Wednesday, April 25, 2012

SIC declares JK Bank as Public Authority under RTI Act


In an order of far-reaching consequences, the State Information Commission (SIC) has declared the Jammu and Kashmir Bank as a Public Authority and held it liable to provide information under the Right to Information Act, 2009.

The order has been passed by the full bench of the Commission comprising Chief Information Commissioner, G R Sufi and Information Commissioners Dr Sudesh Kumar and Nazir Ahmad while deciding bunch of complaints and appeals filed by Advocate Vilakshan Singh, RTI activist Raman Sharma and others.

After hearing arguments of Senior Advocate Zaffar Shah appearing for the Jammu and Kashmir Bank and Advocate Vilakshan Singh for the complainants and perusal of records, the State Information Commission observed, "the State Government has defacto control over the Bank", adding "with the Government directions, the Bank has started traveling to other areas of public services and is discharging all public functions like implementation of Common Services Center (CSC) Scheme, which is an important part of National e-governance Programme (NEGP) of Government of India". 

"The Bank was entrusted with the responsibilities of implementing this scheme in the State as a specific case by Department of Information Technology on the recommendations of the State Government. The Bank is entrusted with the scheme of interest subvention of Government of India also", the Commission said, adding "whatever schemes for last several years Government of Jammu and Kashmir have introduced for the welfare and economic betterment of its state subjects, the J&K Bank has been used as its own agency by the Government to make these schemes successful".

"These schemes are listed in the website of the Bank itself, for instance, Roshni Finance Scheme to provide finances to occupants desirous of acquiring free hold rights of the Government of Jammu and Kashmir. Similarly, schemes of finances to the growers of the State, finances to traders, commission and forwarding agents and zafran growers are being implemented by the Government through J&K Bank", the SIC said.

Moreover, J&K Bank is also playing an important role in implementation of seed capital fund scheme of State Government, which is aimed at to provide finance to eligible candidates sponsored by JKEDI under the Seed Capital Fund Scheme and the same is highlighted on the website of the Bank, the SIC further said.

"The J&K Bank is considered to be one of first State Banks in the country. According to the extended central laws to the State, the J&K Bank was characterized as a Government Company as per the provisions of the Indian Companies Act, 1956. In 1971 the Bank was accorded the status of Scheduled Bank and in 1976 it was declared as ‘A’ class Bank by RBI", the SIC mentioned.

The SIC observed: "The Comptroller and Auditor General of India is exercising its jurisdiction while auditing the Bank. The State Audit Authorities are also auditing the accounts of the Bank. All these factors strengthen Government Control and influence over J&K Bank". 

Observing that for the last few years the Government has further tightened its control over the Bank, the Commission said that State Legislature has established its authority over the Bank through Committee on Public Enterprise and directed the Bank authorities to appear before it and carry out the instructions and directions for ensuring speedy recovery of loans advanced by the Bank. 

"These developments are not mere formalities and indicate that Bank is a Public Authority within the definition of Section 2 of the State RTI Act, 2009", the Commission said, adding "the CAG through its AG’s office in Jammu and Kashmir Bank Ltd have also assumed jurisdiction over the Bank and the Bank has acquiesced in the jurisdiction".

"The CAG’s audit control cannot be dismissed merely by saying that it is a requirement under the Companies Act 1956. Only the Government companies are subjected to such audit and the Government companies are nothing but Public Authorities established, owned, controlled by the Government", the SIC said, adding "the J&K Bank Ltd may not be a ‘State’ as defined under Article 12 of the Constitution of India, but the Commission is of the considered opinion that it fulfills all the limbs of Section 2 of the State RTI Act, 2009".

"The Government is exercising its dominating influence and control through the Chairman of the Bank and through its nominee as Directors. It has been also seen that J&K Bank has always carried out guidance, instructions and wishes of the Government, whether it be granted extra ordinary overdrafts, whether it is subsidy schemes, whether it is the appointment and removal of the Chairman at the wish and pleasure of the Government", the Commission said while drawing conclusion that Government has ‘defacto control’ over the multifarious activities of J&K Bank.

"Another limb in the definition of Public Authority given in Section 2 is the term—substantially financed by the Government. Not only has the Government substantial financial control over the Bank by having 92% shares initially, which has been later on reduced to 53% not by de-investing or withdrawing or selling the shares but by the mere fact that no subsequent subscription was made by the Government when the bank invited and floated a public issue in late 1990’s", the SIC said. 

While declaring the J&K Bank as Public Authority as defined in Section 2 of the J&K RTI Act, 2009, the Commission directed the Chairman and CEO of the Bank to designate First Appellate Authority/ Authorities, Public Information Officer/Officers and Assistant Public Information Officers as provided under Section 5 of the RTI Act to provide information to residents of the State under the Act. 

The Commission directed that the applications made to the Chairman/Chief Executive Officer and other executives of J&K Bank Ltd by various complainants should be forwarded to the concerned Public Information Officers and they be directed to dispose of those applications in accordance with the provisions of Section 7 of the State Right to Information Act. 

About the apprehensions of the counsel for the Bank that declaration of Public Authority would amount to opening flood gates for certain exploiters with vested interest to make frivolous applications, which may breach trust between the banker and depositors, the Commission brought the attention of Bank’s counsel towards adequate safeguards provided in the Act under Section 8 particularly Sub Section (d), (e) and (i) and Section 10 and 11 of the State RTI Act, 2009 and Commission".

The Commission directed that its order be given effect within a period of one month from the date of its receipt.

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