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NGO’s ‘Substantially Financed’ By Government Will Come Under The RTI Act, 2005

Debargha Mukherjee_JudicateMe


This Blog is written by Debargha Mukherjee from Indian Law Society’s Law College, Pune. Edited by Harsh Sonbhadra.



The Right to Information Act, 2005 was enacted to bring transparency in public dealings and righteousness in public life. It was regarded as democracy necessitates an informed community and transparency of information which are essential to its operative. It was to combat corruption and hold Government authorities accountable to the common people. Taking cognizance to the motive of the act, the Hon’ble Supreme Court of India in the case of D.A.V. College Trust and Management Society v. Director of Public Instructions [1] marked that Non-Governmental Organisations which receive sizable funds from the Government ought to unveil vital data and information to the general mass who apply for the information under the said act. This was held because the two-judge bench comprising of Hon’ble Justice Deepak Gupta and Hon’ble Justice Aniruddha Bose observed that such NGOs fall within the scope of “public authority” as defined u/s. 2(h) of the Right to Information Act, 2005. Considering the “substantial financing” part which can be both direct and indirect, the bench held that it does not inevitably have to mean a majority portion (more than fifty percent) & no rigid and compulsory rule can be laid down in this regard. The Hon’ble Court cited an instance of land in a city if allotted without a penny or on huge concessions to public bodies like educational institutions, hospitals, etc., would be constituted as substantial financing. The establishment of such an institution, if it is reliant on the generosity of the Government in allocation the land at a minimal or discounted price, would be counted as substantially financed. The bench observed that simply because the financial involvement of the Government comes down during the actual funding, will not in itself mean the indirect finance given is not to be taken into contemplation.


If NGOs or other bodies are financed substantially from the State, there exists no reason as to why a citizen of the nation would not possess a right to ask for the requisite information as given under the RTI Act of 2005. A citizen has the right to find out if his/her money which has been given to an NGO or any other like bodies is being used for the requisite purpose or not. This facilitates transparency in the system which is an essential; factor for the continuance of an active democracy in a country like India. The sole purpose of enforcing the said act was to inform and give citizens the right to ask about the functioning of the State. There might be circumstances where the revelation of information would likely cause a conflict in interest with other public authorities, which include efficient operations of the Government, optimum usage of limited fiscal resources, and preservation of confidentiality of sensitive information. However, the Act marks it necessary to harmonise and maintain these differing interests meanwhile preserving the paramountcy of an ideal democracy, and thus it is necessary to make available certain material to the citizens who wish to have it. That being said, by including substantially financed NGOs and other like bodies within the ambit of the RTI Act, 2005, the Hon’ble Supreme Court construed the intention and motive of law-makers of the act and ensured transparency on part of the State and the bodies.


The development which has been bought by the Apex Court, would result in these NGOs maintaining proper records and entries of their activities as laid down under the Act, which would be accessible to every citizen of the nation who desires to know the information. Also, the Non-Government Organisations sector stands for enhancing transparency on the part of both the Government and the Corporates. The Sector needed to set an example of its work, by following these principles and not hide behind the legal doors. This shall develop an insight into the minds of the general public that the concerned sector is transparent, which would routinely boast people’s contribution to the NGOs and other like bodies. The development would also make it compulsory to all such substantially Government financed NGOs to follow Chapter II, Section 4 of the Right to Information Act, 2005, which shall further strengthen the transparency. The RTI Act will disperse the darkness of silence and privacy, and squalls of corruption, ensuring and promoting accountability in the governance of the Non-Governmental Organisations and other like bodies.


The Apex Court’s bench supposed that the bodies and NGOs stated in the Principle Act as ‘public authority’ are in addition to those established or constituted by/ under the Constitution of India, 1950, any other law made by Parliament, any other law made by the state legislature and by the notification issued or order made by the appropriate government. As Section 2(h) of the Act includes expressions such as ‘means’ and ‘includes’, the Court observed ‘means’ is prima facie restrictive, while ‘includes’ is extensive. When both the expressions are used, they afford an exhaustive explanation, and hence both these words should be given equal emphasis and none could override each other.

It was stared that the principle of “purposive construction of the statute” is a well-recognised principle incorporated in our jurisprudence which endorses the Court to place itself in the chair of the law-maker or the Legislature, and provisions of an act ought to be interpreted in a way which safeguards the objective of the act, or the law-maker. The Language of the Act is to be followed; the court cannot construe it by its understandings if it does not have a dual interpretation. Nevertheless, if a statute can be interpreted variedly, the Courts ought to refer to the objects and probable reasons and interpret the true meaning as envisioned by the statute frame workers. Thus, the bench claimed societies which are neither owned by the Government, nor controlled by authority, as NGOs, and if they were financed substantially, they fall within the realm of the Right to Information Act, 2005.

The burden to prove that an NGO or alike body is substantially financed directly or indirectly by the concerned Government would ideally lie on the applicant who seeks the information of the same under the RTI Act, 2005. However, an NGO or alike body is free to establish it is not, depending on case to case.


The meaning of “public authority” was well dealt with in the case of Thalappalam Service Cooperative Bank Ltd. V. State of Kerala [2]. The Hon’ble Supreme Court whilst dealing with Section 2(h) of the RTI, 2005, mentioned that the legislature intended to embrace only those categories, which are specifically included unless the context of the Act requires otherwise. As mentioned earlier, the Hon’ble Court interpreted usage of expressions of ‘means’ and ‘includes’ which has been stated evidently in Delhi Development Authority v. Bhola Nath Sharma [3], the conclusion being it indicates an exhaustive explanation of the meaning which, for the purposes of the Act. However, in the present scenario, the word “means” has been used in the former portion of Section 2(h) whereas the word “includes” has been used in the latter portion of the above-mentioned Section which means that they have not been used together.

The Hon’ble Supreme Court of India in the case of D.A.V. College Trust and Management Society v. Director of Public Instructions [4] observed that after the end of clause (d) of the said section, there is a comma & a big gap follows, which is then continued with the expressions “includes any”. The Hon’ble Court held that the second or the latter portion of the definition in Section 2(h) of the act is an inclusive clause which directs the motive of the Law-makers to cover bodies other than those mentioned in the former portion. By insertion of an inclusive clause in the definition, the Parliament intended to add more categories to the first part in the definition of “public authority”. This stance was also taken by the Hon’ble Supreme Court in Thalappalam Service Cooperative Bank Ltd. V. State of Kerala [5]. Therefore, the Hon’ble Court had no doubts in holding an NGO which is financed substantially, either directly or indirectly, as a public authority amenable to the provisions of the Right to Information Act, 2005.


The Hon’ble Supreme Court of India took a just stand by the decision of including NGOs which have been substantially financed within the horizon of the Right to Information Act, 2005. Following the principle of purposive construction of the statute, the Hon’ble Court interpreted the case keeping in mind the intention of the legislature while implementing the act. The general public should know about the policies of the State when supporting the NGOs and other like bodies which are essential in our societies to maintain transparency which would prevent scams to a great extent. The term ‘NGO’ has not been defined under the RTI Act; however, it has been seen over time, that the expression has got its meaning which can be seen in the context when used in the Act.  When viewed on the part of being “substantially financed”, it ought to be observed that every case pertaining to this issue would be different, and whether an NGO or alike body is substantially financed by the State would always be a question of fact, with varying results and views in each case. The only notion which has to be borne while interpreting the case is the ultimate intention of the legislature while drafting the RTI act which empowers citizens to have access to the information which is in control of public authorities.


Non-Governmental Organisations or NGOs provide effective and efficient governance in India and are an integral part of the administrative machinery. They are vital groups that support the Government in the social and political spheres, also in the implementation of government policies which include varying areas like human rights, health, environment, welfare schemes, public distribution systems, etc. They provide services similar to those provided by the Government, helping out the common masses of the nation. That being said, their transparency and accountability on their working and other activities need to be monitored and ensured appropriately as NGOs have faced series of scams and scandals in recent times that have led the beneficiaries and supporters to question their trust in these organisations. Despite receiving finances from the State, several NGOs and like bodies were avoiding scrutinies of their functioning under the RTI Act, on the grounds of not being Public Authorities. However, these scenarios are likely to end as the Hon’ble Supreme Court of India has clarified that an NGO or other like bodies if substantially financed by the Government would come within the ambit of the RTI Act of 2005.


[1] https://indiankanoon.org/doc/175087359/

[2] https://indiankanoon.org/doc/37517217/

[3] https://indiankanoon.org/doc/15173/

[4] https://indiankanoon.org/doc/175087359/

[5] https://indiankanoon.org/doc/37517217/

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