Why KIIT comes under purview of RTI Act
1. Introduction
Kalinga
Institute of Industrial Technology (KIIT) is a famous private Institution/
organization spread over more 120 acres of Govt. land which has been leased out
by Government of Odisha within period of 15 years. Though
the Government has leased out land to this organization, it has also encroached
huge land and acquired the Government land through fraudulent means as per CAG
Audit report-2013. Besides that
it has taken a lot
of monetary benefits from the Government to run the
institution in terms of obtaining NOC
from IDCO to get loan
from nationalized banks, Govt.
projects, infrastructure development,
MPLAD and MLALAD fund etc. With Govt. land and monetary support, this organization has
developed huge infrastructure and multiple educational institutions for business
purpose. As claimed by Sri Achyut
Samant, founder of KIIT, the KIIT deemed
University , Kalinga Institute of Medical sciences (KIMS) are the institutions of national repute rendering
public service in the state of
Odisha.
2.
Applicability of RTI for KIIT-
A long fight
In
2014, CAG Audit Report on Allotment of land by GA Department, IDCO, BDA was placed
in the Odisha assembly. It exposed
huge irregularities and illegalities
in allotment of land in Bhubaneswar and
favoritism shown to some
people and land acquired by KIIT
through fraudulent means.
Prior to this report, RTI Activists in Odisha
has brought to limelight huge
land allotted to KIIT and KISS ( Kalinga
Institute of Social Sciences ) in Bhubaneswar
run by Achyut Samant.
To
understand functioning of KIIT organization , multiple RTI
Applications were filed by
many RTI Activists in the office
of KIIT, Patia, Bhubaneswar seeking
information about relatives of Govt.
officers and employees working
in KIIT , retired officers and employees appointed in
KIIT , various Govt. support mobilized by
KIIT to run the institution etc.
The PIO of the KIIT denied to supply
the information on the ground that
it is not the state
within the scope
of Article 12 of the
Indian Constitution. So it does not come under RTI Act.
The
Appellant of this case (Pradip Pradhan,
RTI Activist, Bhubaneswar) had filed RTI Application dt. 1.9.2014 to the PIO,
office of KIIT seeking the information
about retired Govt. employees working
in KIIT. Ms. Smita Mohanty, Senior PIO
rejected RTI Application vide Form-C dt. 29.9.14 by stating
that “ Kalinga Institute of
Industrial Technology is a society registered under the Societies Registration Act and a self-financed private deemed university. KIIT is not a state or authority under
Article 12 of the
Indian Constitution. Then, the First appeal dt. 7.10.14 was
filed before FAA of KIIT, Bhubaneswar. On rejection of first appeal, Second
Appeal was filed in the office of Odisha
Information Commission alleging that “
the PIO erred in rejecting his application by referring article 12 of
the constitution which was not
relevant in this context. Further, as per definition
of “ Public Authority” provided
under section 2(h) of the RTI Act, the
same includes “ any Non-Government Organization , substantially financed ,
directly or indirectly
funds provided y the appropriate Government. As KIIT was
being directly or indirectly funded
by the appropriate Government ,
it would have to be deemed as a public authority under
section 2(h)(d) (ii) of the RTI
Act.
3.
Hearing in Odisha Information Commission
The Second
Appeal case was registered
as SA No. 228/2015 and Sri Sunil Kumar Mishra, State Chief
Information Commissioner started initial
hearing from 15.2.2017 and ended
on 5th August, 2021.
Within period of 5 years,
the Commission conducted around 20
hearings seeking from both parties their
submissions and counter –submissions
whether KIIT would come under
ambit of definition of
Public Authority as per section 2(h)(d)(ii) of the RTI Act.
4.
Argument of Authority of KIIT
Shri Rabindra Nath Das, Secretary, KIIT submitted
that KIIT was
not a Public Authority as per definition given
in section 2(h) of the RTI Act as
it had not been established or
constituted ( a) by or under the constitution, (b) by any other law made
in parliament, or (c ) by any
other law made by
the state legislature.
It was also neither
established nor constituted
by any notification issued
or order made by the appropriate
Government , nor
substantially financed by funds
provided by the
appropriate Government. On the contrary, KIIT was a society
of private persons registered
under Societies Registration Act.
And set up with the
objectives of establishing and running educational institutions.
The Union Government in the Ministry
of Human Resource Development in
exercise of power conferred
under section 3 of the U.G.C. Act, 1956 declared KIIT
vide notification dated
16.2.2004 as a “Deemed
to be University” for the
purpose of UGC Act. He
also referred Karnataka High
Court Judgement dated
30.11.2015 in WP Case No. 25114
of 2009 dealt with the question whether
or not the RTI Act would be applicable to the
Manipal deemed University. The
Court observed that “ it would have to be accepted that the petitioner
is a “Deemed to be University” and recognized as
such under the U.G.C.
Act . However, unlike a regular
University established under a statute i.e., either under
Central Government or State
Government Act. It could
not be confused with any
other university. It was further
held by the hon’ble
court that the
petitioner University was
neither controlled nor financed by the State Government and it was certainly a
private institution with its own management and control
and there fore same could not be
brought under the purview of RTI Act.” The Secretary, KIIT argued that In
the light of this
judgment, KIIT as deemed to be University should not come under RTI Act .
The Appellant ( Pradip Pradhan) submitted
plethora of documents obtained
under RTI from various public authorities about
details of support in terms of land leased out to KIIT , KIMS ,
Financial support obtained for
infrastructure development ,
projects etc. to justify how KIIT is substantially financed. The offices from which information received under RTI is as follows.
A.
Dept. of General Administration , Govt. of
India ( valuation Cost of land )
B.
IDCO, Bhubaneswar
( Land leased out to KIIT )
C.
Ministry
of Tribal affairs , New Delhi ( Land records )
D.
Ministry
of Human Resource Development, New Delhi
E.
Ministry
of Science and technology, New Delhi (
Project sanctioned to KIIT )
F.
Ministry
of Home Affairs , Govt. of India
( about FCRA Fund received by KIIT )
G.
University
Grants Commission, New Delhi ( Land records submitted by KIIT to get deemed University
Status)
H.
Department
of Forest and Environment, Govt. of Odisha ( Forest Land acquired by KIIT and applied for diversion)
I.
Tahasildar,
Bhubaneswar ( Land acquired by KIIT)
J.
BDA,
Bhubaneswar ( Permission granted
for developing buildings on KIIT Land )
K.
Dept.
of Panchayat Raj, Government. of Odisha
L.
Department
of SC and ST Development, Govt. of Odisha ( Student stipend )
M. Dept. of School and Mass Education, Govt. of Odisha
N.
CAG
Report (General and Social sector volume- 2) produced in 2013 concerning to quantity of land leased out to
KIIT at concessional rate and loss of revenue to Govt. due to favoritism shown to KIIT ).
O.
Office of District Sub-Registrar, Bhubaneswar ( DSR
value of land )
P.
Audit
Reports of KIIT
Q.
Reply
of Minister in Assembly on land acquired by KIIT on question raised by Sri
Krustan Sagaria, MLA on dt. 22.3.2016.
R.
Reply of Minister for Trial Affairs , Government of India about details of fund released to
KISS on unstarred question raised by Sri
Saptagiri Ulka, MP, Lok Sabha in Parliament on 18.11.2019.
S.
Reference
of Judgement of Odisha High
Court in WPC No. 17171/2011( Dr.
Uttam Kumar Samanta vs Kiit University And Others) passed on 29 September, 2014.
5. Hearing,
Inquiry, verification and analysis of Data by Chief Information Commission.
A. Initially , it was observed
by the Commission that
response to the RTI Application submitted on 1.9.2014 was
given by Ms. Smita Mohanty , a senior Public Information officer of KIIT
University. Although there is no
such designation as senior PIO
in the Act, , the reply indicated
that KIIT is consciously
treated as Public Authority by their administration. Accordingly, the senior PIO
rejected RTI Application sending
Form-C ( intimation of rejection) dt.
29.4.2014 stating that
if the applicant is aggrieved , he could file first appeal
before First Appellate Authority of KIIT university with 30 days.
The Commission observed that
this response of PIO indicated that KIIT
is a Public Authority and the
PIO has acted accordingly complying provisions of RTI Act.
B. On 29.4.21, the senior PIO of
KIIT rejected RTI Application on the ground that “ KIIT is not the
state or
authority under article 12
of the Constitution of
India”. Concededly, on same day the
Hon’ ble Odisha High Court decided the Writ Petition in WP( C) 171/2011 in the case of Dr. Uttam Kumar Samanta VS KIIT University and held
that KIIT being creature of
statute and also discharging a public duty
came well within
the meaning of “State”
under Article 12 of the Constitution of India. The ground adopted by the PIO
of KIIT for rejecting
appellant’s application for information had been negated by the Hon’ble High
Court on the very date of rejection of
RTI Application. The Hon’ble High Court
also observed that KIIT
University appeared to have brought
itself under the fold of the Right to
Information Act , 2005 and Odisha RTI
Rules, 2006.
C. Section 2(h) of the RTI Act has
defined the Public Authority which is a follows.
“ Public Authority”
means any authority or body
or institution of self-government
established or constituted;
(a)
by or under the
Constitution
(b)
by any other law made
by the Parliament
(c)
by any other law
made by the State Legislature;
(d)
by notification issued or order
made by the appropriate
Government and
includes any-
(i)body
owned, controlled or substantially
financed ;
(ii) Non-Government
Organisation substantially financed, directly or indirectly by funds provided
by the appropriate Government.
D. In the context of question whether KIIT is an
authority under Article 12 of the Constitution of India , the Commission has referred
the decision of Hon’ble
Supreme Court of India in the
case of Ramana Dayaram Shetty
vrs International Airport Authority
of India , AIR 1979 SC 1628 in
which the determining factors of a state
or an authority under Article
12 of the Constitution of India were laid down as
under-
a. If the share capital of the corporation is held
by the Government , it would go on to indicate the Corporation as an instrumentality or agency
of the Government.
b. Assistance from the
State in order to meet
the financial expenditure of the Corporation is an indication of the
corporation being
impregnated with a Government character.
c. The monopoly status must either
be state conferred or state protected.
d. The State must have a deep and
pervasive control over the affairs.
e.
The functions of the entity must be of public importance.
f. A separate Department of the Government
must be transferred to the Corporation.
The
Commission has further elaborated that the function of the
entity being of public
importance is one of the tests laid down by the Hon’ble Supreme Court. The
Commission has referred “ Public Functions Doctrine” in Black’s Law Dictionary. It is stated
that Private Persons’ actions constitute
state action if the
private persons perform function that
are traditionally reserved for
the state. “ Government- Function
theory “ or “ Public Function Rationale”
have been referred to as the principle
by which private conduct is
characterized as State Action, especially for due
process and equal protection
purpose, when a private party is
exercising private function.
E. The Commission
has also made reference
of decision of High Court, Odisha ( this
order of High Court was
presented before Commission during course
of hearing ) in the
case of Uttam Kumar
Samanta vrs KIIT
University and others. The
High Court held that the
KIIT University as a
State under Article 12 of the
Constitution of India in view of the fact that being
a Deemed University , the University
was the creature of the statute
and it was also performing public duty.
F. The argument
“that as because KIIT deemed University is the
State within meaning of the
Article 12 of the
Constitution of India , it should
come under purview of definition of
public Authority under RTI Act” does not
hold same thing as establishing
or constituting a body
or institution under
constitution or by or
under any law of the Legislature as per section 2(h) of the RTI Act. The Supreme Court held in the
Thalappam case “We can….. draw a
clear distinction between a body
which is created by a
statute and a body which
after having coming into
existence is governed in accordance with the
provision of a statute.” The
Hon’ble Supreme Court observed it in the context of the Kerala Cooperative
Society Act. The Court held
that the concerned
societies which are governed by the
societies Act are not
statutory bodies but only body
corporates within the meaning of section 9 of the Kerala Cooperative Societies Act. In the
light of this judgment,
deemed University status of KIIT
does not by itself make it into a public authority within the meaning of
Clause (d) of Section 2(h) of the
RTI Act.
G. Then, the Commission has examined whether KIIT
will come under
section 2(h)(d)
(i)
Body
owned , controlled or substantially financed;
(ii)
Non-Government
Organization substantially financed, directly or indirectly by funds provided by
the appropriate Government.
While defining
three words “owned” ,
“controlled” or “substantially financed”, the Commission has completely
relied on decision of Supreme Court
in the case of Thalappalam vrs State
of Kerala reported
in 2013 (11) CLR (SC)881. The
Court has held that
“
We are of the
opinion that when we test the
meaning of expression “
controlled which figures
in between the words “ body
owned” and substantially financed” , the
control by the appropriate Government
must be a control of substantial
nature. The mere “supervision” or “regulation” as such by a statute or otherwise
of a body would not make that
body a “ public authority” with the
meaning of Section
2(h)(d)(i) of the RTI Act. In other words, just like a body owned or
body substantially financed by the appropriate Government, the control of the
body by the appropriate Government would also be substantial and not merely
supervisory or regulatory. The
power exercised by the
Registrar of Cooperative Societies
and others under the
Cooperative Societies Act are
only regulatory and supervisory in nature , which will not amount
to dominating or interfering with
the management or affairs of the society so as to be controlled. The management and control
are statutorily conferred on the management Committee
or the board
of Directors of the
society by the respective Cooperative Societies Act and not on the authorities
under the Cooperative Societies Act. We are , therefore of the
view that the word “
controlled” used in section 2(h)(d)(i) of the
Act has to be understood in the
context in which it has been used vis-a-vis a body
owned or substantially
financed by the appropriate Government, that is, the
control of the body
is such a degree which amounts
to substantial control over the
management and affairs of the body.”
In
view of this judgment, the
commission considered that
KIIT cannot be
treated as public authority under section 2(h)(d)(i) of the RTI Act.
H. Then, the Commission finally examined
whether KIIT would come under
section 2(h)(d)(ii) of the RTI Act. This section
exclusively relates to “non-Government Organisations substantially
financed, directly or indirectly, by funds provided by appropriate government”. While finding out meaning of
“substantially financed”, the Commission has taken clue from Black’s Law Dictionary (6th
Edn.) and Shorter Oxford English
Dictionary (5th Edn.). In the Black’s Law Dictionary, the word
“substantially” has been defined as ‘of real worth and importance; of considerable
value; valuable. Belonging to substance; actually existing; real : not seeming or imaginary; not illusive ; solid;
true; veritable. Something worthwhile as distinguished from something without
value or merely nominal. Synonymous with
material. In the Shorter Oxford English Dictionary, the word ‘ substantial’ has been defined to mean
“of ample or considerable
amount of size; sizeable, fairly
large; having solid worth or value, of real significance; solid;
weighty; important, worthwhile; of an
act, measure etc. having force or effect
, effective , thorough.
The Commission has also
made reference of
few judgements of the
courts to bring more
clarity on ‘ substantial funding’. The Hon’ ble Punjab and Harayana High
Court in the case of Hindu Urban Cooperative bank Ltd. 2011 observed that –
‘Taken in the
context of larger public interest, the funds which the Government deal with
are public funds. They belong to the
people. In that eventuality, wherever public funds are provided, the word ‘substantially
financed’ can not possibly interpreted in narrow and limited terms of
mathematical calculation and percentage (%). Wherever public funds are
provided, the word ‘substantial’ has to be construed in contradistinction to
the word ‘trivial’ and where the funding is not trivial
to be ignored as pittance, then to me , the same would amount
to substantial funding coming from
the public funds. Therefore, whatever benefit flows to the
petitioner-institutions in the form of share capital
contribution or subsidy, land or
any other direct or indirect
funding from different fiscal
provisions for fee , duty, tax etc. as depicted
hereinabove would amount to
substantial finance by the funds
provided directly or
indirectly by the appropriate
Government.”
In
the case
of the Registrar, Thiagarajar
College of Engineering (2013), the Hon’ble
Madras
High
Court did not attach much of significance to the quantum of funds. Instead, the Hon’ble High Court
attached more significance to the nature
of functions performed by
the organization. If the functions are
public and if organization is receiving government grants, the High Court
held that these should suffice
to consider the body or organization as public authority. The relevant part of the
judgment is presented below.
“ once public
money is paid to the college for the
purpose of imparting
education and when public policies towards
implementation of achieving
social justice is sought to be enforced in any educational institution, by the state
, then it is incumbent on the
educational authorities to implement the same, and that no college can be permitted to take a defense that
it does not come within the purview of the Act, and that the
Public Information Officer can not
issue any direction to the
college to disclose any information to the applicant. Such a stand would defeat
the very purpose and object of
the RTI Act.” Xxxx The
Court is of the view that the quantum of grant does not always decide applicability of the provisions of the RTI Act, to an educational
institution or any other body established
or constituted as defined
under section 2(h) of the RTI Act
, but it should be referable to the
activity carried on by such entities , involving public interest and public duty which includes an educational institution.”
The Commission has also referred
that the Hon’ble Orissa High
Court in the case of North East
Electricity Supply Company of Odisha , 2009
linked Public authority with public function. In the case of Thalappalam Service
Cooperative bank and others vs Director of Public Instructions & Others,
the Supreme Court observed that
“The word ‘substantial’ is not
synonymous with ‘dominant’ or ‘majority’. It is closer to ‘material’ or
‘important’ or ‘of considerable value’.
‘Substantially’ is closer to ‘Essentially’. Both words can signify varying degree
depending on the context”.
“Merely providing subsidies,
grants , exemptions , privileges
etc. as such, cannot be said to be providing funding
to a substantial extent,
unless the record shows that the
funding is so substantial
to the body which
practically runs by such funding and but for such funding, it would struggle
to exist. The state may also float many
schemes generally for
the betterment and welfare of the
cooperative sector like deposit
guarantee scheme, scheme of assistance
from NABARD etc. but those facilities or
assistance cannot be termed as ‘
substantially financed’ by the state government
to bring the body within the fold of ‘public authority” under section 29h)(d)(i) of the RTI Act. But there are instances,
where private educational institutions getting ninety-five per cent grant –in-aid from the
appropriate Government , may answer definition of public authority under section 2(h)(d)(i) of the RTI Act.”
In
the DAV college Trust Case, the Hon’ble Supreme Court elucidated the term “substantial
financed’ as under;
In
our view, “substantial funding” means a large portion. It does not necessarily
have to mean a major portion or more than 50%. No hard and fast rule can be
laid down in this regard. Substantial
financing can be both direct and indirect.
To give an example, if a land
in a city is given free of cost or on heavy
discount to hospitals, educational institutions or such other
body, this in itself could also be
substantial financing. The very establishment of such an
institution, if it is dependent on the largesse of the state in getting land at
a cheap price, would mean that it is substantially financed. Merely because
financial contribution of the state comes down during the actual funding, will
not by itself mean that the indirect finance given is not
to be taken into consideration. The value of the land will have to be
evaluated not only
on the date of allotment but
even on the date when the question arises as to whether
the said body or NGO is substantially financed.
Whether
an NGO or body is substantially financed by the government is a question of fact
which has to be determined on the facts of each case. There may be cases where
the finance is more than 50% but still
may not be called substantially financed.
Supposing a small NGO which has a total capital of Rs. 10,000/- get a grant of Rs. 5000/- cannot be termed as substantial
contribution. On the other hand , if a
body or an NGO gets hundreds
of crores of rupees as grant
but that amount is less
than 50%, the same can still
be termed to be substantially funding.
I. From these two judgements of the Supreme Court , the Commission finds that
mere grants or exemptions or privileges
as such would not amount to
substantial funding. Even
majority funding would not mean substantial funding. In order that the funding can be considered as
substantial, the same ought to have a bearing on the existence of the non-Government
organisations. If an organisation could not have been set up but for support
from the appropriate Government or but for the discounts / subsidies received
from the appropriate Government; and, conversely, if withdrawal of the support
would adversely affect the existence or running of the organisation, the
expression ―substantially financed‖ would be applicable
irrespective of the amounts. It is the nature and quality of the funding rather
than its quantity, and the possible consequence of non-funding which are more
relevant than the amounts per se.The judgement of the Hon‘ble Supreme Court in
the DAV College Trust case is significant because it has widened the scope of
‗substantial financing‘ in order to include such assistances as
allotment of land free of cost or at heavy discount. The Hon‘ble Court held
that if the entity depended on the largesse of the State in getting land at
cheap price, it will be treated as substantially financed by the State,
irrespective of the extent of actual financing or contribution. In fact, the
Hon‘ble Court went on to hold that in order to find whether land was given at
cheap price or heavy discount, even the value of land on the date when the
question arises whether the body or NGO is substantially financed will also
have to be evaluated.
J. In the light of the
above-mentioned Supreme
Court Judgement on DAV College Trust,
the Commission takes “largesee factor”
as key determining factor for
consideration whether KIIT would
come under RTI Act. The Commission made thorough analysis of the
data/ information provided by the appellant in the course of hearings about details of benefits in terms of land and
financial support received by KIIT
from Government. During course of
hearing, it was argued by the Appellant that KIIT i.e., respondent Institution
has got huge extents of land from the Government, through leases or otherwise,
and at subsidised rates; and that if the lease arrangements are withdrawn, the
institution would struggle to exist. In this case, the appellant has referred
to Government land including forest land encroached upon by KIIT, subsequent
regularization of such encroached and unauthorisedlyused land by the
Government; land taken on lease from the Government indirectly i.e. on the
Government agreeing to mutual transfers of the land which had been leased out
earlier to other private entities; availing of such land, whether directly or
indirectly (through mutual transfer) at less than market rates and many times
on soft-loan arrangements; KIIT using such lease-hold land for getting
finance / loans from banks and others etc. The appellant has also drawn
attention of the Commission that KIIT
got such huge extent of land at cheap and throwaway prices
referring to certain objections raised
and observations made by Audit which find place in the C&AG Report, and to
the present market values of these land which are phenomenally higher. The
appellant has further submitted a few
documents in support of the present bench mark-values of land and has argued that the judgement of the Hon‘ble
Supreme Court in the DAV College Trust case would squarely apply. Apart from
referring to land used through the encroachment mode or land taken on lease,
the appellant has also pointed out several grants and financial assistances
which KIIT received from the Governments or their
agencies from time to time; the other subsidies, scholarships etc. which
were obtained under RTI from the
appropriate Government in some years and to the Income-tax exemptions availed
by the said institution year after year.
K. The
Commission first analysed the issue of encroachment of 18.100 acres of forest
land by KIIT which were submitted y the
Appellant. The Hon‘ble Minister of
Forest & Environment, in the reply given by him to an Unstarred Question
raised in the Assembly, confirmed the fact of encroachment of land by KIIT.
Some of the notes in the files have been adverted to. It is noted from the said
notes that the KIIT had encroached upon some other Government land as well and
had also constructed multi-storeyed building thereon for class-room purposes
etc. before approaching the Government with request for regularization. It is
also seen from the notes that some such requests were decided favourably. The
appellant has referred to an Audit objection in the matter of encroachment of
land. The Audit observed that under the OPLE Act, such encroached land being
surplus forest land was meant for distribution amongst the landless. Audit
considered regularization of such land as irregular. Be that as it may, the
appellant‘s contention regarding encroachment of Government land is found to be
correct. The appellant has also acquired
120.708 acres of Government land. The same includes 11.538 acres on which
multistoreyed buildings have been constructed, 18 acres of forest land
unauthorisedly occupied and 91.07 acres of land given on lease by IDCO in the
Patia and Patharagadia Mouza and in the Chandaka Industrial area which has not
been objected by KIIT. The Commission has taken view that it is not
the authority to adjudicate on the issue of encroachment or on occupation of
land without approval. The Commission no doubt cannot make any such
adjudication. However, the fact remains that the extent of Government land as
pointed out by the appellant has not been proved to be wrong. As per the
appellant, the above extent of 120.708 acres is more than 90% of the total land
since the other private plots purchased by KIIT and KISS are 11.304 acres only.
The authority of KIIT has not come out with any direct denial of the above
claim of the appellant either. It has been merely stated that the appellant
should separately say how much private land was purchased by KIIT and KISS
respectively. In other words, the appellant‘s contention that KIIT has built
its institutions largely on Government land stands confirmed. Even IDCO has
confirmed that it gave lease of land to the extent of 90.170 acres (91.170 acres
– 1.00 acre given to KIIS) to KIIT. The appellant‘s further argument is that
these land have been availed on lease at throw-away prices / subsidised rates.
In this connection, the appellant has submitted several documents obtained by
him from the concerned authorities through the RTI route. The Commission finds
that a few of these documents show that some of the land were given at
subsidised rates. There is an admission to this effect in the affidavit filed
by the Principal Secretary in the matter of allotment of land to Hospitals
including KIMS under KIIT. The land
allotted to KIIT was shown as 26.976 acres. It also emerges from the
filenotings that some of the land had been earlier given by IDCO at
concessional rate of Rs.18.00 lakh per acre. When KIIT sought permission of the
Medical Council of India to construct a 700 bedded Hospital, it came to know
that the lease period of the land should be 99 years and not 75 years as per
the agreement with IDCO. Hence KIIT approached the G.A. & P.G. Department to
get the above land back from IDCO and then to re-lease the same to it. The
re-leasing no doubt required payment of differential cost. But seen in the
light of the affidavit made by the Principal Secretary, the rate would still
remain highly subsidised even after such payment. Therefore, the contention of
the appellant in this regard is not without merit. The appellant has referred
to the alleged undue benefits shown by the appropriate Government to the
respondent in the matter of allotment of land resulting in huge revenue loss.
In this connection, he has referred to the report of the C&AG of India on
General & Social Sector, Volumes-II & III for the year 2012. In
Volume-II, the C&AG computed loss of premium of Rs.33.70 crore on account of
charging of lower premium as against DSR premium in respect of 26.970 acres of
land. The C&AG also pointed out short realization of Rs.66.24 crore by IDCO
on account of land given to KIIT. Rightly as pointed out by the respondent,
this Commission has no competence to make any observation on the allegations of
undue favour etc. However, this Commission also cannot overlook the material
which is available on record, i.e. the reports of the C&AG. The respondent
has contended that the inference drawn by the C&AG may not be a fact.
Further, as per the respondent, it is not known whether or not the State
Government has taken any action on the basis of the above report. But the fact
remains that a public authority has raised certain objections which would hold
good until and unless the objections are withdrawn. Therefore, the Commission
takes the objections raised by Audit to construe that the respondent has
availed liberal lease arrangements. The more significant documents which the
appellant has submitted in support of his contention that land have been given
to the respondent, i.e. KIIT, at throw-away prices are the bench-mark values of
such land at the time when the appellant asked for the information or at a
still later point of time. The appellant has submitted an order dated 28.08.2017
of the G.A. & P.G. Department as per which the bench-mark values / market
values of the land in the Chandrasekharpur area were shown as Residential:
Rs.800.00 lakh; Commercial: Rs.1250.00 lakh, Agricultural: Rs.600.00 lakh,
Potential to be Residential: Rs.800.00 lakh and Industrial: Rs.1150.00 lakh.
The corresponding figures in Patia were Rs.1000.00 lakh, Rs.1200.00 lakh,
Rs.400.00 lakh, Rs.900.00 lakh and Rs.900.00 lakh respectively. The bench-mark
values thus fixed by the Government with retrospective effect from 2014 are
supported by an order which is a fact on record and the correctness of the same
has not been denied. As already noted, the appellant has also submitted a
certificate dated 14.07.021 issued by the DSR, Bhubaneswar in which the value
of Plot No.320/3370 (Industrial) was shown as Rs.13.80 crore per acre on the
said date as against Rs.12.00 crore per acre as on 31.12.2016. The values thus
fixed are significantly higher than the values of Rs.18.00 lakh per acre,
Rs.22.00 lakh per acre and Rs.25.00 lakh per acre at which the appellant got
land on lease from IDCO from time to time. The respondent‘s argument is that it
had taken land on lease much earlier than the dates to which the bench-mark
values referred to by the appellant relate. In fact, identical arguments had
been raised with reference to the values of IDCO land as per the information
received by another applicant, namely, Shri Srikanta Kumar Pakal, from the APIO
of IDCO. The further argument of the respondent as 76 per its latest submission
is that the latest values submitted by the appellant are in respect of private
land and not Government land. The private land are also tiny plots with minimal
areas. Coming to the first argument that the values relied upon by the
appellant do not relate to the dates on which the respondent had taken land on
lease, it would be pertinent to again refer to the observation made by the
Hon‘ble Supreme Court in the D.A.V. College Trust case that even the value of
the land at the time when the question arises whether the body or NGO is
substantially financed or not will have to be evaluated. Therefore, the
reference made and reliance placed by the appellant on the subsequent
bench-mark values cannot be disregarded. As regards the argument that the plots
/ land to which the values cited by the appellant relate are private land and
not Government land, the Commission cannot appreciate how values of private
land, irrespective of the size, can be ignored particularly as such values are
representative of market values unless proved to the contrary. Similarly, as
regards size of plots, it is difficult to see how there can be any significant
variation between the values of small plots and large plots. Therefore, the
above argument cannot be considered as germane to the issue. In view of the
observations made hereinabove, and particularly in view of the observation of
the Hon‘ble Supreme Court in the D.A.V. College Trust case referred to supra,
the references made by the appellant to the subsequent values of land merit
consideration. On such consideration, and on evaluation on the basis thereof,
it cannot be gain-said that the respondent has got land on lease from the
appropriate Government at very cheap rates. Therefore, even if the appellant‘s
allegation of undue favour is not considered as the Government‘s response
thereto or action taken thereon are not known, the Commission has nonetheless
to hold that the respondent institution got land from the appropriate
Government at extremely cheap rates having significant financial implications
in its own favour. This has to be treated as indirect substantial financing.
The respondent‘s contention is that land were taken from the Government at IDCO
prices. The above contention has not been found to be incorrect. However, it
has been already noted that the IDCO price itself is a concessional price. In
fact, the IDCO prices are even less than the G.A. prices as seen from the
information regarding bench-mark values provided by the respective PIOs. Even
the respondent in its latest submission has admitted that ―the State Government
gave land to IDCO………. in subsidised rates to boost industries. Thus, by
the appellant‘s own admission, the values at which it had got
land on lease from IDCO were subsidised / concessional. Therefore, it has to be
held that the respondent institution got greatly benefitted by getting large
tracts of land on lease from the appropriate Government. Moreover, in view of
the discussion in the preceding para relating to the subsequent bench-values of
the land in question, the extent of concession which the respondent institution
had got at the time of the leases has paled into insignificance. Reference has
been made to secondary leasings as well. The appellant got several patches of
land on the basis of mutual transfers. These land had been earlier leased out
by IDCO to same private industries. IDCO had done the leasings in pursuance of
its avowed policy of promoting industrial infrastructure. IDCO‘s agreement with
the suggested mutual transfers resulted in great benefit to KIIT which was assured of contiguity of the land
thereby immensely facilitating its operations. The fact that even the value of
these land have soared significantly in due course need not be over-emphasised.
The appellant has referred to several letters which KIIT and its Founder wrote
to the Government and Government Agencies with fervent prayer for allotment of
land for institutional purposes, for setting up Hospital etc. The requests thus
made were in respect of forest land under encroachment, land under unauthorized
occupation and other land including the proposed mutual transfers. The
significant feature standing out from the various proposals / requests made by
the KIIT to the Government and its
agencies is that all these were adjoining plots. Overall, they combined to be
an asset spread over a large area. Such large areas marked by contiguity cannot
be easily had from individuals or private sellers / lessors. Non-availability
is an important factor. Even otherwise, the buyers / lessees will have to
undergo the rigours of approaching several individuals and private entities and
of making acquisitions from numerous sellers and lessors through multiple
separate negotiations and deals. These processes by themselves lead to sky-rocketing
of prices because of the demands which they trigger and also because of
anticipation of growth of the area which the acquisitions stoke. Getting large
tracts / areas from the Government spares the buyers / lessees of such rigours.
There is also definite financial saving vis-a-vis cost of land and expenses
incidental to the transactions. Savings in terms of expenses are in the nature
of intangible gains which often remain uncomputed. Getting large number of
contiguous plots from the Government at the approved rates, particularly for
large projects, results in a still bigger intangible gain. We may imagine a
project coming up in bits and pieces and at several places, distant from one
another. We may also imagine the operational costs involved in such cases. Not
having to incur such additional costs over the duration of the lease is
undoubtedly of immense benefit with great financial implications in favour of
the buyers / lessees. Such benefits / implications are seldom considered, let
alone computed. The benefits, both direct and indirect as well as tangible
and intangible, would be still much more
if the assets are located at prize destinations such as a commercial hub or a
city, more so a capital city. In the present case, KIIT gained
immensely by getting contiguous plots of
land on lease from the Government in a prize destination such as the capital
city of Bhubaneswar, that too at very cheap prices.
L. The appellant has raised
another issue of KIIT being gained over out of leasing lands by mortgaging to
banks after getting “No Objection
Certificate” from IDCO i.e., lessor. Had not
IDCO issued “No Objection Certificates”
, KIIT would not have been able to avail
substantial amounts of loans from Banks. The Commission has considered the
submissions thus made by the appellant. Records have also been perused. The
Annual accounts for the financial years 2013-14, 2014-15 and 2015-16 which have
been submitted by KIIT show that the institution
had taken term loans and O/D loans of
Rs.467.02 crore, Rs.497.37 crore and Rs.541.96 crore respectively during these
three years from several scheduled Banks and a few other private parties. The
loans from the private parties were less than Re.1.00 crore each year. Thus
almost the entire loans had been taken from the Scheduled Banks on the basis of
primary securities and collateral securities. It has been clarified in the
―notes forming part of the Annual accounts‖ that these loans had been
availed mainly on the basis of primary and collateral securities, being land,
buildings and equipment of the society. The Commission has also noted from the
information received by the appellant from IDCO under the RTI Act that IDCO had
given consent for availing loans on the basis of mortgage of its land leased
out to KIIT. The extent of land given by IDCO on lease has been already noted.
Of course, IDCO could furnish details of loans availed by the KIIT on the basis
of mortgage of its land only in one instance. But the very fact that consent
had been given by IDCO in respect of the land, and in the Annual reports it has
been stated that loans were availed from the scheduled Banks by offering land,
amongst others, as security, it can be inferred that the KIIT could get substantial amount of loans from
Banks by offering the leasehold land as security. During hearing, the representative of KIIT contended that there is nothing wrong on the
part of an organization in taking loan from any Bank by mortgaging its own
land. However, the respondent has not specifically rebutted the appellant‘s
submission that it could get substantial amount of loans from the Banks by
offering the Government land taken on lease as security. Hence the Commission held that the land leased out by IDCO greatly
helped KIIT in arranging substantial
amounts of finances.
M. Then, the Commission examined
details of indirect as well as direct finances from the Government and the
Government agencies referred by appellant during course of hearing. In this
connection, the appellant has invited attention to the respondent‘s accounts
for the year ended 31.03.2009. The appellant has also referred to Post-Matric
scholarships given by the State Government to the tribal students of KIIT
during the years 2012 to 2017; donations, grants and subsidies received from
various Government Departments during the years 2005-2010, foreign funds
received by the respondent etc. First coming to the Annual accounts for the
year ended 31.03.2009, the appellant has claimed that the unsecured loans and
other income of the respondent included public money. Similarly, students’ fees
were nothing but public money. The Commission does not find merit in the above
contention of the appellant. Public money is the public fund given by the
public authorities or Government or its agencies either directly or indirectly.
Individual persons advancing loans or paying fees cannot be regarded as public
fund.
N. As regards the foreign funding stated to have
received by KIIT during the year- ended
31.03.2019, the Commission observed that even such funding cannot be treated as
having any ingredient of public fund or public money unless it is shown that
such foreign funding was done at the instance and promise of the Government or
its agencies. Nothing of that sort has been let in by the appellant. Now coming
to the scholarships given by the Government to the tribal students of KIIT in
certain years, the appellant has contended that such scholarship amounts are
part of funding by the Government. The Commission did not accept the above contention. The scholarships
are specifically earmarked for the concerned students who alone can receive the
same. The institution where the concerned students study only acts as the
medium. The institution cannot exercise any liberty with the amounts routed
through it. When the institution has no such liberty and cannot use the amounts
in any manner other than for which the same have been earmarked or intended,
distribution of the scholarship amounts cannot be taken as part of funding of
the institution. Hence the appellant‘s argument on this score is rejected by
the Commission.
O. The Commission analysed details
of the grants and subsidies received from the various Departments and other
Government agencies such as DBT, DST, ICMR, CSIR, ICAR, AICTE, DAE, UGC, ORMAS
etc. As per the documents submitted by the appellant, KIIT had got Rs.6.13 crore (Rs.2.24 + Rs.3.89)
towards such grants and subsidies during the period 2005-10 and Rs. 2.42 crore
during the period 2010-17. It had also received Rs.21.12 crore from ORMAS under
the DDU-GKY Scheme. The argument of the appellant is that these grants amount
to Government financing of the respondent society. The respondent
Institution on the other hand contended
that the 82 research grants received were for earmarked projects undertaken by
the Faculty Members and also received because of efforts made by the Faculty
Members. The Commission has considered the above submission of the respondent.
The Commission has also noted from the Annual accounts for the years-ended
31.03.2013, 31.03.2014 and 31.03.2015 that the various Departments had provided
grants etc. for specified projects. It has to be inferred, unless shown to the
contrary, that the grants were to be used only for such projects and not for anything
else. Thus, even here, the respondent cannot use the grants in any other manner
which it would choose to. Therefore, normally, such research grants by
themselves cannot be considered as financing or funding the respondent even
though the researches and the outcomes thereof might help enhance its prestige
and add to its stature. However, research grants and similar funding are given
to an institution after taking into consideration its infrastructure etc.; and
if direct or indirect Government funding has had a bearing on the
infrastructure, then the grants etc. may have to be considered together with
the other direct or indirect Government fundings.
P. Last but not least, the Commission examined
the tax exemptions availed by KIIT. The appellant has submitted that tax
exemptions are another instance of indirect financing of the respondent society
by the Government. This submission of
the appellant was considered by THE Commission taking into account the annual
reports for the 3 years which were submitted by the respondent society. These
were examined to find out if KIIT could be said to have derived any great
financial benefit in view of the income-tax exemptions availed by it. Before analyzing it, the Commission briefly discussed the rationale, import and effect of the relevant
tax exemption provisions.
Under
Sections 11 & 12 of the Income-tax Act, 1961, certain entities who are
otherwise liable to pay tax on their income enjoy the benefit of exemption from
payment of tax if they are registered by the Commissioner of Income-tax under
Section 12A of the said Act and also if they comply with the conditions
enumerated in Section 11 and do not commit any contravention of the nature
specified in Section 13 of the said Act. These entities are: Public and Charitable
Trusts, not being religious Trusts, registered under the Public Trust Acts;
and, Societies and Associations / Institutions registered under the Societies‘
Registration Act, 1860. Registration under Section 12A of the Income-tax Act is
the prime enabler of the exemption. The Commissioner of Income-tax allows
registration after being satisfied that the entity is genuinely carrying on
public and charitable activity. The conditions as per Section 11 are that the
Trust or the Society or the Institution spends 85% of its surplus in a given
year on public charitable activity; in case of any short-fall in application,
it seeks the permission of the concerned Income-tax Authority to accumulate the
unutilized surplus for a period not exceeding five years for utilization
towards the ear-marked objects; it deposits the unutilized surplus amounts in
specified categories such as deposits in scheduled banks etc. The
contraventions listed out in Section 13 are: the benefits of the activities
must ensure to the general public and not to any particular religion or caste;
no undue benefit or advantage must accrue to the trustees, the managers or to
persons who are substantially interested in the entity etc. If the entity is
registered under Section 12A, complies with the conditions stipulated in
Section 11 and does not commit any of the contraventions listed out in Section
13, its entire income becomes eligible for exemption from payment of
Income-tax. Further, Section 80G of the
Income-tax Act, 1961 provides that, amongst others, if a Trust or an
Institution / Society registered under Section 12A is also separately approved
by the Commissioner of Income-tax under Section 80G, then the contributors(of
donations) to such entities shall have the benefit of deduction of 50% of such
contributions from their income subjectible to tax. In certain situations, the
deductions can be even 100%. Section 2(15) of the Income-tax Act, 1961, which
is the Section containing definitions, defines ―charitable purpose‖
as including ―relief
of the poor‖, ―education‖,
―medical relief‖,
advancement of any other object general public utility etc. As can be seen from
the above, Sections 12 and 80G are land-mark socialwelfare-enabling provisions.
The avowed objective is to promote specified activities known as public and
charitable activities not only by foregoing tax on their income but also by
foregoing a portion of the tax which the donors/contributors would have to
otherwise pay. The State thus has made a great sacrifice to promote such activities,
the foremost being education, medical relief and relief of the poor. The
rationale behind foregoing tax on the income of the Trust, Society or
Institution and on the income of the contributors is to enable the entities to
utilize the funds spared from/exempt from taxation in the activities undertaken
by them. Needless to say, this is a
clear case of indirect funding. And since tax is public fund, it can more appropriately be called indirect public funding. Larger the spectrum
of the activities and larger the income, larger would be the indirect funding.
What is the income subjectible to tax which thus gets exempted from tax and
enjoys the benefit of indirect public funding ? Generally, income subjectible
to tax is the net income i.e. gross income deducted by expenditures. There are
specified taxable entities called ‗Persons‘ recognised under the Indian
Income-tax Act. They are: Individuals; Hindu Undivided Families; Companies;
Firms; Bodies of Individuals or Associations of Persons; Local Authorities and
Artificial Juridical Persons (Clause 31 of Section 2). Public Charitable Trusts
and Associations come under the category of Bodies of Individuals or
Association of persons. In the cases of the taxable entities, both income as
well as expenditures are restricted to the revenue field. Receipts arising or
accruing or becoming due on account of operations are ‗income‘. Expenditures
incurred in the course of operations, referred to as ―in the course of business
or profession‖, are the ‗deductible
expenditures‘.
But the Income-tax Act has narrowed the scope of income and has widened the
scope of expenditures in the cases of the tax-free entities. Such narrowing and
widening have been done through deeming provisions. In the case of Trusts,
Societies, Associations and Institutions engaged in public and charitable
activities, receipts in the nature of contributions to the corpus are not
deemed to be Income. Thus the ‗taxable income‘ in their cases has a narrower
domain. Further, expenditures in their cases include expenditures of a capital
nature, say incurred on expansion etc., and thus 100% deductible, whereas in
the cases of the other entities such expenses are not admissible in full. Only
depreciation on account of wear and tear is allowed at specified percentages.
So what gets exempted from tax in the cases of the tax-free entities is not the
income as ordinarily understood in the common, commercial and professional
parlance. The income which are not deemed as income and the special
expenditures allowed specifically to them and not to the others get added to
the tax-free basket. Thus the exemption from payment of tax in their cases is
of substantial amounts. The State allows such exemption in the hope and with the
objective that these entities cater to the general public needs and promote
public activities.
Q.
The annual accounts for the financial years 2013-14, 2014-15 and 2015-16 which
were submitted by the respondent were examined. The examinations revealed the
following salient features:
|
Sl. |
Nature |
F.Y. |
F.Y.2014-15 |
F.Y.2015-16 |
|
1 |
Surplus for the |
25,85,68,579/- |
36,76,45,077/- |
46,46,19,779/- |
|
2. |
Reserves and |
349,84,34,268/- |
453,62,64,470/- |
569,66,51,308/- |
|
3. |
Development Fee |
46,31,11,390/- |
67,01,85,125/- |
69,57,67,059/- |
|
4. |
Long Term |
467,04,37,731/- |
497,38,55,204/- |
541,96,58,415/- |
|
5 |
Tangible Assets |
723,49,58,310/- |
830,30,68,886/- |
840,07,82,141/- |
|
6 |
Capital Work in |
12,01,72,850/- |
06,53,78,137/- |
92,68,87,152/- |
The
Commission has analysed that in the
above abstract, except for the surpluses of the given years, the remaining
figures are year-end cumulative closing balances. It gives indications about the surpluses and
the borrowings on the one hand and the tangible assets and works-in-progress on
the other hand. The indications regarding the surpluses are that the same have
been steadily increasing year after year. This is clear not only from the rise
in the surpluses year on year but also from the increase in ‗reserves and
surpluses.‘ These are nothing but the profits of the Society. The reserves and
surpluses include the cumulative balance surpluses as per the Income and
Expenditure statements as also the development fees. While the surpluses have
been shown as ‗’direct income’ or as ‗’other income‘ in the Income and
Expenditure statements, the development
fees have been separately shown only in the Balance-Sheets. However, the
development fees to the extent not refundable are also in the nature of income.
Therefore, the surplus of each year, as reflected in the
Income and Expenditure statements, will have to be increased by the development
fees. If that is done, the tax-free surpluses would be higher than have been
shown in the abstract. In this case, be it the surplus or the development fees,
the same are not taxable in view of the exemption available to it under Section
12 of the Income-tax Act, 1961 by virtue of the Society having been registered
under Section 12A of the said Act. Thus, almost the entire reserves and
surpluses at the end of any given year represent the cumulative amounts which
have not suffered from tax. The indication one gets from the figures of
long-term borrowings are that these have been growing year after year. The
relevant schedules in respect of long-term borrowings have been perused. Term
loans have been taken from several scheduled Banks such as the Allahabad Bank,
Bank of India, Canara Bank, HDFC Bank, Oriental Bank of Commerce and the Punjab
National Bank. All these are secured loans. The respondent Society has also taken over-draft (O.D) loans from
some of these Banks. These are also secured by collaterals. It is mentioned in
the ‗notes to the accounts of the relevant years that the securities given to
the Banks, whether primary securities or collateral securities, are the land,
buildings and equipment of the society. There are personal guarantees in a few
cases as well. The respondent has also taken secured loans from certain private
parties. Even these loans are secured by the land of the society. In other
words, the respondent has availed huge loans from the scheduled Banks and
others by mortgaging its land and buildings. Then the Commission analysed the tangible assets. The closing
balance of the tangible assets at the end of a given year is more than the
closing balance at the end of the
preceding year. The same applies to capital work-in-progress as well. The above
would clearly indicate that the respondent has been expanding steadily year
after year. The increase is more than what would appear from the BalanceSheets
because there have been increases even after claiming deductions on account of
depreciation. Now if we make a still closer reading of the accounts, it would
be clear that the expansion is financed largely by the surpluses and the
long-term borrowings. This is evident from the Income and Expenditure
statements as well as from the schedules to the ‗reserves and surplus
accounts.‘ It also emerges from the analysis that the tax-exemption benefits
enjoyed by the respondent have enabled it to go in for huge and steady expansion.
Further, the land taken from the Government /IDCO on lease, some of which were
mortgaged to the Banks helped the respondent society get substantial finances
from the Banks. The Commission also looked into surpluses amount during the three
years under consideration.The apparent surpluses would be more if the
development fees are taken into consideration by including the same as income.
Thus, but for the exemption provisions of Section 12 of the Income-tax Act,
1961, the incomes / receipts for the above 3 years would have got taxed. In
fact, the exempted income would be still higher. For example, KIIT made a
donation of Rs.27,19,04,435/- to KISS
during the financial year-ended 31.03.2014. Similarly, during the financial
year-ended 31.03.2015, the respondent made a further donation of Rs.51,68,99,341/- to KISS. In the next
year, i.e. year ended 31.03.2016, the donation to this entity was of the order
of Rs.58,21,25,784/- . Under the
other provisions of the Income-tax, 1961 (i.e. other than Sections 11, 12 &
13), the above donations would have been disallowed on the ground of not having
been incurred in the course of business or profession. Alternately, assuming
that KISS has been approved by the Commissioner of Income-tax under Section 80G
of the Income-tax Act, 1961, the donor, i.e. the respondent, would have been
entitled to only 50% of the donation amount as deduction from its total income
of the relevant years. Either way, the taxable surpluses would have got further
increased. In order to appreciate the financial benefit, which registration
under Section 12A of the Income-tax Act, 1961 has ensured to the respondent,
the above disallowable items will have to be necessarily reckoned.
R.The
elaborate discussions made by the commission in this order clearly show that
the respondent got large tracts of land, many of them contiguous, in the
capital city of Bhubaneswar from the Government or its agencies at subsidized
rates. It got such land over a period of several years. Parts of these land
were earlier under encroachment by the respondent itself. Some parts were under
encroachment by others and the respondent incurred expenses and made such parts
of land encroachment-free. KIIT had also already built multi-storied buildings
for class rooms, compound walls etc. on such land. After persistent efforts and
fervent prayers made by authority of KIIT, some of these were later regularized
in the respondent‘s favour. The respondent also used the forest land which
under the OPLE Act are required to be distributed among the landless. The fact
that the respondent had started using several patches of land even before the
same were allotted would indicate its strong self-assurance that the same would
be allotted. The further fact that some of these were also allotted is
indicative of the benevolence of the State. If the Government had been of
unkinder disposition, KIIT would not have had the advantage of such large
tracts and contiguous plots/land for its campuses. Reference has been already
made to the mutual transfers. It has been observed by the Commission that all the land involved in such mutual
transfers, the leases of which were eventually transferred in favour of the
respondent, were adjoining the respondent‘s existing campus. Had the lessor
i.e. IDCO refused to make the transfers,
KIIT’s campus expansion programme would have got adversely affected. Large tracts of contiguous land used to
develop a large campus at one place has brought to be respondent tremendous
operational advantages. Finances availed from the Banks by mortgaging the
leasehold land have helped in the expansion of KIIT as an institution. The Commission has also noted that the tax exemptions availed by KIIT
have helped it utilise its surplus for the setting up, expansion, development
and growth of various institutions. In short, the largesse of the State as well
as the tax exemptions have had crucial roles in the evolution and growth of the
respondent and its several institutions. By any reckoning, the financial
benefits availed by the respondent through allotment of Government land and
availment of tax exemptions will have to be considered substantial. It has been
observed that the respondent got the
land from the Government and its agencies by making repeated efforts and
through determined pursuit. The respondent had at each point of time pleaded
before the Government and its agencies for help so that it could build up world
class institutions. The contents of the respondent’s correspondences with the
Government and its Agencies and the prayers for allotment and regularization of
land would by themselves show how badly the respondent needed such land. There
are also express admissions by the respondent itself that it would not be able
to build the University on such a large scale and of such admirable class but
for these land. The Commission has also referred to the litmus test laid down by the
Hon‘ble Supreme Court in the Thalappalam case. The test to determine
substantial financing is whether or not the non-Government organization could
have established itself but for such financing and whether or not it would
struggle to exist if such financing is withdrawn. It cannot be gain-said that KIIT
could not have easily become what it is today – a highly admired University –
but for the huge land at cheap rates which it got from the Government or its
agencies. No doubt, it cannot be said that withdrawal of these land would make KIIT
struggle to exist.
S.
The Commission has also referred to the judgement of the Hon‘ble Supreme Court in the
Thalappalam case wherein it was held that mere grants, subsidies, privileges
and exemptions as such could not be treated as public financing. The words
―mere‖ and ―as such‖ are important. In the present case, KIIT not only got land from the Government and its
agencies but also other grants and exemptions. Therefore, in the present case,
the grants and exemptions including tax exemptions cannot be considered ‗mere.‘
On the contrary, all the above will have to be considered together. We have
already referred to the decisions of the Hon‘ble Punjab and Haryana, Madras and
Odisha High Courts in which significance was attached to ―the public
function(s)‖ performed by an organization
as well as to grants received from the Government, irrespective of quantum, as
the test for deciding whether or not the organization could be treated as a
public authority as per the definition provided in Section 2(h) of the RTI Act,
2005. There can be no dispute that KIIT
is performing a public function. The Commission has made an elaborate discussion regarding the facts of
the respondent‘s case in the light of the judgements of the Hon‘ble Supreme
Court in the Thalappalam case and in the DAV College Trust case. It has clearly
emerged from such discussion that the financing / funding received by the
respondent Society KIIT from the
Governments and their agencies have proved to KIIT to be of solid worth, considerable value, of
real significance and of having significant material bearings and effects on
the respondent‘s establishment growth and continuing existence as an acclaimed
multi-disciplinary institution. But for such direct and indirect financing /
funding, the respondent would have had to
struggle, if such financing and fundings in the form of
land on lease at concessional and subsidised rates of grants and of tax
exemptions etc. are to be withdrawn.
Therefore, the Commission is of the considered
view that the respondent, M/s KIIT, is a public authority within the meaning of
Section 2(h)(d)(ii) of the RTI Act, 2005. In the light of the above, KIIT is declared as a public authority as per
Section 2(h)(d)(ii) of the RTI Act, 2005; and is directed to furnish the
required information to the appellant, as per his application in Form-A, within
30 days from the date of receipt of this order.
Analysis by
Pradip Pradhan
Appellant
M-9937843482
Email-pradippradhan63@gmail.com
Date- 18.9.21
