Reserve Bank of India v. Jayantilal N.

Mistry
Transferred Case (Civil), NO: 91 OF 2015
Delivered on: 16/12/2015
Coram- The Honble Mr. Justice M.Y.Eqbal
The Honble Mr. Justice C.Nagappan
STATEMENT OF FACTS
The Respondents sought certain information with regard to various
banks and other details in the banking sector from RBI, to which the
latter refused to furnish information of certain queries. The
aggrieved parties by appeal approached the Central Information
Commission, wherein the Commission directed the RBI to provide
the sought information. The RBI later challenged the said order of
CIC before various High Courts in India, on account of the various
orders passed by CIC. All these petitions were transferred to the
Supreme Court, withdrawing the writ petitions filed before the High
Courts. Thus, the Honble Supreme Court observed that the CIC has
passed the order stating valid reasons and that the order do not
require interference of this Court and therefore, case was dismissed.
ISSUES RAISED
1. Whether all the information sought for under the Right to
Information Act, 2005 can be denied by RBI and other banks to
the public at large, on the ground of economic interest,
commercial confidence, fiduciary relationship with other bank on
the one hand and the public interest on the other?
2. Whether RTI Act overrides various provisions of special statutes
which confer confidentiality in the information obtained by the
RBI?

JUDGMENT IN BRIEF
The Honble Supreme Court refused to interfere with the orders
passed by the Central Information Commissioner by saying that,
they are based on valid reasons. The court said that responsibility
of the RBI is to take rigid action against those Banks which have
been practicing disreputable business practices and not to cover up

their acts from public scrutiny. The court opined that argument of
the RBI that the disclosure of information sought would hurt the
economic interest of the country is baseless, unsubstantiated and
totally misconceived. RBI is supposed to uphold public interest and
not the interest of individual banks. RBI is clearly not in any fiduciary
relationship with any bank. RBI has no legal duty to maximize the
benefit of any public sector or private sector bank, and thus there is
no relationship of trust between them. RBI has a statutory duty to
uphold the interest of the public at large, the depositors, the
countrys economy and the banking sector. Thus, RBI ought to act
with transparency and not hide information that might embarrass
individual banks. It is duty bound to comply with the provisions of
the RTI Act and disclose the information sought by the respondents,
held the court.
CRITICAL ANALYSIS
The Right to Information Act, 2005 is proved to be a milestone of
Indian democracy. Democracy requires an informed citizenry and
transparency of information which are vital to its functioning and
also to contain corruption and to hold Governments and their
instrumentalities accountable to the governed, it is so stated in the
Act itself. The Bill is in accord with both Article 19 of the Constitution
as well as Article 19 of the Universal Declaration of Human Rights. In
my opinion the honble Supreme Court has done full justice to the
purpose of the Act and to the democratic values of this country.
Reserve Bank of India, being the apex regulatory body regarding the
banking sector in India, should have been more interested in the
interest of the general public rather than that of banking companies.
As per the RTI Act,2005, information means any material in any
form, including records, documents, memos, e-mails, opinions,
advices, press releases, circulars, orders, logbooks, contracts,
reports, papers, samples, models, data material held in any
electronic form and information relating to any private body which
can be accessed by a public authority under any other law for the
time being in force.
RBI is a public authority as per S.2(h) of the said Act and hence
bound to give the information sought under the Act. However the
Act also provides for exceptions, listed under S.8(1). RBI relied upon
clauses (a) (d) and (e) of sub section (1) of S.8 for justifying their
decision, refusing disclosure of the information sought (inspection
and enquiry reports, complaints received, list of defaulters, advisory
letters etc.).

Clause (a) of sub section (1) of S.8 says that information, disclosure
of which would prejudicially affect the sovereignty and integrity of
India, the security, strategic, scientific or economic interests of the
State, relation with foreign State or lead to incitement of an offence.
The contention of RBI was that economic interest of the nation
makes it important not to disclose certain information sought.
According to them if people, who are sovereign, are made aware of
the irregularities being committed by the banks then the countrys
economic security would be endangered. It is strange that such an
argument was made by RBI. By covering up such irregularities and
fraud committed by banking companies they are threatening the
economic interest of the country as well as the customers, and at
the very same time seeking exception in the name of nations
economic interest. RBIs responsibility is to enhance the economic
growth of the nation through policy making and its implementations
and not to protect the fraudulent interests of banking companies.
The other exception sought by RBI was S.8(1)(d), it says as follows;
information including commercial confidence, trade secrets or
intellectual property, the disclosure of which would harm the
competitive position of a third party, unless the competent authority
is satisfied that larger public interest warrants the disclosure of such
information. Competitiveness is solely the interest of a particular
company, which is nothing but profit motive. RBI is not constituted
to protect the competitiveness of each and every banking company,
but that of the banking sector of the nation as a whole.
As per S.8(1)(e) information available to a person in his fiduciary
relationship, unless the competent authority is satisfied that the
larger public interest warrants the disclosure of such information.
RBI relied on the fiduciary relationship that ,they alleged, they have
with the banking companies and refused to give information saying
that all that information are obtained by them in that capacity.
The word fiduciary has been defined in Blacks Law Dictionary as 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 good faith and candor which it requires or a
person having duty created, by his undertaking, to act primarily for
anothers
benefit
in
matters
connected
with
such
undertaking. Banking companies are submitting reports and
information before RBI owing to the legal compulsion placed on
them by Banking Regulation Act,1949. Likewise RBI is receiving the
same on statutory mandates. There cannot be seen any amount of
trust or confidence which binds them other than legal compulsions.
Besides RBIs indifference and irresponsibility is manifest in most of
the replies given by them to RTI applications. Even when there is a

specific information sought they refused the same on reason of

being nonspecific. And also they are not even ashamed to say that
they dont possess certain information, they ought to have.
As far as the second issue is concerned I am of the opinion that RTI
Act is the special statute in this regard. It is clear from the wordings
of S.22 of the Act (S.22- the provisions of this Act shall have effect
notwithstanding anything inconsistent therewith contained in the
Official Secrets Act, 1923 (19 of 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.).
I hope that this landmark judgment would be an eye opener to the
public authorities like RBI and a step towards a transparent
democratic system.