Room No. 305, 2nd Floor, August Kranti Bhawan, Bhikaji Cama Place, New Delhi 110 066 Website: www.cic.gov.in CIC/LS/A/2013/001656/SS Dated: 26.4.2016 Appellant : Shri K. C. Unnikrishnan Respondents : Bhagyanagar Gas Limited Date of Hearing : 26.4.2016 This matter pertains to the RTI application dated 20.5.2013, filed by the Appellant to M/s Bhagyanagar Gas Ltd., seeking a copy of the Hook Up Agreement with Reliance Gas Transportation Infrastructure Ltd. (RGTIL) entered into in 2010. Shri V. Prabhatam, Senior Manager, O&M of M/s Bhagyanagar Gas Ltd. (BGL) responded on 23.5.2013, stating that BGL was not covered under the RTI Act. He returned the IPO sent by the Appellant in payment of the RTI application fee. The Appellant filed first appeal on 27.5.2013, which was responded to by Shri S. V. Prasad, Vice President (Projects and O&M) on 15.6.2013. He reiterated that BGL was not a public authority under the RTI Act, 2005 and added that the information sought by the Appellant was treated as information of absolute commercial confidence and its disclosure might harm the business standing of the Respondents. Aggrieved with the replies received from the Respondents, the Appellant filed an appeal dated 25.6.2013 to the Commission, which was heard on 29.1.2014, 28.3.2014 and 29.4.2014. In interim order No. CIC/LS/A/2013/001656/SS dated 15.5.2014, a single member bench of the Commission came to the conclusion that in view of an intricate question of law being involved in this matter, a full bench should be constituted to hear and decide it. Accordingly, a two member bench of the Commission was constituted to hear the matter.
2. The Appellant has submitted his written submissions dated 16.4.2016 that have been taken on record. The key points made by him are that M/s Bhagyanagar Gas Ltd. is a joint venture company constituted with participation of M/s GAIL India Ltd. and M/s HPCL, two public sector undertakings. He has also referred to the Commissions decision dated 28.10.2009 in complaint No. CIC/AT/C/2007/0216, 365, 462, 498, 540,
511 and complaint No. CIC/AT/C/2008/172, 342, 655, 487 and appeal No. CIC/AT/A/2007/0735, 729, 1370. The Appellant states that M/s Bhagyanagar Gas Ltd. have placed reliance on the CIC decision in respect of Madan Lal vs. Banking Division dated 26.8.2011 in support of their contention that BGL is not a public authority under the RTI Act. He submits that two separate awards were passed in the above decision of a full bench and the decision of the majority announced on 21.4.2011 stated, inter alia:
In the instant case, the financing of Hardicon by the appropriate Government(s) indirectly is to the extent of 30.8% (approximately). Though 30.8% may not constitute dominant or majority financing but it is certainly a substantial sum. In view of the reasons described above, Hardicon is a public authority under Section 2 (h) (d) (i) of the RTI Act.The Appellant has also referred to certain top functionaries of M/s Bhagyanagar Gas Ltd. coming from GAIL and HPCL. Hearing on 26.4.2016
3. The Appellant was present at the NIC Studio, Rangareddy. On behalf of the Respondents, Shri V. Prabhatam, Senior Manager, O & M was present at the NIC Studio, Rangareddy.
4. The Appellant stated that he filed an RTI application to the Respondents on 20.5.2013 seeking certain information, which has not been provided on the ground that M/s Bhagyanagar Gas Ltd. is not a public authority under the RTI Act. He submitted that in keeping with the provisions of Section 2 (h) (d) (i) and (ii) of the RTI Act, the Respondents qualify as a public authority. In this context, he stated that M/s Bhagyanagar Gas Ltd. have substantial shareholding of 99% approximately of GAIL India Ltd. and HPCL and are headed and controlled by Directors provided by the above public sector undertakings. Therefore, M/s Bhagyanagar Gas Ltd. is a body substantially controlled and financed by Government. The Appellant also challenged the involvement of commercial confidence in this matter and stated that the Respondent public authority got into an agreement with M/s Reliance Gas Transportation Infrastructure Ltd., involving public money and, therefore, the public has the right to get information concerning the agreement. He prayed for direction to the Respondents to appoint a CPIO and provide the information sought by him.
5. The Respondents stated that they stand by their earlier position that they are not a public authority under the RTI Act, even though they are a joint venture of GAIL India Ltd. and HPCL. They further submitted that Commissions decision No. 1182/IC(A)/2007 dated 28th August 2007, declaring Indraprastha Gas Ltd. promoted by GAIL India Ltd. and BPCL as a public authority under the Act was stayed by High Court. The information sought by the Appellant concerns an agreement involving commercial confidence, which cannot be revealed to third parties. In response to our query regarding their shareholding, the Respondents stated that GAIL India Ltd. and HPCL hold approximately 98% shares. The Respondents also referred to subSection
45 of Section 2 of the Companies Act, 2013 as per which a Government company means any company in which not less than 51% of the paidup share capital is held by the Central Government or by any State Government or Governments and added that M/s Bhagyanagar Gas Ltd. do not fall in this category. In response to our query, they stated that in the Board of Directors of M/s Bhagyanagar Gas Ltd., there are two directors each from GAIL India Ltd. and HPCL and, at the moment, one independent director; though as per the Companies Act, there should be two independent directors. In future, the shareholding of GAIL India Ltd. and HPCL would be diluted. M/s Bhagyanagar Gas Ltd. have obtained financing from Canara Bank and Corporation Bank.
6. The Appellant reiterated his prayer for provision of the information, stating that two public sector undertakings have substantial shareholding in M/s Bhagyanagar Gas Ltd., which has been financed from Government funds. It should, therefore, be a public authority under the RTI Act. Discussion and Decision
7. We have considered the submissions of both the parties. The following observations made by the High Court of Delhi in its judgment dated 12.3.2015 in Hardicon Ltd. vs. Madan Lal [W.P.(C) 6946/ 2011] are germane to the aspect of substantial financing by the appropriate Government raised in this matter:
14. The next question to be examined is whether the petitioner is substantially financed by the appropriate Government. In my view, this question must also be answered in the negative as there is no material to indicate that the petitioner has been indirectly funded by the appropriate Government. Undoubtedly, the Central Government has substantially funded the nationalized banks. However, it is equally true that the said banks have been funded to a significant extent by other shareholders. Concededly, the petitioner has been promoted by its shareholders as a commercial entity to render consultancy services on a commercial basis. The petitioner is, clearly, a joint commercial venture by several entities.As is clear from the above observations, in order to hold that an entity has been indirectly financed by an appropriate Government, first of all, it is necessary to find that the Central Government has parted with some funds for financing the authority / body; and secondly, the said funds have found their way to the authority / body in question. The link between the financing received by an entity and an appropriate Government must be clearly established. The High Court further observed in the above case that although substantial part of equity of nationalised banks is held by the Government, the sources of funds available to the bank are not limited to the Government alone. Banks receive substantial deposits as part of their business and also generate substantial income from their commercial activities. Such funds are also deployed by lending and investing in other entities. Further, since the funds received by Hardicon Ltd. by way of subscription to its equity could not be traced to any Government, the conclusion that the Government had indirectly provided substantial finance was not sustainable.15. The CIC held that as 61.5% of equity of the petitioner was subscribed by government owned entities and the same would meet the criteria of substantial financing by an appropriate Government. I find it difficult to agree with the said conclusion. Admittedly, the Government whether it be State Government or Central Government has not provided any direct funding to the petitioner. The question whether the entity has been indirectly financed is to be determined on the facts of each case. In this case, there is no material to indicate any flow of funds from any government to the petitioner. In order to hold that an entity has been indirectly financed by an appropriate Government, first of all, it is necessary to find that the Central Government has parted with some funds for financing the authority/body; and secondly, the said funds have found their way to the authority/body in question. The link between the financing received by an entity and an appropriate Government must be clearly established.
16. In this case, there is no material to indicate that any of the funds received by the petitioner owed their source to either the Central Government or the State Government. The constituent shareholders of the petitioner are independent entities and whose source of funds are not limited to the Central Government/State Government. Although, substantial part of equity of nationalized banks is held by the Government, the sources of funds available to the bank are not limited to the Government alone. Banks receives substantial deposits as a part of their business. In addition, the banks also generate substantial income from their commercial activities. Such funds are also deployed by banks by lending and investing in other entries. Since the funds received by the petitioner by way of subscription to its equity cannot be traced to any Government. The conclusion that the government has indirectly provided substantial finance to the petitioner is not sustainable.
8. From the information obtained from the websites of GAIL India Ltd. and HPCL, it is seen that the shareholding of Government of India in these entities is 56.11% and 51.11% respectively. The remaining shareholding is of financial institutions, banks, mutual funds, employees and others. Further, these entities also generate income from their commercial activities. Therefore, shareholding of approximately 98% by these organizations in M/s Bhagyanagar Gas Ltd. does not qualify as substantial financing by the appropriate Government within the scope of Section 2 (h) (d) (i) of the RTI Act. Further, even though four of the five directors of M/s Bhagyanagar Gas Ltd. are from GAIL India Ltd. and HPCL, because of what is stated above regarding the shareholding of GAIL India Ltd. and HPCL, their presence on the Board of Directors cannot be regarded as substantial control by the appropriate Government.
9. In view of the foregoing, we decide that M/s Bhagyanagar Gas Ltd. is not a public authority under the RTI Act. The appeal is disposed of accordingly.
10. Copies of this order should be given free of charge. Sd/ Sd/ (Manjula Prasher) (Sharat Sabharwal) Information Commissioner Information Commissioner Authenticated true copy. Additional copies of orders shall be supplied against application and payment of the charges prescribed under the Act to the CPIO of this Commission. (Vijay Bhalla) Deputy Registrar Name & Address of Parties:
1. Mr K.C Unnikrishnan B1, Industrial Estate, Sanathnagar, Hyderabad 500004
2. The Senior Manager (O&M, Bhagyanagar Gas Limited, Parisrama Bhavan, 2nd Floor, Parisrama Bhavan, Basheer Bagh, Hyderabad 500004
3. The Vice President (Project & OM), Bhagyanagar Gas Limited, Parisrama Bhavan, 2nd Floor, Parisrama Bhavan, Basheer Bagh, Hyderabad 500004
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