2009 (10) TMI 969 - Commission - Indian Laws

Finance Companies Designated Public Authorities under RTI Act; Must Disclose Info

The Commission concluded that LIC Housing Finance Limited (LICHFL), LIC Mutual Fund Asset Management Company Limited (LIC MFAM), and GIC Housing Finance ... - Issues Involved:1. Whether LIC Housing Finance Limited (LICHFL) is a Public Authority under Section 2(h) of the Right to Information (RTI) Act, 2005.2. Whether LIC Mutual Fund Asset Management Company Limited (LIC MFAM) is a Public Authority under Section 2(h) of the RTI Act, 2005.3. Whether GIC Housing Finance Limited (GICHFL) is a Public Authority under Section 2(h) of the RTI Act, 2005.Detailed Analysis:1. LIC Housing Finance Limited (LICHFL) as a Public Authority:The complainants argued that LICHFL is a Public Authority under Section 2(h) of the RTI Act because it is substantially financed by the Life Insurance Corporation (LIC) of India. They pointed out that LICHFL was promoted by LIC, and LIC holds a significant shareholding (40.497%) in LICHFL. Additionally, other government insurance companies also hold shares, bringing the total public sector shareholding to 45.918%. The complainants emphasized that LICHFL uses a logo similar to LIC's and shares the same Chairman and Managing Director with LIC.LICHFL countered that it is not a Public Authority as defined by the RTI Act because LIC's shareholding is less than 51%, and thus, LIC does not have ownership or control over LICHFL. They argued that substantial financing should mean more than 50% shareholding, which is not the case here.The Commission noted that while LIC does not own more than 50% of LICHFL, the combined shareholding of LIC and other public sector entities constitutes substantial financing. The Commission also referred to the Madras High Court's decision in Tamilnadu Road Development Company Ltd. vs. Tamilnadu Information Commission, which emphasized a liberal interpretation of 'Public Authority' to include entities substantially financed by the government. Based on these considerations, the Commission concluded that LICHFL is a Public Authority under the RTI Act.2. LIC Mutual Fund Asset Management Company Limited (LIC MFAM) as a Public Authority:The complainants did not provide specific arguments regarding LIC MFAM. However, the Commission examined the relationship between LIC and LIC MFAM. LIC MFAM was established by LIC, which is a Public Authority under the RTI Act. LIC provided the initial corpus and financial assistance to LIC MFAM, and LIC has the authority to appoint and change the Trustees of LIC MFAM.The respondents argued that LIC MFAM is a private company and not substantially financed by the government. They contended that LIC's investment in LIC MFAM does not constitute substantial financing.The Commission found that LIC MFAM is substantially financed and controlled by LIC, which is a Public Authority. The Commission emphasized that funding and control by LIC, an entity established by the government, constitutes indirect financing and control by the appropriate government. Therefore, the Commission concluded that LIC MFAM is a Public Authority under the RTI Act.3. GIC Housing Finance Limited (GICHFL) as a Public Authority:The complainants argued that GICHFL is a Public Authority because it is substantially financed by public sector insurance companies. They pointed out that the aggregate shareholding of public sector entities in GICHFL is 47.68%.GICHFL countered that it is not a Public Authority as defined by the RTI Act. They argued that the shareholding of public sector entities does not constitute substantial financing and that GICHFL operates independently without government control.The Commission noted that the combined shareholding of public sector entities in GICHFL is substantial and that these entities exercise control over GICHFL. The Commission referred to the Madras High Court's decision in Tamilnadu Road Development Company Ltd. vs. Tamilnadu Information Commission, which emphasized a liberal interpretation of 'Public Authority.' Based on these considerations, the Commission concluded that GICHFL is a Public Authority under the RTI Act.Decision:The Commission decided that LIC Housing Finance Limited, LIC Mutual Fund Asset Management Company Limited, and GIC Housing Finance Limited are Public Authorities under the RTI Act. The respondents are directed to provide the requested information to the applicants within three weeks from the date of receipt of the decision notice. The decision was announced on October 28, 2009.