Information related to PF account of an employee is not a third party information. Moreover, it will act as an impediment to the breach of trust. Read on to know more.
In an interesting case the appellant sought information about the PF payments made to the employees of M/s Aditi Electricals. But the CPIO denied information saying that the information fell under section 8 (1) (j) of RTI Act and hence could not be furnished. However, the Information Commission contended the claims of the CPIO. Let’s look at the details.
The CPIO argued that they had a fool proof system to provide information to the PF account holder about his account, but the applicant cannot ask for the information about the accounts of other employees. They also contended that the list of employees and their salaries were available in official website which would be enough for the applicant to know. They also apprehended that disclosure of account number and amount of money in it will tempt the fraudsters and may lead to misappropriation of the workers’ money.
There have been several cases reported before Information Commission wherein the employer deducted the 12 per cent from salary of workers but did not credit into their account. The employers did not contribute his portion and misappropriated the contributions of workers. This is violation of EPF Act, breach of trust and also misappropriation of employee’s money. Besides it affects the social security of the worker and puts in financially disadvantageous position. The EPF Act provides for enquiry and penal actions against such employers.
The Commission said that if this information is protected, the interests of the workers will be harmed, it will embolden the employers to defraud the workers and misappropriate their money temporarily or permanently. The transparency in the system will facilitate verification by any citizen or trade union leaders, Hence, the EPFO personnel and employers will be compelled to deposit the money regularly in PF accounts without delay. The Commission argued that assuming for a moment, without agreeing, that PF account was personal information, we needed to satisfy other conditions under Section 8 to deny the disclosure
“There have been several cases before Information Commission wherein the employer deducted the 12 per cent from salary of workers but did not credit into their account. The employers did not contribute his portion and misappropriated the contributions of workers. This is violation of EPF Act, breach of trust and also misappropriation of employee’s money. Besides it affects the social security of the worker and puts in financially disadvantageous position. The EPF Act provides for enquiry and penal actions against such employers.”
The expression ‘personal information’ applies to ‘individuals’ and not ‘bodies/institutions’ or entities working for the public good. The use of the term “personal information” under Section 8(1)(j) means information involving a private individual. Black’s law dictionary, sixth edition, inter alia, defines the word “personal” as under:-
“The word “personal” means appertaining to the person; belonging to an individual; limited to the person; having the nature or partaking of the qualities of human beings, or of movable property.”
“21. …… Another very significant provision of the Act is Section 8(1)(j). In terms of this provision, information which relates to personal information, the disclosure of which has no relationship to any public activity or interest or which would cause unwarranted invasion of the privacy of the individual would fall within the exempted category, unless the authority concerned is satisfied that larger public interest justifies the disclosure of such information. It is, therefore, to be understood clearly that it is a statutory exemption which must operate as a rule and only in exceptional cases would disclosure be permitted, that too, for reasons to be recorded demonstrating satisfaction to the test of larger public interest.”
Delhi High Court explained the term ‘personal information’ in Naresh Trehan vs. Rakesh Kumar Gupta and Ors. (2015) 216 DLT 156; Justice Vibhu Bhakru said: (paragraph 22)
“Person” is a defined term in the statute; “personal” is not. When a statute does not define a term, we typically “give the phrase its ordinary meaning,” [Johnson v. United States, 559 U.S., 559 U.S. 133, 130 S. Ct. 1265, 176 L. Ed. 2d 1, 8 (2010)]. “Personal” ordinarily refers to individuals. We do not usually speak of personal characteristics, personal effects, personal correspondence, personal influence, or personal tragedy as referring to corporations or other artificial entities. “
“Interestingly, here in second appeals like this, the employers are objecting to disclosure and pretending to protect ‘privacy’ of other worker’s PF account information. This is an effort to prevent complaints against employer’s acts of breach of PF Act. The EPFO, for unknown reasons is supporting these employees by rejecting the information request like this. In the name of ‘privacy’ of other workers, the PIO is protecting dubious interests of employer and harming the interests of the workers.”
The term ‘fiduciary’ connotes the idea of trust or confidence, contemplates good faith, rather than legal obligation. It was contended that where information is required by mandate of law to be provided to an authority, it cannot be said that such information is being provided in a fiduciary relationship.
The word ‘information available to a person in his fiduciary relationship’ are used in Section 8(1) (e) of the RTI Act in its normal and well recognized sense, that is to refer to persons who act in a fiduciary capacity, with reference to specific beneficiary or beneficiaries who are expected to be protected or benefited by the action of the fiduciary. Filing of an income tax return is a statutory non-commercial function.
“A relationship in which one person is under a duty to act for the benefit of the other on matters within the scope of the relationship. Fiduciary relationships – such as trustee-beneficiary, guardian-ward, agent-principal, and attorney-client – require the highest duty of care. Fiduciary relationships usually arise in one of four situations : (1) when one person places trust in the faithful integrity of another, who as a result gains superiority or influence over the first, (2) when one person assumes control and responsibility over another, (3) when one person has a duty to act for or give advice to another on matters falling within the scope of the relationship, or (4) when there is a specific relationship that has traditionally been recognized as involving fiduciary duties, as with a lawyer and a client or a stockbroker and a customer.”
“Interestingly, here in second appeals like this, the employers are objecting to disclosure and pretending to protect ‘privacy’ of other worker’s PF account information. This is an effort to prevent complaints against employer’s acts of breach of PF Act. The EPFO, for unknown reasons is supporting these employees by rejecting the information request like this. In the name of ‘privacy’ of other workers, the PIO is protecting dubious interests of employer and harming the interests of the workers.”
The Supreme Court in CBSE v. Aditya Bandopadhyay: (2011) 8 SCC 497 had observed that the words ‘information available to a person in its fiduciary relationship’ could not be construed in a wide sense but has to be considered in the normal and well recognized sense. The relevant extracts of the said decision are:-
“41. In a philosophical and very wide sense, examining bodies can be said to act in a fiduciary capacity, with reference to students who participate in an examination, as a Government does while governing its citizens or as the present generation does with reference to the future generation while preserving the environment. But the word ‘information available to a person in his fiduciary relationship’ are used in Section 8(1) (e) of the RTI Act in its normal and well recognized sense, that is to refer to persons who act in a fiduciary capacity, with reference to specific beneficiary or beneficiaries who are to be expected to be protected or benefited by the action of the fiduciary-a trustee with reference to the beneficiary of the trust, a guardian with reference to a minor/physically infirm/mentally challenged, a parent with reference to a child, a lawyer or a chartered accountant with reference to a client, a doctor or nurse with reference to a patient, an agent with reference to a principal, a partner with reference to another partner, a Director of a company with reference to a shareholder, an executor with reference to a legatee, an employer with reference to the confidential information relating to the employee, and an employee with reference to business dealings/transaction of the employer. We do not find that kind of fiduciary relationship between the examining body and the examinee, with reference to the evaluated answer books, that come into the custody of the examining body.”
The term ‘fiduciary’ refers to a person having a duty to act for the benefit of another, showing good faith and condour, where such other person reposes trust and special confidence in the person owing or discharging the duty. The term ‘fiduciary relationship’ is used to describe a situation or transaction where one person (beneficiary) places complete confidence in another person (fiduciary) in regard to his affairs, business or transaction/s. The term also refers to a person who holds a thing in trust for another (beneficiary).
The fiduciary is expected to act in confidence and for the benefit and advantage of the beneficiary, and use good faith and fairness in dealing with the beneficiary or the things belonging to the beneficiary. If the beneficiary has entrusted anything to the fiduciary, to hold the thing in trust or to execute certain acts in regard to or with reference to the entrusted thing, the fiduciary has to act in confidence and expected not to disclose the thing or information to any third party.
In other words, the provider of information gives the information in trust to be used for his benefit. In business or law, we generally mean someone who has specific duties, such as those that attend a particular profession or role, e.g. doctor, lawyer, financial analyst or trustee. All relationships usually have an element of trust, but all of them cannot be classified as fiduciary.
If there is a statutory duty to provide information that has to be distinguished from the fiduciary relation. This distinction was explained by Supreme Court in Reserve Bank of India vs. Jayantilal. N. Mistry and others; T.S (C) No. 91-101/2015;
“In the instant case, the RBI does not place itself in a fiduciary relationship with the Financial institutions (though, in word it puts itself to be in that position) because, the reports of the inspections, statements of the bank, information related to the business obtained by the RBI are not under the pretext of confidence or trust. In this case neither the RBI nor the Banks act in the interest of each other. By attaching an additional “fiduciary” label to the statutory duty, the Regulatory authorities have intentionally or unintentionally created an in terrorem effect.”
The Gujarat High Court in Rajendra Vasantlal Shah vs. Central Information Commissioner and Ors, AIR 2011 Guj 70: had observed that any statutory body/ Institution/association meant to serve public good cannot claim to be working in a fiduciary capacity, as follows:
“8.2. Accounts of Respondent No. 4, being a Religious Charitable Trust, is statutorily audited, whose administration is subject to certain controls by the Charity Commissioner under the Bombay Public Trust Act. Its action of filing income-tax returns with the Income Tax Department cannot be, in the context of the R.T.I. Act, viewed as a fiduciary relationship. No contrary interpretation can be given to defeat the object of the act, rendering lack of transparency in functioning of public and religious charitable trusts which carry considerable importance in their functioning, which touch greater portion of the population through different activities and would also make them immune from publishing their accounts, expenditure, funds, etc.”
“8.4. As already noted, Respondent No. 4 is a religious charitable Trust, functioning under the Scheme formulated by the District Court, having considerable public importance and registered under the Bombay Public Trust Act, as a religious charitable Trust. Considering its nature and activities, emerging from the objects of the Trust, it can be stated that disclosure of such information is in relation to any public interest of activity. The Trust is engaged, in public activities, disclosure of its statements and accounts of income-tax returns and assessments orders cannot be withheld under Section 8(1)(e) or (j)of the R.T.I. Act.”
“8.6. The case of “P.R. Kapasiawala” (supra) is distinguishable. It was the case in which the applicant had asked for details of income-tax returns of 100 persons of a club, which information had been gathered by the club from its members. It was in this background, the Court held that the information shall be covered under the exemption, under Section 8(1)(e) of the R.T.I. Act. The Court confirmed the order of the lower authorities, holding that such information was gathered by the Club in fiduciary capacity, which is not the case in the present matter.”
“We have given a serious thought to the matter. We have also taken note of the preamble of the RTI Act which aims at promoting transparency and accountability in the working of the every Public Authority. In this context, it would be apt to advert to sub section 15 of section 2 of the IT Act which defines “charitable purpose”. This sub section is extracted below:-
“15. ‘Charitable purpose’ includes relief of the poor, education, medical relief and advancement of any other object of general public utility.” Needless to say, avowed purpose for which these institutions/entities come into existence is charity. Charity and secrecy are contradiction in terms. Any charitable institution should have no secrets and should be open to public for all purposes, including its finances. In other words, in our opinion, it will be in the larger public interest if the identity of the charitable trusts/institutions/entities which are granted exemption from income tax under the statutory provisions are placed in the public domain…….”
The proviso to Section 11(1) is very significant. 11. Third party information.—(1) Where a Central Public Information Officer or a State Public Information Officer, as the case may be, intends to disclose any information or record, or part thereof on a request made under this Act, which relates to or has been supplied by a third party and has been treated as confidential by that third party, the Central Public Information Officer or State Public Information Officer, as the case may be, shall, within five days from the receipt of the request, give a written notice to such third party of the request and of the fact that the Central Public Information Officer or State Public Information Officer, as the case may be, intends to disclose the information or record, or part thereof, and invite the third party to make a submission in writing or orally, regarding whether the information should be disclosed, and such submission of the third party shall be kept in view while taking a decision about disclosure of information: Provided that except in the case of trade or commercial secrets protected by law, disclosure may be allowed if the public interest in disclosure outweighs in importance any possible harm or injury to the interests of such third party.
Delhi High Court in Arvind Kejriwal vs. Central Public Information Officer AIR 2010 Delhi 216 considered Section 11 of the RTI Act. “The third party may plead a ‘privacy’ defence. But such defence may, for good reasons, be overruled. After consulting the third party as prescribed under Section 11(1) of the RTI Act, the CIC may still decide that information should be disclosed in public interest overruling any objection that the third party may have to the disclosure of such information”.
Section 8(1)(j) prescribed ‘public interest’ as a requirement to decide the disclosure of information though exempted. The CPIO or First Appellate Authority is not just an executive officer in his office but an “authority” under RTI Act with a responsibility to use his personal discretion as per law while deciding RTI request. Whether every MP is a public personality and his activities are public in nature, including financial transactions? If there is any public interest, is it larger enough to share with public in general? The public interest under section 8(1)(j) requires three conditions to be considered: absence of relationship with public activity or interest or, possibility of unwarranted invasion of privacy or, existence of larger public interest. Language of section 8(1)(j) is very clear i.e., it demands satisfaction of CPIO.
“The Supreme Court in CBSE v. Aditya Bandopadhyay: (2011) 8 SCC 497 had observed that the words ‘information available to a person in its fiduciary relationship’ could not be construed in a wide sense but has to be considered in the normal and well recognized sense”
In G.R. Rawal Vs Director General of Income Tax (Investigation), Ahmadabad, Appeal No. CIC/AT/A/2007/00490 on 05- 03-2008 CIC Full Bench has explained:
“Authority may order disclosure of such information if they are satisfied that the larger public interest justifies disclosure. This would imply that even a personal information which has some relationship to any public activity or interest may be liable to be disclosed. An invasion of privacy may also be held to be justified if the larger public interest so warrants. It is, therefore, necessary to analyze the ambit and scope of both the expressions “personal information” and “invasion of privacy”. However, there could be circumstances when it becomes necessary to disclose some of this information if it is in larger public interest. Thus, for example, if there is a doubt about the integrity of any person occupying a public office, it may become necessary to know about one’s financial status and the details of his assets and liabilities not only of the person himself but also of other close members of the family as well. Similarly, if there is an allegation about the appointment of a person to a public office where there are certain rules with regard to qualification and experience of the person who has already been appointed in competition with others, it may become necessary to make inquiries about the person’s qualification and experience and these things may not be kept confidential as such.”
The PF account is not like any other individual private bank account where all one’s personal money is deposited. The PF account does not contain any other money except accumulated amount of both the contributions over a period of time. It is social security of workers at postretirement, which need to be secured for such longer periods. That is the public interest. If it is kept secret, and an individual PF subcriber doesn’t challenge the fraud if taking place, this will lead to perpetuating the fraud. Hence a third person or trade union leader or citizen can seek such information. It is also far fetching to contend that because the amount is made known there would be a fraud.
So, the Commission based on the entire observation held that the money deposited in EPFO accounts is done in fiduciary capacity, but information is not. Information if disclosed in the instant case helps securing the money, hence should be shared. Thus, it is found that the information sought is not ‘third” party information, is not personal information since no person’s privacy is involved, and there is no fiduciary relationship between the employees and EPFO.
The Commission directed the respondent authority to provide information relating to employees after removing their personal details such as address, contact details, details of their family members and PF account numbers, within 21 days from date of receipt of this order.
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