Even as the Ministry of Fisheries, Animal Husbandry and Dairying had in July 2019 advised the National Dairy Development Board (NDDB) to extend provisions of the RTI Act, 2005, Central Vigilance Commission Act and Prevention of Corruption Act (PCA) to its subsidiary companies including Mother Dairy Foods and Vegetables Pvt Ltd, NDDB is yet to follow the advice.
On February 7, Sanjeev Kumar Balyan, Minister of State for Fisheries, Animal Husbandry and Dairying, reiterated his stand and said that the Department of Animal Husbandry and Dairying suggested to NDDB that all its subsidiary companies should fall under the purview of CVC Act, 2003.
On the other hand, after the government’s advice in July last, the board of directors of MDFVPL passed a resolution to maintain status quo on the issue, considering — amongst others — the fact that the matter of applicability of RTI Act to MDFVPL is currently sub-judice before the Delhi High Court, the minister informed.
Seven months after he first advised NDDB, Balyan again maintained the government’s stand on the status of NDDB funds held in its subsidiary companies. Replying to a question in Rajya Sabha on February 7 “whether NDDB funds, which are under jurisdiction of RTI, CVC Acts and Prevention of Corruption Act become free of such jurisdiction merely because such funds are transferred to NDDB’s subsidiary companies?”, Balyan categorically replied “No sir”. He further stated, “As per provisions of Section 8(2)(b) of CVC Act, 2003, this Department suggested NDDB that all the subsidiary companies of NDDB should fall under the purview of CVC Act, 2003. NDDB stated that no officers or employees of MDFVPL fall under the purview of the CVC Act, 2003. The issue of applicability of CVC Act, 2003 was taken up with Central Vigilance Commission (CVC). As regards to jurisdiction of CVC over Mother Dairy, CVC agrees with the view of the Department that NDDB and all its subsidiary companies including MDFVPL come under the purview of CVC Act, 2003.”
He added that after receipt of the government’s request, the board of directors of MDFVPL passed a resolution “resolving to maintain status quo on the said issue considering, amongst others, the fact that the matter of applicability of RTI Act to MDFVPL is currently sub-judice before the Hon’ble Delhi High Court. The issue of applicability of RTI Act, 2005 on MDFVPL and other subsidiary companies of NDDB will be discussed in the next Board meeting of the NDDB to be held on 7th February, 2020.” NDDB did not respond to a detailed questionnaire sent by The Indian Express seeking response on its board’s decision on February 7, and on the company’s stand on applicability of the said provisions on its subsidiaries.
However, in its response, MDFVPL said it does not fall within the ambit of Public Authority as per the provision of the Section 2 (h) of the RTI Act. It further said that MDFVPL does not fall into the category under the ambit of CVC Act.
“Mother Dairy Fruit & Vegetable Pvt Ltd (MDFVPL) is a private limited company incorporated under the Companies Act 1956 as a subsidiary company of NDDB. MDFVPL is a separate legal entity distinct from its parent organisation and is governed by the separate Memorandum of Association and Article of Association within the provision of Companies Act and is a commercial organisation generating revenues entirely from its commercial activities and businesses and hence it does not fall within the ambit of Public Authority as per the provision of the Section 2 (h) of the RTI Act. Further, the issue is pending before the Hon’ble Delhi High Court and is sub-judice, hence; we would not like to comment on it further,” it said.
In addition, as per the CVC Act of 2003 under Section 8(1)(d) and Section 8 (2)(b) and in tandem with Gazette Notification of September 12, 2007, Department of Personnel & Training specifying the central government-owned and controlled, companies, societies and other local authorities, corporations, MDFVPL does not fall into the category under the ambit of CVC Act, MDFVPL added.
“MDFVPL is neither a society, nor any local authority owned or controlled by the state or central government, therefore the officer and employees of MDFVPL are not public servant as defined under Section 8(1)(c) of the CVC Act.”
When asked, a government official — who is closely monitoring the development — said, “It is surprising why NDDB is thwarting the government’s efforts in enforcing transparency and good governance in NDDB’s subsidiary companies, which after all are Public Institutions using Public Funds.” He added that if a sum of Rs 200 crore lying with NDDB as part of NDDB’s funds was subject to CVC Act, RTI Act and also CAG audit, how can it be the case that when the amount is transferred to its wholly-owned subsidiary company, then the same fund is not covered by CVC Act, RTI Act and CAG audit.
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