COLLEGE TRUST AND MANAGEMENT SOCIETY & ORS. versus DIRECTOR OF PUBLIC INSTRUCTIONS & ORS. on 17 September 2019

[2019] 12 S.C.R. 549

D.A.V. COLLEGE TRUST AND MANAGEMENTSOCIETY & ORS.

v.

DIRECTOR OF PUBLIC INSTRUCTIONS & ORS.

(Civil Appeal No. 9828 of 2013)SEPTEMBER 17, 2019

[DEEPAK GUPTA AND ANIRUDDHA BOSE, JJ]

Right to Information Act, 2005:

s. 2(h) – Public Authority – Non-governmental organizations(NGO) substantially financed by the appropriate government, if apublic authority u/s. 2(h) – Held: NGO substantially financed,directly or indirectly, by funds provided by the appropriategovernment would be a public authority amenable to the provisionsof the Act – Appellant-society running various colleges/schools,which are substantially financed, are public authority within themeaning of s. 2(h) of the Act.

s. 2(h) – Definition of public authority – Explained.

s. 2(h) – Non-governmental organization – Meaning of –Held: Term NGO is described as an international body which islegally constituted but non-governmental in nature – It is createdby natural or legal entities with no participation or representationby the Government – Even NGOs which are funded totally orpartially by the Governments essentially maintain the NGO statusby excluding Government representations in all their organisations– In some jurisprudence, they are also referred to as civil societyorganisations – Society which may not be owned or controlled bythe Government, may be an NGO but if it is substantially financeddirectly or indirectly by the government it would fall within the ambitof sub-clause (ii) of s. 2(h) of the Act.

Interpretation of statutes:

Statutory rule of interpretation – Explanation of – Held: Whenin the definition clause a meaning is given to certain words thenthat meaning alone will have to be given to those words – However,when the definition clause contains the words ‘means and includes’549

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Athen both these words must be given the emphasis required and oneword cannot override the other – Thus, the word ‘means’ indicatesthat the definition is exhaustive and complete – Word ‘includes’enlarges the scope of the expression.

Purposive construction of a statute – Principle of – Held:BWhile giving a purposive interpretation, a court is required to placeitself in the chair of the Legislature or author of the statute – Provisionshould be construed in such a manner to ensure that the object ofthe Act is fulfilled – If the language of the Act is clear then thelanguage has to be followed, and the court cannot give its owninterpretation – However, if the language admits of two meaningsCthen the court can refer to the Objects and Reasons, to find out thetrue meaning.

Disposing of the appeals, the Court

HELD: 1.1 It is a well settled statutory rule of interpretationDthat when in the definition clause a meaning is given to certainwords then that meaning alone will have to be given to thosewords. However, when the definition clause contains the words‘means and includes’ then both these words must be given theemphasis required and one word cannot override the other. It isthus, clear that the word ‘means’ indicates that the definition isEexhaustive and complete. It is a hard and fast definition and noother meaning can be given to it. On the other hand, the word‘includes’ enlarges the scope of the expression. The word‘includes’ is used to signify that beyond the meaning given in thedefinition clause, other matters may be included keeping in viewFthe nature of the language and object of the provision. In theinstant case, the word ‘means’ has been used in the first part ofsub-section (h) of Section 2 whereas the word ‘includes’ has beenused in the second part of the said Section. They have not beenused together. [Para 8, 10] [558-G-H; 559-G; 560-A-B]

G1.2 The first part of Section 2(h) relates to authorities,bodies or institutions of self-government established orconstituted (a) under the Constitution; (b) by any law ofParliament; (c) by any law of State Legislature or (d) by notificationmade by the appropriate Government. There is no dispute with H

regard to clauses (a) to (c). As far as clause (d) is concerned, thesubmission that unless a notification is issued notifying that anauthority, body or institution of self-government is brought withinthe ambit of the Act, the said Act would not apply, cannot beaccepted. The notification contemplated in clause (d) is anotification relating to the establishment or constitution of thebody and has nothing to do with the Act. Any authority or body orinstitution of self-government, if established or constituted by anotification of the Central Government or a State Government,would be a public authority within the meaning of clause (d) ofSection 2(h) of the Act. [Para 15] [560-H; 561-A-C]

1.3 The words ‘and includes any’, expand the definition ascompared to the first part. The second part of the definition is aninclusive clause which indicates the intention of the Legislatureto cover bodies other than those mentioned in clauses (a) to (d)of Section 2(h). Thus, the bodies and NGOs mentioned in sub-clauses (i) and (ii) in the second part of the definition are inaddition to the four categories mentioned in clauses (a) to (d).Clauses (a) to (d) cover only those bodies etc., which have beenestablished or constituted in the four manners prescribed therein.By adding an inclusive clause in the definition, Parliamentintended to add two more categories, the first being in sub-clause(i), which relates to bodies which are owned, controlled orsubstantially financed by the appropriate Government. These canbe bodies which may not have been constituted by or under theConstitution, by an Act of Parliament or State Legislature or by anotification. Any body which is owned, controlled or substantiallyfinanced by the Government, would be a public authority. As faras sub-clause (ii) is concerned it deals with NGOs substantiallyfinanced by the appropriate Government. Obviously, such an NGOcannot be owned or controlled by the Government. Therefore,the question of financing is relevant. [Para 16, 17, 18] [561-E-H;562-A]

1.4 The principle of purposive construction of a statute is awell-recognised principle which has been incorporated in thejurisprudence. While giving a purposive interpretation, a courtis required to place itself in the chair of the Legislature or authorof the statute. The provision should be construed in such a AB

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Amanner to ensure that the object of the Act is fulfilled. Obviously,if the language of the Act is clear then the language has to befollowed, and the court cannot give its own interpretation.However, if the language admits of two meanings then the courtcan refer to the Objects and Reasons, and find out the truemeaning of the provisions as intended by the authors of theBenactment. [Para 20] [562-C-D]

1.5 Section 2(h) deals with six different categories and thetwo additional categories are mentioned in sub clauses (i) and(ii). Any other interpretation would make clauses (i) and (ii) totallyredundant because then an NGO could never be covered. ByCspecifically bringing NGOs it is obvious that the intention of theParliament was to include these two categories mentioned in subclauses (i) and (ii) in addition to the four categories mentioned inclauses (a) to (d). Therefore, an NGO substantially financed,directly or indirectly, by funds provided by the appropriateDgovernment would be a public authority amenable to theprovisions of the Act. [Para 22] [563-E-F]

1.6 NGO is not defined under the Act or any other statute.In fact, the term NGO appears to have been used for the firsttime describing an international body which is legally constitutedEbut non-governmental in nature. It is created by natural or legalentities with no participation or representation by the Government.Even NGOs which are funded totally or partially by theGovernments essentially maintain the NGO status by excludingGovernment representations in all their organisations. In somejurisprudence, they are also referred to as civil societyForganisations. A society which may not be owned or controlledby the Government, may be an NGO but if it is substantiallyfinanced directly or indirectly by the government it wouldfall within the ambit of sub-clause (ii). [Para 23, 24] [563-G;564-A-B]G

1.7 ‘Substantial’ means a large portion. It does notnecessarily have to mean a major portion or more than 50%. Nohard and fast rule can be laid down in this regard. Substantialfinancing can be both direct or indirect. To give an example, if aland in a city is given free of cost or on heavy discount to hospitals, H

educational institutions or such other body, this in itself couldalso be substantial financing. The very establishment of such aninstitution, if it is dependent on the largesse of the State in gettingthe land at a cheap price, would mean that it is substantiallyfinanced. Merely because financial contribution of the State comesdown during the actual funding, will not by itself mean that theindirect finance given is not to be taken into consideration. Thevalue of the land will have to be evaluated not only on the date ofallotment but even on the date when the question arises as towhether the said body or NGO is substantially financed. Whetheran NGO or body is substantially financed by the government is aquestion of fact which has to be determined on the facts of eachcase. There may be cases where the finance is more than 50%but still may not be called substantially financed. Another aspectfor determining substantial finance is whether the body, authorityor NGO can carry on its activities effectively without gettingfinance from the Government. If its functioning is dependent onthe finances of the Government then there can be no manner ofdoubt that it has to be termed as substantially financed. Whileinterpreting the provisions of the Act and while deciding what issubstantial finance one has to keep in mind the provisions of theAct. This Act was enacted with the purpose of bringingtransparency in public dealings and probity in public life. If NGOsor other bodies get substantial finance from the Government,there is no reason why any citizen cannot ask for information tofind out whether his/her money which has been given to an NGOor any other body is being used for the requisite purpose or not.[Para 26, 27 and 29] [565-C-G; 566-A-B]

1.8 Appellant no.1 is the Society which runs various colleges/schools but each has an identity of its own and, each of the college/school is a public authority within the meaning of the Act. Thedocuments show that M.C.M. D.A.V. College, Chandigarh, in theyears 2004-05, 2005-06 and 2006-07, has received grants whichconstituted about 40-44% of the expenditure of the College. 95%of the salary of the teaching and non-teaching staff of the Collegeis borne by the State Government. The State has placed on recordmaterial to show that now these grants have increased A

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Asubstantially. It can be safely said that they are substantiallyfinanced by the Government. The Fund is being granted to theseinstitutions from the year 2013-14 to 2015-16. These are thesubstantial payments and amount to almost half the expenditureof the Colleges/School and more than 95% of the expenditure asfar as the teaching and other staff is concerned. Therefore, theseBColleges/School are substantially financed and are public authoritywithin the meaning of Section 2(h)of the Act. [Para 32-35][566-E-H; 567-A, G-H]

1.9 As far as CA NOS. 9844-9845/2013, CA NOS. 9846-9857/2013, CA NO. 9860/2013 are concerned, though it is heldCthat these bodies are NGOs, the issue whether these aresubstantially financed or not needs to be decided by the HighCourt. The matters are remitted to the High Court fordetermination whether the institutions are substantially financedor not. [Para 36, 37] [568-B-D]

DThalappalam Service Cooperative Bank Ltd. and Ors.v. State of Kerala and Ors. (2013) 16 SCC 82 : [2013]14 SCR 475 ; Kasilingam v. P.S.G. College ofTechnology (1995) Supp 2 SCC 348 : [1995] 2 SCR1061 ;Bharat Coop. Bank (Mumbai) Ltd. v. Coop. BankEEmployees Union (2007) 4 SCC 685 : [2007]4 SCR 347 Delhi Development Authority v. Bhola NathSharma (D) by L.Rs. (2011) 2 SCC 54 ;New IndiaAssurance Company Ltd. v. Nusli Neville Wadia and Anr.(2008) 3 SCC 279 : [2007] 13 SCR 598 ;Abhiram Singhv. C.D. Commachen (D) by L.Rs. and Ors. (2017) 2 SCCF629 : [2017] 1 SCR 158 - referred to.

Purposive Interpretation in law (2007)by AharonBarak - referred to.

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 9828of 2013.

From the Judgment and Order dated 25.02.2008 of the High Courtof Punjab and Haryana at Chandigarh in C.W.P. No. 2626 of 2008.

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Civil Appeal Nos. 9844-9845, 9846-9857, 9860 of 2013.

Mathai M. Paikaday, Sr. Adv., S. S. Ray, Shree Pal Singh,Ms. Rakhi Ray, Vaibhav Gulia, Santhosh Krishnan, Sonam Anand, HariKumar G., A. V. Balan, Santhosh Krishnan, Ramesh K., Sunil Roy,A. Venayagam Balan, T. G. Narayanan Nair, Amit Sharma, Advs. forthe Appellants.

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Sangram S. Saron, Jatinder Kumar Bhatia, Ms. Liz Mathew,DRamesh Babu M. R., Sudhir Naagar, Rohit Kumar Singh, C. K. Sasi,Nayarilara Roy, Abdulla Naseeh, Swati Setia, Chandy Oommen, JamesP. Thomas, Advs. for the Respondents.

The Judgment of the Court was delivered by DEEPAK GUPTA, J.

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1. Whether non-governmental organisations substantially financedby the appropriate government fall within the ambit of ‘public authority’under Section 2(h) of the Right to Information Act, 2005 is the issue forconsideration in this case.

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2. The Right to Information Act (for short ‘the Act’) was enactedby Parliament in the year 2005, for the purpose of setting out a practicalregime of right to information for citizens to secure access to information.The relevant portion of the Objects & Reasons of the Act reads asfollows:- G

“…AND WHEREAS democracy requires an informedcitizenry and transparency of information which are vital to itsfunctioning and also to contain corruption and to hold Governmentsand their instrumentalities accountable to the governed; AND WHEREAS revelation of information in actual practiceis likely to conflict with other public interests including efficient H

[2019] 12 S.C.R.

Aoperations of the Governments, optimum use of limited fiscalresources and the preservation of confidentiality of sensitiveinformation; AND WHEREAS it is necessary to harmonise these conflictinginterests while preserving the paramountcy of the democraticBideal;…”3. Under the Act, a public authority is required to maintain recordsin terms of Chapter II and every citizen has the right to get informationfrom the public authority. ‘Public authority’ is defined in Section 2(h) ofthe Act which reads as follows:- C“…

(h) “public authority” means any authority or body or institution ofself-government established or constituted –

(a) by or under the Constitution;

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(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 appropriateGovernment, Eand includes any –

(i) body owned, controlled or substantially financed;

(ii) non-Government organisation substantially financed, directly or indirectly by funds provided by the appropriateGovernment;”F

4. The appellants before us are all colleges or associations runningthe colleges and/or schools and their claim is that Non-GovernmentalOrganisations (NGOs) are not covered under the Act. According to theappellants, the objective of the Act was to cover only Government andits instrumentalities which are accountable to the Government. It hasGalso been urged that the words ‘public authority’ mean any authority orbody or institution of self-government and such body or institution mustbe constituted under the Constitution, or by any law of Parliament, or byany law made by the State Legislature or by a notification issued ororder made by the appropriate Government.

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5. It is urged that unless a specific notification is issued, in termsof clause (d), no body or institution outside the ambit of clauses (a) to (c)of Section 2(h) can be deemed to be public authority. It is further urgedthat there are 4 types of public authorities as pointed out above, i.e.,those set up (a) under the Constitution, (b) by an Act of Parliament, (c)by any law made by State Legislature, or (d) by notification issued ororder made by the appropriate Government. No other authority can beconsidered a public authority. Since the appellants do not fall under anyof the above mentioned 4 categories, they cannot be termed to be publicauthority.

6. As far as definition of public authority is concerned this Courthas dealt with the matter in detail in Thalappalam Service CooperativeBank Ltd. and Ors. v. State of Kerala and Ors.[1] It would however,be pertinent to mention that in that case the Registrar of CooperativeSocieties had issued a Circular No. 23 of 2006 directing that all cooperativesocieties would fall within the ambit of the Act. This notification waschallenged before this Court. Dealing with Section 2(h) of the Act, thisCourt in the aforesaid judgment held as follows:- “30. The legislature, in its wisdom, while defining theexpression “public authority” under Section 2(h), intended toembrace only those categories, which are specifically included,unless the context of the Act otherwise requires. Section 2(h) hasused the expressions “means” and “includes”. When a word isdefined to “mean” something, the definition is prima facierestrictive and where the word is defined to “include” some otherthing, the definition is prima facie extensive. But when both theexpressions “means” and “includes” are used, the categoriesmentioned there would exhaust themselves. The meanings of theexpressions “means” and “includes” have been explained by thisCourt in DDA v. Bhola Nath Sharma (in paras 25 to 28). Whensuch expressions are used, they may afford an exhaustiveexplanation of the meaning which for the purpose of the Act,must invariably be attached to those words and expressions.

31. Section 2(h) exhausts the categories mentioned therein.The former part of Section 2(h) deals with:

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(1) an authority or body or institution of self-governmentestablished by or under the Constitution, A

(2) an authority or body or institution of self-governmentestablished or constituted by any other law made by Parliament,

(3) an authority or body or institution of self-governmentestablished or constituted by any other law made by the StateLegislature, and B

(4) an authority or body or institution of self-governmentestablished or constituted by notification issued or order made bythe appropriate Government.

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32. The Societies, with which we are concerned, admittedly,do not fall in the abovementioned categories, because none ofthem is either a body or institution of self-government, establishedor constituted under the Constitution, by law made by Parliament,by law made by the State Legislature or by way of a notificationDissued or made by the appropriate Government. Let us nowexamine whether they fall in the latter part of Section 2(h) of theAct, which embraces within its fold:

(5) a body owned, controlled or substantially financed, directlyor indirectly by funds provided by the appropriate Government, E

(6) non-governmental organisations substantially financeddirectly or indirectly by funds provided by the appropriateGovernment.”

7. At this stage we may note that in the Thalappalam case (supra)there was an order issued directing that cooperative societies would fallFwithin the ambit of the Act. The validity of this order was challenged on the grounds that the cooperative societies were neither bodies owned,controlled and/or substantially financed by the government nor couldthey be said to be NGOs substantially financed, directly or indirectly, byfunds provided by the appropriate Government.

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8. It is a well settled statutory rule of interpretation that when inthe definition clause a meaning is given to certain words then that meaningalone will have to be given to those words. However, when the definitionclause contains the words ‘means and includes’ then both these wordsmust be given the emphasis required and one word cannot override theHother.

9. In P. Kasilingam v. P.S.G. College of Technology & Ors.[2]this Court was dealing with the expression ‘means and includes’, whereinJustice S.C. Agrawal observed as follows:- “19. …A particular expression is often defined by the Legislatureby using the word ‘means’ or the word ‘includes’. Sometimes thewords ‘means and includes’ are used. The use of the word ‘means’indicates that “definition is a hard-and-fast definition, and no othermeaning can be assigned to the expression than is put down indefinition”. (See : Gough v. Gough; Punjab Land Developmentand Reclamation Corpn. Ltd. v. Presiding Officer, LabourCourt.) The word ‘includes’ when used, enlarges the meaning ofthe expression defined so as to comprehend not only such thingsas they signify according to their natural import but also thosethings which the clause declares that they shall include. The words“means and includes”, on the other hand, indicate “an exhaustiveexplanation of the meaning which, for the purposes of the Act,must invariably be attached to these words or expressions”. (See : Dilworth v. Commissioner of Stamps (Lord Watson);Mahalakshmi Oil Mills v. State of A.P. The use of the words“means and includes” in Rule 2(b) would, therefore, suggest thatthe definition of ‘college’ is intended to be exhaustive and notextensive and would cover only the educational institutions falling in the categories specified in Rule 2(b) and other educationalinstitutions are not comprehended. Insofar as engineering collegesare concerned, their exclusion may be for the reason that theopening and running of the private engineering colleges arecontrolled through the Board of Technical Education and Trainingand the Director of Technical Education in accordance with thedirections issued by the AICTE from time to time…”

This judgment was followed in Bharat Coop. Bank (Mumbai)Ltd. v. Coop. Bank Employees Union[3] and Delhi DevelopmentAuthority v. Bhola Nath Sharma (Dead) by L.Rs. and Ors.[4]

10. It is thus clear that the word ‘means’ indicates that the definitionis exhaustive and complete. It is a hard and fast definition and no othermeaning can be given to it. On the other hand, the word ‘includes’

2 (1995) Supp 2 SCC 3483 (2007) 4 SCC 6854 (2011) 2 SCC 54

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Aenlarges the scope of the expression. The word ‘includes’ is used tosignify that beyond the meaning given in the definition clause, othermatters may be included keeping in view the nature of the language andobject of the provision. In P. Kasilingam’scase (supra) the words‘means and includes’ has been used but in the present case the word‘means’ has been used in the first part of sub-section (h) of Section 2Bwhereas the word ‘includes’ has been used in the second part of thesaid Section. They have not been used together.

11. One of the arguments raised before us is that the words “self-government” occurring in the opening portion of Section 2(h) will governthe words ‘authority’, ‘body’ or ‘institution’. It is urged that only suchCauthorities, bodies or institutions actually concerned with self-governancecan be declared to be public authorities. This objection has to be rejectedoutright. There are three categories in the opening lines viz., (a)authorities; (b) bodies; and (c) institutions of self-government. Therecan be no doubt in this regard and, therefore, we reject this contention.D12. The next contention is that a public authority can only be anauthority or body or institution which has been established or constituted(a) under the Constitution; (b) by any law of Parliament; (c) by any lawof State Legislature or (d) by notification made by the appropriateGovernment. It is the contention of the appellants that only thoseEauthorities, bodies or institutions of self-government which fall in thesefour categories can be covered under the definition of public authority.It is also contended that in the Thalappalam case (supra) the Court didnot consider the effect of clause (d) on the remaining portion of thedefinition.F13. On the other hand, on behalf of the respondents it is urgedthat the reading of Section 2(h) clearly shows that in addition to the fourcategories referred to in the first part, there is an inclusive portion whichincludes (i) body owned, controlled or substantially financed; (ii) non-Government organisation substantially financed, directly or indirectly byfunds provided by the appropriate Government.G14. The Section, no doubt, is unartisticallyworded and therefore,a duty is cast upon us to analyse the Section, find out its true meaningand interpret it in a manner which serves the purpose of the Act.15. If we analyse Section 2(h) carefully it is obvious that the firstpart of Section 2(h) relates to authorities, bodies or institutions of self-H

government established or constituted (a) under the Constitution; (b) byany law of Parliament; (c) by any law of State Legislature or (d) bynotification made by the appropriate Government. There is no disputewith regard to clauses (a) to (c). As far as clause (d) is concerned itwas contended on behalf of the appellants that unless a notification isissued notifying that an authority, body or institution of self-governmentis brought within the ambit of the Act, the said Act would not apply. Weare not impressed with this argument. The notification contemplated inclause (d) is a notification relating to the establishment or constitution ofthe body and has nothing to do with the Act. Any authority or body orinstitution of self-government, if established or constituted by a notificationof the Central Government or a State Government, would be a publicauthority within the meaning of clause (d) of Section 2(h) of the Act.

16. We must note that after the end of clause (d) there is a commaand a big gap and then the definition goes on to say ‘and includes any –’ and thereafter the definition reads as:

“(i)body owned, controlled or substantially financed;

(ii) non-Government organisation substantially financed, directly or indirectly by funds provided by the appropriateGovernment;”

The words ‘and includes any’, in our considered view, expand thedefinition as compared to the first part. The second part of the definitionis an inclusive clause which indicates the intention of the Legislature tocover bodies other than those mentioned in clauses (a) to (d) of Section2(h).

17. We have no doubt in our mind that the bodies and NGOsmentioned in sub-clauses (i) and (ii) in the second part of the definitionare in addition to the four categories mentioned in clauses (a) to (d).Clauses (a) to (d) cover only those bodies etc., which have beenestablished or constituted in the four manners prescribed therein. Byadding an inclusive clause in the definition, Parliament intended to addtwo more categories, the first being in sub-clause (i), which relates tobodies which are owned, controlled or substantially financed by theappropriate Government. These can be bodies which may not havebeen constituted by or under the Constitution, by an Act of Parliament orState Legislature or by a notification. Any body which is owned, controlledor substantially financed by the Government, would be a public authority.

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A18. As far as sub-clause (ii) is concerned it deals with NGOssubstantially financed by the appropriate Government. Obviously, suchan NGO cannot be owned or controlled by the Government. Therefore,it is only the question of financing which is relevant.

19. Even in the Thalappalam case (supra) in para 32 of theBjudgment, this Court held that in addition to the four categories therewould be two more categories, (5) and (6).

20. The principle of purposive construction of a statute is a well-recognised principle which has been incorporated in our jurisprudence.While giving a purposive interpretation, a court is required to place itselfCin the chair of the Legislature or author of the statute. The provisionshould be construed in such a manner to ensure that the object of theAct is fulfilled. Obviously, if the language of the Act is clear then thelanguage has to be followed, and the court cannot give its owninterpretation. However, if the language admits of two meanings thenthe court can refer to the Objects and Reasons, and find out the trueDmeaning of the provisions as intended by the authors of the enactment.Justice S.B. Sinha in New India Assurance Company Ltd. v. Nusli Neville Wadia and Anr.[5] held as follows:- “51. …to interpret a statute in a reasonable manner, the courtmust place itself in the chair of reasonable legislator/author. SoEdone, the rules of purposive construction have to be resorted towhich would require the construction of the Act in such a mannerso as to see that the object of the Act is fulfilled; which in turnwould lead the beneficiary under the statutory scheme to fulfil itsconstitutional obligations as held by the court inter alia in AshokaFMarketing Ltd.”

Justice Sinha quoted with approval the following passage fromBarak’s treatise on Purposive Interpretation in Law,[6] which reads asfollows:- “52. …Hart and Sachs also appear to treat ‘purpose’ as aGsubjective concept. I say ‘appear’ because, although Hart andSachs claim that the interpreter should imagine himself or herselfin the legislator’s shoes, they introduce two elements of objectivity:

5 (2008) 3 SCC 279H6 (2008) 3 SCC 279: Aharon Barak, Purposive Interpretation in Law, (2007) at pg.87

First, the interpreter should assume that the legislature is composedof reasonable people seeking to achieve reasonable goals in areasonable manner; and second, the interpreter should accept thenon-rebuttable presumption that members of the legislative bodysought to fulfil their constitutional duties in good faith. Thisformulation allows the interpreter to inquire not into the subjectiveintent of the author, but rather the intent the author would havehad, had he or she acted reasonably.”

21. Justice M.B. Lokur speaking for the majority in AbhiramSingh v. C.D. Commachen (Dead) by L.Rs. and Ors.[7] held as follows:- “39. …Ordinarily, if a statute is well drafted and debated inParliament there is little or no need to adopt any interpretationother than a literal interpretation of the statute. However, in awelfare State like ours, what is intended for the benefit of thepeople is not fully reflected in the text of a statute. In suchlegislations, a pragmatic view is required to be taken and the lawinterpreted purposefully and realistically so that the benefit reachesthe masses...”

22. Therefore, in our view, Section 2(h) deals with six differentcategories and the two additional categories are mentioned in sub clauses(i) and (ii). Any other interpretation would make clauses (i) and (ii)totally redundant because then an NGO could never be covered. Byspecifically bringing NGOs it is obvious that the intention of the Parliamentwas to include these two categories mentioned in sub clauses (i) and (ii)in addition to the four categories mentioned in clauses (a) to (d).Therefore, we have no hesitation in holding that an NGO substantiallyfinanced, directly or indirectly, by funds provided by the appropriategovernment would be a public authority amenable to the provisions ofthe Act.

23. NGO is not defined under the Act or any other statute as faras we are concerned. In fact, the term NGO appears to have been usedfor the first time describing an international body which is legallyconstituted but non-governmental in nature. It is created by natural orlegal entities with no participation or representation by the Government.Even NGOs which are funded totally or partially by the Governmentsessentially maintain the NGO status by excluding Government

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Arepresentations in all their organisations. In some jurisprudence, theyare also referred to as civil society organisations.

24. A society which may not be owned or controlled by theGovernment, may be an NGO but if it is substantially financed directlyor indirectly by the government it would fall within the ambit of sub-Bclause (ii).

25. That brings us to the second limb of the argument of theappellants that the colleges/schools are not substantially financed. Inthis regard, we may again make reference to the judgment in theThalapplamcase (supra) wherein this Court dealing with the issue ofCsubstantially financed made the following observations:- “47. We often use the expressions “questions of law” and“substantial questions of law” and explain that any question oflaw affecting the right of parties would not by itself be a substantialquestion of law. In Black’s Law Dictionary (6th Edn.) the word“substantial” is defined as D

“Substantial.—Of real worth and importance; of considerablevalue; valuable. Belonging to substance; actually existing; real;not seeming or imaginary; not illusive; solid; true; veritable. …Something worthwhile as distinguished from something withoutvalue or merely nominal. … Synonymous with material.”

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The word “substantially” has been defined to mean “essentially;without material qualification; in the main; in substance; materially”.In Shorter Oxford English Dictionary (5th Edn.), the word“substantial” means “of ample or considerable amount of size;sizeable, fairly large; having solid worth or value, of realsignificance; solid; weighty; important, worthwhile; of an act,measure, etc. having force or effect, effective, thorough”. Theword “substantially” has been defined to mean “in substance; asa substantial thing or being; essentially, intrinsically”. Thereforethe word “substantial” is not synonymous with “dominant” or“majority”. It is closer to “material” or “important” or “ofconsiderable value”. “Substantially” is closer to “essentially”. Bothwords can signify varying degrees depending on the context.

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48. Merely providing subsidies, grants, exemptions, privileges,etc. as such, cannot be said to be providing funding to a substantial H

extent, unless the record shows that the funding was so substantialto the body which practically runs by such funding and but forsuch funding, it would struggle to exist. The State may also floatmany schemes generally for the betterment and welfare of thecooperative sector like deposit guarantee scheme, scheme ofassistance from NABARD, etc. but those facilities or assistancecannot be termed as “substantially financed” by the StateGovernment to bring the body within the fold of “public authority”under Section 2(h)(d)(i) of the Act. But, there are instances, whereprivate educational institutions getting ninety-five per cent grant-in-aid from the appropriate Government, may answer the definitionof public authority under Section 2(h)(d)(i).”

26. In our view, ‘substantial’ means a large portion. It does notnecessarily have to mean a major portion or more than 50%. No hardand fast rule can be laid down in this regard. Substantial financing canbe both direct or indirect. To give an example, if a land in a city is givenfree of cost or on heavy discount to hospitals, educational institutions orsuch other body, this in itself could also be substantial financing. Thevery establishment of such an institution, if it is dependent on the largesseof the State in getting the land at a cheap price, would mean that it issubstantially financed. Merely because financial contribution of the Statecomes down during the actual funding, will not by itself mean that theindirect finance given is not to be taken into consideration. The value ofthe land will have to be evaluated not only on the date of allotment buteven on the date when the question arises as to whether the said body orNGO is substantially financed.

27. Whether an NGO or body is substantially financed by thegovernment is a question of fact which has to be determined on thefacts of each case. There may be cases where the finance is more than50% but still may not be called substantially financed. Supposing a smallNGO which has a total capital of Rs.10,000/- gets a grant of Rs.5,000/-from the Government, though this grant may be 50%, it cannot be termedto be substantial contribution. On the other hand, if a body or an NGOgets hundreds of crores of rupees as grant but that amount is less than50%, the same can still be termed to be substantially financed.

28. Another aspect for determining substantial finance is whetherthe body, authority or NGO can carry on its activities effectively withoutgetting finance from the Government. If its functioning is dependent on AB

C

D

E

F

G

H

Athe finances of the Government then there can be no manner of doubtthat it has to be termed as substantially financed.

29. While interpreting the provisions of the Act and while decidingwhat is substantial finance one has to keep in mind the provisions of theAct. This Act was enacted with the purpose of bringing transparency inBpublic dealings and probity in public life. If NGOs or other bodies getsubstantial finance from the Government, we find no reason why anycitizen cannot ask for information to find out whether his/her moneywhich has been given to an NGO or any other body is being used for therequisite purpose or not.

C30. It is in the light of the aforesaid proposition of law that wenow propose to examine the cases individually.

Civil Appeal No. 9828 of 2013

31. This has been filed by D.A.V. College Trust and ManagementSociety, New Delhi; D.A.V. College, Chandigarh; M.C.M. D.A.V.DCollege, Chandigarh and D.A.V. Senior Secondary School, Chandigarh.

32. Appellant no.1 is the Society which runs various colleges/schools but each has an identity of its own and, in our view, each of thecollege/school is a public authority within the meaning of the Act. It hasbeen urged that these colleges/schools are not being substantially financedEby the Government in as much as that they do not receive more than50% of the finance from the Government. Even the documents filed bythe appellants themselves show that M.C.M. D.A.V. College, Chandigarh,in the years 2004-05, 2005-06 and 2006-07, has received grants in excessof 1.5 crores each year which constituted about 44% of the expenditureFof the College. As far as D.A.V. College, Chandigarh is concerned thegrant for these three years ranged from more than 3.6 crores to 4.5crores and in percentage terms it is more than 40% of the total financialoutlay for each year. Similar is the situation with D.A.V. Senior SecondarySchool, Chandigarh, where the contribution of the State is more than44%.G

33. Another important aspect, as far as the colleges are concerned,is that 95% of the salary of the teaching and non-teaching staff of theCollege is borne by the State Government. A major portion of theremaining expenses shown by the College is with regard to the hostels,etc. It is teaching which is the essential part of the College and not the H

hostels or other infrastructure like auditorium, etc. The State has placedon record material to show that now these grants have increasedsubstantially and in the years 2013-14, 2014-15 and 2015-16, the D.A.V.College, Chandigarh received amounts more than Rs.15 crores yearly,M.C.M. D.A.V. College, Chandigarh received amounts more than Rs.10crores yearly and the D.A.V. Senior Secondary School, Chandigarhreceived grant of more than Rs.4 crores yearly. It can be safely saidthat they are substantially financed by the Government.

B

34. During the course of hearing, some information was placedon record by the learned counsel for the respondents showing how muchis the fund being granted to these institutions from the year 2013-14 to2015-16. As far as these institutions are concerned the payments received C

are as follows:-

35. These are substantial payments and amount to almost half theexpenditure of the Colleges/School and more than 95% of the expenditureas far as the teaching and other staff is concerned. Therefore, in ouropinion, these Colleges/School are substantially financed and are publicauthority within the meaning of Section 2(h) of the Act.

G

H

ACIVIL APPEAL NOS. 9844-9845 OF 2013CIVIL APPEAL NOS. 9846-9857 OF 2013

CIVIL APPEAL NO. 9860 OF 2013

36. As far as these cases are concerned, we find from theBjudgments of the High Court that the aspect with regard to substantialfinancing has not been fully taken into consideration, as explained by usabove. Therefore, though we hold that these bodies are NGOs, the issuewhether these are substantially financed or not needs to be decided bythe High Court. The High Court shall give both the parties opportunityto file documents and decide the issue in light of the law laid down by us.C

37. With these observations, all the appeals are disposed of in theaforesaid terms. Civil Appeal No. 9828 of 2013 is dismissed. CivilAppeal Nos. 9844-9845 of 2013, 9846-9857 of 2013 and 9860 of 2013are remitted to the High Court for determination whether the institutionsare substantially financed or not. The High Court shall treat the writDpetitions to be filed in the year 2013 and give them priority accordingly.

Nidhi Jain

Appeals disposed of.

E

F

G

H