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NGOs largely funded by govt under RTI: Indian apex court

Oct 10, 2013

The civil society organizations like NGOs funded substantially by the government are liable to reveal information under the transparency law, the Indian apex court said.

NGOs and private organisations, substantially financed by government or its authorities, come under the ambit of Right to Information Act making them liable to reveal information under the transparency law, the Supreme Court said.

A bench of justices K S Radhakrishnan and A K Sikri on Monday said that even though government may not have any statutory control over such organisations but they fall within the definition of public authority if they are substantially financed by it.

"Government may not have any statutory control over the NGOs, as such, still it can be established that a particular NGO has been substantially financed directly or indirectly by the funds provided by the appropriate government, in such an event, that organisation will fall within the scope of Section 2(h)(d)(ii) of the RTI Act (definition of public authority).

"Consequently, even private organisations which are, though not owned or controlled but substantially financed by the appropriate government will also fall within the definition of public authority," the bench said.

Although the term NGO has not been defined in the RTI Act but these organisations carry on various social and welfare activities which are otherwise governmental in nature, it said.

"The term Non-Government Organisations (NGO), as such, is not defined under the Act. But, over a period of time, the expression has got its own meaning and, it has to be seen in that context, when used in the Act.

"Government used to finance substantially, several non-government organisations, which carry on various social and welfare activities, since those organisations sometimes carry on functions which are otherwise governmental," it said.

The bench, however, said that whether an NGO has been substantially financed or not by the appropriate government, is a question of fact, to be examined by the authorities concerned under the RTI Act.

The apex court said that substantially financed means that "the degree of financing must be actual, existing, positive and real to a substantial extent, not moderate, ordinary, tolerable etc."

It said "merely providing subsidiaries, grants, exemptions, privileges etc., as such, cannot be said to be providing funding to a substantial extent, unless the record shows that the funding was so substantial to the body which practically runs by such funding and but for such funding, it would struggle to exist".

"The State may also float many schemes generally for the betterment and welfare of the cooperative sector like deposit guarantee scheme, scheme of assistance from NABARD etc., but those facilities or assistance cannot be termed as substantially financed by the government to bring the body within the fold of public authority," the bench said.

It also said that people's right to privacy and right to information be balanced and quashed the order of the Kerala High Court which had declared Cooperative Societies registered under the Kerala Co-operative Societies Act as public authority.

We, therefore, hold that the Cooperative Societies registered under the Kerala Co-operative Societies Act will not fall within the definition of public authority as defined under Section 2(h) of the Act," the bench said.

"Societies are, of course, subject to the control of the statutory authorities like Registrar, Joint Registrar, the Government, etc. but cannot be said that the State exercises any direct or indirect control over the affairs of the society which is deep and all pervasive.

"Supervisory or general regulation under the statute over the co-operative societies, which are body corporate does not render activities of the body so regulated as subject to such control of the State so as to bring it within the meaning of the State or instrumentality of the State," the bench said.

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