In the month of March 2020, amidst the spread of deadly Corona Virus in India, Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund a.k.a PM Cares Fund was founded. Prime Minister of India i.e. Mr. Narendra Modi is the ex-officio Chairman of the this Fund and Minister of Defence, Minister of Home Affairs and Minister of Finance, of Government of India are ex-officio Trustees of it. 

Objective of PM Cares Fund

It was established for having a dedicated national fund with the primary objective of dealing with any kind of emergency or distress situation like COVID-19. Therefore, it can be inferred that it is a Public Charitable Trust and is set up as a dedicated national fund that deals with any kind of emergency or distress. 

Already existing relief funds prior to PM Cares Fund:-

1. ‘Prime Minister’s National Relief Fund’ (PMNRF) – It is not covered under the ambit of the RTI Act as held in the case titled as PMNRF vs. Aseem Takyar by the Delhi High Court.
2. National Disaster Response Fund (NDRF)
3. State Disaster Response Fund (SDRF)
4. Contingent Fund of India (Article 267, Constitution)

How is PM Cares Fund different from all other existing funds?

PM Cares Fund has same purpose as those of the already existing funds.

In a reply to an RTI filed by Sri Harsha Kandukuri, it was stated by PMO that PM cares Fund is not a public authority under Section 2 (h) of the Right to Information Act, 2005 (hereinafter referred to as ‘RTI Act’). Therefore, no information can be asked under the RTI Act.

What is Public Authority?

The Delhi High Court in April 2010, in the case titled as National Stock Exchange of India Limited v. Central Information Commission held that the three conditions namely owned, controlled and substantially financed are distinct and even if one of the three are satisfied by a body, it would be sufficient to declare it as a public authority.

Hon’ble Supreme Court in 2013, in case titled as Thalappalam Service Coop. Bank Ltd. v. State of Kerala held that mere ‘supervision’ or ‘regulation’ as such by a statute or otherwise of a body would not make that body a ‘public authority’. Therefore, the control of the body by the appropriate Government would also be substantial and not merely supervisory or regulatory.

In 2019, the Hon’ble Supreme Court held in DAV College Trust v. Director of Public Instruction, ‘substantial’ under the RTI Act means a large or considerable value. It does not necessarily have to mean majority or dominant.

Is PM Cares Fund controlled by Govt. or is it an independent body?

After the RTI was filed, the PMO said that Pm Cares Fund is a Public Trust Fund that works on micro-donations from people and corporates. The question arises that if this fund is a public trust fund on the premise that private money is being invested into it, but the moment Public Sector Undertakings (PSUs) and Member of Parliament Local Area Development Scheme (MPLAD) funds have being invested in it, does the status of it being a Public Trust Fund ceases immediately? It is pertinent to note that the MPLAD funds are generated from the Consolidated Fund of India (a fund created by the tax payers of the entire country and looked after by the govt.)

Thus, interpreting the above-mentioned judgments of Supreme Court, it can be inferred that the PM Cares Fund is a public authority because of it being financed and controlled by the government.

Transparency in the Fund?

PM CARES Fund is to be audited by M/s. SARC Associates, Chartered Accountants (Independent Auditor/(s)) who are appointed by the Trustees. Thus, the Fund is kept out of the purview of audit by Comptroller and Auditor General of India (CAG) stating that the donations are done by private individuals and such audit can only happen by CAG if trustees request for an audit.

The Constitution of India prohibits the Executive from spending what the legislature cannot vote upon. Thus, all monies must be regulated by the vote of parliament. Under Article 283, the Consolidated Fund of India, the Contingency Fund of India and public accounts are envisioned. Therefore, the Union cannot receive any monies in any other manner apart from these three heads. Art. 226 (2) and Art. 284(a) provides that monies received or deposited with government other than revenue or public monies are payable into a public account. Monies are not per se under the ownership of government but deposited under its administration are constitutive of public account. Hence, public donation deposited on representation of public office and administered through governmental control, falls under Article 226 (2). Such funds have to be supervised by parliament. Alternatively, public health is a state subject and therefore all matters concerning the prevention, containment and treatment of an epidemic should be dealt with by the States by virtue of entry 6, List II, Schedule VIII.

Section 2 of Epidemic Disease Act, 1897 lays power with the state government to take special measures and prescribe regulations in case of an outbreak of any dangerous epidemic. The power in the hands of the State reflects the spirit of federalism as mandated by our constitution.

Section 19 of the Indian Trusts Act, 1882 mandates trustees to present full and accurate information of the amount and state of the trust property to its beneficiaries. Section 92 of CPC deals with the provisions of public charities. PM Cares Fund is a Public Charitable Trust which is meant for the benefit of the people, therefore making it fall under the domain of ‘Public Charity’. S.92 allows two or more persons of the public to approach the courts in relation to such trusts. Thus, a decree can be sought seeking alteration in the composition of trustees, directing disclosure of trust accounts, or even redirecting trust property.

Have courts interfered in PM Cares Fund?

Bombay High Court had issued a notice to the Centre and all trustees of PM CARES Fund seeking the declaration of the total amount collected.

Hon’ble Supreme Court sought the Centre’s response to a plea seeking direction that contributions made to the PM CARES Fund be transferred to the National Disaster Response Fund (NDRF). This petition urged the court to direct the government to prepare, notify and implement a national plan under the Disaster Management Act to deal with the pandemic. It claimed that the Centre has been “refraining from divulging information” about the money “contributed to the PM CARES Fund till date”.

QUESTIONS TO BE ASKED

The question which is of grave concern is whether PM Cares Fund is right in keeping it out of the purview of RTI and CAG Audit despite receiving donations from people and working towards the betterment of people? This question has to be answered keeping in mind whether accountability is an essential factor for keeping the system corruption free and fair. This question needs to be further answered keeping in mind the work undertaken and the distribution of funds towards combating the pandemic and such disclosures by the trustees of the PM Cares Fund.