Although the government has advised the National Dairy Development Board (NDDB) to subject itself and its subsidiaries to the RBI Act, it continues to dodge the transparency law.
It was in this year, vide letters dated 10th July and 11 July 2019 that NDDB was asked to submit itself to the Rright to Information (RTI) Act. But the dairy cooperative claimed that applicability of the law to it is sub-judice because of litigation pending before Division Bench of the Delhi High Court in the case of its subsidiary Mother Dairy Fruit and Vegetable Pvt Ltd (MDFVPL).
Using long drawn litigation, delays and appeals has been a trick adopted by several organisations that are heavily funded by the government or in regulatory roles to avoid the statute.
The matter came up in the Rajya Sabha on 29 November 2019 in response to a question by Prof Manoj Kumar Jha (unstarred question No. 1375), asking whether NDDB has accepted advice of Government to extend provisions of RTI Act?
The minister of state for fisheries, animal husbandry and dairying, Dr Sanjeev Kumar Balyan provided this information to the house. It is curious why the government is shying away from issuing a directive to NDDB to fall in line.
NDDB further stated that it could only consider the ministry’s advice after the issue of applicability of RTI Act to MDFVPL was decided. The matter is listed for discussion in NDDB Board’s agenda in the next meeting, the reply in Rajya Sabha shows.
As of now, the question of RTI applicability to NDDB and its subsidiaries has been upheld by the Central Information Commission’s order of 15 April 2011, followed by a decision by a single-judge Bench of the Delhi High Court (HC). An appeal was filed before the Division Bench of the Delhi HC which is pending. This same strategy has been adopted by several other organisations who fulfill a quasi-regulatory function.
When asked whether department of animal husbandry and dairying (DAHD) has received a resolution of NDDB approving contribution of Rs200 crore towards equity of its subsidiary NDDB Dairy Services, Dr Balyan, the minister replied affirmatively saying the information was received.
Prof Jha also sought details of equity and resources transferred by NDDB to originally incorporated NDDB Dairy Services Pvt Ltd, which had previous approval of government under section 43(1) of NDDB Act. Dr Balyan revealed that as per Section 43(2)(a) of NDDB Act, 1987, NDDB has contributed Rs200 crore as equity to the NDDB Dairy Services.
Prof Jha also probed whether NDDB re-incorporated NDDB Dairy Services Pvt Ltd with change of name without pre-approval from government under section 43 of NDDB Act.
Dr Balyan stated that the NDDB has informed that the central government conveyed its approval on 3 August 2009 for formation of a wholly owned subsidiary company of NDDB for implementing NDDB’s development objectives relating to productivity improvement and cooperative effort in terms of the resolution passed in the 89th meeting of the board of directors of NDDB held on 28 January 2009.
NDDB has further stated that in the agenda note of the board meeting it was clearly mentioned that “Since the objective of the proposed subsidiary is developmental in nature, after formation, the company will, at an appropriate stage take steps to convert itself into a not for profit company under Section 25 of the Companies Act, 1956”.
As a result, the company was initially incorporated as NDDB Dairy Services Pvt Ltd on 12 October 2009 and license was issued to it under section 25 of the Companies Act, 1956 on 10 March 2010. The company received fresh certificate of incorporation on 26 March 2010 with the change of name as NDDB Dairy Services (as a not for profit company).
Earlier Moneylife had reported
about the propensity of NDDB to set up numerous subsidiaries and quickly cause them to vanish through a closure or amalgamation or often without an explanation.