Another aspect for determining substantial finance is whether the body, authority or NGO can carry on its activities effectively without getting finance from the government, according to the judges.
To bring further transparency in “public dealings and probity in public life”, the Supreme Court on Tuesday held that NGOs getting substantial funds directly or indirectly from the government fall within the ambit of the Right to Information (RTI) Act. A Bench led by Justice Deepak Gupta in the case, DAV College Trust and Management Society vs Director of Public Instructions, said: “If NGOs or other bodies get substantial finance from the government, we find no reason why any citizen cannot ask for information to find out whether his/her money which has been given to an NGO or any other body is being used for the requisite purpose or not.”
However, it said 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 as 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 gets a grant of Rs 5,000 from the government, though this grant may be 50%, it cannot be termed to be 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 financed,” the Bench stated.
Another aspect for determining substantial finance is whether the body, authority or NGO can carry on its activities effectively without getting finance from the government, according to the judges. “If its functioning is dependent on the finances of the government, there can be no manner of doubt that it has to be termed as substantially financed,” they added.
The apex court further said “in our view, ‘substantial’ 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 or 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 the land at a cheap price, would mean that it is substantially financed. Merely because the 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,” the SC said.
All colleges or associations running the colleges and schools in their appeals had claimed that they were NGOs and were not covered under the Act. They argued that the objective of the Act was to cover only government and its instrumentalities which are accountable to the government.