appointments of key
personnel of the IRWO as noticed hereinbefore bears testimony to the
control that the central government through the Ministry of Railways and
Railway Board has over IRWO.
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16. As regards the financing, it is important to note that apart from the past
financing through loans by the Indian Railways and the Ministry of
Railways even the recent proposal from the Ministry of Railways for a loan
to the IRWO has not been rejected. All that is said is that “in this case also
it has to be with the approval of the Ministry of Finance”. Also importantly
as regards the request by Indian Railways for loan from the PSUs it has
been observed as under:
“IRWO requested for loan from Railway PSUs like Rs.
20 crores each from RITES, CONCOR and IRCON and
Rs.10 crores each from IRCTC & Railtel Corporation at
the same term and conditions as last time as mentioned
at Genesis above. IRWO has discussed the matter with
IRFC and advised that IRFC is agreeable to advance
loan to IRWO at appropriate terms. However, IRWO
still feels that possibilities may be explored for
advancing the loan from Railway PSUs (viz. IRCON,
RITES, CONCOR, etc.) since rate of interest from bank
would be high.”
17. It is, therefore, not possible to agree with the contentions of learned
counsel for the Petitioner that there is no substantial financing of the IRWO
through funds directly or indirectly provided by the Ministry of Railways.
The point here is whether such financing is accessible to the IRWO. The
answer to that question has to be in the affirmative. This distinguishes
IRWO from any other society that may not have similar access to
government funds. The other factors highlighted in the counter affidavit
filed by the Respondents also demonstrate the control over the IRWO of the
Ministry of Railways.
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