Citizens' Issues
Competition Commission probing Hiranandani Hospital for unfair practices in stem cell market

CCI said it found prima facie evidence that Hiranandani Hospital may have abused its dominant position to restrict parents from preserving their newborn's umbilical cord in other stem cell banks

The Competition Commission of India (CCI) is investigating Mumbai-based LH Hiranandani Hospital for alleged unfair business practices in the stem cell market by restricting parents from preserving newborn’s stem cells at banks of their choice.


According to a latest newsletter, the Commission has “found prima facie evidence that the hospital may have abused its dominant position under the Competition Act, 2002 and directed the Director General (DG) to investigate the matter."


The informant had submitted to the Commission that while obtaining maternity services of the hospital, he was not allowed to take LifeCell’s umbilical cord stem cell banking services’.


“The said hospital, instead, insisted to have the services from Cryobanks, with which the hospital had an exclusive tie-up,” the newsletter said.


As per the newsletter, companies like LifeCell and Cryo-Cell provide various services relating to collection and preservation of the cord blood and cord tissue.


The Commission found that the patients were forced to take services of Cryobanks, if they wanted to preserve the stem cells of their new born babies.


“The consumers were left with no other choice for availing themselves of the stem cell services, while hospitalised in the said hospital. Prima facie, the agreement between the hospital and Cryobanks was found to be exclusive in nature and in violation of Section 3(4), requiring further investigation by DG,” the newsletter said.


Moreover, the commission has found that the hospital is a dominant player in the relevant market—of providing maternity services in high end multi-speciality hospitals in Mumbai, among others.


“ ... the condition imposed by the said hospital to avail the stem cell banking services of Cryobanks only, appears to be an unfair condition and a prima facie violation of Section 4, that is, abuse of dominant position, requiring further investigation by DG,” the newsletter said.


Stem cells are increasingly being used for regenerative medicine. These cells, which can help in treating a variety of diseases, are generally taken from cord blood and bone marrow.


A new born’s stem cells are preserved so that if necessary, these cells can be harvested to treat diseases in the future. They are taken soon after birth from the umbilical cord blood.


RTI Judgement Series: Legislations or rules cannot go beyond exemptions provided in Section 8 and 9 of the RTI Act

Rules framed by a competent authority cannot go beyond the exemptions provided in Section 8 and 9 of the RTI Act, said the CIC. This is the 47th in a series of important judgements given by former Central Information Commissioner Shailesh Gandhi that can be used or quoted in an RTI application

The Central Information Commission (CIC), said exemptions other than those provided under Section 8 and 9 of the Right to Information (RTI) Act can neither be claimed not be provided for in subordinate legislations.


While giving this important judgement on 11 January 2010, Shailesh Gandhi, the then Central Information Commissioner, said, “The Commission would like to stress that since Right to Information is a fundamental right of citizens, any move which constricts it should be avoided. Even Parliament is very wary of the restrictions it can place on the fundamental right of the citizen, and hence competent authorities would be well advised to ensure that they do not create any exemptions which the lawmakers did not provide."


Delhi resident Vijay Kumar sought information from the District Sessions Judge, Delhi about a fact finding inquiry report conducted by Sangeeta Dhingra Sehgal. He sought the following information...


Copy of fact finding inquiry report, - date not known, - conducted by Ms. Sangeeta Dhingra Sehgal, the then Ld. CMM, Tis Hazari Courts, Delhi on the basis of which a regular charge sheet was issued to the Appellant vide file no. F.903/Vig/02. The said report is lying in the Vigilance Branch.


Shailesh Gandhi recently conducted an RTI workshop organised by Moneylife Foundation, on how to file effective RTIs

To access the event report, please click here.


The Public Information Officer (PIO) of District Sessions Judge, Delhi while denying the information forwarded a note from Superintendent of Vigilance Branch, Tis Hazari Court, Delhi. He said, "After obtaining the report from the Superintendent, Vigilance Branch, Tis Hazari Court, Delhi u/s 5 (4) of RTI Act, 2005 is being forwarded to you which is self explanatory."


In his report, the deemed PIO and Superintendent, Vigilance Branch said, "The matter was before Ld. District Judge-I & Sessions Judge (Officiating), Delhi and vide order dated 25.05.09 request of the applicant has been declined as supply of copy of fact finding inquiry is not permissible and the same is prohibited under Central Civil services (Classification, Control & Appeal) RULES, 1965 or CCS (CCA) Rules, Right to Information Act, 2005 that overrides other enactments, but the same has to be read harmoniously along with CCS (CCA) Rules. To take any other view would amount to defeating the CCS (CCA) Rules which has not repealed. Similar view has been taken by the Hon'ble High Court vide order dated 27 April 2009 in Writ Petition (C) 8517/2009 titled as 'District and Sessions Judge and Anr. VN Venkatesan and Anr while granting relief."


After receiving this reply, Vijay Kumar requested the PIO to provide him a copy of the relevant rules. The PIO forwarded the request to the Superintendent of Vigilance Branch, who in turn provided extracts of a book on disciplinary proceedings to Kumar.


Not satisfied with the reply from the PIO, Kumar the filed his first appeal, in which he stated that "The information sought is available with the concerned branch and has to be made available to the Appellant since RTI Act overrides any other enactments in this regard. The CCS (CCA) Rules cannot override a statutory enactment.  Rules are subservient to law and not above it.  A clear unambiguous provision in law cannot be downplayed under the guise of a rule."


However, the First Appellate Authority (FAA) rejected the appeal. In his order, the FAA, said, "The Appellant (Kumar) is aggrieved by the information provided by PIO viz the requisite information could not be provided as not permissible being prohibited under CCS-CCA Rules 1965 and in view of the judgment dated 27/04/2009 in Writ Petition (C) 8517/09 passed by the High Court. The Appellant states that he is very much entitled to a copy of Fact Finding Inquiry. The Appellant has been informed that under the rule 7 (xii) of Delhi District Court. (Right to Information Rules) 2008, the information cannot be disclosed/provided to him."


Vijay Kumar then approached the Commission with his second appeal.


During the hearing, Mr Gandhi, the CIC noted that the PIO had refused to give a copy of the fact finding enquiry report using Rule 7 (xii) of the Delhi District Courts (Right to Information) Rules, 2008. The Rule 7 (xii) states that "the information asked for relates to vigilance enquiry, except for the final result of the enquiry" is exempt from disclosure.


The Commission said from a cursory look at Rule 7 it appeared that it is creating exemptions not provided for in the RTI Act 2005 passed by the Parliament of India. It then decided to seek a response from the Delhi High Court before deciding the appeal.


In a letter sent to the Registrar General of Delhi High Court, the Commission raised two broad issues. Firstly, that the Competent Authority to frame rules under Section 28 of the RTI Act for the District Courts was not the High Court. The High Court had jurisdiction to frame rules for itself only. Secondly, even assuming the Delhi High Court had the power to make these Rules, the Commission observed that the exemptions included in Rule 7 go beyond the exemptions under Section 8 and 9 of the RTI Act.


Supreme Court order to impact RTI Act


The Commission stated in its letter that High Court should respond to these concerns and if the Commission did not receive any response before 30 November 2009, it would decide on the pending appeal based on the provisions of the RTI Act.


The Commission did not receive any communication from the High Court. "Since no response has been received from the High Court, it is presumed, it does not wish to state anything in this matter. Hence the Commission decides the matter on the basis of the RTI Act," the CIC said in its order.


Mr Gandhi, the CIC cited a ruling of the Supreme Court in Hukam Chand vs Union of India AIR 1972 SC 2427. The apex court had said:


"The underlying principle is that unlike Sovereign Legislature which has power to enact laws with retrospective operation, authority vested with the power of making subordinate legislation has to act within the limits of its power and cannot transgress the same. The initial difference between subordinate legislation and the statute laws lies in the fact that a subordinate law making body is bound by the terms of its delegated or derived authority…"


RTI Judgement Series


The RTI Act was enacted with the spirit of ensuring transparency and access to information giving citizens the right to information. The RTI Act is premised on disclosure being the norm, and refusal, the exception. According to the RTI Act, information may be exempted from disclosure in accordance with Section 8 and 9 only and no other exemptions can be claimed while rejecting a demand for disclosure, Mr Gandhi said.


The Commission said, as per the provisions of the RTI Act, information may be exempted from disclosure in accordance with Section 8 and 9 only and no other exemptions can be claimed while rejecting a demand for disclosure. Therefore, further exemptions can neither be claimed under this Act nor be provided for in subordinate legislations.


The information sought by Kumar was denied on the basis of Rule 7 (xii) of Rules. Rule 7(xii) which falls under the chapter on "Exemptions to disclosure of information" of the Rules made by the Delhi High Court provides-

7(xii) "The information asked for relates to a vigilance enquiry, except for the final result of the inquiry."


Unless the disclosure of information would impede the process of investigation or apprehension or prosecution of offenders, the same cannot be exempted from disclosure. Therefore, it is clear that Rule 7(xii) cannot be invoked to deny information under the RTI Act, as it goes beyond the scope of the exemptions provided in the RTI Act, the CIC noted.


Mr Gandhi, in his order stated, that, "Rule 7(xii), if implemented it would defeat the purpose of the RTI Act and reading it as valid would tantamount to adding exemptions to the RTI Act, which were not envisaged by Parliament which enacted this Act. Hence, it can be stated that Rule 7(xii) which has been framed by the Delhi High Court under section 28(1) of the RTI Act goes beyond the scope of the RTI Act."


The PIO while denying the information to Kumar had invoked CSS (CCA) Rules, 1965. He stated that supply of copy of the fact finding inquiry is not permissible because it is prohibited under Para 7(8) to Chapter 10 of the Swamy's Compilation of CCS (CCA) Rules, 1965. He also argued that the CCS (CCA) Rules, 1965 should be read harmoniously along with the RTI Act.


Moneylife strives to spread RTI literacy and we have a dedicated section on our website.

To visit the section, please click here.


However, the Commission said the contention of the PIO cannot be accepted as Section 22 of the RTI Act, clearly provides that the Act would have an overriding effect over any law for the time being in force which is inconsistent with it.


Section 22 provides-

The provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in the Official Secrets Act, 1923, and any other law for the time being in force or in any instrument having effect by virtue of any law other than this Act.


"...any rule, the application of which would result in denial of information under the RTI Act would be inconsistent with the RTI Act and cannot be read harmoniously. Thus, CCS (CCA) Rules, 1965 cannot be invoked as exemptions to deny information which otherwise can be obtained under the RTI Act," the Commission ruled.


Allowing the appeal, Mr Gandhi, then ordered the PIO to provide the information sought by Vijay Kumar before 31 January 2010.


Section 25(5) of the RTI Act provides:

"If it appears to the Central Information Commission or State Information Commission, as the case may be, that the practice of a public authority in relation to the exercise of its functions under this Act does not conform with the provisions or spirit of this Act, it may give to the authority a recommendation specifying the steps which ought in its opinion to be taken for promoting such conformity." (emphasis added)

In exercise of the power in Section 25(5) quoted above, the Commission recommended to the High Court of Delhi to withdraw the Rules made by it for the District Courts due to lack of jurisdiction and the fact that certain sub-rules of Rule 7 are beyond the exemptions provided in Section 8 and 9 of the RTI Act. Other sub-rules under Rule 7 of the Rules, inter alia, which go beyond the ambit of the RTI Act:


1. Rule 7(i) exempts information from disclosure, if it is covered by Section 8, 9, 11 or 24 of the Act. As stated above only Section 8 and 9 provide exemptions to disclosure of information. Section 11 does not exempt disclosure of information but provides the procedure to be followed by the Public Information Officer (PIO) in case information sought relates to or has been supplied by a third party. Section 24 is not an exemption provision but an exclusion provision as it excludes the application of the Act to certain organisations which have been listed in the Second Schedule of the Act.

2. Rule 7(vi) provides that the PIO will not give information which relates to a judicial proceeding, or judicial functions or the matters incidental or ancillary thereto. This provision provides for a much wider exemption than provided in Section 8 (1) (b) of the RTI Act. According to Section 8(1) (b), unless the disclosure of information has been expressly forbidden from being published by the Court of law or tribunal or it may constitute contempt of Court, the same cannot be exempted from disclosure.

3. Rule 7(xiii) appears to give a blanket option to the PIO to refuse information for any other reason which may justify the denial of information to the applicant. The RTI Act does not give such a 'residuary power' to the PIO as it could lead to gross injustice. Therefore, the Rules cannot create such a residuary power.


The Commission said it would like to stress that since Right to Information is a fundamental right of Citizens, any move which constricts it should be avoided. "Even Parliament is very wary of the restrictions it can place on the fundamental right of the Citizen, and hence competent authorities would be well advised to ensure that they do not create any exemptions which the lawmakers did not provide," it added.




Decision No. CIC/SG/A/2009/001997/6358

Appeal No. CIC/SG/A/2009/001997



Appellant                                      : Vijay Kumar

                                                          S/o Shri Chhotey Lal,

                                                          R/o House No. 2174,

                                                          Gali Ravi Dass, Telewara,

                                                          Sadar Bazar, Delhi- 110006.


Respondent                                    : KS Rawat

                                                            PIO & Office Superintendent

                                                            District Sessions Judge, Delhi

                                                            Administration Branch-I,

                                                            Tis Hazari Courts, Delhi.


                                                            Superintendent (Vigilance Branch)

                                                            o/o District Judge I & Sessions Judge,

                                                            Tiz Hazari Courts, Delhi 110054.


Signs of economic recovery still elusive?

Even if an imminent recovery in project planning were to happen, it would still imply that the investment cycle would likely bottom out in about two years, says Nomura.

After examining a raft of real data across sectors —deseasonalised in many cases to gauge the momentum—it is evident that the slowdown in the Indian economy is showing few signs of abating, says Nomura Equity Research. Indeed, there are signs of volume growth grinding down to near negligible levels especially in sectors that are connected to industrial demand -- steel, petroleum products, port traffic and commercial vehicles. That the last three months have been much worse for volume growth which belies hopes of a speedy economic revival. Indeed, a possible growth may have been priced in by the stock market, feels Nomura.


On an aggregate basis, corporate results are showing a similar slowdown with sales growth continuing on a downward spiral. Nomura analysts note that the sequential growth in sales in 3QFY13 was the weakest in three years.


If the private sector is in trouble, can the government sort it out? Government reforms are likely to cause a compression of growth in the short term because they would entail cutting back of government expenditure. Any slack created by the government would likely not be taken up by investments by the private sector because the investment cycle has structural and cyclical issues which will take time to sort out, point out Nomura analysts.


Nomura expects the focus to turn to domestic fundamentals this year. It is not calling for a re-rating of the market given the structural imbalances and expects the market performance to be driven by earnings growth.


For institutional investors and large buyers in the stock market, Nomura notes that the investment cycle cannot revive meaningfully so long as corporate balance sheets remain in distress. It is better to play reforms by buying oil & gas companies and select infrastructure developers.


Finally, Nomura analysts reckon that even if an imminent recovery in project planning were to happen, it would still imply that the investment cycle would likely bottom out in about two years. The analysts believe that in a deteriorating credit quality environment, a pick-up in growth is unlikely in the short term. Data from the banking sector show that credit growth to the wider industry and key infrastructure-driving sectors is languishing at its lows. Nomura notes that the evidence suggests that the current rate of economic activity and investment leads credit growth by 3-4 quarters.  Improvement is likely in domestic cyclicals (construction, cement, autos, and capital goods), metals and telecom, predicts Nomura.


Nomura’s top 5 stock picks for the year are ICICI Bank, ITC, Mahindra & Mahindra, Dr Reddy's Laboratories, and Zee Entertainment.


Read Moneylife’s analysis for other Nomura reports.



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