RTI Judgement Series: Defining “substantial funding” for a public authority
Moneylife Digital Team 29 January 2013

If a body receives a minimum of Rs5 lakh funding from the government and if this amount constitutes over 10% of its annual income, then the body can be considered to be “substantially funded” under the RTI Act. This is the 29th in a series of important judgements given by former Central Information Commissioner Shailesh Gandhi that can be used or quoted in an RTI application

While defining "substantial financing" for a body to be considered as public authority, the Central Information Commission (CIC), said if the body receives a minimum funding of Rs5 lakh and this constitutes over 10% of its annual income then it can be considered to be "substantially funded" for the purposes of the Right to Information (RTI) Act. While giving this important judgement, Shailesh Gandhi, former Central Information Commissioner dismissed an appeal filed against a senior citizen's association.

"In the present case, the respondent association (Senior Citizens Welfare Association, New Delhi) has submitted its audited balance sheet for 2007-2008. From the balance sheet it appears that the income and the expenditure of the association are below Rs1 lakh. The complainant has submitted that the association has been given Rs50,000 recently by the government. This amount falls below the guidelines specified and therefore the respondent association is not substantially financed by the appropriate government and it is therefore not a public authority under Section 2(h) of the RTI Act," the CIC said in its order issued on 5 October 2009.

Delhi resident Ved Prakash Sharma, on 10 October 2008 and on 20 October 2008, sought information about the affairs of the Senior Citizens Welfare Association.

Information sought vide application dated 10 October 2008 was the following:
1. Copy of the agenda of the meeting held on 02/10/2008 under the signatures of the secretary dated 13/09/2008 regarding the governing body meeting of the Sr. Citizens Welfare Assn.
2. Along with a certified copy of the minutes of the meeting of the governing body held on 02/10/2009
3. Copy of the list of the newly constituted governing body of the SCWA duly certified which is without any date as sent to the governing body members of the SCWA.

Information sought vide application dated 20 October 2008 were following:
1. Copy of the complainan''s letter dated 07/10/2008 addressed to Shri Kewal Krishan Chandha
2. Regarding this complainant sought information in following manner regarding the amounts received by the Treasurers w.e.f  29/06/ 2008 to 31/08/2008 and receipts issued to the members/ non members of SCWA and others in the following:
(a) SCWA Cash Receipt No
(b) Date of issue
(c) Name of the person whom amount received.
(d) Whether member of SCWA or not on the date of receipt of money vide shown at sl. no. (b) above.
(e) On account of donation… Donation, subscription for the year/ admission fee.
(f) Whether the amount so received deposited in the SCWA A/C with the State Bank of India, Shakti Nagar, Delhi branch  or not.
(g) Photo copy of each receipted supplied

Mr Sharma said since there is no Public Information Officer (PIO) or First Appellate Authority (FAA) appointed by the association, he had to file second appeal before the Commission.

During a hearing on 25 September 2008, Mr Sharma contended that the Association had been provided an office, furniture and power free of cost by the Municipal Corporation of Delhi (MCD). His contention was that substantial funding was being provided by the government, and hence the association is a public authority as defined under Section 2 (h) (ii) of the RTI Act.

Bhagwan Das Sharma, president of the association along with vice-president Bhagirath Singh, secretary ML Bansal and OP Verma, member of the governing body, were present during the hearing. They pointed out that that it was an association comprising of about 300 senior citizens and that it was being run on a voluntary basis by the members who are appointing a committee to manage its affairs. They also pointed out that they did not have a proper office or any employees who could answer RTI queries.

The Commission then reserved its order.

During the next hearing on 5 October 2009, Mr Sharma stated that the association has been given about 300 square feet place free of cost and that no rent is charged for this by the MCD. He also stated that the electricity and furniture used in the office is not charged and the monetary value of this is estimated at about Rs24,000 per year.

The officials, while admitting that it received Rs50,000 from the government for carrying out certain activities stated that the association was not in a position to discharge responsibilities required to be discharged by a public authority under the RTI Act since it has no full-time employee and the members are doing the work voluntarily.

Mr Gandhi, the CIC, said the issue before Commission was whether the association is "substantially financed" or not.

Section 2(1)(h) of the RTI Act defines "public authority"…
h) "public authority means any authority or body or institution of self-government established or constituted,-
(a) by or under the Constitution ;
(b) by any other law made by Parliament;
(c) by any other law made by the State Legislature;
(d) by notification issued or order made by the appropriate government, and includes any--
(i) body owned, controlled or substantially financed;
(ii) non-government organisation substantially financed, directly or indirectly by funds provided by the appropriate government;"

Mr Gandhi said it is clear from the wording of Section 2(1)(h) that the Parliament did not wish to cover all organisations which may have received any amount of funding from the appropriate government under the definition of public authority. "The Right to Information Act does not provide any guidance with regard to what is meant by 'substantially financed'. The Oxford English Dictionary defines the word substantial as 'of considerable importance, size or worth'. A determination therefore has to be made of what amount of finance to an organization is 'of considerable importance' for it to come within the ambit of Section 2(h)," he said.

"I am of the view that substantial funding can be decided through two methods-first to identify what percentage of the organisation's income is given by the government which is 'of considerable importance' to its revenue; and second, to identify an amount of money which in the Indian scenario would, in itself, be 'of considerable importance'," Mr Gandhi said.

"Both methods if applied on a case-to-case basis are vulnerable to a charge of arbitrariness. Therefore, I take this opportunity to lay a specific guideline to decide whether a body is substantially financed by the government or not."

"I am aware that such a guideline is also open to a charge of arbitrariness but it is better to have a pre-decided transparent standard which everyone can follow rather than a post-facto case-to-case determination. I recognize that for this particular matter the guideline that I lay down would be a post-facto determination but the precedential value of this decision could help remove the arbitrariness to a large extent," Mr Gandhi said in his order.

The Commission then deliberated on the minimum amount of funding from government and deciding on the percentage of such funding out of total income per year. After detailed deliberations, the Commission said, "...if a body receives a minimum of Rs5 lakh and this amount constitutes over 10% of its annual income, the body can be considered to be 'substantially funded' for the purposes of the RTI Act, and would be considered to be a public authority."

Mr Gandhi, then dismissed the appeal of Mr Sharma since the association was not substantially financed by the government and therefore was not a public authority.


Decision No. CIC/SG/C/2009/001193/5009

Complaint No. CIC/SG/C/2009/001193

Complainant                    : Ved Prakash Sharma,

Respondent                      : Bhagwan Das Sharma
                                              Senior Citizens Welfare Association (Regd.)
                                             C/o Shri Bhagwan Dass,
                                             President, SCWA, 7365, Prem Nagar,
                                             Shakti Nagar, New Delhi-110007


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