Indian Potash Limited comes under RTI Act's ambit: CIC

NEW DELHI: Indian Potash Limited (IPL), the Rs 15,000-crore fertliser behemoth, is answerable to people under the Right to Information Act, the full bench of Central Information Commission has ordered, rejecting arguments that it was established under the Companies Act, hence exempted from the transparency law.
The direction by the Central Information Commission (CIC) bench will mean that IPL will have to set up the RTI application processing body within six weeks with the appointment of designated CPIOs and Appellate Authority within the company.

The company has also been directed to put up on its website information about its working as mandated by the disclosure clause of the Right to Information Act.

In its submission, IPL had argued that it having been incorporated under the Companies Act, 1956 was not a public authority as defined under Section 2(h) of the RTI Act, 2005.

"Furthermore, in context of the appointment of its Managing Director with the approval of Central Government, the Respondent (IPL) has relied on the provisions of the Sections 198, 269 and 309 of the Companies Act, 1956," the CIC noted.

IPL had also showed two entities, namely Gujarat State Fertilisers and Chemicals Ltd. (with 7.87 per cent holding) and Bihar State Cooperative Marketing Union Ltd. (0.42 per cent holding), as non public-authority shareholders.

"As a result, the total non-governmental funding in IPL has risen to 62.71 per cent in the tabular representation, from the earlier submission in affidavit...where it stood at 53.76 per cent," it suggested.

Rejecting the contention, the Bench said it is evident that the objective behind creation of IPL still remains its core area of operation which is "rendering support to the agricultural sector in fulfillment of the government's aims and the development of the agrarian sector".

The bench, comprising Information Commissioners Basant Seth, M A Khan Yusufi and Yashovardhan Azad, said the website of the company gives credit to the Government of India for structuring its share capital pattern which acknowledges its allegiance to the government in "no uncertain terms".

"The company not only accredits the Government of India for structuring its share capital sharing pattern but it is also a fact that IPL has been designed so as to include the Public Sector Fertiliser Companies as its members, to ensure enhanced reliability, accountability and transparency in the functioning of IPL," the bench said.

It said it is a known fact that no government official can hold the post of chairperson or other board member of a company as controlling affairs of the company unless the company is a government company.

"Thus it is apparent that the government exercises its control over the Respondent company through its officials, appointed as Board of Directors of the Respondent company," the order said.

The Commission said it is evident from the above figures as provided by IPL on their own website, summation of 46.24 per cent of funds undisputedly received directly or indirectly from the government coffers or is public money.

"It is also not the Respondent's (IPL) case that the assistance granted to promote the company was in terms of any general scheme floated by the government, leaving no doubt that the Respondent was set up to act as the Government's vehicle to support the nation's agriculture and the farming sector as a whole, with complete involvement and support of the government," it said.

Directing IPL to set up RTI processing mechanism in six weeks, the Commission said IPL comes under the RTI Act as it is enjoying a monopoly status which is state conferred, as one of the three STEs for import of Potash, besides its vision itself being delivering a function for the benefit of the public, the farmers to be precise and thus taking the character of government function or "function...of public importance and closely related to governmental function..."

"The Commission holds that the Respondent viz. IPL is a Public Authority," it said.