Citizens' Issues
Disclosure of fiduciary information under Sec 8 (1) (e) of the RTI Act: This is the true scope of the exclusion clause

No statutory authority is above the Republic of India. In our democratic setup, the people of India are supreme. The exceptions contained in Section (8) are exceptional pieces of information for which disclosure is not warranted or not desirable for a variety of reasons—but the broad spirit of the RTI Act is full transparency

The RTI Act is one of the rare legislations that empower citizens and bind the bureaucracy. The rest of the laws do exactly the opposite. However, though the purpose of the RTI Act might have been benign, its actual operation continues to be bogged down by the burden of bureaucracy.

At first blush, a PIO (Public Information Officer) hides behind one or the other of the exclusions given under Section (8) of the Act and declines to provide the information under some pretext. The information seeker has the right to file an appeal, but how many people have the time, patience and resources to go for appeals?

Section (8) of the RTI Act enlists some special instances when the authorities are exempted from disclosing information sought for. This includes information that would be prejudicial to national integrity, security or economic interests; would constitute to contempt of court of law; would hamper police investigations; would affect commercial interests like trade secrets; would impede the process of investigation; would affect 'fiduciary' relationships and would harm the person physically.

One of the common exceptions relied upon by the authorities is that the information being sought is with the regulatory agency in "fiduciary relationship" [Sec 8 (1) (e)]. This article explains the meaning of information in fiduciary capacity in Sec. 8 (1) (e) and how, in most cases, the information held by a regulator cannot be said to be information held in a fiduciary capacity.

The plea of fiduciary relationship, advanced by several regulatory bodies has not impressed us. Fiduciary relationship is not to be equated with privacy and confidentiality. It is one where a party stands in a relationship of trust to another party and is generally obliged to protect the interest of the other party.  While entrusting any information under any Act, rule, proceedings etc., that is no agreement between the provider of the information and the regulatory authority that the information provided is to be kept immune from the scrutiny of the public authority. It is to be kept in mind that the RTI Act is premised on disclosure being the norm, and refusal being the exception.


The word "fiduciary" has been defined in Black's Law Dictionary as follows: which reads thus:

    Fiduciary- The term is derived from the Roman Law and means-

As a noun-a person holding the character of a trustee, or a character analogous to that of a trustee, in respect to the trust and confidence involved in it and the scruples of good faith and candor which it requires, or a person having duty created, by his undertaking, to act primarily for another's benefit in matters connected with such undertaking.    

It is evident from the above that a fiduciary is a trustee. In context of information, if the information was reposed with a person for safe-keeping, or a person came to be vested with confidential information, and there is a question of good faith between the information provider or concerned entity, and the person having the information, it can be said that there is a relation of trusteeship.

The Advanced Law Lexicon, 3rd Edition, 2005, defines fiduciary relationship as:

"A relationship in which one person is under a duty to act for the benefit of the other on the matters within the scope of the relationship. Fiduciary relationship usually arises in one of the four situations:

(1) When one person places trust in the faithful integrity of another, who as a result gains superiority or influence over the first,
(2) When one person assumes control and responsibility over another,
(3) When one person has a duty to act or give advice to another on matters falling within the scope of the relationship, or
(4) When there is specific relationship that has traditionally been recognised as involving fiduciary duties, as with a lawyer and a client, or a stockbroker and a customer."{break}

The scope of the exemption in Sub-section 8(1) (e) of the RTI Act was discussed by the Supreme Court in CPIO, Supreme Court of India, New Delhi v. Subhash Chandra Agarwal and another (Writ Petition No. 288/200), decided on 2 September 2009. The Apex court held that the purpose of the exemption is to permit screening and preservation of confidential and sensitive information made available due to a fiduciary relationship.


In Bristol & West Building Society vs. Mothew [1998] Ch 1, the term 'fiduciary', was described as under:

"A fiduciary is someone who has undertaken to act for and on behalf of another in a particular matter in circumstances which give rise to a relationship of trust and confidence."

It is to be therefore noted that a fiduciary relationship is build up when one acts for another's benefit. However, a public authority such as SEBI (the Securities and Exchange Board of India) cannot be acting primarily for benefit connected with such undertaking but for the benefit of the entire public, i.e., in the public interest.

In Woolf vs. Superior Court (2003) 107, the California Court of Appeals defined 'fiduciary relationship' as:

"Any relationship existing between the parties to the transaction where one of the parties is duty bound to act with utmost good faith for the benefit of the other party. Such a relationship ordinarily arises where confidence is reposed by one person in the integrity of another, and in such a relation the party in whom the confidence is reposed, if he voluntarily accepts or assumes to accept the confidence, can take no advantage from his acts relating to the interests of the other party without the latter's knowledge and consent".

The traditional definition of a 'fiduciary' is a person who occupies a position of trust in relation to someone else, therefore requiring him to act for the latter's benefit within the scope of that relationship. In business or law, we generally mean someone who has specific duties, such as those that attend a particular professional role, e.g., financial analyst or trustee. The information must be given by the holder of information when there is a choice as when a litigant goes to a particular lawyer, or a patient goes to a particular doctor.

It is also necessary that the principal character of the relationship is the trust placed by the provider of information in the person to whom the information is given. An equally important characteristic for the relationship to qualify as a fiduciary relationship is that the provider of information gives the information for using it for the benefit of the giver. All relationships usually have an element of trust, but all of them cannot be classified as fiduciary.


Only that information can be considered as "available to a person in his fiduciary relationship", which is available to a person in an explicit relationship of trust (typically that of a lawyer, medical practitioner or financial advisor), where the trustee has been given access to the information on the mutual understanding that it is solely to be used for protecting the interests or promoting the welfare of the person giving the information, and where the withholding (or not proactively making public) of such information is not contrary to the law of the land.

If information is at all available with a regulatory agency in a fiduciary relationship, there is a reason to withhold the disclosure of the same. However, where information is required by mandate of law to be provided to an authority, it cannot be said that such information is being provided in a fiduciary relationship.

Admittedly, the authorities are not a public library of information, nor are a databank where people deposit information because they love to keep it with them. We have no hesitation to hold that even if there be any agreement—the same cannot be used as a shield to counter a request from any citizen seeking information and the RTI Act would obviously override such an assurance.


It is not necessary in case of RTI applications for a citizen to provide the reason for which the information may be required. If there is information available with an authority covered by the RTI Act, the information available must, on requisition, be made available to a citizen seeking the same. The RTI Act works on the noble principle that statutory authorities seek information and are seized and possessed of information as repositories of public faith. There is no question of hide-and-seek in the functioning of statutory authorities, as what they are—and what powers they enjoy—are for the larger interest of the citizens of India. No statutory authority is above the Republic of India. In the democratic setup in which India functions, the people of India are supreme.

Hence, no statutory authority can pretend to play hide-and-seek with the citizens of the country. The exceptions contained in Section (8) are exceptional pieces of information, for which, disclosure is not warranted or not desirable for a variety of reasons. However, the broad spirit of the RTI Act is full transparency.

It is surprising and unfortunate to find that on being requisitioned, the authorities generally take the ground that the information is being held by them in a fiduciary capacity. A mere cryptic statement that the information is protected under a fiduciary relationship does not do service to the object of the RTI Act at all. As contended above, whatever information the authorities have, it is because they have power to seek the information under the law, rules, and proceedings and not because the information provider provided the information for safe keeping.

(Vinod Kothari is a chartered accountant, trainer and author. He is an expert in such specialised areas of finance as securitisation, asset-based finance, credit derivatives, accounting for derivatives and financial instruments and microfinance. He can be contacted at [email protected]. Visit his financial services website at




6 years ago

Thanks Vinod Sir & Aditi for such a beautiful article... I also share similar views that no statutory authority can be above the Republic of India! All the laws are made by the legislature which comprises of the elected representatives of the people. The legislature derives its legislative powers from the Constitution. The preamble to the Constitution lays down that it is "We the people of India" who has given ourselves this Constitution implying that the ultimate source of the Constitution and all the statutes is we the people of India! Hence legislations like RTI Act cannot be so interpreted that it comes within the trappings of the exceptions provided therein so as to prejudice public interest or the object for which that special law has been made!

GNIIT: As boring as a classroom lecture

This commercial is sure to put you to sleep, just as a lecture would by a very boring econometrics professor

GNIIT is an IT training institute. Given the number of geeks they train, or so I am told, one assumes the institute has been doing pretty well for itself. Being tech-challenged, quite frankly, I had very little idea about GNIIT until I watched their new ad.
And from the advert I can read what their marketing strategy might be, and of course, their real need to advertise the institute. I suspect, quite ironically, the recent innovation and boom in the IT gadgets market has had a negative impact on GNIIT. The very industry the institute feeds on has come to bite it. With instant connectivity possible across the world, and at very low rates, who in their right minds would want to trudge all the way to a study school? Which is why GNIIT has now launched a programme which will ensure you can participate in their course from wherever you are located.

An obvious strategy to hold on to business… many educational institutes have been into correspondence courses for ages, long before the IT sector was born. So that's fine. But since the marketing task is so obvious, it becomes imperative that the communication shines so that the brand gets noticed, talked about and is coveted by the students.
And what has GNIIT done? Well, they have simply translated their obvious strategy into an obvious creative. All that the commercial (titled 'Cloud Campus') features is students sitting by their respective machines and communicating with each other and with their faculty. Of course, they all look very pleased and very happy. And yes, they are located at the usual suspect 'addy' haunts: gardens, lakes, restaurants and of course, the good old classroom. A totally dull ad. Must say even a fresher from a communication school would put out a better ad as part of her project work. The commercial is sure to put you to sleep, just as a lecture would by a very boring econometrics professor.
I assume GNIIT thinks very poorly of its prospective students for it to run such an ordinary ad. What was called for is zippy, surprising, happening creative work to help sneak into the minds of the highly net-savvy youngsters. To fire their imagination, and project GNIIT as an organisation that truly lives, breathes and enjoys the magic of IT.  
Perhaps I should hold an advertising workshop for the GNIIT professors. Online, of course.




6 years ago

You put me to sleep!
Get a life!!!

Go take out your life's frustrations elsewhere!!!

Indian stocks to open in positive: Friday Market Preview

The real test of the market will come as economic data flows in and corporate results for the June quarter are announced

The local market is likely to open higher, tracking the markets across the world. Wall Street continued with its gains, closing higher for the fourth straight day on Thursday on easing of debt tensions in Europe and mixed economic news. Most Asian markets were also in the green in early trade on Friday as signs indicated that the global economic recovery is gaining momentum. The SGX Nifty was 47.50 points higher at 5,700 compared to its Thursday’s close of 5,652.50.

On Thursday the market finished for an eighth consecutive day in the green, but the rally should moderate now. With the short covering following the deep pessimism in mid-June over, the market will trade in a narrow range.

The positive outcome of the Greek government's vote of confidence over austerity measures supported the Indian bourses as well. The Nifty opened 15 points higher at 5,615 and the Sensex gained 47 points to resume trade at 18,741. Fast moving consumer goods, capital goods and banking sectors reported buying interest in early trade.

The market pared some of its early gains and continued to be range-bound till the post-noon session. Even the sharp fall in the weekly food inflation numbers did not have any major impact on the market. The indices touched the day's lows with the Nifty falling to 5,606 and the Sensex slipping to 18,723.

However, a fresh bout of buying in select stocks lifted the indices to their day's highs. At the intra-day high, the Nifty rose to 5,658 and the Sensex touched 18,873. The market closed a tad lower with the Nifty adding 47 points to close at 5,647 and the Sensex finished 152 points higher at 18,846.

US markets continued their winning run on Thursday, finishing higher for the fourth day in a row. Easing of debt issues problems in Greece and mixed economic data helped to notch gains. Investors ignored concerns about the end of the Federal Reserve’s $600 billion bond buying programme, which came to an end yesterday.

In economic news, the Chicago Federal Reserve’s Purchase Manager’s Index registered a 61.1 reading in June, up from May’s 56.6 and ahead of expectations for a 53. A reading above 50 is considered an expansion. However, initial claims for unemployment benefits fell by 1,000 last week to a seasonally adjusted 428,0000. Analysts had forecast that claims would fall by 8,000.

In corporate news, Bank of America fell 1.6% as the company reached an $8.5 billion settlement of investor claims on securities purchased before the US housing collapse. Eli Lilly edged up 0.7%. The drug maker said it expects sales and profits to take a hit over the next several years as top-selling drugs’ patents expire.

The Dow surged 152.92 points (1.25%) at 12,414.34. The S&P 500 gained 13.23 points (1.01%) at 1,320.64 and the Nasdaq rose 33.03 points (1.21%) at 2,773.52.

Most markets in Asia were higher in early trade on Friday despite not-so-good-economic news from across the region. China’s official manufacturing Personal Managers’ Index fell to 50.9 in June from 52 in May—the third consecutive month of slowing in the manufacturing sector. Japan’s core consumer prices rose 0.6% in May from a year earlier, rising for a second month in a row in part due to higher commodity prices.

This apart, the quarterly tankan index of sentiment at large manufacturers fell to minus 9 in June from 6 in March, the Bank of Japan said in Tokyo today. Large companies said they will boost capital spending 4.2% in fiscal 2011, higher than analysts’ forecasts for a 2.4% increase.

The Shanghai Composite added 0.02%, the Jakarta Composite surged 0.96%, the KLSE Composite rose 0.02%, the Nikkei 225 gained 0.48%, the Straits Times advanced 0.43%, the Seoul Composite advanced 1.05% and the Taiwan Weighted was up 0.65%. The Hang Seng was closed for a local holiday.

Back home, the Cabinet Committee on Economic Affairs (CCEA) yesterday granted conditional approval to Vedanta Resources to buy British oil explorer Cairn Energy’s Indian business, Cairn India, oil minister S Jaipal Reddy told reporters in New Delhi on Thursday.

The decision had been expected after Cairn and Vedanta cut the price of the deal earlier this week.


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