May 2021 Vol.58 No.11 - National cooperative ...
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Vol. 58 No. 11 May 2021
The
Vol. 58 No. 11 MAY 2021
Editor-in-Chief
Dr Sudhir Mahajan
Editor
Sanjay Kumar Verma
Published by
National Cooperative Union of India
Tel: 011-49407837, 41811157, 40793299
E-mail : ncui.pub@gmail.com
07 Rupala asks cooperatives to enter into food processing
Subscription Rates 09 Rationale of RBI’s views on Dividend Payment
Life - Rs. 5000
Annual - Rs. 500
13 RBI restrictions on Dividend Payment
16 RBI allows banks to pay dividend
For Articles
Contact: Sanjay Kumar Verma 17 Gujarat Dy CM releases Amin’s biography
(Mobile No. 9871146034)
18 Online Cooperative Training
20 Divulging DPC minutes under the RTI Act
production support by
Swati Communications 24 Atmanirbhar Bharat through Coopreneurship
T: 011-41659877, 09213132174
26 India is burning & so is humanity
Opinions expressed in ‘The Cooperator’ 27 Identification and Measurement of Digital Transactions
do not reflect views of the National
Cooperative Union of India 31 lesfdr fodkl dk ekWMy gS lgdkfjrk
(Cover Image: Unsplash) 34 In News
Total PAGES 36 MAY 2021 The Cooperator 3
4 The Cooperator MAY 2021
EDITORIAL
Engaging cooperatives to secure life
and livelihood of citizens
When oxygen shortages were reported from various parts of the country for a growing pool of
patients under oxygen support during the second wave of Covid pandemic, fertilizer cooperative
IFFCO decided to set up four oxygen plants in UP, Gujarat and Odisha. This galvanized other
cooperatives. Soon KRIBHCO sprung into action and decided to produce oxygen at its two plants.
Banas dairy in Gujarat set up an oxygen plant in a short span of just 72 hours to help a district
medical college tide over oxygen shortage. In the wake of increasing number of Covid patients in
Kozhikode district, Uralungul Labour Contract Cooperative Society started installation of oxygen
plants. Campco, a cooperative of areca growers in Karnataka, decided to set up an oxygen pant
in Dakshin Kannada district which will also supply oxygen to the neigbouring state of Kerala. To
improve logistics, Gujarat’s Registrar of Cooperative Societies directed all district cooperative
milk unions throughout the state to arrange oxygen cylinders in their respective areas. Besides
augmenting the supply of medical oxygen in the state of emergency, cooperatives also responded
in many other ways to help the nation tide over the crisis posed by the second wave. For instance,
NCDC pledged to lend Rs 10,000 crore to cooperatives for setting up new healthcare facilities, or
upgrade the existing ones.
Last year also, during the first wave of Covid pandemic, AMUL, MILKFED, NAFED, MARFED
and a host of other cooperative organizations had provided necessary services to the people despite
the supply chain being terribly disrupted by the lockdown. Almost all the cooperatives during that
period had mobilized their members who reached out to the people in distress and provided them
food and other critical goods such as masks and sanitizers.
Why cooperatives are so proactive in the event of a community crisis! It’s because cooperatives
are community based organizations and thus have strong roots in the communities. In fact,
‘concern for community’ has been accorded as one of the seven cooperative principles making
it obligatory for the cooperatives to serve community needs. History acknowledges the vital
contribution of cooperatives in disaster management across the world, be it of any nature or
scale. Indian cooperatives have also time and again proved their worth in rescuing the community
from large scale crises. Kerala has been able to handle the pandemic quite effectively and keeping
the mortality rate very low despite high infection rate also because there is a strong presence of
cooperatives in the state, including in the healthcare sector.
We have more than eight lakh cooperatives in the country spread across about 90% of the villages
and are engaged in almost all the areas of socio-economic activities, including healthcare. It’s
time the government roped in the cooperatives in tackling the pandemic to secure the life and
livelihood of its citizens and also engaged them in building critical health infrastructure in the
country n
MAY 2021 The Cooperator 56 The Cooperator MAY 2021
NCUI Organises National Consultation Meet
A
t a national consultation web-
inar on ‘Separate Adminis-
trative Structure for Coop-
eratives’ organized by NCUI on 10th
May, 2021, Shri Parshottam Rupala,
Union Minister of State for Agricul-
ture said that cooperatives have a big
role in creating Atmanirbhar Bharat.
Highlighting some of the issues,
he said there is a need to involve
cooperatives actively in the field of
food processing where they can suc-
cessfully diversify their activities.
Speaking further, he stressed on the
need for strengthening primary agri-
cultural cooperatives.
of cooperative organizations all over Shri B. Subrahmanyam, Managing
NCUI President Shri Dileep Sang- the country. Besides, he called for Director of National Federation of
hani, who chaired the meeting, said strengthening NCUI – the apex body State Cooperative Banks said there
that this year’s budget proposed of cooperatives in the country – so that are three alternatives before us –
creating an administrative struc- it can effectively voice the concerns either we should create a separate
ture for multi-state cooperatives to of the cooperatives in the country. ministry of cooperatives, or con-
facilitate ease of doing business. stitute a department of cooperation
He thanked Hon’ble Minister Shri Shri G H Amin, Chairman of Gujarat with the finance ministry, or thor-
Rupala for his efforts in convincing State Cooperative Union and oughly review the existing coopera-
the government to accept this long- former President of NCUI, while tion department.
pending demand of the cooperative highlighting the need for supervi-
sector and said such administrative sion of multi-state cooperatives and Shri K. K. Ravindran, Managing Di-
structure will solve the managerial enhancing their business potential, rector of NCARDB Federation said
problems of cooperative societies. also endorsed the idea of setting up that cooperatives should be provided
He exuded optimism that this struc- a separate ministry or department of same concessions and privileges to
ture will meet the aspirations of At- cooperatives. improve ease of doing business.
manirbhar Bharat, and will facilitate
in doubling of farmers’ income. Shri V P Singh, President of Delhi Dr K. K. Tripathy, former Director
State Cooperative Union and a for VAMNICOM and currently Fi-
A number of high level functionar- Member of NCUI Governing nancial Advisor to the Government
ies from the cooperative sector, who Council said that the government of India said that separate divisions
were present at the meeting, de- should ensure that the Constitu- related to IT, innovation, interna-
manded that the government should tional Amendment Bill is passed tional programmes, plan, policy and
resolve pending issues related to the by all the state legislatures. He also programme may be created under
implementation of the 97th Consti- said that a Model Law should be the present cooperation department.
tutional Amendment Bill so that co- formulated which take into view the
operatives can work as autonomous issues pertaining to Constitutional Reformulating national policy on
organizations. It needs to be recalled Amendment Bill, and creation of cooperatives, providing same fa-
here that Gujarat High Court had administrative structure for multi- cilities/privileges to cooperatives
stayed the implementation of the state cooperatives. He added that as given to corporates for ease of
Bill, and the matter is now pending a committee should be constituted doing business, need for registration
in the Supreme Court. by the government to consider the of FPOs under Cooperative Societ-
above-mentioned issues. ies Acts, etc. were some of the other
KRIBHCO Chairman and former important suggestions that came up
President of NCUI Dr Chandra Pal Shri H.K. Patil, former Minister during the meeting.
Singh Yadav asked for setting up a in the Karnataka Government said
separate ministry or department for that such administrative structure Dr Bijender Singh, Vice President,
cooperatives so as to avoid overlap- should see that the autonomy of the NCUI proposed vote of thanks on
ping, and streamline the functioning cooperatives is not compromised. the occasion n
MAY 2021 The Cooperator 78 The Cooperator MAY 2021
Rationale of RBI’s views on
Dividend Payment
Bhima Subrahmanyam*
Cooperative Banks need to comply with applicable minimum regulatory capital requirements
while declaring dividend on equity shares.
T
he Reserve Bank of India on equity shares from the profits Cooperative Societies and Reserve
(RBI) announced dividend for the financial year ended March bank of India (RBI). These statu-
payment norms for both 31, 2021, subject to the quantum of tory authorities exercise powers to
commercial banks and co- dividend being not more than fifty lay down restrictions on payment of
operative banks on 22 April 2021. percent of the amount determined dividends based on the Acts/Rules/
Cooperative banks include rural as per the dividend payout ratio. Byelaws.
cooperative banks namely State
Cooperative Banks (SCBs) and As is commonly known to all, ‘divi- According to the provisions of a
District Central Cooperative Banks dend’ means the amount paid, out of State Cooperative Societies Act,
(DCCBs) as well as Urban (primary) the profits of a cooperative society, “No society shall pay dividend to
Cooperative Banks (UCBs). The to its member, proportionate to the its members at a rate exceeding 15
conditionality imposed in the year shares held by him in such society. per cent except with the prior sanc-
2020 not to pay dividend has been The payment of dividend depends tion of the Registrar.” As per the
relaxed and the cooperative banks upon the provisions laid down in provisions of Multi State Coopera-
have now been permitted to pay the respective state cooperative tive Societies Act, 2002, no part of
dividend on equity shares from the societies’ Acts and also Multi State the funds, other than net profits, of
profits of the financial year ended Cooperative Societies Act, 2002. a multi-state cooperative society
March 31, 2021 as per the extant The provisions in the matter of shall be distributed by way of bonus
instructions. Commercial banks payment of dividend are also linked or dividend or otherwise among the
have been allowed to pay dividend to the directions by Registrar of members; payment of dividend to
* Managing Director, National Federation of State Cooperative Banks, (NAFSCOB)
MAY 2021 The Cooperator 9the members on their paid-up share approved securities) in any case iv. The Reserve Bank should not
capital shall be as specified in the where adequate provision for have placed any explicit restric-
bye-laws; and the bye-laws of a such depreciation has been made tions on the bank for declaration
multi-state cooperative society may to the satisfaction of the auditor of dividends.
provide for distribution of patronage of the banking company; (iii)
bonus to its members in consonance the bad debts, if any, in any case The RBI also issued guidelines on the
with the transactions of a member where adequate provision for quantum of dividend payable subject
with the society. It has been under- such debts has been made to the to compliance of certain requirement
stood that income-tax shall not be satisfaction of the auditor of the and also penalties for violating the
payable by an assessee, who is a banking company. guidelines. These guidelines permit-
member of a co-operative society, ted banks to declare dividends subject
in respect of any dividends received Declaration of dividends by to a ceiling of 33.33% on the dividend
by him from the society. banks, guidelines by RBI & payout ratio, without obtaining the
related changes prior approval of RBI, subject to the
A view has also been expressed fulfilment of the laid down criteria.
by some elected representatives of The policy approach adopted by No new amendments in Section 15
rural cooperative banks that any the RBI with regard to payment have been carried out in The Banking
restrictions imposed on dividend of dividends by banks has been Regulation (Amendment) Act,2017.
payouts affect the financial health reviewed from time to time in However, RBI reviewed the policy
of grassroots level agricultural consultation with the Standing approach again in 2005 based on the
cooperatives, hamper their growth, Technical Advisory Committee on experiences gained and decided to
and therefore voiced against the Financial Regulation (STACFR). grant general permission to banks to
decision of RBI in 2020. RBI decided that the regulatory declare dividents subject to compli-
focus with regard to payment of ance of certain laid down guidelines.
Let us now understand the provi- dividend by banks should shift from The most important guidelines on
sions of The Banking Regulations ‘quantum of dividend’ to ‘dividend payment of dividend, quantum of
Act, 1949. Section 15 of the Act payout ratio’. Accordingly, revised dividend, conditionalities, etc. are
deals with the ‘restrictions as to guidelines on eligibility criteria for extracted and reproduced below for
payment of dividends’ as follows: declaration of dividends payable by better appreciation of the issue.
banks without prior approval have
■■ No banking company shall pay been issued by RBI for the first time Eligibility criteria (2005) for
any dividend on its shares until all after 1995, on 23 April 2004 to all declaration of dividend
its capitalised expenses (including commercial banks. The relevant
preliminary expenses, organisa- paras of eligibility criteria, quantum Only those banks, which comply
tion expenses, share-selling com- of dividend payable, interim divi- with the following minimum pru-
mission, brokerage, amounts of dend, etc. have been extracted and dential requirements, would be
losses incurred and any other item reproduced below: eligible to declare dividends:
of expenditure not represented by
tangible assets) have been com- Eligibility criteria (2004) for i) CRAR of at least 9% for the pre-
pletely written off. declaration of dividend ceding two completed years and
the accounting year for which it
■■ Notwithstanding anything to i. The bank should have CRAR of proposes to declare dividend.
the contrary contained in sub- at least 11% and Net NPA of less ii) Net NPA of less than 7%.
section (1) or in the Companies than 3%.
Act, 1956 (1 of 1956), a banking ii. The bank should comply with If any bank does not meet the above
company may pay dividends on the provisions of Sections 15 CRAR norm but is having a CRAR
its shares without writing off (i) and 17 of the Banking Regula- of at least 9% for the accounting
the depreciation, if any, in the tion Act, 1949. year for which it proposes to declare
value of its investments in ap- iii. The bank should comply with the dividend, then it would be eligible
proved securities in any case prevailing regulations/ guidelines to declare dividend provided its Net
where such depreciation has not issued by RBI, including creating NPA ratio is less than 5%.The divi-
actually been capitalised or oth- adequate provisions for impair- dend payout ratio shall not exceed
erwise accounted for as a loss; ment of assets and staff retire- 40%. The Reserve Bank will not en-
(ii) the depreciation, if any, in the ment benefits, transfer of profits tertain any application for a higher
value of its investments in shares, to Statutory Reserves and Invest- dividend payout ratio than the one
debentures or bonds (other than ment Fluctuation Reserve, etc. for which the banks qualify.
10 The Cooperator MAY 2021RBI further directed the banks to to meet the applicable minimum
ensure that the board approved RBI guidelines issued to the regulatory capital requirements
policy be put in place based on cooperative banks may, in the after dividend payment. While de-
these guidelines with regard to present circumstances, be viewed claring dividend on equity shares,
deciding on the proposals for de- as part of the overall strategy it shall be the responsibility of the
claring dividend after taking into to prevent them from declaring Board of Directors to inter-alia
account the interim dividend paid, dividends without actually consider the current and projected
the Annual Financial Inspection considering their financial capital position of the bank vis-à-vis
findings of the Reserve Bank with strength. the applicable capital requirements
regard to divergence in identifica- and the adequacy of provisions,
tion of NPAs, shortfall in provision- profit figures, a huge shortfall in taking into account the economic
ing, the auditors’ observations, the provisioning against their impaired environment and the outlook for
Basel II capital requirements, and assets, and have declared a profit or profitability.
the bank’s long term growth plans, dividend in violation of the norms
in the interests of all stakeholders. laid down by the RBI. The decision with regard to the
The bank should comply with the payment of dividend is always
provisions of Sections 15 and 17 of It further observed that the eligibil- taken by the General Body of a co-
the Banking Regulation Act, 1949. ity criteria laid down have not been operative society as recommended
complied with by SCBs and DCCBs by the Board of Management
Based on the guidelines released by while declaring dividend. within the statutory provisions and
RBI to commercial banks, NABARD framework laid down by the statu-
issued circular to that extent to all Based on further review of norms, tory authorities/Act and Rules. The
the Registrars of Cooperative Soci- guidelines, experiences and prac- general body appreciates the fact
eties in May 2004 with regard to the tices adopted by the cooperative that the guidelines issued by RBI
declaration of dividends by SCBs banks, the policy approach has been and NABARD are no doubt in the
and DCCBs, reemphasising the reconsidered by the RBI from time form of well-considered advice and
shift from ‘quantum of dividend’ to to time. RBI, on a serious reconsid- in the interests of stakeholders. It
‘dividend payout ratio’. eration and in view of the ongoing also appreciates that there is always
stress and heightened uncertainty a relationship between declara-
This means the payment of dividend on account of Covid-19 in 2020, tion and distribution (payment) of
by cooperative banks shift from the was of the strong view that it is very dividend to the members and their
percentage of dividend payable important and also imperative that commitment and longer association
in a year to the net profit earned banks continue to conserve capital with the society.
during that year. The criteria for to support the economy and absorb
declaration of dividend by SCBs/ losses. “In order to further strength- Against this background, the
DCCBs vary from the criteria pre- en the bank’s balance sheets, while permission granted by RBI to the
scribed for commercial banks. They at the same time support lending cooperative banks to pay dividend
include: i) the banks’ NPAs should to the real economy, it has been on equity shares from the profits of
not be more than 5% of net loans decided that banks shall not make the financial year ended March 31,
& advances outstanding as on 31 any dividend payment on equity 2021 as per the guidelines/ instruc-
March of that related year, ii) the shares from the profits pertaining to tions is in the appropriate direction.
minimum CRAR of 5% was sug- the financial year ended March 31, The guidelines issued to the coop-
gested to be fixed (in 2004) for the 2020”, according the circulars dated erative banks may, in the present
purpose of deciding the dividend, 17 April 2020 and 4 December 2020 circumstances, be viewed as part of
iii) the dividend payout ratio should released by RBI. the overall strategy to prevent them
not exceed 20%., iv) the banks with from declaring dividends without
accumulated losses are not allowed While reiterating the need for co- actually considering the overall
to declare dividend. operative banks to conserve capital financial strength and then ensure
to support the economy and absorb their financial strength. As has been
The assessment by NABARD on losses, RBI vide circular dated 22 rightly advised by RBI, the Board of
the practices adopted by SCBs April 2021 permitted cooperative Directors of cooperative Banks need
and DCCBs in 2005, in declaring banks to pay dividend on equity to assume the prudent responsibility
dividends, according to sources shares from the profits of the finan- to comply with applicable minimum
from NABARD, revealed that a cial year ended March 31, 2021 as regulatory capital requirements
few banks have adopted incor- per the extant instructions. RBI also while declaring dividend on equity
rect procedure leading to incorrect added that all banks shall continue shares n
MAY 2021 The Cooperator 1112 The Cooperator MAY 2021
RBI restrictions on Dividend
Payment
Arvind Kumar Srivastava*
Are RBI restrictions on payment of dividend by cooperative banks justified?
T
he shareholders of an organi- country. While the shareholders of establishment of Central Coopera-
zation enjoy many privileges a company are primarily interested tive Banks (CCBs) at district level
like voting rights on impor- in the financial profit and increased in many states. These CCBs got
tant decisions, participation market value of their share, the itself affiliated to State Coopera-
in the annual general meeting of members of cooperatives being the tive Bank registered at State level
shareholders, etc., but more im- user of services of cooperatives have to cater to their (includes affiliated
portantly a sense of ownership in greater interest in the organization. societies) financial requirements.
the organization. The shareholders The profitability and sustainability In other states, the primary coop-
are the most important stakeholder of the cooperative society are of far erative societies became member
having keen interest in the financial greater importance to members than of State Cooperative Banks and
performance of the organization. In a company shareholder. availed financial services directly.
case of a company listed on the stock The development also witnessed
exchange, the value of its share on the The cooperative societies in the establishment of Primary Credit So-
stock exchange provides some indi- country were established at the cieties, largely in urban areas, which
cation of its performance. However, village level primarily to take care catered to the financial requirements
the profit earned by an organization of the credit requirements of agri- of individuals who belonged to the
and the consequent declaration of culture. Later on, those engaged in lower strata of the society. All these
dividend is the ultimate test for other economic activities also orga- cooperative societies are registered
shareholder about strong financial nized themselves into cooperative under State Cooperative Societies
performance of the organization. societies. Since economic activities Acts of the state, where they operate.
require financial support, the co- An important provision of the State
There is a great deal of differ- operative societies federated them- Cooperative Societies Act requires
ence between the shareholder of a selves to establish a bank at district societies to conduct Annual General
company and cooperatives in the level or state level. This resulted in Meeting of members to approve the
* General Manager (Retired), NABARD
MAY 2021 The Cooperator 13financial results. The approval of Fund and Agriculture Credit Stabi- 2020. In this connection, it must
dividend payment is an important lisation Fund by Rural Cooperative be kept in view that most of com-
agenda of these meetings. Since Banks. It would suffice to state that mercial banks have issued shares to
a major chunk of members do not the State Acts provide for adequate public. The shareholding in a com-
possess great managerial and finan- safeguards with regard to payment mercial bank is a matter of choice
cial acumen, payment of dividend of dividend by cooperative banks. – a financial decision. The listing
by cooperative societies serves as of their shares on stock exchanges
the most important evidence of Notwithstanding this, the protec- provides an opportunity to share-
smooth functioning and retains their tion of depositors’ interest has holders to encash the value of their
confidence in the societies. forced regulatory/ supervisory shares – even secure some capital
authorities to issue guidelines to appreciation. Further, these being
The importance of payment of be complied with by cooperative listed entities; they publish their
dividend in the cooperative frame- banks for payment of dividend. financial results on quarterly basis,
work has been recognized for long. There have been concerns because while there is no such stipulation in
Appreciating its criticality to the of availability of limited sources case of cooperative banks. The same
cooperative structure, law makers for augmenting their capital and the does not hold good for a shareholder
did not consider it as directly related legislative stipulation (Section 11 of in a cooperative bank. The shares are
to banking activities. It was for Banking Regulation Act, 1949) of held by individuals and cooperative
this reason that the provisions in requirement of a paltry sum of Rs. institutions primarily because of
the Banking Companies Act, 1949 1 lakh as minimum value of paid up linking of borrowings to amount
(Section 15) dealing with payment capital and reserves for cooperative of share held by them. Further, the
of dividend, were not made applica- banks. The guidelines require coop- byelaws of Cooperative Societies
ble to cooperative banks in the year erative banks to ensure compliance Acts/ Rules do not generally provide
1966 when these banks were brought with liquidity requirements (Cash for refund/ transfer of shares. The
under regulatory fold of the Reserve Reserve Ratio and Statutory Li- cooperative banks publish their ac-
Bank of India. As a consequence, the quidity Ratio), capital requirements counts on annual basis and generally
cooperative banks have continued to (Capital to Risk Weighted Assets approve payment of dividends in the
make payment of dividend to their Ratio) and operational benchmarks annual general meeting conducted
members (both individuals and co- relating to provision and level of thereafter. The receipt of dividend by
operative societies) after compliance Non Performing Assets (NPA). shareholders of a cooperative bank
with provisions of the State Coop- Suggestions have also been made provides them the confidence both
erative Societies Acts/Rules. to restrict dividend payout ratio to about the financial performance and
20% of profit during any year for management of the bank. Dividend
It would be worthwhile to note the rural cooperative banks. is also an important tool to maintain
provisions in the State Acts to appre- the goodwill, faith and reputation of
ciate that a lot of importance has been It is in this backdrop that one has the bank, which is even more impor-
accorded to creation of reserves and to examine the RBI instructions tant in case of a cooperative bank.
making adequate provisions before (RBI/2019-20/218 DOR.BP.BC. Needless to add, dividend from a
dividend is declared. For example, No.64/21.02.067/2019-20 dated 17 cooperative bank is a good source
Rajasthan State Cooperative Societ- April 2020) issued to commercial of income for affiliated cooperative
ies Rules, 2003 (Rules 69 and 70) banks and cooperative banks in the societies and individual members.
provide for deductions like financial aftermath of Covid pandemic. The Many cooperative societies also
expenses, operating expenses, etc. to banks were restrained from making look forward to decisions by bank on
arrive at distributable profits, trans- any further payout in respect of profit such matters and follow the same for
fer of 25% of profit to Reserve Fund for the financial year ending March their own members. RBI guidelines
(Section 48 of the Act), prescribing 2020. The same was reiterated by proved to be a great dampener to the
manner of distribution of profits and RBI circular dated 04 December entire cooperative credit structure.
stipulating a ceiling of 10% of the Incidentally, it may be noted that
value of shares as dividend payment. some commercial banks paid divi-
Similarly, Telengana Cooperative The cooperative banks should dend (interim) for the year 2019-20.
Societies Rules (Rule 34) restricts a take a realistic view of their (HDFC Bank, Annual Report -
cooperative society to utilize its net requirements of reserves and 2019-20, Page 310)
profit unless the audit certificate cer- any distribution of profit by way
tifying the amount of net profit has of dividend must pass not only The issue of payment of dividend
been issued by the Chief Auditor. The the test of members’ aspiration by banks has hit headlines again
Rules also provide for transfer of at but also bank’s stability. with RBI instructions dated 22
least 40% of profit towards Reserve April 2021 permitting commercial
14 The Cooperator MAY 2021banks to pay dividend upto 50% of ity provided by law. A query filed are not yet declaring their position
the amount determined as per the under Right to Information Act in of NPA on system based calcula-
dividend payout ratio prescribed by July 2020 seeking RBI response tion. Under these circumstances,
existing RBI guidelines. An impor- on such an instruction by RBI to the exact requirement of provision
tant component of this instruction is Cooperative Banks in the light of is anybody’s guess. The limited
permitting cooperative banks to pay existing RBI instructions only to maneuverability for raising capital
dividend as per extant instructions. scheduled commercial banks and resources is another handicap for
This brings us to the question of extant provisions of the Act, did not these banks. Strangely, the require-
instructions governing payment of elicit requisite response. ment of minimum value of paid-up
dividend by cooperative banks. It capital and reserves for cooperative
would be worthwhile to recall that In this background, RBI guidelines banks continue to remain pegged at
provisions relating to payment of permitting payment of dividend by Rs. one lakh, stipulated more than
dividend in the Banking Regulation cooperative banks is a welcome half a century ago. The distressing
Act (Section 15) were not applica- step as it upholds the cooperative fact is that a good number of coop-
ble to cooperative banks prior to the principles and reposes faith in the erative banks are unable to comply
promulgation of Banking Regulation safeguards available under Cooper- even with this requirement.
Amendment Act, 2020. The amend- ative Societies Act. However, as per
ment has been notified for rural the Financial Stability Report of the In view of these, RBI guidelines
cooperative banks only with effect RBI issued in January 2021, there permitting payment of dividend by
from 01 April 2021. The RBI’s ex- are indications that the gross NPA cooperative banks casts enormous
isting instruction (circular DBOD. of the banks may increase substan- responsibility on the Board of
No. BP.BC.88/21.02.067/2004-05 tially (from 7.5% in September 2020 Directors. The banks must prepare
dated 04 May 2005) is meant only to 13.5% by September 2021). It is them well, particularly in the after-
for scheduled commercial banks. feared that the position in respect of math of Covid pandemic. Further,
RBI’s decision to make the same cooperative banks would be even the cooperative banks should take a
applicable for cooperative banks worse keeping in view greater vul- realistic view of their requirements
and more so in the light of extant nerability of its clients. Further, ma- of reserves and any distribution of
provisions of Banking Regulation jority of cooperative banks, whether profit by way of dividend must pass
Act does not appear to be justified it is Urban Cooperative Banks, not only the test of members’ aspi-
and in alignment with the author- DCCB or State Cooperative Banks, ration but also bank’s stability n
MAY 2021 The Cooperator 15P
ayment of dividend is an
important aspect of profit
distribution among share-
holders/ members of a
company or a cooperative organisa-
tion. It is the reward for taking risk
by public capital in any business.
In case of cooperatives, dividend is
paid out of net profit to the members
on their paid up share capital at a rate
not exceeding the prescribed limit.
Different states prescribe different
rates for payment of dividend but it
usually varies from 8% to 10%.
Since the dividend is paid out of
profit, only profit making organisa-
tions are eligible to pay dividend,
which otherwise means that regular
RBI allows banks to
dividend payment organisations are
always the going concerns. Regular
payment of dividend is an attraction
pay dividend
for shareholders and they tend to Subhash Gupta*
invest more in capital of such con-
cerns. Capital and dividend are in NAFCUB welcomes the decision of the RBI to allow
fact complementary and supplemen- cooperative banks to pay dividends
tary to each other – if more capital
is subscribed then more dividend is in order to maintain financial stabil- quantum of dividend being not more
received, and vice versa. ity announced Covid-19 package for than 50% of the amount determined
banks under which moratorium on as per the dividend payment ratio.
Capital is the basic element to start any payment of interest and installments Cooperative banks have been permit-
business enterprise. Capital acts as a of loan by borrowers from 1st March ted to pay dividend on equity shares
buffer in times of crisis or poor per- 2020 to 31st August 2020 was an- as per the existing norms. However,
formance by an enterprise including nounced. It was also announced that RBI has instructed both commercial
banks. In case of banks, sufficiency of in an environment of heightened and cooperative banks that they
capital instills confidence in deposi- uncertainty caused by Covid-19, it is shall continue to meet the applicable
tors. As such, adequacy of capital is important that banks conserve capital minimum regulatory capital require-
one of the three conditions for licens- to retain their capacity to support ment after dividend payment.
ing of a bank as well as its continu- the economy and absorb losses.
ance in business. A bank’s capital is As such, banks shall not make any In case of cooperative banks, it
required as a cushion to absorb losses dividend payouts on equity shares is a big relief since cooperative
which are borne by shareholders and from the profits pertaining to the fi- members and dividends are embed-
also to meet expenses for infrastruc- nancial year ended March 31 2020 to ded in each other. Regular payment
ture development of their banking strengthen their balance sheet while of dividend is a motivation as
business. Thus, public confidence at the same time support lending to well as emotional fulfillment of
in the banks is closely related to the the real economy. members belonging to the coop-
capital funds of the banks. Based on eratives they promote and nurture
this confidence, the banks mobilize Now with easing of restrictions and from generation to generation.
deposits which are many times more economic activities picking up, espe-
than the capital. cially in third and fourth quarters of UCBs would thus be able to supple-
the financial year 2020-21, the RBI ment their capital by retaining
Since banks’ capital is the first line has permitted banks to pay dividend present members and attract new
of defence to absorb losses, it needs on equity shares for the year ended members. UCBs would thus be able
to be censored and further strength- March 31 2021. However, RBI has to grow and meet credit needs of their
ened. Last year, during Covid-19 revived the dividend declaration members. It is a welcome decision of
pandemic where economic activities norms and permitted commercial the RBI and NAFCUB is happy that
were halted due to lockdown, the RBI banks to pay dividend subject to the its demand has been accepted n
* Former Chief Executive, NAFCUB
16 The Cooperator MAY 2021Gujarat Dy CM releases Amin’s biography
G
ujarat State Cooperative
Credit Societies Federa-
tion Ltd in close coop-
eration with the Gujarat
State Cooperative Union
prepared a biography of the former
President of NCUI Shri Ghanshy-
ambhai Amin, an eminent cooperative
leader, selfless Karmayogi and Sahakar
Purush. The biography was released in
the form of a book titled “Kalyanpathna
Karmayogi”, epitomizing his works,
deeds and life journey as a leading credentials and rich advocacy expe- a new way and direction for agricul-
cooperative leader, learned advocate, rience,” said Shri Patel, adding that tural development of the country. Shri
educationist, political leader, social Shri Amin’s biography will be an Amin, at the time of the formation of
leader, cooperative icon and a real gem inspirational guide to the youth of WTO, safeguarded the interests and
of the cooperative sector. Shri Amin, today. He further said that the pres- welfare of the farmers of the nation
while occupying important posts and ence of various cooperative leaders by constituting Asian Farmers Group
positions, immensely contributed in from across the country clearly shows in Japan and this group protects the
making sweeping changes in the co- that the works and selfless services of interests and welfare of farmers, he
operative sector at all levels – rural, Shri Amin are well known in every pointed out.
state, national as well as international, nook and corner of the entire country.
which has been appreciated from all His dedication towards cooperative Addressing the function, Shri Nar-
quarters. sector is really commendable, stated haribhai Amin appreciated and
the Deputy CM and wished Shri Amin admired the great work done by Shri
The book, Kalyanpathna Karmayogi a healthy and long life. Amin in the fields related to coopera-
was released on the 21st of March tives and advocacy.
2021 by Shri Nitinbhai Patel, Hon’ble Reminiscing over the work of Shri
Deputy Chief Minister of Gujarat in Amin, Dr Chandra Pal Singh Yadav, Thanking the guests, Shri Amin said
the august and gracious presence the guest of honour for the function that commencing the life career as
of Shri Bhupendrasinh Chudasma, stated that Ghanshyambhai has played an advocate, he took each and every
Hon’ble Education Minister of a vital role in strengthening the coop- task of his life as challenge and put
Gujarat, Dr. Chandra Pal Singh erative movement at national level and in vigorous and unceasing efforts to
Yadav, Chairman of KRIBHCO, Shri has taken effective steps to strengthen achieve success in his field. He ex-
Narharibhai Amin, Member of Parlia- cooperative education in the country. pressed satisfaction that he was able
ment, Shri Sunil Kumar Singh, Vice He further said that after taking over to perform several tasks successfully
Chairman of NAFED, Shri Ajaybhai as the Vice Chairman of ICA (Asia- in the capacity of the chairman of the
Patel, Chairman of Gujarat State Co- Pacific) in 2008, Shri Amin made the bar council in the larger interests and
operative Bank and other dignitaries. nation proud. He also acknowledged welfare of the legal fraternity.
Shri Amin’s hard work and commit-
Releasing the book, Shri Nitinbhai ment to the cause for strengthening Recalling his engagements with na-
Patel stated that as Gujarat is quite the cooperative movement while tional and international cooperative
often bestowed with well-deserved serving for two terms as the President movement, Shri Amin said: “Mere
honour for its contribution in the of NCUI. He hoped that the biography thinking does not lead you to success.
cooperative movement, but the of Shri Amin will inspire the young It’s my experience that you have to do
credit must go to the grassroots level generation to associate itself with the a lot of research, put in hard work, and
cooperative workers like Shri Ghan- cooperative movement. undertake vigorous efforts keeping in
shyambhai Amin. The success of Shri mind a specific goal.”
Amin is attributed to the factors like Speaking on the occasion as another
hard work, sacrifice, commitment to guest of honour, Shri Sunil Kumar On the occasion, a blood donation camp
cause, diligence, and above all, the Singh wished Shri Amin a long life and was also held. Cooperative workers and
struggle waged by him during his stated that one has to put in gigantic dignitaries across the state participated
entire career, he said. efforts for achieving name and fame in large numbers by donating blood
as Kalyanpathna Karmayogi. He said and making the event successful. Dr.
“Ghanshyambhai has earned name that Shri Amin has done a great job by Jivrajbhai Godhani proposed vote of
and fame not only in the coopera- safeguarding the larger interests of the thanks to all the guests and dignitaries
tive sector, but has strong academic farmers of the nation and is showing attending the function n
MAY 2021 The Cooperator 17T
raditional training methods
are changing rapidly with
the advancement of tech-
nology and connectivity in
India. Technological revolutions
also have changed the cooperative
sector creating new forms and pat-
terns of work and leading to wider
societal changes. On the other hand,
the current wave of pandemic has
created a profound impact on the
business of cooperatives as well as
methods of cooperative training.
While there are numerous training
methods, most of the traditional
methods used in offline classes can
be applied equally and efficiently
in online mode. The trend of online
training is increasing day by day Online Cooperative
Training
and it has now become an integral
part of teaching and learning. Coop-
erative training institutions in India
have already initiated the online SC Pradhan*
training, utilising their technical
advancement and reach. Thanks to What are the requirements of cooperative training in online
good internet connectivity across mode and how to prepare for it?
India, it is now possible to reach
every corner and impart cooperative recording capabilities, VoIP facility, Prior to a meeting
training through online mode. co-browsing, cloud based meeting,
file transfer, and unified communica- ■■ When using equipment or loca-
Requirements tion. tions not regularly used, test your
meeting connections in advance.
1. Hardware: Mobile or Laptop or Few names of the popular online
all-in-one PC or a desktop with platforms are Google Meet, Micro- ■■ When possible, establish online
webcam, mic and speaker soft Teams, CISCO Webex, Zoom video conferencing connections
Meeting, GoTo Meeting, Jio Meet, several minutes before the meet-
2. Software: Video conferencing Airtel BlueJeans, WhatsApp Group ing start time.
app/software or an online meeting Meeting, Vconsol and many others.
platform ■■ Create a backup communication
Vconsol, a product of Kerala based plan in case you have trouble
3. Stable internet connection Techgentsia Software Technologies connecting with remote partici-
Pvt. Ltd. is the winner of innovation pants. A backup plan can include
While choosing the online meeting challenge for development of video asking onsite participants to con-
platform, the user should consider conferencing solution conducted nect to the meeting through their
few things which are: user licences under Digital India Program. The laptops, using a mobile or speak-
- free or paid, capacity of partici- company received a grant of Rs 1 erphone, and/or collaborating
pants, PC OS support - Windows/ crore for this development from through an online collaboration
Mac/Linux, mobile OS support Govt. of India. tool (e.g., Google docs, Office
- Android/IOS/Win, audio support online).
- uni/bi directional, video sharing Planning
support, video quality VGA/HD During a meeting
480/720/1080p, chat support, screen Plan, whether webinar is the right
sharing support, white board support, tool for target audience, subject ■■ Ensure all participants can see
security access, encrypted commu- matter, and the time needs to cover and hear all other participants, as
nication, host meeting from mobile, the topics. appropriate.
* Principal, Delhi State Cooperative Training Centre
18 The Cooperator MAY 2021■■ Ensure conference room micro- Format of Webinar ■■ Make sure of stable Internet con-
phones are distributed appropri- nection
ately to pick up all speakers. One Speaker: A single presenter ■■ Get rid of distraction, mobile etc
speaks, demonstrates, and answers ■■ Dress properly
■■ Ensure location lighting does questions from the audience. ■■ Get a uniform illumination
not limit a participant’s visibil- ■■ Select a clean background, sur-
ity (e.g., avoid backlighting from Interview Style: Interviewer asks a
set of predetermined questions. roundings
windows or lamps). ■■ Mind your posture
■■ Have participants mute their mi- Panel Discussion: Multiple people ■■ Instruct (if needed) prior to start
crophones if their location has on the line at the same time, with a ■■ Have a Moderator/ facilitator
excessive background noise or moderator facilitating the discussion. ■■ Be on time
they will not be speaking. Interactive Training: Use of PPTX, ■■ Frame camera properly
Audio-Video, short film, Interactive ■■ Choose a quiet location, no noise
■■ Make sure all participants have ■■ If you’re using external mic, speak-
equal access to content by sharing board, Unified Communication
er, headphone, camera, external
all content within the video con- keyboard, mouse, do a trial run.
ferencing connection and using STRATEGIES
■■ While using Mobile for the we-
online tools whenever possible. binar, fix on a stand as per your
1. Know the technology
■■ Have a meeting Facilitator, the convenient.
person who called the meeting. A. This is new to everyone, so be ■■ use Laptop for better view
The facilitator is responsible for: prepared to troubleshoot. ■■ Use Paper, pen for quick note.
B. Inform about the App prior to
■■ providing an agenda to partici- During the training
the session
pants — ahead of the meeting is
nice, but minimally at the start ■■ Ensure all participants can see
2. Expect the unexpected & remain
of the meeting — that includes and hear
flexible
an overview of topics to be cov- ■■ Instruct to mute their mic
ered and planned outcome; ■■ Mute when you are listening
A. Technology may fail sometimes
B. Audio or Video may not work ■■ Never speak at the same time
■■ establishing the visual or verbal
C. Back up your plan, keep ■■ While presenting look into the
cues, such as raising a hand, to
alternatives camera
indicate when someone wants
D. Learn to solve technical chal- ■■ Instruct to raise the hand, while
to actively contribute verbally
lenges, real time speak
to the meeting;
■■ Position your camera at your eye
■■ engaging participants at all lo- level
cations to ensure discussion un- 3. Create & maintain a strong presence ■■ If Connection is slow share PPT only
derstanding, and alignment; ■■ Instruct others to use audio only,
4. Set clear expectations for the course
for slow connection.
■■ limiting “side conversations” ■■ Engage participants by showing
5. Establish a sense of comfort
and multitasking or ensure all Video, animation & other inter-
participants are made aware of 6. Request feedback and be mindful actives.
that content; of misinterpretation ■■ Share your PPT and recording
■■ Have the Presenter(s) or sub- for better understanding
ject experts. Ideally, presenters Best Practices for Online ■■ Content on the slide of PPT
should be able to concentrate Training should be short and with larger
their efforts on preparing and font size.
delivering their presentation. Prior to training
■■ Test your equipment and Soft- After the training
■■ Have the Assistants, who can ware
help by answering technical ■■ Establish online video conferenc- ■■ Get the feedback from the par-
and logistical questions (“Am I ing connections several minutes ticipants verbally
audible?” for example). Experi- before meeting. ■■ Use online Feedback form
enced facilitator often conducts ■■ Create a backup communication (google/ Microsoft form)
webinars without any assis- plan in case of failure. ■■ Share Recording of Online Train-
tance, but you should consider ■■ Be acquainted with App & its ing
asking for help if you or your features ■■ Share the documents, like PPTs
audience is unfamiliar with we- ■■ Send agenda/topics prior to meeting and AVs n
binars and webinar tools. ■■ Keep time zone in mind
MAY 2021 The Cooperator 19D
epartmental Promotion
Committee is constituted
to judge the suitability of
officials of the establish-
ment for promotion. All cases for
regular promotions are to be first
considered by the Departmental
Promotion Committees (DPC for
brevity), which have to be consti-
tuted for category-wise posts. The
DPC is to be guided by the instruc-
tions as issued from time to time
and the office is required to place
complete and correct information
before the DPC.
Members included in DPC should
be at least one level above the
post to which promotion is to be
made. The DPC is to consider and
recommend the names of officials
for promotion/ confirmation in
respect of various services/posts.
For holding meetings of the DPC,
the precise number of vacancies for
which select-list is to be prepared
has to be worked out. For one
vacancy, five officers are consid-
ered. If there are two vacancies,
eight officers will be considered,
the formula being 2(x)+4, where ‘x’
stands for number of vacancies. To
illustrate the formula, if there are
ten vacancies, twenty four officers
DIVULGING DPC MINUTES
will be considered for the post, i.e.
the zone of consideration is twenty
UNDER THE RTI ACT
four. To assess the relative merit of R. Muralidharan*
officers the Confidential Reports for
equal number of years in respect of When can DPC proceedings be disclosed, and to whom?
all officers being considered for a
particular post are scrutinised. DPC considered by the DPC. It is not out vs. Assistant Director, Lok Sabha
recommendations are advisory in place that a third party also applies Secretariat and others, Complaint
nature and have to be approved by under the Right to Information Act, No.CIC/WB/C/2006/00223 dated
the appointing authority before they 2005 for copy of minutes of DPC 23.4.2007 considered, inter alia, on
are given effect. for one reason or other. This article disclosure of minutes of the DPC.
analyses the case laws of the Central It observed that however insofar
The proceedings of the DPC are Information Commission (CIC) and as the departmental examinees are
reduced in writing in the form of High Court on the instances under concerned or the proceedings of
DPC minutes. When promotion is which the applicant is entitled for Departmental Promotion Commit-
denied to an official he is entitled to copy of the DPC minutes. tees are concerned, the Commission
challenge the action of the authori- tends to take a different view. In
ties before the proper forum in the Consistent (at times, such cases, the numbers of exam-
manner known to law. To ventilate contradictory) views of the CIC inees are limited and it is neces-
his grievance, he is entitled to sary that neutrality and fairness
have a copy of the DPC minutes • The Full Bench of the CIC in are maintained to the best possible
to establish why his name was not Rakesh Kumar Singh and others extent. Disclosure of proceedings
* Puducherry Civil Service Officer (Retired), Director, Catalyst [The Training People]
20 The Cooperator MAY 2021or disclosure of the answer sheets have a claim to seek copy of these public domain that such objectivity
not only of the examinees but also proceedings. However, it has been and transparency can be ensured.
of the other candidates bring in held by the Commission in a number Therefore, there is no reason why
fairness and neutrality and will of its decisions that the affected the DPC proceedings, specially,
make the system more transparent personnel have a right to obtain a the comparative gradings of those
and accountable. The Commission copy of these proceedings. The recommended for promotion should
moreover finds that the proceed- appellant is Advocate by profession not be disclosed. It is not at all
ings of the Departmental Promotion and, therefore, is a third party and correct to claim that such informa-
Committees or its minutes are not has no title to obtain a copy of the tion is held in a fiduciary capacity.
covered by any of the exemptions DPC proceedings. Both CPIO and After all, the DPC operates as a
provided for under Section 8(1) AA are in error in denying DPC part of the administrative decision
and, therefore, such proceedings/ proceedings only on the ground that making process in any organisation.
minutes are to be disclosed. disclosure thereof will enable the The material that it considers is also
affected party to prosecute his case generated within the organisation.
• Another Full Bench of the Com- more effectively in the Court of Therefore, it is not correct to say
mission in Ms. J.D. Sahay, Chief law. In fact, it should be other way that the DPC proceedings including
Commissioner of Income Tax-I vs. around. Contesting a case in a Court the recommendations made by it
Ministry of Finance Department of law is, indeed, a good ground to can be said to be held by the public
of Revenue, New Delhi, Appeal seek a copy of the DPC proceed- authority in a fiduciary capacity.
No. CIC/AT/A/2008/00027 and 33 ings, particularly when an affected
dated 6.2.2009 held that as regards person feels aggrieved by the deci- • Making a reference to the decision
the documents concerning DPC, sion of the competent authority, as of the of the High Court of Delhi
the concerned Public Authority is reflected in the proceedings. in the case of THDC India Ltd. vs.
directed to make available informa- R. K. Raturi, decided on 8.7.2014
tion in terms of request of the appel- • The proceedings of the DPC [discussed below] in regard to dis-
lant but there shall be no obligation cannot be denied just because it closure of marks of DPC, the CIC
to disclose details concerning third may contain the ACR grading of rejected the claim of the appellant
parties. The respondent Public Au- other officers/employees. It is true on the ground that he has not es-
thority may suitably use the sever- that the ACR of any government tablished any larger public interest
ability clause in Section 10(1) of the employee cannot be disclosed to for disclosure of the information
Right to Information Act. any other unauthorized person; but regarding third party employees
in case of the DPC, what is normally to him, except for making an un-
• The DPCs prepare their minutes taken into consideration is not the substantiated allegation regarding
and make recommendations after entire ACR but only the grading. favour shown to some employees
examining ACRs of the employees Since this input is an essential pre- by the respondents in the matter of
due for promotion. Disclosure of the condition for promotion, therefore, promotion.
complete proceedings of the DPC in respect of the recommended can-
and the grades given by various didates at least, the ACR grading • Relying on yet another decision
officers to their subordinates may must be placed in the public domain of the High Court of Delhi dated
lead to disclosure that by infer- to show that the DPC process has 30.4.2015 [W.P (C) No. 4735/2011
ence the DPC proceedings should been transparent. [Arti Sinha vs. – Union of India vs. D.S. Meena],
be similarly barred. However, in Debts Recovery Tribunal, Allaha- the CIC in S. Jayaram vs. Depart-
all such cases the CPIO and AAs bad, CIC/SM/A/2012/000985 dated ment of Posts, Chennai, CIC/
should apply the doctrine of sever- 31.12.2012]. BS/A/2015/000056/9501 dated
ability and should provide him the 14.1.2016, RTIR I (2016) 188 held
information, which can be provided • It is apposite to quote the deci- that DPC minutes/proceedings of
under Section 10(2), vide 2009 (2) sion of the CIC in R K Ratudi vs. other officers cannot be disclosed
ID 426 (CIC, Delhi). THDC India Limited, Rishikesh, unless warranted by larger public
CIC/LS/A/2012/002538SM dated interest.
• However, a third party cannot 4.1.2013. The objective of the Right
seek the copy of minutes of the to Information Act is to bring about • In Laxman Singh Hada vs. Min-
DPC. In Shri M.P. Dixit vs. Income transparency in the functioning of istry of Communication & IT
Tax Department, Patna, CIC/LS/ the public authorities. All decision Department of Posts, New Delhi,
A/2010/000097 dated 31.3.2010, making in the government and all its CIC/BS/A/2015/001764/11925
the CIC held that needless to say undertakings must be objective and dated 16.12..2016, RTIR I (2017)
DPC proceedings are confidential transparent. It is only by placing the 129 the appellant has sought in-
in nature. Hence, third party cannot details of all decision making in the formation relating to promotion
MAY 2021 The Cooperator 21of officers in Rajasthan in Class I NTPCO/A/2017/606030 dated in nature nor is it a trade secret or
cadre on regular basis during the 13.6.2019, RTIR IV (2019) 40, it intellectual property which could
year 2014-15 including minutes of was held that marks of the promot- harm the competitive position of
DPC. As regard to DPC proceed- ed/non-promoted employees cannot another employee i.e. a third party.
ings, the CPIO stated that the ap- be provided to the appellant as the The expression competitive position
plicant was not a candidate and in same relate to personal information of a third party i.e. other employees
any case the information relates to of third parties, hence, its disclosure of the petitioner has to be read in
third party and cannot be disclosed is exempted under Section 8(1)(j) of consonance with the nature and the
being exempted under Section 8(1) the RTI Act. kind of information to which the
(j) of the RTI Act. The Commission said expression applies. None of the
held that DPC proceedings relating Essence of Judgments of the expressions used i.e. commercial
to other officers cannot be disclosed High Court secrets, trade secret and intellectual
unless the CPIO is satisfied that property would envelop the assess-
larger public interest warrants such It is curious to note that all the deci- ment of a DPC carried out in a
disclosure. sions on the subject are rendered by service environment.
the High Court of Delhi.
• Though it is the prerogative of the The contention of the petitioner
employer to proceed against the em- (i) In Union of India vs. Sita Ram is that the information contained
ployee in accordance with the rules Verma and another, W.P. (C) No. in the DPC minutes would advert
but principles of natural justice as 5525 of 2008 dated 4.5.2011 the to the ACR gradings of the other
well requirements of Section 4(1)(d) petitioner was seeking information employees who may wish to object
of the RTI Act require that reasons concerning the DPC proceedings in to the said information being dis-
for every administrative action which his case was considered for closed to the respondent, and if,
must be disclosed to the person who promotion. The disclosure of such the CIC was of the view that such
is adversely affected. The right of DPC proceedings to the petitioner information ought to be disclosed in
appellant to know reasons for his cannot in the circumstances be public interest, notwithstanding the
ordeal assumes greater significance denied. It is not covered under the intrusion into the private domain of
as other similarly situated persons exemptions under Section 8 (1) (j) other employees, the procedure pre-
have been promoted by the DPC. The of the Act. The identity of the of- scribed under Section 11 of the RTI
suitability of appellant for promo- ficers, who may have taken part in Act ought to have been followed.
tion is to be evaluated by the DPC. the deliberations at the DPC may be The argument being notice ought to
As per the dicta laid by Supreme withheld by applying Section 10 of have been issued to the employees
Court in Union of India (UOI) the Act. who would then, have taken a call,
and others vs. K.V. Jankiraman as to whether or not they would want
and others, MANU/SC/0445/1991 (ii) The petitioner, which is a public to oppose the disclosure of informa-
the DPC recommendations qua a sector undertaking, has laid a chal- tion pertaining to them, contained
delinquent employee are to be kept lenge to a common order passed by in the DPC proceedings. The inter-
in sealed cover till the conclusion the Central Information Commis- est of justice would be served if the
of departmental action/ Court pro- sion to the extent it directs provi- direction of the CIC contained in
ceedings. However, specific reasons sion of minutes of the Departmental the impugned order is set aside and
for keeping recommendations of Promotion Committee, pertaining the matter remanded for a de novo
DPC in sealed cannot be kept in to promotions made in THDC India hearing by the CIC. It was ordered
sealed cover. That is, the decision Limited vs. T. Chandra Biswas, accordingly.
of competent authority to not act RTIR III (2013) 67. The Court was
upon the DPC recommendations is not persuaded by the argument of (iii) A perusal of the Second Sched-
administrative order and must be the petitioner that the information ule which enumerates the intel-
supported with reasons, specifically with regard to the DPC proceed- ligence and security organisations
when there is an allegation that ings would fall within the exception established by the Central Govern-
other similarly situated persons have provided under Section 8(1)(d) of ment which are in Section 24 of
been promoted, vide Raj Kumar vs. the Act. Information with regard the Act would show that Aviation
Deputy Commissioner of Police, to DPC proceedings cannot come Research Centre is included in the
Establishment/Headquarters, CIC/ within the ambit and scope of any said list at serial No.7. Admittedly
DEPOL/A/2017/193783 dated of three exclusions i.e. commercial the respondent was working in the
11.7.2018, RTIR I (2019) 77. confidence, trade secret and intellec- Aviation Research Centre only.
tual property rights. The information Therefore, the provisions of the
• In Pritam Dhanraj Motghare regarding assessment of employees RTI Act would not apply to the
vs. NTPC Ltd., New Delhi, CIC/ by a DPC is neither commercial aforesaid organisation except in the
22 The Cooperator MAY 2021You can also read
