Right to Information
LIC Housing Finance, GIC and BoM Employee Welfare Trust also come under RTI: CIC

Several welfare trusts and public authorities claim exemption from the RTI Act on the basis of being independent bodies. In the cases of the Bank of Maharashtra Employees Welfare Trust and LIC Housing Finance, the CICs ruled that they are public authorities and information must be provided

Last year, Pune-based Prakash Ranade filed a Right to Information (RTI) application at the Bank of Maharashtra corporate office seeking information on holiday homes of employees which come under its Bank of Maharashtra Employee Welfare Trust.


Mr Ranade sought a copy of the constitution of the welfare trust; list of the places where the holiday homes of staff members are provided as of April 2011; agreement copies of the holiday home owners/hotels that have an arrangement with the bank for years April 2010 to March 2011 with full terms and conditions; the procedure followed while selection of particular property for holiday homes and their renewals after expiry of agreed terms; names of selection committee members; details of expenses for their visits to renew/fresh lease, etc during the years April 2010 to March 2011 paid by the bank through the welfare fund; and total payment made to each holiday home for the financial year 2010-2011.


The Public Information Officer (PIO) of Bank of Maharashtra denied him information stating that the information is related to the trust which is a separate legal entity.


Mr Ranade then filed first an appeal with the First Appellate Authority (FAA) of the Bank of Maharashtra. The FAA, in its order, agreed with PIO’s reply stating: “the said ‘Welfare Trust’ is a registered trust. It is managed by independent board of trustees which has the entire custody, management and control of the trust fund. I therefore agree with the PIO that the trust is a Separate legal entity and uphold the decision of the PIO.”


Unsatisfied with the answer, Mr Ranade filed second appeal with the Central Information Commissioner Shailesh Gandhi who held a hearing on 13 February 2012 wherein the RTI applicant Mr Ranade and the PIO Ajay Banerjee were present via video conferencing from a studio in Pune. Gaurav Tyagi, Law Officer, Regional Office, Delhi was present in the CIC office, Delhi.


RTI applicant Mr Ranade argued that the Bank of Maharashtra Employee Welfare Trust receives around Rs8-Rs1o crore from Bank of Maharashtra, “the executive director of the bank is the ex-officio head of the trust and other members of the trust are also employees of the bank.” Since the PIO and the law officer did not contest these claims, they were asked by the CIC to give a written submission.


Based on the submission sent by the law officer of Bank of Maharashtra, CIC Shailesh Gandhi ordered that the Bank of Maharashtra Employee Welfare Trust is a public authority and that the bank should immediately appoint a Public Information Officer for the trust. His argument was as follows:

  • •  The law officer of the bank stated in his submission that the Bank of Maharashtra had provided ‘substantial’ funds to the tune of Rs90 to Rs100 crore to the trust since 1999 and a grant of Rs50.80 crore also has been given to the trust since 1999.


Shailesh Gandhi argued that since public funds of over a crore rupees have been diverted to the trust, citizens have a right to know the use of this money. He stated: “a contribution or grant of Rs50.80 crore given by the bank from its corpus of public funds cannot be considered as insignificant. This would render the trust as being ‘substantially financed’ indirectly by government funds. Citizens have a right to know about the manner, extent and purpose for which public funds are being deployed by the government or its agencies. Having said so, not every financing of an entity in the form of a contribution or grant by the government or its instrumentalities (such as the bank) would qualify as ‘substantial’—but certainly a grant of over Rs1 crore would constitute ‘substantial financing’ rendering such entity a public authority under the RTI Act.”


  • The law Officer of the bank also mentioned that the trust was run by the executives of the bank as ex-officio members and by staff members as representatives. The RTI applicant Mr Ranade mentioned that the trust is a separate legal entity, registered with the Charity Commissioner, Pune. The location of the registered office of the trust is—Lokmangal, 1501, Shivajinagar, Pune-411005’ (Which is the corporate headquarters of the bank). Mr Ranade also submitted that the trust is managed by an independent board of trustees which has the entire custody, management and control of the trust funds.  He had also provided details of the officials of the bank who are the trustees of the said trust.


Shailesh Gandhi argued that: “There are various forms in which the government exercises control over an entity, which is relevant in determining whether the latter is a public authority.” The Commission noted that “the board of trustees of the Bank of Maharashtra Employees Welfare Trust consists of nine officials. The chairman of the trust is MG Sanghvi, who is the executive director of the bank… the officials of the bank constitute the board of trustees… the registered office of the trust is same as the head office of the Bank.”


Although the law officer of the bank argued that the trust is being run by an independent board of trustees, Mr Gandhi argued that, “it is difficult to assume that senior officials of the bank can constitute the entire board of trustees in an independent capacity where the trust itself has been set up for the welfare of the bank’s employees. Moreover, the executive director of the bank, who is a government appointee, is the chairman of the trust. The Commission can only assume that such officials must necessarily be acting on behalf of the bank—when they are required to take executive decisions as members of the board of the trust for the welfare of the bank’s employees. It is also true that significant funding is provided to the trust by the bank.”


The Commission ruled in March 2012 that the Bank of Maharashtra Employees Welfare Trust is a public authority under Section 2(h) of the RTI Act. The Commission directed the chairman of the Bank of Maharashtra Employees Welfare Trust to appoint a Public Information Officer and a First Appellate Authority—as mandated under the RTI Act before 15 April 2012. The order concluded: “The Public Information Officer so appointed shall provide the complete information as per records in relation to the RTI application dated 18 September 2011 to the appellant as per the provisions of the RTI Act.”


Point to note: The Bank of Maharashtra website www.bankofmaharashtra.in has yet not appointed a PIO and AA for the trust going by the fact that it has listed the names and contacts of all other 34 PIOs.


In the case of the LIC Housing Finance, LIC Mutual Fund Asset Management Co and GIC Housing Finance, the CIC received 10 complaint petitions stating that they were denied information from these authorities.


The CIC needed to base their decisions on whether these were public authorities.


The CIC decisions on LICHFL and GIC Housing Finance are similar to the Bank of Maharashtra Employees Welfare Trust case.


As per the document posted in http://www.rtigateway.org.in/Documents/CaseLaw/1.%20Definitions.pdf, “LICHFL was incorporated by LIC of India and both of them share the chairman and managing director. The stake of LIC in the LICHFL is 40.497%. If the share of the LIC is aggregated with other government insurance companies, the total stake in the shareholding of LICHFL comes to 45.918%. As per Article 133(1) of the Articles of Association of LICHFL, LIC has the authority to appoint one of its directors and managing director of LICHFL. 


“In view of this, it can be inferred that the control of LIC over LICHFL is explicit and effective. The very fact that the chairman of the LIC is also the chairman of LICHFL further strengthened this inference. The RTI applicant has also submitted that if the shareholding of other banks is added to the total shareholding of the PSU, the total shareholding will exceed 80%. It is an admitted fact that the total shareholding of the PSU is 45% and this is sufficient enough to bring it within the definition of the term ‘substantial finance’.


“We may agree that the LICHFL is not owned by LIC of India as the total shareholding of the LIC does not exceed 50% but there can be no doubt that LIC and other insurance companies and banks taken together have financed LICHFL substantially.” 


LIC Mutual Fund: “The LIC of India is a body established, constituted, owned and controlled by central government which is the appropriate government for the LIC of India and the funding by LIC of India and their general control over the functioning of the LIC Mutual Fund can be nothing but an indirect funding and control by the appropriate government. LIC of India is a public authority having been constituted by an Act of Parliament. LIC of India in turn in order to further carry out their public function have formed LIC Mutual Fund approved for formation ‘through subsidiary’ which has to function under LIC’s control. The respondent Mutual Fund is fully financed and administratively controlled by the LIC of India through a board of trustees. The trustees of the board who manage the LIC Mutual Fund are appointed with the approval of LIC of India. LIC of India has the power to change the trustees from time to time. The corpus of the trust amounting to Rs10 lakh was contributed by the LIC. The trust deed provides that a further sum not exceeding Rs.25 crores shall be made available as initial contribution to the trust by the LIC. The LIC has floated the mutual fund to mop up the additional savings from the public in rural and semi-urban areas and it would be receiving considerable amount of insurance business from the mutual fund.


“LIC of India for the above purpose provides to the mutual fund all suitable help and guidance which includes payment of initial corpus of the trust, financial assistance to the trust, renting out premises after housing the mutual fund, provision of initial office equipment and deputation of suitable employees, etc. The chairman of LIC is authorised to take such administrative decisions as may be required periodically so as to ensure the smooth launching of the LIC Mutual Fund and its successful operation.” 


GIC Housing Finance: “Now coming to GIC Housing Finance, the Commission’s finding is not any different. The shareholding of six public authorities in GIC Housing Finance is 47.68% and coupled with the control they exercise over the GIC Housing Finance is sufficient to bring them within the ambit of the definition of ‘Public Authority’ as defined in Section 2(h) of the Right to Information Act, 2005.


In view of the above observations and findings, all the three respondents, LIC Housing Finance, LIC Mutual Fund Asset Management Co and GIC Housing Finance are ‘Public Authorities’ under the RTI Act. All of them are, therefore, obliged to take all necessary steps to carry out their duties and responsibilities assigned by the Act.”




4 years ago

It is hilarious for these subject entities to claim exclusion from the purview of the RTI Act, the three PSUs being owned by the President and, in consequence, the employees andall their actions while in service, must also come under the supervision of the central Acts including the RTI Act. In fact, it is high time, the Goi issued a notification to the effect that any organisation or entity receiving any benefits (like funds/grants, exemptions under the IT Act, FCRA, etc.) including the public funds-guzzling high profile NGOs are necessarily covered by the Act. It is high time, as appropriately and editorially acknowledged by The New Indian Express on the 3rd October instant (Ensure NGOs Become More Accountable, Transparent), NFOs enjoying govt. funds/grants for (bogus) projects, and further, getting dionations from the public under the aegis of sections 12AA/80G, 35Ac/35CCA, etc. and FCRA, must be held responsible and answerable under the RTI and all other Acts. It is high time that that the CBDT, CBI and DRI along with the FCRA authorities join hands and constitute a joint crack team to inquire into the affairs of the the swindlers of public money (inclusive of donations collected by luring the public with 100% or 50% tax deductions)operating under the guise of NGOs run by the high and the powerful.

Neyveli Lignite Corporation: Performance review and prospects for the future

Neyveli Lignite Corporation has been showing laudable performance since it inception. Government support for the company’s future plans will surely boost investor sentiment

The 56th Annual General Meeting (AGM) of Neyveli Lignite Corporation (NLC) was held in Chennai two weeks ago, presided by its newly appointed chairman and managing director, B Surender Mohan.


Since its inception, NLC achieved its highest performance to date, in terms of overburden removal (1651 LM3 from all the mines of the company), lignite production reached a record

24.59 million tonnes, power generation of 18,789 million units (Mu), out of which 15,811 Mu was supplied to Rajasthan (where two units of Barasingsar Thermal Power plants are located) and these have attained commercial operation during the financial year under review.  Indeed, a creditable achievement for a public sector undertaking.


According to the balance sheet made available to the shareholders, sales reached a peak level of Rs4,868.85 crore and the profit before tax was Rs1983.89 crore, both recording the highest since the inception of the company.


Studying the details further, over the last one decade, the dividend has gradually increased from 14% to 28% for the current year, though it registered a drop to 12% only once in the 2006-07 period.


The book value too increased from Rs35.45 in 2003-03 to Rs71.46 in 2011-12, while the earnings per share moved from Rs6.83 to Rs8.41 for the same period.


The equity capital base, however, remained static at Rs1,677.71 crore while the disposable reserves and surplus steadily increased from Rs4,290.46 (in 2002-03) to Rs20,362.18 by 2011-12. So, no rights or bonus issues were made to reward the shareholders in the last one decade and currently the CMP hovers around Rs87.30 per share, at a comfortable level to the book value.


There are several projects under construction or implementation.  The thermal power station (II) expansion under execution of works by BHEL is underway but this had to undergo a revised cost estimate due to delays and now expected to cost Rs3,027.59 crore. The increased cost, due to delays at BHEL end will be borne by them, in line with the contract.


Other thermal, wind power and solar power contracts are in various stages of tendering and it would take some time before these are actually completed, but related work is in progress.


The joint venture in Tamil Nadu—(2 x 500 MW) thermal power plant —is in various (final) stages of completion and the Mahanadi Coalfields, a subsidiary of Coal India is the nominated (linked) supplier. The first unit is scheduled to be commissioned by December 2013 while the 2nd unit may go into stream by March 2014.  On the whole, progress has been satisfactory.


Also, several other new projects, such as Bithnok Thermal Power Project (250 MW), Barasingsar Extension (250MW), NLC-UPRVUNL Ghatmpur Power (1980 MW), Sirkali Thermal Power (4000 MW) and the Devangudi Mine Project are also progressing slowly but steadily.


The ministry of coal has been approached for allocating coal blocks for many of the above projects, and it is hoped that these will be cleared well in time, so that work on obtaining the state and ministry of environment and forests (MOEF) clearances can be undertaken.


In the meantime, NLC is also exploring the possibility to tie up with state governments which are in possession of coal blocks, for new projects, besides looking at the overseas markets.


In view of the change in policy of power procurement by states through competitive based tariff rates, except for power projects for which PPA has been signed prior to 6th January 2011, all other projects can be completed only when concerned beneficiaries formally issue a notification of purchase of power through competitive bidding process.


The company has sought ministry of coal’s exemption for the above requirement for lignite based projects. The ministry’s decision is anxiously awaited by NLC, which will boost the investor sentiment.


(AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce and was associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts; and later to the US. He can be contacted at [email protected].)



Dr Anantha K Ramdas

4 years ago

For Sivaraman Anant Narayan:

thanks for your comments; as a shareholder when I read the balance sheet, I found there were gaps in information provided and no detailed explanations.

I took up the issue and exchanged emails with the Company Secretary seeking information on why the Company should suffer for no fault of theirs if BHEL had delivery schedule problems which resulted in delays. Only after I got the response clarifying the issue, I completed the article on the subject.

As a general rule or say as a habbit, most of us do not spend time reading and understanding what is stated in annual reports. I think it is in our interest to do so and ask the company to explain what is not specifically stated.

Now a days, when companies use email to send the annual reports, studying them becomes truly a difficult task and printing them would be expensive,time consuming and waste of a lot of paper! So, when some companies do send annual reports, let's make the best use of them and understand where our investsments go and how best they are utilized and safeguarded.

sivaraman anant narayan

4 years ago

Doesn't this reads like a PR handout of the CO after the AGM?


240p FLV

In Reply to sivaraman anant narayan 4 years ago

Not to me. Straight forward information

Five MF houses to discontinue 190 schemes for investment through SIP

Reliance MF, ICICI Pru, HSBC, Morgan Stanley and IDFC Mutual Funds have decided to discontinue about 190 schemes for subscription through existing SIPs

New Delhi: Five mutual funds, including leading players like Reliance and ICICI Prudential MF, has listed out a total of 190 schemes that would be discontinued for fresh systematic investment plan (SIP) investments to comply with guidelines issued by Securities and Exchange Board of India (SEBI), reports PTI.
The move follows new regulations by SEBI, which require fund houses to launch only one plan per scheme with effect from this month.
Consequently, Reliance MF, ICICI Pru, HSBC, Morgan Stanley and IDFC Mutual Funds today communicated the required changes in their schemes to the BSE, where many of their schemes are listed for trading.
Together, a total of 190 schemes of these five fund houses would be discontinued for subscription or registration in existing SIPs.
SIP offers the mutual fund investors an option to invest as low as Rs100 per month and have gained popularity in the market in recent past.
However, many fund houses have launched multiple SIP plans under one scheme, prompting market regulator SEBI to ask the fund houses to move to 'single plan per scheme' model in a move to make the investment process simpler for investors.
The five fund houses have also communicated to the BSE a list of 22 schemes where the Minimum Purchase Amount and Additional Purchase Amount have been lowered as per SEBI guidelines.
All the proposed changes would be effective immediately and are part of wide-ranging reforms notified by SEBI recently.


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