CDR not a public authority, says Central Information Commission

NEW DELHI: In response to right to information applications seeking information on the corporate debt restructuring (CDR) cell, a full bench of the Central Information Commission has ruled that it is not a public authority. Upholding the government's contention that the CDR Cell is not directly financed by the government, the CIC in its order ruled that the CDR Cell doesn't fall in the definition of public authority as described under section 2 (h) (i) and (ii) of the RTI Act 2005.

The matter came up when three RTI applicants - Shailesh Gandhi, Madhukar Ganpat Kukde and Nimish Agarwal approached the CIC after they were denied information. The information ranged from the total expenditure incurred by the CDR system and how much of it was financed by the public sector banks and IDBI, various audits of the CDR system to the final CDR packages approved between April 2012 and March 2014 etc.

A bench comprising information commissioners Sharat Sabharwal and Manjula Parashar went through the matter. In their order, the information commissioners, while ruling that the CDR Cell is not a public authority, added that since the CDR restructures debts running into crores of rupees, especially given by public sector banks, a mechanism to provide information regarding the CDR needs to be undertaken. Or the public would have to obtain the required information through the public sector banks, which are public authorities.

The Corporate Debt Restructuring ("CDR") mechanism is a voluntary non statutory mechanism under which financial institutions and banks come together to restructure the debt of companies facing financial difficulties due to internal or external factors, in order to provide timely support to such companies.

In all the RTIs filed, the CDR Cell had responded that it was neither estabtished nor constituted by or under the constitution or any other law made either by the Parliament or state legistature and it was also not created by notification issued or order made by the appropriate government.

In his arguments for declaring the CDR Cell as a public authority, Gandhi had argued that the CDR Cell, created by an RBI circular, has no independent legal status. "Also, as per the RBI circular, the initial finance was provided by lDBl, a pubtic sector bank, and more than l5 years of the subsequent finance is from public sector banks and institutions. Thus, it is a public authority as defined by section 2 (h) (i) and (ii) of the RTI Act 2005," was the argument.

According to Gandhi, the CDR cell despite being created by an RBI circutar, claims a virtual presence without accountability to anyone. lf such an argument is accepted, all government organisations could create such virtual cells and deny information and accountability.

Madhukar Ganpat Kukde, another appellant, said, "lf CDR Cell's contention that it is not a public authority is accepted, it would mean that it is neither accountable to Partiament nor audited by anyone."