JK Bank under RTI Act-Umer Maqbool

SIC Declares Bank As Public Authority; Invokes Maharaja’s Order, Appointment Of Directors, Removal Of Drabu As Grounds

Srinagar, Apr 24: In a significant judgment, the State Information Commission (SIC) on Tuesday ruled that J&K Bank Limited is a Public Authority under Jammu and Kashmir Right to Information Act-2009, entitling people to seek information from the premier financial institution of the State.

Announcing the decision, the full Bench of SIC comprising Chief Information Commissioner G.R. Sufi and Information Commissioners Nazir Ahmad and Dr S.K. Sharma asked Chairman J&K Bank to designate First Appellate Authority/Authorities, Public Information Officer/Officers and Assistant Public Information Officers for disposal of RTI applications.

“The Commission declares the J&K Bank (Ltd) to be a “Public Authority” as defined in Section 2 of the J&K RTI Act, 2009, fulfilling the conditions therein,” the judgment reads.

To allay the apprehensions that bringing the Bank under the Act “will open floodgates for certain exploiters with vested interest to make frivolous applications which may breach the trust between the banker and depositors, the Commission said that there are enough safeguards in the Act.
During proceedings before the Bench that lasted for more than six months, both the parties- the appellants (RTI activist Raman Sharma, Advocate Vilakshan Singh and others) and the respondent (J&K Bank represented by its counsel Advocate ZA Shah) - presented their arguments and cited various orders and judgments to support their respective claims.


The ruling says that creation of J&K Bank by Maharaja Hari Singh (sovereign ruler) was a legislative Act, saying that all executive, legislative and judicial powers were lying with him.

It adds that that Article 157 of the State Constitution gives protection to the orders, Acts and commands of Maharaja and terms the Registration of the Bank in 1956 as necessity.
“The registration of the Bank under the Indian Companies Act, 1956, was a requirement to be fulfilled because of extension of certain Central laws like Companies Act, 1956, to the State of J&K,” the order reads, adding, “The learned counsel for the respondent Mr. Z. A. Shah could not satisfactorily explain before the Commission how the legal status of the Bank should be treated as from Oct. 1947 to 1956.
The answer is simple that the Bank sustained and subsisted itself on the Memorandum of the Maharaja and later on was incorporated as a company in 1956.”

According to the Commission, there has been substantial financial control of the State Government over the financial institution.
“Not only has the Government substantial financial control over the Bank by having 92% shares initially, which has been later on reduced to 53% not by de-investing or withdrawing or selling the shares,” the Commission said.
Other grounds like ‘sanction of Maharaja’s Government for construction of a building of J&K Bank and order for demolishing buildings for construction of the Bank issued by Prime Minister on 5-7-1939 confirmed by Maharaja Bahadur on 10-7-1939’ have also been shown as grounds for bringing the Bank under RTI Act.

The other justification cited is the power of State Government to appoint three Directors. “It is the State Government which has power and authority to appoint three Directors of J&K Bank Ltd. The private Directors have no authority to expel these Directors- the Government nominees. It is, thus, established that a minority of Directors being Government nominees exercise effective and real control on behalf of the Government,” the ruling reads.

The Commission said that “CAG’s audit control cannot be dismissed merely by saying that it is a requirement under the Companies Act 1956.”
“Only the Government companies are subjected to such audit. Government companies are nothing but Public Authorities established, owned, controlled by the Government. The J&K Bank Ltd. may not be a ‘State’ as defined under Article 12 of the Constitution of India, but the Commission is of the considered opinion that it fulfills all the limbs of Section 2 of the State RTI Act, 2009,” the SIC said.

Not only this, the ruling said that J&K Bank Ltd has always carried out guidance/ instructions and wishes of the Government whether it be overdrafts, subsidy schemes, appointment and removal of the Chairman at the wish and pleasure of the Government.

Even the removal of former Chairman Dr Haseeb Drabu by Jammu and Kashmir Government has also been cited to demonstrate applicability of State’s authority over the Bank.

RTI activists have hailed today’s ruling by the SIC terming it as a big step towards bringing transparency in the system.

Greater Kashmir, 24 April, 2012, http://www.greaterkashmir.com/news/2012/Apr/25/jk-bank-under-rti-act-61.asp

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