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Indian Railway Welfare Organisation v. D.M Gautam & Anr. .
Summary of Opinion — Indian Railway Welfare Organisation v. Central Information Commission
Factual and Procedural Background
The Central Information Commission (CIC) held that the Indian Railway Welfare Organisation (IRWO) is a "public authority" within the meaning of Section 2(1)(h) of the Right to Information Act, 2005 (RTI Act). IRWO, a society registered under the Societies Registration Act, 1860, promotes and provides dwelling units to serving and retired railway personnel on a no profit no loss, self-financing basis. The IRWO challenged the CIC's order by filing the present writ petition contending that it is not an instrumentality or agent of the State, that the Ministry of Railways does not exercise deep or pervasive control over it, and that it receives no substantial funding from the Central Government. The CIC's order finding IRWO to be a public authority is under challenge before the High Court; the Court disposed of the writ petition by dismissing it.
Legal Issues Presented
- Whether the Indian Railway Welfare Organisation (IRWO) is a "public authority" within the meaning of Section 2(1)(h) of the RTI Act.
- Whether IRWO is "controlled" by the appropriate government (Ministry of Railways/Railway Board) for purposes of Section 2(1)(h).
- Whether IRWO, as a non-governmental organisation, is "substantially financed, directly or indirectly by funds provided by the appropriate Government" under Section 2(1)(h)(d)(ii).
Arguments of the Parties
Petitioner's (IRWO) Arguments
- IRWO is a society registered under the Societies Registration Act, 1860, and its activities are self-financing; its principal objective is welfare housing for railway personnel on a no profit no loss basis.
- IRWO receives no grant from the Railway Board or Central Government; past loans (Rs. 10 crores from Ministry of Railways repaid; Rs. 6 crores from Railway PSUs with Rs. 1.2 crores outstanding) do not amount to substantial financing.
- The Railway Board/Ministry of Railways does not exercise administrative or financial control over IRWO; only 4 officials of the Ministry serve ex officio on a 19-member governing body and no member is nominated or removable by the Central Government.
- A letter by Member (Staff), Railway Board initiating registration was not determinative of IRWO's legal status and should not be taken as establishing that the Indian Railways formed the society.
Respondent No. 1's (CIC / Counter-affidavit) Arguments
- The Union Railway Minister announced the registration of IRWO in Parliament (1989–90) and IRWO commenced activities with loan assistance from the Ministry of Finance; Rs. 10 crores was proposed in the Railway Budget (1990–91).
- The Ministry of Railways was the sole sponsor in IRWO's registration; a letter dated 20 September 1989 from Member (Staff), Railway Board to the Registrar of Societies stated the Ministry's decision to set up IRWO.
- Key posts in IRWO are held by Railway Board officials in an ex officio capacity (Chairman as Patron; Member (Staff) as Chairman; Executive Directors as governing body members); appointments of MD, Director (Technical), Director (Finance) are by nomination of Railway Board officials; four co-opted members are approved by Chairman Railway Board; the grievance committee is chaired by a Railway Board adviser.
- Operational and administrative matters, including appointments, terms of service, and employee representations, are processed by the Land and Amenities Directorate of the Railway Board, and IRWO was instructed to submit such cases to that Directorate for Railway Board approval.
- Financial assistance and facilitation: loans from Railway PSUs were directed (IRCON, RITES, CONCOR gave soft loans); proposals for further loans have been considered by the Ministry; complimentary railway passes are sanctioned to IRWO officers and staff; land and office accommodation (including headquarters space in Delhi and multiple zonal offices) were provided on nominal or no charges, demonstrating substantial indirect financing.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Indian Olympic Association… v. Veeresh Malik & Ors.… | The observation that bodies (including societies) may be public authorities if there is ownership, control or substantial financing by the appropriate government; and that "substantial" financing cannot be rigidly defined and must be assessed on facts of each case. | The Court relied on the principles from this judgment to assess IRWO on two angles — control and substantial financing — and to hold that the presence of control and accessible financing from the Ministry of Railways/Railway Board brought IRWO within Section 2(1)(h). |
Court's Reasoning and Analysis
The Court approached the question along two lines: (1) whether IRWO is "controlled" by the appropriate Government (Ministry of Railways/Railway Board); and (2) whether IRWO is a non-governmental organisation substantially financed, directly or indirectly, by funds provided by the central government.
On control: the Court found that key posts in IRWO are held by Railway Board officials (even if in ex officio capacity) — the Chairman of the Railway Board is Patron, Member (Staff) Railway Board is ex officio Chairman of IRWO, Executive Directors of Establishment, Finance and Land Management are members of the governing body; the Managing Director and other senior IRWO directors are appointed by nomination by Railway Board officials; four co-opted members are nominated/approved by the Chairman Railway Board; the permanent grievance committee is chaired by a Railway Board adviser; and core administrative functions (appointments, terms, employee demands) are processed through the Land and Amenities Directorate of the Railway Board. These composition and appointment mechanisms were held to demonstrate control by the Ministry of Railways.
The Court rejected the submission that "deep and pervasive" control (a test from Article 12 jurisprudence) was required for the RTI Act context, noting that the definition of "public authority" under Section 2(1)(h) does not require such a stringent standard — it suffices that the authority is "controlled" by the central government.
On financing: the Court considered historical and potential financings — loans provided by the Ministry of Railways and Railway PSUs (including a past Rs. 10 crores loan, PSUs directed to give soft loans, and consideration of further loan proposals), nominal or free provision of land/office accommodation (including headquarters space in Delhi licensed at a nominal fee), and complimentary passes — and concluded that IRWO had access to funds and resources provided by the central government, which qualified as substantial financing for purposes of Section 2(1)(h)(d)(ii). The Court relied on the principle from Indian Olympic Association v. Veeresh Malik that substantial financing is a facts-based inquiry and not susceptible to a rigid formula.
Considering the aggregate of formation, management, appointments, access to government-controlled financing, provision of premises and other facilities, the Court concluded that the CIC did not err in treating IRWO as a public authority under Section 2(1)(h) of the RTI Act.
Holding and Implications
Holding: The writ petition is dismissed. The Court upheld the CIC's order that IRWO is a public authority within the meaning of Section 2(1)(h) of the RTI Act and directed disclosure of the information sought by the respondents. The Court DISMISSED the writ petition, vacated the interim order, and dismissed the application.
Implications: The direct effect is that IRWO is subject to the RTI Act and must comply with disclosure obligations under the CIC's order. The opinion does not purport to create a new legal precedent beyond applying existing principles (including those from Indian Olympic Association v. Veeresh Malik) to the facts of IRWO; no broader novel doctrine is announced in the text of this opinion beyond the application of Section 2(1)(h) principles to the present facts.
Dr. S. Muralidhar, J.— 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 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 exofficio 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 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 1989-1990. 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 exofficio 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 1989-1990 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 1990-1991. 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 20th 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 upon.
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.
—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 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 lakh 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 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 & Ors.…) No. 876 of 2007] it has been observed, in the context of Section 2(h) as under:
“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 strait-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 fulfilment 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 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 and 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.
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.
18. For the aforementioned reasons, this Court is satisfied that no error has been committed by the CIC in holding that IRWO is a public authority within the meaning of Section 2(1)(h) of the RTI Act and directing disclosure to the Respondent of the information sought by them from the IRWO. The writ petition is dismissed. The interim order is vacated and the application is also dismissed.
Writ Petition Dismissed.
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