CIAL is a public authority
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE AMIT RAWAL
FRIDAY, THE 2ND DAY OF DECEMBER 2022 / 11TH AGRAHAYANA, 1944
WP(C) NO . 19452 OF 2019
Cochin International Airport Ltd. v. The State Information Commission & Anr. and other connected cases
https://www.livelaw.in/news-updates/kerala-hc-holds-cochin-international-airport-ltd-to-be-public-authority-216252
26. Both parties have not denied that the promoter share of
the State of Kerala is 32.42% and that other Government entities
have also share holding. On perusal of the Article 125 extracted
above, it is evident that the Chairman of the Company would be
the Chief Minister and the Managing Director, an IAS officer who
WPC No.19452 of 2019 and conctd. cases
35
is drawing a salary from the State Ex-chequer. Besides these two
persons, two directors are the sitting Ministers and another
Director is the Chief Secretary. The list of the present Board of
Directors reads thus:
Shri. Pinarayi Vijayan, Chief Minister of Kerala Chairman
Shri.P.Rajeeve, Minister Director
Shri.K.Rajan, Minister Director
Dr. V.P Joy, Chief Secretary Director
Shri. E.K Bharat Bhushan (Former Chief
Secretary, Former DGCA) Director
Smt. Aruna Sundararajan (Former Telecom
Secretary) Director
Shri. N.V George Director (MD, M/s Geo Electricals Trading and
contracting company Ltd., Sharjah)
Shri. M.A Yusuff Ali Director (MD, M/s EMKE Group, Abu dhabi)
Shri. E.M Babu Director (M/s Majeed Bukatara Trading Esst, Dubai,
UAE)
Shri. S. Suhas IAS , Managing Director, CIAL.
27. In Thalappalam Service Cooperative Bank Ltd.
(supra), the controversy pertained to disclosure of the
information in respect of the Co-operative Society registered
under the Kerala Co-operative Societies Act, 1969. In para 40 of
the judgment it was held that the burden to show that the body is
owned, controlled or substantially financed or that a nongovernment organization is substantially financed directly or
indirectly by the funds provided by the appropriate government is
on an applicant, who seeks the information. Para 40 of the
judgment reads as under:
40. The burden to show that a body is owned, controlled or
substantially financed or that a non-government organization
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is substantially financed directly or indirectly by the funds
provided by the appropriate Government is on the applicant
who seeks information or the appropriate Government and
can be examined by the State Information Commission or the
Central Information Commission as the case may be, when
the question comes up for consideration. A body or NGO is
also free to establish that it is not owned, controlled or
substantially financed directly or indirectly by the
appropriate Government.
43. We are of the view that the High Court has given a
complete go-bye to the above-mentioned statutory principles
and gone at a tangent by mis- interpreting the meaning and
content of Section 2(h) of the RTI Act. Court has given a
liberal construction to expression “public authority” under
Section 2(h) of the Act, bearing in mind the “transformation
of law” and its “ultimate object” i.e. to achieve “transparency
and accountability”, which according to the court could alone
advance the objective of the Act. Further, the High Court has
also opined that RTI Act will certainly help as a protection
against the mismanagement of the society by the managing
committee and the society’s liabilities and that vigilant
members of the public body by obtaining information
through the RTI Act, will be able to detect and prevent
mismanagement in time. In our view, the categories
mentioned in Section 2(h) of the Act exhaust themselves,
hence, there is no question of adopting a liberal construction
to the expression “public authority” to bring in other
categories into its fold, which do not satisfy the tests we have
laid down. Court cannot, when language is clear and
unambiguous, adopt such a construction which, according to
the Court, would only advance the objective of the Act. We
are also aware of the opening part of the definition clause
which states “unless the context otherwise requires”. No
materials have been made available to show that the
cooperative societies, with which we are concerned, in the
context of the Act, would fall within the definition of Section
2(h) of the Act.
28. By noticing the definition of Section 2(h) in Para 43, it
was held that the High Court had given a liberal construction to
the expression 'public authority' under Section 2(h) of the Act,
bearing in mind that the 'transformation of law' and its 'ultimate
WPC No.19452 of 2019 and conctd. cases
37
object' to achieve transparency and accountability. Therefore,
the provision of RTI Act would be applicable to the management of
the Society. The said view according to the Supreme Court was
held to be incorrect on the ground that there was no question for
the High Court in adopting a liberal construction to the expression
'Public authority' to bring other categories into fall than the one
specified in Section 2(h)(d) (i) and 2(h)(d) (ii). The aforementioned
judgment was rendered on 7.10.2013.
29. In a matter pertaining to D.A.V. College Trust And
Management Society (supra) Supreme Court on 17.9.2019
noticed that the expression 'substantial' though means a large
portion but it would not necessarily mean a major portion or more
than 50%. No hard and fast rule can be laid down as a Substantial
Financing can be both 'Direct or Indirect'. By giving such
observations, it was held that whether an NGO or body or any
company is “Substantially Financed” by the Government would be
a question of fact and has to be determined as per the facts on
each case. For example, there can be a finance more than 50%
but still cannot be called substantially financed but where if a
company or body gets hundreds or crores of Rupees as grant and
it is less than 50%, the same would be termed to be substantially
financed.
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30. The aims and object of the Cochin International Airport
(CIAL), read with provisions of Article 95 and 125 of the Articles of
Association would lead to an irresistible conclusion that the
Government of Kerala had Deep and Pervasive control over the
Company. As per the provisions of the Articles of Association, the
Managing Director shall have the general directions, management
and supervision of the business of the Company with powers to do
all acts, matters, things deem necessary for carrying out the
business of the Company. Thus, his control is also Deep and
pervasive. The Board de facto is controlled by the Chief Minister
and three other ministers of the Cabinet and the senior IAS officer
of the State. The Government order of 15.6.2016, also is a
testimony to the fact that the Managing Director of the CIAL
would be drawing a salary from the Government of Kerala in the
capacity of the Additional Chief Secretary in the Government. In
the Thalappalam Service Cooperative Bank Ltd.(supra), it
was held that the Co-operative Society would not be falling within
the definition of Public authority whereas by noticing the ratio
culled out in the subsequent judgment of the D.A.V. College
Trust And Management Society (supra), wherein, it has been
held that if the holding is even less than 50% but the funding is
substantial or financing direct or indirect would be substantial. In
the present case decisions are being taken by the majority of the
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Directors who are from the Government then it cannot be said that
such entity would not be a public authority as defined under
Section 2(h). The relevant paragraphs of the judgment in D.A.V.
College Trust And Management Society vs Director Of
Public Instructions (2019) 9 SCC 185 para 26, 27 and 28 read
thus:
26. In our view, "substantial" means a large portion. 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. To give
an example, if a land in a city is given free of cost or on heavy
discount to hospitals, educational institutions or such other
body, this in itself could also be substantial financing. The
very establishment of such an institution, if it is dependent on
the largesse of the State in getting the land at a cheap price,
would mean that it is substantially financed. Merely because
financial contribution of the State comes down during the
actual funding, will not by itself mean that the indirect
finance given is not to be taken into consideration. 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.
27. Whether an NGO or body is substantially financed by the
Government is a question of fact which has to be determined
on the facts of each case. There may be cases where the
finance is more than 50% but still may not be called d
substantially financed. Supposing a small NGO which has a
total capital of Rs 10.000 gets a grant of Rs 5000 from the
Government, though this grant may be 50%, it cannot be
termed to be substantial contribution. On the other hand, if a
body or an NGO gets hundreds of crores of rupees as grant
but that amount is less than 50%, the same can still be
termed to be substantially financed.
28. Another aspect for determining substantial finance is
whether the body. authority or NGO can carry on its activities
effectively without getting finance from the Government. If its
functioning is dependent on the finances of the Government
then there can be no manner of doubt that it has to be termed
as substantially financed.
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31. The petitioners have also relied upon the judgment of
the Supreme Court in Steel Authority of India Ltd. And Others
v. National Union Waterfront Workers and Others (2001) 7
SCC 1 Para 41 wherein by noticing the judgment of Heavy
Engineering Mazdoor Union v. State of Bihar and Others
1969 (1) SCC 765, the question which came up for consideration
before the Supreme Court in the earlier decision and in the
subsequent was with regard to the expression 'appropriate
government'. Where the Central Government had contributed the
entire share capital and all the shares held by the President of
India and certain officers of Central Government would not make a
difference until and unless there is a statutory provisions or a
commercial co-operation acting on its own behalf. Even though it
was controlled wholly or partially by Government department
would be ordinarily presumed not to be servant or agent of the
State. But it was clarified that a reference that the Corporation
was the agent of the Government could be drawn where it was
performing 'in substance' Governmental and not “commercial
functions”. In other words, mere share holding of the Government
would not lead to a conclusion that it has a Deep and Pervasive
control. There is no quarrel to the aforementioned findings, but
the facts cumulatively noticed above along with the Articles of
Association, and acceptance of the candid admission of the
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Company on their website leaves no manner of doubt that the
State of Kerala has deep and pervasive control and therefore the
petitioner Company CIAL would definitely fall within the definition
of public authority as defined under Section 2(h) (d) (i) and (ii) of
the Act