CIC Stay Order Restrains RBI Authority from Sharing Information on Saraswat Bank's NPAs, Defaulters
Moneylife Digital Team 06 July 2021
The central information commission (CIC) has stayed the order of the first appellate authority (FAA) of the Reserve Bank of India (RBI) for the release of information on non-performing assets (NPAs) and top defaulters of the Saraswat Co-operative Bank Limited. This is the first time a stay order of this sort has been granted by the Commission. 
 
The central information commissioner Suresh Chandra opted to stay the RBI FAA’s order despite an earlier order from the  Supreme Court (SC) holding that such information was disclosable.
 
In his Right to Information (RTI) application, filed on 25 October 2019, former central information commissioner and RTI activist Shailesh Gandhi had sought information on Saraswat Co-operative Bank Ltd for the previous three years. He had asked for copies of RBI’s audit reports and inspection reports, warnings or advisories issued to the bank, fines or penalties levied on the bank, the grade allotted to the bank, its total non-performing assets, the report on quality of borrowers, and the list of its top five defaulters with the amounts of default.
 
In his application, Mr Gandhi had stressed that “none of the information sought is exempted in RTI as per SC decision in Reserve Bank of India Vs. Jayantilal N. Mistry & Ors. (2016) 3 SCC 525.”
 
The Mumbai-based Saraswat Cooperative Bank Limited filed a second appeal on 27April 2021, before the CIC against an order of the RBI First Appellate Authority issued on 15 February 2021. 
 
In its second appeal, Saraswat Bank submitted that the CPIO of RBI, through its order, informed the bank of their intention to disclose the information sought by the applicant Shailesh Gandhi under RTI.
 
CPIO of RBI through its letter on 23 February 2021 had directed the bank “to produce a stay order from CIC restraining RBI from disclosing the information”. The CPIO further added that “in the absence of such a stay order, the information would be disclosed to the applicant (Mr Gandhi)”.
 
Saraswat Bank then filed an urgent application on 12 May 2021 in the Commission for the grant of such an interim stay order.
 
The central information commissioner, Suresh Chandra, mentioned in his order of 4th June, that Saraswat Bank in its appeal before CIC further prayed that “if the information, which is confidential in nature, once disclosed, irreparable damage and image loss will be caused to the Appellant (Saraswat Bank).”
 
In his order, Mr Chandra said, “The Commission after adverting to the facts and circumstances of the case, and perusal of the records, observes that the appellant has prayed for interim order restraining the CPIO/FAA from releasing the information in terms of RTI application.”
 
Mr Chandra further said in the order, “In terms of the prayer, the second appeal is admitted and keeping in view of the urgency, the operation of the FAA’s order dated 15.2.2021 is stayed till further orders.”
 
Mr Chandra has not quoted any reasons for the decision. Mr Gandhi told Moneylife that he has never heard of such a stay order having been given before about disclosure of information. 
 
“May be the commissioner wants to create history by giving such a stay order. The commission has effectively refused disclosure of information which has been ordered by the SC in 2015 in the Jayantilal Mistry case. That was a landmark order because for the first time SC upheld the commission’s decision for disclosure of information in 11 cases. This order seems to want to nullify the effect of that SC order,” Mr Gandhi said.
 
“Recently Punjab National Bank & Union Bank had approached the SC to give stay orders on the release of inspection reports and list of defaulters. Even the SC had refused to grant a stay.
 
“What the SC refuses to stay, the commission goes ahead and stays. This is very bizarre and unfortunate. I have never heard of such a stay order before. In my opinion the Commission has no authority to give such a stay,” Mr Gandhi added.
 
He pointed out that Saraswat Bank played it smart and approached the CIC who without any legal authority stayed the decision!
 
In the aftermath of the CIC’s controversial order, Mr Gandhi has also filed an appeal before the CIC on 19 June 2021, seeking a recall of the stay order.
 
“The information sought is clearly covered by the SC decision, and hence the First Appellate Authority ordered that it should be given,” he reiterated.
 
Moneylife has accessed the email sent by Mr Gandhi to the chief information commissioner on 4th  July. Referring to his email on 19th June, he said he had “expected some response and was slightly disappointed.” 
 
Mr Gandhi wrote the chief information commissioner saying: 
 
“I want to draw your attention to a recent report from the Supreme Court and would like to draw your attention to it. According to this report it appears the Supreme Court has dismissed the plea of Punjab National Bank and Union Bank to stay RBI's decision to share inspection reports of banks:
 
 
On the other hand, the central information commission has stayed the order of the First appellate authority of RBI to share the same information from Saraswat Bank. This goes contrary to the Supreme Court judgment in the Jayantilal Mistry case. This represented the biggest confirmation of CIC orders and covered 11 Orders with detailed reasons and a clear ratio decidendi. I request that order be recalled”.
 
 
In a detailed conversation with Moneylife, Mr Gandhi said “the Commission’s stay order on releasing the information has been given on the ground that that Saraswat Bank has claimed it is ‘confidential’.” He reminded the CIC that the “parliament has not exempted ‘confidential’ information and the Commission’s action is in gross violation of the Supreme Court order and erroneous.”
 
Mr Gandhi also recalled how the SC had in Girish Mittal v. Parvati V. Sundaram (2019) held that RBI committed contempt by withholding disclosure of information that was directed to be given by it and that RBI was duty-bound to furnish all information relating to inspection reports and other material as per the order of Jayantilal N. Mistry.
 
Mr Gandhi emphasised that even the SC had dismissed the miscellaneous applications filed by the banks and praised the SC for dealing with the issue comprehensively. He affirmed that
“the power to stay any order has not been given to the Commission in the RTI Act by Parliament.”
 
“Thus the stay to the disclosure of information is contrary to the directions of the Supreme Court and disrespect for the clear decision of the apex court for transparency. It is also an exercise without the sanction of the RTI Act and hence must be withdrawn,”Mr Gandhi concluded.
 
 
Comments
garg0505
4 weeks ago
In my opinion now training is required to information commissioner by the experts, how to dealt with provisions of RTI act and various courts ruling while disposing second appeals.
Here in instant case seems that information commissioner playing out of crease and hitting boundaries and sixes to defend the wrong doings of the Banks by not allowing legigment information.
Since Honourable Shailesh Ghandhi former information commissioner has the guts to bring illegality on mats by exposing the misdeeds of the Central Information Commission, but questions remains about other poor appellants who are suffering from the other illegal decisions of other information commissioner's.
garg0505
4 weeks ago
In my opinion now training is required to information commissioner by the experts, how to dealt with provisions of RTI act and various courts ruling while disposing second appeals.
Here in instant case seems that information commissioner playing out of crease and hitting boundaries and sixes to defend the wrong doings of the Banks by not allowing legigment information.
Since Honourable Shailesh Ghandhi former information commissioner has the guts to bring illegality on mats by exposing the misdeeds of the Central Information Commission, but questions remains about other poor appellants who are suffering from the other illegal decisions of other information commissioner's.
bhanot1952
4 weeks ago
What is the locus-standi of the bank to file second appeal before the commission, and it's intriguing that commission went ahead and stayed the valid order of RBI First Appellate Authority?

All is not well with the intention of the commission to scuttle the process of free flowing of the information under the transparency law.

There is a rat-smelling in this whole apisode!
krg1274
4 weeks ago
RBI is governed body by central Govt?
CIC is a Quasi judicial body? So direction sought
Meenal Mamdani
4 weeks ago
Why should the bank be so concerned about disclosing the name of the defaulter?
Is the defaulter related to the bank officials?
Is she/he related to a prominent politician?
If the defaulter was an ordinary citizen, then surely the bank would not be trying so hard to shield the names.
krg1274
4 weeks ago
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