Friday 6 February 2015

Mother Dairy a "public authority" under RTI Act: Delhi High Court

NEW DELHI: National Dairy Development Board (NDDB) subsidiary Mother Dairy Fruit and Vegetable Private Limited has been declared a "public authority" as defined under the Right to Information (RTI) Act, making it amenable to disclosure of information.
A Delhi High Court bench of Justice Vibhu Bakhrudismissed the petition filed by Mother Dairy Fruit and Vegetable Pvt Ltd, which had challenged the Central Information Commission (CIC) April 15, 2011 order holding it to be a "Public Authority" within the meaning of section 2(h) of the 2005 RTI Act."The entire equity of the petitioner is held by the NDDB. Thus, even though petitioner's Board of Directors manages its affairs, NDDB would exercise control over the affairs of the petitioner as its principal shareholder.
"The power of shareholders of a company to appoint and remove directors results in them exerting real influence over the affairs of a company. The Central Government retains complete control over NDDB and for all practical purposes, it is an instrumentality of the Central Government.
"In the present case, the basic infrastructure of the petitioner's (Mother Dairy) undertakings were promoted by funds provided by the Central Government; whether the said funds found their way through NDDB or otherwise is not material.

"Thus, in my view, the petitioner would also be a public authority on account of being substantially financed by the Central Government," the bench said.
The High Court also said that incorporation of Mother Dairy as a wholly owned subsidiary of NDDB was for better management of certain undertakings.
"A body which is owned or controlled by an appropriate government would not cease to be controlled by an appropriate government only because an intermediary corporate entity is introduced for better management.
"Plainly, NDDB is under the control of the central government and the petitioner being a subsidiary of NDDB would be indirectly under the control of the central government," it said.
The CIC's April 15, 2011 order had held Mother Dairy to be a "Public Authority" and directed it to appoint a Central Public Information Officer (CPIO) and an Appellate Authority.
Senior advocate Arvind Nigam, appearing for Mother Dairy, contended that the petitioner was a company registered under the Companies Act, 1956 and a subsidiary of NDDB.
He argued that Mother Dairy had neither received any finances from central government nor does any government hold any equity capital of the petitioner. Therefore, CIC's order that the petitioner was a public authority was "erroneous".
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