The six major political parties named as respondents in the two complaints, one filed by Sh. Subash Chandra Aggarwal and the other by Shri Anil Bairwal, before the Central Information Commission (CIC), were Indian National Congress (INC), Bhartiya Janta Party (BJP), Nationalist Congress Party (NCP), Communist Party Of India (Marxist) (CPM), Communist Party of India (CPI) and Bahujan Samaj Party (BSP). In both the complaints, the common issue relating to the disclosure of the accounts and funding of Political Parties had been raised. Hence, the Commission clubbed them together for disposal. It was observed that while CPI and NCP had furnished some of the information initially requested for by the applicants under the RTI Act, INC and BJP had straightaway refused to furnish any information on the assertion that they were not “public authority” and hence, not under the purview of the RTI Act. The other two parties had not responded in the matter.

2.It would be useful to know in the first instance how the expression “public authority” is defined under the RTI Act, 2005. In terms of section 2(h) of the Act ibid, “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 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 organization substantially financed, directly or indirectly by funds provided by the appropriate Government. The last named clause under section 2 (h) (ii) is of particular interest in the present case.

3.It was vehemently argued on behalf of the complainants that the Political Parties in question were decidedly being substantially indirectly funded by the Government in as much as they had been:

(i)  allotted  large tracts of land at highly subsidized rates to set up their offices in Delhi and even in States. The details of the allotments so made were furnished to the Commission;

(ii) rented out huge accommodations at concessional rates, the details whereof were also furnished to CIC;

(iii) totally exempted from payment of income tax under section 13 of the Income Tax Act, 1961;

(iv) allotted free time on All India Radio and Doordarshan at the time of Elections; and

(v) supplied free of charge two copies of Electoral Roll at the time of Elections.

4.It was further argued on behalf of the complainants that these political parties clearly performed important and sensitive public functions in that:

(i) they hold constitutional status and wield constitutional powers under the Tenth Schedule of the Constitution in as much as they have the power to –

a) disqualify legislators from Parliament and State Assemblies; b) bind legislators in their speeches and voting inside the house; c) decide what laws are made;  d) decide whether Government remains in power or which Government should come to power;  e) decide public policies that affect lives of millions of people;

(ii) they had been conferred statutory status under section 29 A of the Representation of the People Act, 1951 and are required to bear true faith and allegiance to the Constitution of India as by law established;

(iii) as per Section 29C of the Representation of People Act, 1951, all donations of and above Rs. 20,000/- made to Political Parties are required to be reported to the Income Tax Department,  which obligation points towards their public character; and

(iv) allotted election symbols by the Election Commission which  again was suggestive of their public character.

5.The counter-arguments advanced before the Commission on behalf of the respondent political parties included the following:

(i) free airtime granted to Political Parties during the election time on national television and national radio is not suggestive of government financing in as much as during elections, it is a popular practice in most of the democracies.

(ii) supply of  two copies  electoral rolls free of charge during elections , again, is not indicative of financing by the Government, as it is a statutory obligation imposed on the Election Commission of India;  

(iii) allotment of party  accommodation at economical rates cannot be construed as substantial financing in as much as the Government makes this facility available not only to Political Parties recognized by the Election Commission but also to other segments of population such as journalists etc.;

(iv)  exemption from Income Tax granted under section 13A of the Income Tax Act also does not mean that it is a case of substantial funding by the Government. The  Income Tax exemption is allowed to the farmers also but by virtue of this, the farmers cannot be designated as public authority under section 2(h) of the RTI Act:

(v) even if it is admitted for the sake of argument that the Government is funding the Political Parties in the manner mentioned above, it cannot be said to be ‘substantial financing’, as it constitutes a very small portion of their overall funding;

(vi) The powers conferred on the Political Parties under the 10th Schedule of the Constitution can be exercised only when an elected Member has voted or abstained from voting against the whip of the political party or he has voluntarily given up the membership of such political party. Even in such cases, the political party cannot disqualify a Member of Legislature. All that it can do is to move an application seeking disqualification of such elected Member before the Chairman/Speaker of the House who has exclusive authority to declare such elected Member to be disqualified or otherwise.

(vii) No doubt, Political Parties  play a significant role in public life but public interest is not the criterion for declaring a body or institution as public authority under section 2(h) of the RTI Act.

6.The CIC carefully essayed the arguments given on behalf of both sides and observed as follows:

A:Substantial financing of Political Parties by the Central Govt.

(i)The  allotment  of huge tracts of land in prime areas of Delhi allotted to the respondent Political Parties either free of cost, or at concessional rates, the details whereof were confirmed by the Land & Development Officer, was one instance of indirect funding of these Political Parties by the Government. Though the  lease value of these properties in the open market was not available, the Commission strongly believed that the premium and the lease rent being charged from the Political Parties did not reflect the true value of these properties, which  would be much higher This, in its  considered opinion, amounted to indirect financing and when added to the income tax exemption enjoyed by these political parties, it would amount to substantial financing. This was further reinforced by the fact that such concessional allotments had been made at the State Capitals by the State Governments also.

(ii) The information  in regard to allotment of houses to the Political Parties on rental basis on concessional rates as furnished on behalf of the complainants, and confirmed by the Directorate of Estates, led the CIC to strongly believe that the rent charged did not reflect the true rental value of these properties, which would be much higher. This, in the opinion of CIC, constituted another instance of substantial indirect funding by the  Government.

(iii) The total exemption from payment of income tax on their incomes, very obviously, constituted the most important benefit. Since these political parties had not paid any income tax, the exact quantum of money that the Central Government had foregone in the process had not been worked out specifically. However, since the level of income of all these political parties would place them in the highest slab of income tax, at least 30% of their total income would have been collected as income tax but for the total exemption given to them by law. By a simple calculation, this would show that the Central Government had bestowed  substantial  financial benefits on the six political parties.  The CIC refused to accept the plea made on behalf of the political parties that  such concessions and exemptions were routinely extended to many charitable and non-profit non-governmental organisations across the country, and if they were not considered to be public authorities, there was no reason why the political parties should be considered so. There was  a great difference between the tax exemption given to charitable and non-profit non-governmental organisations and that given to the political parties. The exemption given to the former was strictly conditional: full or part exemption was given to these organisations only if they pursued the objectives outlined in their respective charters. There were other strict conditions laid down in the Income Tax Act which the assessee must comply with. In other words, if any of these non-governmental organisations were found not to be pursuing their objectives or spending the tax exempt amount on activities other than what was enshrined in their respective charters or not comply with the conditions, their entire income became subject to taxation, sometimes with penalty. On the other hand, the tax exemption given to the political parties was complete, the only condition being that they must report to the Election Commission of India, every year, the details of all the contributors who contributed Rs. 20,000 or more to the political party concerned. Thus, the political parties enjoy an almost unfettered exemption from payment of income tax, a benefit not enjoyed by any other charitable or non-profit non-governmental organisations. 

(iv)  The amounts spent by the State  on  giving free airtime on All India Radio at the Election times  might be small  in themselves but  they added to the kitty of Political Parties at the Government cost.

(v) However, the question remained whether the aforesaid financing could be held to be ‘substantial financing’ in terms of section 2 (h) (d) (i) of the RTI Act. The Delhi High Court in judgment dated 07.01.2010 in Indian Olympic Association -vs- Veeresh Malik and Ors. (WP)(C) No. 876/2007 had held  that ‘majority’ test was not appropriate to decide whether or not an Organisation was substantially financed, directly or indirectly, by the appropriate Government in as much as “substantial” financing could not be straight-jacketed into rigid formulae, of universal application. A similar view was taken by the Karnataka High Court in Bangalore International Airport Limited – Vs – Karnataka Information Commission (WP 12076/2008).The gravamen of the said judgments was that for a private entity to qualify to be a public authority, substantial financing did not mean majority financing. What was important is that the funding by the appropriate Government was achieving a “felt need of a section of the public or to secure larger societal goal.” This requirement was clearly met with in the present case.

B:Performance of Public Duty

(i) The Political Parties are the life blood of our polity. The ruling party draws its development programs on the basis of its political agenda. It is responsible for the growth and development of the society and the nation. Political Parties affect the lives of citizens, directly or indirectly, in every conceivable way and are continuously engaged in performing public duty. It is, therefore, important that they became accountable to the public.

(ii)Political Parties are the unique institution of the modern constitutional State. These are essentially political institutions and are non-governmental. Their uniqueness lies in the fact that in spite of being non-governmental, they come to wield or directly or indirectly influence exercise of governmental power. It would be odd to argue that transparency is good for all State organs but not so good for Political Parties, which, in reality, control all the vital organs of the State.

(iii) In the W.P. No.12076 of 2008 dated 9.2.2010 in the case of Bangalore International Airport Limited vs Karnataka Information Commission, the Karnataka High Court has held that:- “It is not incumbent that a body in order to be a public body must always be constituted by a statute; for an authority to be a ‘public authority’ it must be an authority exercised or capable of being exercised for the benefit of the public”  

(iv)The purity of elections assumes critical significance in this context. In Union of India vs. Association of Democratic Reforms & Anr (AIR 2002 SC 2112), the Supreme Court has laid emphasis on the purity of elections in the following words:-  “To maintain the purity of elections and in particular to bring transparency in the process of election, the Commission can ask the candidates about the expenditure incurred by the Political Parties and this transparency in the process of election would include transparency of a candidate who seeks election or re-election. In a democracy, the electoral process has a strategic role. The little man of this country would have basic elementary right to know full particulars of a candidate who is to represent him in Parliament where laws to bind his liberty and property may be enacted.”

(v) The preamble to the Constitution of India aims at securing to all its citizens: JUSTICE, social, economic and political; LIBERTY of thought, expression, belief, faith and worship; and, EQUALITY of status and of opportunity. Coincidentally, the preamble of RTI Act also aims to promote these principles in the form of transparency and accountability in the working of the every public authority. It also aims to create an ‘informed citizenry’ and to contain corruption and to hold government and their instrumentalities accountable to the governed. Needless to say, Political Parties are important political institutions and can play a critical role in heralding transparency in public life. Political Parties continuously perform public functions which define parameters of governance and socio-economic development in the country.  

(vi) In view of the nature of public functions performed by Political Parties and the dicta of the High Court extracted above, the Commission concluded that Political Parties in question are Public Authorities under section 2(h) of the RTI Act. Constitutional/legal provisions vesting Political Parties with rights and liabilities.

(vii)The  Commission attached importance to the contention that Political Parties have constitutional and legal rights and liabilities and, therefore, need to be held to be Public Authorities. Political Parties are required to be registered with the ECI under section 29A of the R.P. Act, 1951 – a Central Legislation. An association or body gets the status of a political party on its registration. ECI awards symbols to Political Parties under the Election Symbols(Reservation and Allotment) Order, 1968, only after registration. The ECI calls for details of expenses made by the Political Parties in the elections. Contributions of the value of Rs. 20,000/- and above received from any person or a Company by a Political Party are required to be intimated to ECI under section 29C of the R.P. Act. ECI is vested with the superintendence, direction and control of elections under Article 324 of the Constitution. ECI is also vested with the authority to suspend or withdraw recognition of a political party in certain contingencies. More importantly, Political Parties can recommend disqualification of Members of the House in certain contingencies under the Tenth Schedule.The Commission found these submissions  quite compelling and unerringly pointing towards their character as public authority.

7.The Commission accordingly concluded that the six Political Parties in question were “public authorities” within the meaning of section 2 (h) (ii) of the RTI Act and directed their Presidents / General Secretaries to designate CPIOs and the Appellate Authorities at their headquarters in six weeks time and also  comply with the provisions of section 4(1) (b) of the RTI Act by way of making voluntary disclosures.

8.However, all the six Political Parties failed to comply with the directions given by the Commission. This was brought to the notice of the Commission by Shr. Subash Chandra Aggarwal through his representations dated 27/08/2013, 10/12/2013 and 23/12/2013. The Commission accordingly sent a notice, dated 07.02.2014, to the  political parties  concerned, in response to which comments were received from three political parties. Another opportunity through notice dated 25.03.2014 was given to the three parties that had not responded. A response was received; however, there was no response from the other two parties. As the responses received were not satisfactory, a show cause notice was issued on 10.09.2014 under section 18 of the RTI Act to all the six political parties to explain why an inquiry should not be initiated for non-compliance of this Commission’s order dated 03.06.2013. Responses were received from four parties. But, there was no response from two parties. The responses that were received from the political parties, in summary, said that this Commission’s order of 03.06.2013 was wrong. Accordingly, a notice dated 03.11.2014 was issued fixing 21.11.2014 as the date for hearing. The six national political parties, through this notice, were directed to produce all relevant documents/ records relating to the action taken in pursuance of the directions of this Commission contained in its order of 03.06.2013.

9.However, on the date of hearing, i.e.,  21.11.2014 , none of the respondent Political Parties were present.However, a letter dated 06.01.2015 was received from INC/AICC, in which they had asserted that “…Nothing in the RTI Act suggests that a political party is a “public authority”… The CIC has expanded its own jurisdiction beyond the letter and spirit of the RTI Act, which is ex facie illegal…that the order dated 03.06.2013 is in excess of the powers of the CIC contemplated under Section 18 of the RTI Act…if the CIC so chooses, it may…find out the status of the Right to Information (Amendment) Bill, 2013…it is requested that these proceedings may either be closed or adjourned sine die till the final outcome of the proceedings before Parliament.”

10.In the course of hearing, several suggestion were made on behalf of the complainants. Shri Subash Chandra Aggarwal   submitted that the Commission should make suitable recommendations to the Election Commission of India, the Ministry of Urban Development, Prasar Bharti, the Central Board of Direct Taxes and such other institutions relevant to the termination of state-funded privileges and concessions, such as subsidized land and government accommodation, free voter-lists, free media-time on Doordarshan/ AIR, income tax exemptions, etc.  Shri R. K. Jain submitted, in his intervention, that penalty be imposed on the political parties along with the award of compensation to the complainants. Shri Jain also said that all citizens are affected by the non-compliance of this Commission’s order. He further submitted that another opportunity of hearing should be granted to the political parties so that any order passed by this Commission is not challenged on grounds of violation of the rules of natural justice. Shri Jain submitted that he be granted some more time to make 3 submissions about the legal provisions and options available for getting this Commission’s order of 03.06.2013 implemented. Prof. Jagdeep Chhokar maximum penalty be imposed on the political parties and that exemplary compensation equal to five percent of the average of the annual income as declared by the six political parties in their income tax returns be granted to the complainants. Conclusions from the hearing. However, the Commission eventually decided  to give the respondent Political Parties another opportunity of being heard and asked them  to appear before the Commission for a hearing on 7th January, 2015 at 4:00 pm and produce all relevant documents/ records relating to this matter.

11.After hearing the submissions made on behalf of the complainants, the Commission observed that:

(i) The enquiry under section 18 can be brought to a close. The respondents were absent en bloc from the hearings on 21.11.2014 and 07.01.2015, and no useful purpose will be served by fixing another date.  

(ii) The Commission’s order of 03.06.2013 is binding and final. It has not been affected by any judicial or legislative intervention. The respondents have been declared public authorities, but they have not taken the steps prescribed for implementation.

(iii) The Commission is not geared to handling situations such as the present instance where the respondents have disengaged from the process. The Commission, having declared the respondents to be public authorities, is unable to get them to function so. This unusual case of willful noncompliance highlights the need to identify the legal gaps and lacunae in the implementation mechanism. An obvious conclusion is that in cases such as this, the Commission is bereft of the tools to get its orders complied with.

(iv) The penalty provisions have been made infructuous as there are no CPIOs. Penalty can be imposed only on the CPIO, and on no one else, not even the first appellate authority in the event of a default. The prayer made in this case for penalizing the non-complying public authorities cannot be considered.

(v) There is a trend towards compartmentalization of the two sections, 18 and 19, by distinguishing between complaints and appeals. There is recognition that the two sections provide different procedures and distinctive remedies. One is supervisory, and the other is appellate. There have been shifts in the way the RTI Act’s scheme and scope of functioning is coming to be perceived, while acknowledging that the two provisions cannot substitute each other. However, petitioners invoke the complaints and appeal dimensions together. The nature of the RTI Act’s implementation is such that legally distinguishable concepts get blurred and bunched with RTI applications that can be read under both sections.

(vi) As regards the proposal for withdrawing the facilities and concessions given by government to political parties, the position is that section 25(5) is not applicable in the present case. The provision applies to those instances where “…the practice of a public authority in relation to the exercise of its functions under this Act does not conform with the provisions or spirit of this Act…” It is for the concerned government departments or agencies to examine the matter from the standpoint of their institutional system and arrive at their own findings as to how non-compliance with the Commission’s order of 03.06.2013 has impacted on the rules and norms under which the facilities and concessions have been provided.  

(vii) There are, in the law, gaps needing to be addressed, e.g., in the context of action against the public authority for non-compliance with the Commission’s directions under section 19(8) to appoint a CPIO; the silence in section 18 on what to do with the enquiry results; the apparent ambivalence in the linkages between sections 18 and 19(8). Other questions are: how does the penalty provision work in the absence of a CPIO; how can the Commission get the respondents to function as public authorities after designating them so; how to provide relief to a complainant unable to file a second appeal in cases where the public authority has not appointed a first appellate authority; the steps required for getting an order implemented; a clearer demarcation of duty with implications for liability, compensation and penalty. It is reasonable to argue that if there is persistent non-compliance, apart from the CPIO, there must be some assignment of responsibility at the level of the public authority.

12.Taking into account all the facts and circumstances of the case, the commission passed the following order on 16/03/2015:

(a) the respondents are not in compliance with the Commission’s order of 03.06.2013 and the RTI Act. The respondents, as public authorities, have not implemented the directions contained in the Commission’s order and there is no evidence of any intention to do so;

(b) the submissions made by the complainants for the imposition of penalty and the award of compensation are not allowed in view of legal considerations;

(c) the prayer for making recommendations to public authorities, reference para 68(6), above, is not allowed;

(d) a copy of this order be sent to the Department of Personnel and Training, Government of India, for taking action as deemed appropriate for addressing the legal gaps and issues that have come to light during the hearings, including those mentioned in para 68(7) above, with a view to ensuring compliance of this Commission’s orders; and  

(e) the complainants are at liberty, in view of the facts and circumstances of this case, to approach the higher courts for appropriate relief and redressal.







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