Make RTI Act applicability must for NGOs to get funds

By Satya Prakash

Seldom does a law capture the popular imagination of the people of a nation the way the Right to Information Act (RTI) has done. The manner and extent of its use by people—cutting across the geographical, class and other such divides—undisputedly makes it the most popular law in India.

“Democracy requires an informed citizenry and transparency of information which are vital to its functioning and also to contain corruption and to hold governments and their instrumentalities accountable to the governed.”

This declaration in the objects and reasons of the RTI Act sums up the importance that the Legislature chose to give to the transparency law enacted in 2005. Notwithstanding certain recent amendments, the Act remains vital to ensuring transparency and holding public authorities to account.

In this context, the Supreme Court’s recent verdict expands the scope of RTI Act’s applicability by clarifying the legal position regarding its ambit in cases involving NGOs funded by the government.

The RTI Act applies to any “public authority” and makes it obligatory of their part to maintain records and confers right on every citizen to seek and get information from the public authority.

Section 2(h) of the Act that defines “public authority” says any authority or body or institution of self­government established or constituted by or under the Constitution; by any other law made by Parliament; by any other law made by state legislature; by notification issued or order made by the appropriate government.

It includes any organisation/body owned, controlled or substantially financed; non­government organisation substantially financed, directly or indirectly by funds provided by the appropriate government, the provision further says.

Despite receiving funds from the government, many NGOs were often avoiding scrutiny under the RTI Act by claiming that they were not a “public authority”. But now the Supreme Court has amply clarified the legal position by ruling that NGOs substantially funded from public exchequer would be amenable to the RTI Act.

“We have no hesitation in holding that an NGO substantially financed, directly or indirectly, by funds provided by the appropriate government would be a public authority amenable to the provisions of the Act,” a Bench headed by Justice Deepak Gupta said while deciding a petition filed by DAV College Trust and Management Society that runs educational institutions. The society had claimed that NGOs were not covered under the RTI Act as they were not a “public authority” as defined under Section 2(h) of the Act.

However, after interpreting Section 2(h) of the RTI Act, the Bench said by specifically bringing NGOs it was obvious that Parliament intended to include them.

A society that may not be owned or controlled by the government, may be an NGO; but if it is substantially financed—directly or indirectly—by the government, it would fall within the ambit of Section 2(h), the top court said.

Noting that “substantial” means a large portion, the top court said, “It does not necessarily have to mean a major portion or more than 50%. No hard and fast rule can be laid down in this regard. Substantial financing can be both—direct or indirect.”

If a piece of land is given free of cost or on heavy discount to a hospital, educational institutions or such other body, this, in itself, could amount to substantial funding, it clarified. What is important is that the court said the value of the land will have to be evaluated not only on the date of allotment but even on the date when the question arises as to whether the said body or NGO is substantially financed.

Whether an NGO or body is substantially financed by the government is a question of fact that has to be determined on the facts of each case. There may be cases where the finance is more than 50 per cent, but still may not be called substantially financed, it said.

The verdict would bring a large number of organisations substantially funded by the government under the ambit of the Act. It would also make all public-private partnership (PPP) projects amenable to the law.

“Revelation of information in actual practice is likely to conflict with other public interests, including efficient operations of the governments, optimum use of limited fiscal resources and the preservation of confidentiality of sensitive information… It is necessary to harmonise these conflicting interests while preserving the paramountcy of the democratic ideal,” the statement of object of the Act stated.

What’s needed is a decision on part of the government to make applicability of the RTI Act a condition precedent for any organisation for receiving public funds. Also, all those already receiving public funds can be notified to be “public authority” under the RTI Act. This will enhance the level of transparency and spare citizens seeking information from unnecessary litigation for something they are entitled to under the law.

Substantial funding, the yardstick 

• An NGO substantially financed, directly or indirectly, by funds provided by the appropriate government would be a public authority amenable to the provisions of the Act
• Substantial does not necessarily have to mean a major portion or more than 50%. No hard and fast rule can be laid down in this regard. Substantial financing can be both—direct or indirect