This article has been written by Kratima Divakar.

Abstract

On March 28, Prime Minister Narendra Modi announced to create a brand new fund to pool out donations from people who are capable of helping the people who necessitate sustenance in the wake of the COVID-19 pandemic. Even though the Fund collected lots of contributions from all over the nation, several interrogations and objections were raised atop. Controversies have been snowballing as segments of civil societies, media houses and political opponents attacked the provisions that submitted that the PM Cares fund was not to be audited by the CAG and was accountable only to the PM. Momentarily, the issue has become a heated gossip where the courts have also allegedly adopted a very lenient stand in deciding the related cases.

This article is a critical analysis of the action of the government in establishing this ‘PM CARES Fund’, and it attempts to cover and analyse various controversies that have been registered throughout the scenario.

Introduction

Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund (PM CARES Fund) is a public charitable trust which was created on 28th March 2020 in the wake of the COVID-19 pandemic. The main objective behind forming it was to deal with any kind of emergency or distress situation to provide relief to the affected people. It was perceived that there is a need for having a dedicated national fund whose primary objective must be dealing with such situations. However, there existed the Prime Minister’s Relief Fund which is similar in nature and other statutory established funds like the State Disaster Response Fund (SDRF), and the National Disaster Response Fund (NDRF).

The Prime Minister himself appealed to the citizens of the country to contribute to the initiative monetarily by making donations. Shortly the news was all abounded with millions of donations by various celebrities including film stars, sportspersons, business personalities and many Political/social activists, who raised motivational calls to endeavour more and more contribution.

How is PM CARES Fund different from the PM National Relief Fund and the National Disaster Response Fund (NDRF)

The State Disaster Response Fund (SDRF), constituted under Section 48 (1) (a) of the Disaster Management Act, 2005, is the primary fund available with State Governments for responses to notified disasters.

The National Disaster Response Fund (NDRF), constituted under Section 46 of the Disaster Management Act, 2005, supplements SDRF of a State, in case of a disaster of severe nature, provided adequate funds are not available in SDRF. The Prime Minister’s National Relief Fund (PMNRF) was established in January 1948 to help the ousted persons from Pakistan. However, now, the resources of the PMNRF are utilised to provide relief to the families of those who got killed in natural calamities like cyclones, floods, earthquakes and to the victims of the major riots or accidents. 

The NDRF and SDRF are statutory bodies and are governed by the provisions of the Disaster Management Act, 2005, and the audits are done by the Comptroller and Auditor General of India (CAG).

The criteria for disbursement of money and determination of beneficiaries in The PM National Relief Fund is wholly at the discretion of the PM and per the PM’s directions. However, the PM CARES, delegates this authority of deliberation and decision making to three other ministers of the government including the Minister of Finance, Minister of Home Affairs and Minister of Defence. The sources in CAG offices say that they have no right to audit the funds since both the funds are based on donations of individuals and organisations. Also as per the latest information provided by the Fund’s administrators, “independent auditors” have been hired to audit the fund. Intriguingly, the same private chartered accountancy firm SARC Associates has been chosen which in 2019 was appointed to audit the PMNRF as well.

Unprecedented Approach of Courts

Recently, the Jharkhand High Court, while hearing a revision petition, extended the accused on bail who was sentenced for one year under Section 174(a) of the Railways Act, for obstructing running of trains, etc. The Court placed fascinating conditions; the court asked the accused to download the Arogya Setu App and deposit a sum of Rs. 35000 in the PM CARES Fund.

The Patna High Court adopted a similar approach. The petitioner sought bail for an offence under Sections 38 (I) and 30(a) of the Bihar Prohibition Excise Act, 2016. Justice Anjani Kumar said,”The bail bond of the petitioner shall be accepted by the learned court below on showing receipt of a deposit of Rs.15,000 in the PM Cares fund”. 

The Judiciary has seemingly adopted a very liberal approach towards the establishment of these non-statutory endowments.

As the country continues to stagger under the outcomes of the novel Coronavirus, a petition was filed in the Hon’ble Supreme Court raising questions about the PM Cares Fund and various Chief Minister Relief Funds, and how they are supplanting the National and State Disaster Relief Funds. The petition subsequently questioned that when the National Disaster Management Act came into force, the National Disaster Relief Fund (NDRF) and the State Disaster Relief Fund (SDRF) were formed in 2005. Then what brings the need to create a dedicated PM Cares Fund and several State CM Relief Funds.

In the same regard, the petition stated the creation of separate public charitable trusts by the Central/State Government(s) only tends to maim, weaken and paralyse the 2005 Act and the trusts/funds thereunder, being the NDRF and the SDRF. The creation of non-statutory public charitable trust/fund by Prime Minister and Chief Ministers, being PM-Cares Funds and various CM-Relief Funds and promoting the same, who are also concerned with promoting the statutory funds/trusts being the NDRF/SDRF, is arbitrary, inappropriate, uncalled for, unjustified an impermissible under the public policy and within the scheme of the 2005 Act and in the interests of the public at large, keeping in view the clash of interests among such funds/trusts."

However, Justice Ramana, heading the 3-judge bench hauled up the petitioner for filing frivolous litigation, yet the question asserted in the petitions appears to be warranted. The judge admonished the petitioner with a fine in case the petition was not withdrawn. Justice Ramana pronounced “This petition has a political colour”. (see here)

PM CARES Fund AND Right to Information

Furthermore, an RTI application seeking details on the PM Cares Fund filed by Advocate Abhay Gupta also came into the mainstream news. The application demanded various information related to the fund including the total amount deposited, PAN details are given to open the PM Cares account, the total amount spent to date, and the information about the person who has deposited the highest amount, to date. 

On April 1st another RTI application was filed by Harsha Kandukuri, a student of LLM at Azim Premji University at Bengaluru, seeking details regarding the constitution of the PM CARES  Fund. The application also asked about the copies of all Government Orders, notifications and other circulars related to the establishment of the PM Cares fund.

Both the applications received the same reply asserting that the PM CARES fund is not a public authority, and therefore, the requisite information can not be provided.

It stated that “PM CARES Fund is not a Public Authority under the ambit of Section 2(h) of the RTI Act, 2005. However, relevant information in respect of the PM CARES Fund may be seen on the Website – pmcares.gov.in.”.

It would be relevant to know at this point that the question, whether PMNRF is a ‘public authority’ under Section 2(h)(d) of the Right to Information Act, 2005 also was placed before a division bench of Delhi High Court in the case of Prime Minister’s National Relief Fund v. Aseem Takyar. There was a divergence in the opinion of the Division Bench consisting of S. Ravindra Bhat and Sunil Gaur, JJ., S. Ravindra Bhat, J. relied majorly on two grounds. First, the directions given by the Prime Minister and other State functionaries as ‘Managers’ of the fund should not be considered to be actions in a personal capacity. Second, “Registration of PMNRF as a Trust for income tax exemption, obtaining of Permanent Account Number (PAN) of the said fund and entrusting the management of the fund qualify as an “order made by the appropriate government”. Therefore, PMNRF must be deemed to be a “public authority” within the meaning of Section 2(h)(d) of the RTI Act.”

On the contrary, Sunil Gaur, J. opinionated that the said fund cannot be held to fall under the purview of “public authority”. As the PM created the fund in his ex-officio capacity, it is neither established by the state nor is it managed by the government. He mentioned “What persuades me to hold that appellant-Trust is not a “Public Authority” under the RTI Act is that Rule 47 of the Rules of Procedure and Conduct of Business in Rajya Sabha and Rule 41 of the Rules of Procedure and Conduct of Business in Lok Sabha prohibit questioning of Ministers in Parliament regarding matters which are not primarily the concern of the Government.”

The Bench thus directed the matter to be placed before the Acting Chief Justice Gita Mittal, which is yet to be heard.

What is Section 2(h) of the RTI Act

Section 2(h) defines public authority. According to the RTI Act, only such information that is held by or under the control of any public authority can be accessed by the general public through RTI.

Applying the principle of purposive construction, the Hon’ble Supreme Court in the case of D.A.V. College Trust; Management Society v. Director of Public Instructions interpreted that “public authority” may include “bodies which may not have been constituted by or under the Constitution, by an Act of Parliament or State Legislature or by a notification”. 

Also in Thalappam Service Co-op Bank Ltd. v State of Kerala the court held that “A body owned by the appropriate Government falls under Section 2(h)(d)(i) of the Act. A body owned, means to have a good legal title to it having the ultimate control over the affairs of that body, ownership takes in its fold control, finance, etc.” In the light of these judgments, it can be innocently inferred that the PM CARES Fund shall be entrusted as a “public authority” and must not be left behind the scope of RTI.

Availing statutory exemptions parallelly

Interestingly, the PM’s page has announced exemptions from taxes, without in fact disclosing under what sanction they are published. Donations to PM CARES Fund would qualify for 80G benefits for 100% immunity under the Income Tax Act, 1961. “Donations to PM CARES Fund will also be counted as Corporate Social Responsibility (CSR) expenditure under the Companies Act, 2013. PM CARES Fund has also arranged exemption under the FCRA and a separate account for receiving foreign contributions has also been opened”.

Conclusion

On one side where the reply to RTIs says that PM CARES Fund is not a public authority and hence, information cannot be provided. On the contrary, The PM’s official web page says that keeping in mind the need for having a dedicated national fund- “A Public Charitable Trust under the name of Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund” has been established. Also, certain statutory exemptions have been granted to the same on the pretence of the name of a public welfare Fund/ Public Charitable Trust.

Another disputable approach of the outlook is that the already existing National Disaster Response Fund (NDRF) and State Disaster Response Fund (SDRF) are statutory establishments for a similar purpose and fall under the definition of “public authority” as per the RTI Act and also comes under the audit jurisdiction of the CAG. Rather than establishing a highly contentious and surreptitious fund for the cause the Prime Ministers and respective Chief Ministers could have called out for collecting funds in the already existing statutory establishments. The defence of the government regarding this is “the urgency of time” and “the long process of departmental clearances for disbursal in the preexisting modes”, is incongruous as it comes within the ambit of government’s power. The author surmises the actions of the government as controversial and rat can be smelled. Meanwhile, the CPIO of PMO continues to avert the questions about important information regarding the PM CARES Fund, and SC continues to declare the PILs questioning the legality of the Fund as frivolous. With some glimmer of hope, it remains to be seen how the matter will unfold with time.

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