‘Govt has defacto control over multifarious activities of bank’
Sufficient safeguards under law to check frivolous applications
Mohinder Verma
JAMMU, Nov 26: Notwithstanding much hue and cry from Kashmir valley based politicians and separatists over the recent decision of the State Administrative Council headed by Governor Satya Pal Malik bringing Jammu and Kashmir Bank Ltd under the purview of transparency law, the Full Bench of State Information Commission (SIC) had declared the bank as Public Authority as defined in Section 2 of the State Right to Information Act way back in 2012.
Click here to see Full Judgment of SIC on J&K Bank
However, the judgment was not implemented by the successive Governments for obvious reasons although all the apprehensions about frivolous applications aimed at breaching the trust between the banker and the depositors were dispelled by the State Information Commission on the ground of adequate safeguards provided in the Act.
Several residents of the State and RTI activists while exercising their right conferred on them under Section 3 of the J&K RTI Act, 2009 had filed applications before the then Chairman of the J&K Bank Limited seeking information on various aspects.
However, these applications were rejected by the then Chairman on the ground that Bank doesn’t fall under the purview of the J&K RTI Act. Finally, the applicants knocked the doors of the State Information Commission, which clubbed the applications for hearing. As an important question of law was involved, a Full Bench of the Commission was assigned the task.
The Full Bench comprising the then Chief Information Commissioner G R Sufi and the then Information Commissioners Dr Sudesh Kumar Sharma and Nazir Ahmad on April 24, 2012 delivered a landmark judgment declaring J&K Bank Ltd as Public Authority as defined in Section 2 of the State RTI Act. The Commission had also directed the then Chairman-cum-Chief Executive Officer of the Bank to designate First Appellate Authorities, Public Information Officers and Assistant Public Information Officers as provided under Section 5 of the RTI Act.
“The J&K Bank is considered to be one of first State banks in the country. According to the extended Central Laws to the State, the J&K Bank was characterized as a Government Company as per the provisions of the Indian Companies Act, 1956. In 1971 the Bank was accorded the status of Scheduled Bank and in 1976 it was declared as ‘A’ class Bank by RBI”, the SIC had observed, adding “the Comptroller & Auditor General of India exercises its jurisdiction while auditing the Bank. The State Audit Authorities are also auditing the accounts of the Bank. All these factors strengthen Government control and influence over J&K Bank Ltd”.
The Commission had further observed: “The Government has further tightened its control over the Bank as is evident from the happenings/events— the State Legislature has established its authority over the Bank through Committee on Public Enterprise and directed the Bank authorities to appear before it and carry out the instructions and directions for ensuring speedy recovery of loans advanced by the Bank. These developments are not mere formalities. They indicate that the Bank is a Public Authority within the definition of Section 2 of the State RTI Act, 2009”.
Similarly, the former Chairman of the J&K Bank was suddenly asked to resign from the Chairmanship and he had to tender his resignation; the Finance Secretary of the State was nominated as the Chairman of the Bank but later on Reserve Bank of India‘s intervention the Collegium comprising of Finance Secretary and other Government nominated “Directors” were exercising the powers of the Chairman.
“The CAG’s audit control cannot be dismissed merely by saying that it is a requirement under the Companies Act, 1956. Only the Government companies are subjected to such audit. Government companies are nothing but Public Authorities established, owned, controlled by the Government. The J&K Bank may not be a ‘State’ as defined under Article 12 of the Constitution of India, but the Commission is of the considered opinion that it fulfils all the limbs of Section 2 of the State RTI Act, 2009”, the Full Bench had mentioned in the judgment.
The SIC had further observed, “the J&K Government exercises its dominating influence and control through the Chairman of the Bank and through its Government nominee Directors. Moreover, J&K Bank has always carried out guidance, instructions and wishes of the Government, whether it be granting extra ordinary overdrafts, whether it is subsidy schemes, whether it is the appointment and removal of the Chairman at the wish and pleasure of the Government. Therefore, the Government has ‘defacto control’ over the multifarious activities of J&K Bank Ltd”.
Stating that Government also enjoys substantial financial control over the Bank, the Information Commission had stated: “J&K Bank is a profit making company and that the State Government had not merely made an investment in the Bank for earning profit. The dominant role played by the then Maharaja’s Government in establishing the Bank with 92% share capital and the interest taken, control exercised and guidance given by the successive Governments after 1947 make it abundantly clear that the intention of the State Government was not to earn profit but to nurture and flourish the J&K Bank as an organization of the State for the financial and economic prosperity and betterment of the people of the State”.
“The J&K Bank has reached its present zenith and heights only because of the patronage of the State Government which nourish its programmes at appropriate times and but for the contribution of the State Government, J&K Bank would have not seen the light of the day”, the Full Bench had recorded in the judgment.
It was further stated by the Commission that J&K Bank caters to the banking needs of millions of citizens of the State and also various other parts of the country. They have a stake in the functioning and working of this premier banking institution of the State. “Hence it would be against the basic spirit of the intention of the State Legislature as expressed in preamble of the Act to deny the citizenry the right to information with regard to J&K Bank Ltd when the same is available to their countrymen in rest of the country so far their dealings with nationalized banks and State bank are concerned”, reads the judgment.
On the basis of different judgments of several High Courts of the country, the Full Bench of SIC had finally declared the J&K Bank as a Public Authority as defined in Section 2 of the J&K RTI Act, 2009 for fulfilling the conditions therein.
Pointing towards the apprehensions of the counsel for the J&K Bank that bringing the bank under the ambit of State RTI Act will open flood gates for certain exploiters with vested interest to make frivolous applications which may breach the trust between the banker and depositors, the Commission had observed, “banking institutions are generally based on the trust and confidence of depositors and to maintain the same there are adequate safeguards provided in the Act under Section 8 particularly Sub Section (d), (e) and (i) and Section 10 and 11 of the State RTI Act and we hope that with proper training to PIOs and FAAs, the safeguards given in these provisions of law will be fully implemented if the facts of the case so warrant”.
The Commission had directed for giving effect to the order within a period of one month from the date of its receipt. However, the implementation of judgment was not paid serious attention by the successive Government for obvious reasons. Finally, the State Administrative Council has given practical shape to the judgment in its recent decision.
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