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explanations:public-authority

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explanations:public-authority [2018/06/01 15:00] – Shrawanexplanations:public-authority [2023/04/15 11:03] (current) – Shrawan
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 (i) body owned, controlled or substantially financed; (i) body owned, controlled or substantially financed;
 (ii) non-Government organisation substantially financed, directly or indirectly by funds provided by the appropriate Government” (ii) non-Government organisation substantially financed, directly or indirectly by funds provided by the appropriate Government”
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 ===== Interpretation of Public Authority ===== ===== Interpretation of Public Authority =====
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 At times when the Government nominees do not have a majority, it is claimed that the Government does not have control.  The plea that if Government nominees are not in complete control the organisation is not a public authority is flawed. It must be noted that the adjective ‘complete’ or ‘pervasive’ control is not mentioned. At times when the Government nominees do not have a majority, it is claimed that the Government does not have control.  The plea that if Government nominees are not in complete control the organisation is not a public authority is flawed. It must be noted that the adjective ‘complete’ or ‘pervasive’ control is not mentioned.
  
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 Where the Government either owns substantial stake, or has control over, or has given substantial finance, these are public authorities, directly covered under the Right to Information Act. The substantial finance can take into account tax-incentives, subsidies and other concessions like land as well. Where the Government either owns substantial stake, or has control over, or has given substantial finance, these are public authorities, directly covered under the Right to Information Act. The substantial finance can take into account tax-incentives, subsidies and other concessions like land as well.
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 By any norm, whenever over 51 percent of the investment in a body lies with any entity, it is said to be owned by that entity and the Company law also confirms this. The RTI Act mentions ‘owned’ ‘controlled’ and ‘substantially financed’ separately, hence these words have to be assigned some meaning not covered by ownership. It is apparent that the intention of the Parliament is to extend the scope of the right to other organisations, which are not owned by the government, but are financed by government funds or controlled by appropriate Government. By any norm, whenever over 51 percent of the investment in a body lies with any entity, it is said to be owned by that entity and the Company law also confirms this. The RTI Act mentions ‘owned’ ‘controlled’ and ‘substantially financed’ separately, hence these words have to be assigned some meaning not covered by ownership. It is apparent that the intention of the Parliament is to extend the scope of the right to other organisations, which are not owned by the government, but are financed by government funds or controlled by appropriate Government.
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 It may be noted that no word in any Act can be considered to be superfluous, unless the contradiction is such as to render a significant part meaningless, or it violates the Preamble. Therefore it becomes necessary to consider a situation where an entity may be controlled by Government without ownership or substantial finance like where they control the board of a trust. It may be noted that no word in any Act can be considered to be superfluous, unless the contradiction is such as to render a significant part meaningless, or it violates the Preamble. Therefore it becomes necessary to consider a situation where an entity may be controlled by Government without ownership or substantial finance like where they control the board of a trust.
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 Company Law gives significant rights to those who own 26 percent of the shares in a Company. No special resolutions may be passed unless 75 percent of the shareholders agrees. Thus, 26% holding represents control.  Company Law gives significant rights to those who own 26 percent of the shares in a Company. No special resolutions may be passed unless 75 percent of the shareholders agrees. Thus, 26% holding represents control. 
  
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 On the other hand, Section 2(6) of the Company law defines “associate company”, in relation to another company as: (6) “associate company”, in relation to another company, means a company in which that other company has a significant influence, but which is not a subsidiary company of the company having such influence and includes a joint venture company. On the other hand, Section 2(6) of the Company law defines “associate company”, in relation to another company as: (6) “associate company”, in relation to another company, means a company in which that other company has a significant influence, but which is not a subsidiary company of the company having such influence and includes a joint venture company.
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 <note>Mendel, Toby (personal communication, May 13, 2016) agrees with the conclusion here i.e. 20-25% but not for this reason. He suggests that this is not a business situation. It is about meeting a threshold of public funding which then attracts obligations.</note> <note>Mendel, Toby (personal communication, May 13, 2016) agrees with the conclusion here i.e. 20-25% but not for this reason. He suggests that this is not a business situation. It is about meeting a threshold of public funding which then attracts obligations.</note>
  
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 It, therefore, appears reasonable to have a threshold representing 26 percent of the equity.  Perhaps 20 percent of the running expenses could be considered as ‘substantial finance’. To obviate the problem which very small organizations may face in meeting the requirements of the Right to Information Act, it may also be reasonable to accept that if an NGO receives an amount - say less than 2 million - it would not be considered as substantial finance.  It, therefore, appears reasonable to have a threshold representing 26 percent of the equity.  Perhaps 20 percent of the running expenses could be considered as ‘substantial finance’. To obviate the problem which very small organizations may face in meeting the requirements of the Right to Information Act, it may also be reasonable to accept that if an NGO receives an amount - say less than 2 million - it would not be considered as substantial finance. 
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 This would be indirect finance. This would be indirect finance.
  
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 It must be noted that the law does not cover entities which exercise public functions unless they are controlled or substantially financed by Government. A private entity which is not financed or controlled by government is not a ‘public authority’ as defined by this act. Public utilities like electricity distribution companies, or those providing and maintaining roads are not ‘public authorities’ as defined by the law unless it can be shown that they are controlled or substantially financed by the government. Many Rights to Information Act users feel that regulatory control should be considered as control. This view is generally not accepted, since almost all bodies are subject to certain regulations, and this would be too wide an interpretation of the law. It must be noted that the law does not cover entities which exercise public functions unless they are controlled or substantially financed by Government. A private entity which is not financed or controlled by government is not a ‘public authority’ as defined by this act. Public utilities like electricity distribution companies, or those providing and maintaining roads are not ‘public authorities’ as defined by the law unless it can be shown that they are controlled or substantially financed by the government. Many Rights to Information Act users feel that regulatory control should be considered as control. This view is generally not accepted, since almost all bodies are subject to certain regulations, and this would be too wide an interpretation of the law.
  
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explanations/public-authority.txt · Last modified: 2023/04/15 11:03 by Shrawan