Right to Information Act: Supreme Court Declares NGOs Receiving Government Funds as Public Authorities

The Supreme Court of India, in the case of D.A.V. College Trust and Management Society & Others vs. Director of Public Instructions & Others, addressed a critical issue regarding the applicability of the Right to Information Act, 2005 (RTI Act) to non-governmental organizations (NGOs) that receive substantial funding from the government. The Court ruled that NGOs substantially financed by the government fall under the definition of “public authority” under Section 2(h) of the RTI Act.

Background of the Case

The case arose when various educational institutions, managed by private trusts and societies, challenged the applicability of the RTI Act to them. The appellants included the D.A.V. College Trust and Management Society, which runs multiple educational institutions across India. They argued that they were not “public authorities” as defined under Section 2(h) of the RTI Act and were not required to provide information to the public under the Act.

The respondent authorities, including the Director of Public Instructions, contended that these institutions received substantial financial aid from the government and were therefore covered under the RTI Act.

Key Legal Issues Considered

Whether NGOs receiving substantial funding from the government qualify as “public authorities” under the RTI Act.
The meaning of “substantial financing” in the context of Section 2(h) of the RTI Act.
Whether such educational institutions are obligated to disclose information under the RTI Act.

Arguments by the Petitioners (D.A.V. College Trust and Others)

The petitioners contended:

The RTI Act was meant to cover only government and its instrumentalities, not private bodies.
The definition of “public authority” should be limited to entities explicitly mentioned in clauses (a) to (d) of Section 2(h) and should not include NGOs.
Receiving financial aid from the government does not automatically make an institution a “public authority.”
Educational institutions managed by private trusts function independently and should not be subjected to RTI requests.

Arguments by the Respondents (Director of Public Instructions & Others)

The respondents countered:

Institutions like the D.A.V. College Trust receive substantial government grants covering a significant portion of their expenses.
Under Section 2(h)(ii) of the RTI Act, NGOs that are substantially financed by the government are considered “public authorities.”
The RTI Act aims to promote transparency, and institutions benefiting from public funds must be accountable.
The financial grants received by these institutions amount to substantial financing, making them accountable under the RTI Act.

Supreme Court’s Observations

The Supreme Court analyzed the language of Section 2(h) of the RTI Act and made the following key observations:

The definition of “public authority” is not limited to entities established by the Constitution, laws of Parliament, or state legislatures. It also includes bodies “substantially financed” by the government.
Even if an institution is not directly created by the government, it can still be considered a “public authority” if it receives substantial funding.
The term “substantial financing” does not mean a majority of funding but a significant or material portion of the financial resources of the institution.
If an institution’s operations depend on government grants, and such grants constitute a major portion of its funding, it qualifies as “substantially financed.”
Educational institutions receiving government grants for staff salaries, infrastructure, or other operational expenses are accountable under the RTI Act.

Final Judgment

The Supreme Court dismissed the appeals of the educational institutions and ruled:

“An NGO substantially financed, directly or indirectly, by funds provided by the appropriate government would be a public authority amenable to the provisions of the RTI Act.”

The Court further held that:

“If an institution’s functioning is dependent on government funds, it is substantially financed, and information regarding such funding must be disclosed under the RTI Act.”

Implications of the Judgment

For Educational Institutions: Private colleges and schools receiving government aid must comply with the RTI Act and disclose financial and operational details.
For NGOs: NGOs receiving significant government funds are considered “public authorities” and are accountable under the RTI Act.
For Transparency and Governance: The ruling strengthens the transparency framework in institutions benefiting from public funds.
For Citizens: The judgment enables citizens to seek information about institutions that receive substantial government support.

Conclusion

The Supreme Court’s ruling in this case expands the scope of transparency and accountability under the RTI Act by ensuring that organizations substantially funded by the government cannot escape public scrutiny. By upholding the principle that public funds necessitate public accountability, the decision reinforces the democratic ideals of transparency and good governance.

Petitioner Name: D.A.V. College Trust and Management Society & Others.
Respondent Name: Director of Public Instructions & Others.
Judgment By: Justice Deepak Gupta, Justice Aniruddha Bose.
Place Of Incident: India.
Judgment Date: 17-09-2019.

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